Start-up iwoca’s share of UK small business overdraft approvals has overtaken that of two established high-street banks.

The London firm has grown its market share by two percentage points to 12 per cent, with Santander on nine per cent and HSBC on 11 per cent.

It is now closing on Barclays, which has 15 per cent of the market, and Lloyds, which has 20 per cent. RBS has the most market share with 30 per cent.

According to Q4 2018 data provided by UK Finance, 31,014 overdraft facilities were approved for small businesses, with 3,802 credit facilities approved by iwoca.

iwoca

The data also reveals that the number of overdraft facilities offered by the banks to small businesses has reduced by 50 per cent since 2011.

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One of Europe’s fastest-growing small business lenders, iwoca announced a £150m fundraise of equity and debt capital in February, taking its total investment to £350m.

“We are a challenger to the banks, and our challenge has been successful,” said CEO and co-founder Christoph Rieche.

“We founded iwoca to help small businesses get the finance they need by filling the gap left by high street banks.

“The fact that we have grown so rapidly and overtaken two of the high street banks so quickly shows how badly small businesses have been served – until now.

“We’ve built a unique digital platform so small businesses can get the funds they need, when they need them.

“Our personal best is 3 minutes and 26 seconds from starting an application to money in the bank. That’s an experience the banks can’t match.

“Our technology innovation and excellent service will enable us to fulfil our mission - to fund one million small businesses.”

iwoca’s volume of approved credit facilities equated to 19 per cent in London, and 15 per cent in the North West and South East.

In March last year, iwoca pledged to lend £100 million to small businesses in the North of England by 2020.

This pledge was to address the lack of credit facilities available for small businesses from banks across key northern towns and cities, with 700 closures combined across the North West and Yorkshire and the Humber in the past three years.