Paragon Bank has secured a further £27 million under the British Business Bank’s Growth Guarantee Scheme, raising its total lending capacity through the programme to £55 million.

Of the newly allocated funds, £7 million will be reserved for small and medium-sized enterprises affected by changes in international trade tariffs, as part of a dedicated £10 million facility.

The additional backing from the British Business Bank reinforces Paragon’s position in delivering targeted support to UK SMEs, particularly those grappling with the rising costs and supply chain difficulties linked to global tariff shifts.

Businesses in the manufacturing sector, which has been especially exposed to such pressures, are expected to benefit most directly from the ringfenced funding.

Paragon has already deployed more than £40 million in GGS-backed loans to over 300 businesses, spanning industries such as construction, transport and agriculture. The new allocation will enable the bank to expand the reach of its SME lending, offering both unsecured loans and asset-based finance to companies that may otherwise find it difficult to obtain funding through conventional channels.

Phil Hughes, deputy managing director of SME lending at Paragon Bank, described the funding boost as “a clear vote of confidence” in the bank’s ability to support the sector.

“The dedicated £10 million for businesses impacted by international trade disruption is particularly important – these firms have faced unique pressures and we’re proud to be in a position to help them adapt and thrive,” he said.

“We’ve already seen the transformative impact of the Growth Guarantee Scheme, and with this new allocation, we’re ready to support even more businesses on their growth journeys.”

The Growth Guarantee Scheme, introduced by the UK government in 2023 as a successor to previous pandemic-era support initiatives, is intended to improve access to finance for small businesses across the country. It offers lenders a government-backed guarantee of 70% on loans of up to £2 million per borrower, designed to support investment, growth and innovation.

Reinald de Monchy, chief banking officer at the British Business Bank, welcomed Paragon’s continued participation in the scheme.

“Manufacturing is an important sector for the scheme, and we look forward to seeing the impact Paragon will have on their customers from this lending, unlocking much-needed capital for smaller businesses across the sector and generating growth,” he said.