Paragon Bank has marked 10 years since its move into SME finance by surpassing £3.6 billion of lending, underscoring how the business has expanded beyond its traditional specialisms to become a significant funder of smaller companies.
The milestone follows a decade of growth since Paragon acquired Five Arrows Leasing Group in 2015.
The SME loan book has risen from £212 million at the point of acquisition to £877 million at the end of the last financial year, and the lender now works with more than 16,000 businesses across the UK. That customer base has increased by 23% over the past three years.
Paragon said its focus on digital investment has been central to improving turnaround times and widening access to finance. Enhancements to its introducer portal have cut approval times by 60%, with nearly 90% of new SME applications initially handled digitally.
Improved functionality has also allowed the lender to raise its auto-decisioning threshold to £150,000.
EXPANDING INTO GREEN FINANCE
Diversification has played a prominent role in Paragon’s strategy over the period, particularly through investment in new technologies and funding for green assets. The lender has broadened its support for renewable energy projects and equipment, including wind turbines, biomass boilers and rooftop solar panels.
Its latest partnership offers SMEs access to solar installations with no upfront costs, covering both installation and maintenance.
John Phillipou, managing director of Paragon SME Lending and chair of the Finance & Leasing Association, said: “Over the past decade, Paragon SME Lending has evolved into a forward-thinking, specialist lender, championing ambition in markets often overlooked by traditional high street banks.
“We’re committed to funding the real economy – whether it’s a Midlands manufacturer investing in automation to stay competitive, or a Yorkshire construction firm adopting greener technology, UK SMEs have a remarkable ability to get things done, and Paragon is proud to help enable that ingenuity.
“Looking ahead, our strong foundations, talented team and commitment to regulatory excellence make us well-placed to accelerate growth and help SMEs thrive in a changing world.
“I’m proud that SME Lending, as part of our wider Commercial Lending division, now plays a central role in Paragon’s strategy and growth – a clear signal of our confidence in UK SMEs.”
Nigel Terrington, chief executive officer of Paragon Banking Group, added: “The growth of our Commercial Lending division, including SME Lending, is central to the diversification strategy implemented by the Group over a decade ago.
“Commercial Lending accounted for nearly half of new lending in our last financial year and, as a result of this hard work, Paragon is no longer viewed as a pure play buy-to-let lender. We expect increasing lending volumes across our Commercial division in the coming years.”
