Paragon Bank’s SME Lending division has exceeded more than £3.6 billion in lending since the acquisition of Five Arrows Leasing Group in 2015 – marking a decade of supporting the nation’s small to medium-size businesses.
The specialist lender, part of FTSE 250 Paragon Banking Group, now works with more than 16,000 SMEs across the UK - a 23% increase in three years - enabling businesses to invest, grow and prosper across vital sectors including manufacturing, construction, agriculture and transport.
Paragon completed the acquisition in November 2015 as part of its diversification strategy and has since grown the SME Lending loan book from £212 million at acquisition to £877 million at its last financial year end.
The SME Lending division has quadrupled its business portfolio over the last decade, digitalised its operations and championed innovation. Investments in digital infrastructure, including an introducer portal, have reduced application approval times by 60%, with nearly 90% of new SME lending now initially handled digitally. Increased performance in the platform has seen Paragon increase the auto-decisioning limit to £150,000, enabling more SMEs to access funding quickly and securely.
Diversifying the lending portfolio has been a central to Paragon’s strategy over the past decade, with a strong emphasis on new technologies to support green finance. Paragon continues to support SMEs on their transition to net zero, having broadened funding for renewable energy and green assets such as wind turbines, biomass boilers and, most recently, rooftop solar panels through an innovative partnership which removes all upfront costs – including installation and maintenance - for SMEs.
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.”
He added: “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, Paragon Banking Group Chief Executive Officer, said: “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.”
