Paragon Bank reports 7.3% rise in SME lending loans

Paragon Bank has reported a 7.3% year-on-year increase in new SME Lending loans for the first half of its 2025 financial year, with total new lending reaching £247 million, up from £230.2 million in the same period last year. The SME Lending loan book also grew by 9.4%, hitting £853.1 million.

Asset finance continued to drive growth, rising 11.1% to £169.9 million, outpacing the market average of 6.4%. Paragon also began issuing loans under the Government’s Growth Guarantee Scheme, totalling £18.3 million during the period.

The bank’s digital broker portal, launched two years ago, has proven pivotal to performance. Nearly 60% of applications were submitted directly through the portal, up from just under 50% last year. The platform now supports around 90% of new SME lending activity, with automated decisioning available on one in three cases. As a result, Paragon has cut application-to-approval times by 60% and nearly halved time to payout, while improving conversion rates.

John Phillipou, Managing Director of SME Lending, said: “Despite a difficult environment for SMEs, with increased costs and the disruption of global events, they continue to show ambition and resilience, and we were pleased to record an increase in lending, particularly within asset finance.

“Additionally, our broker portal continues to drive improved performance, with more applications going through the system, plus conversion and approval rates increasing. We have commenced the replatforming of our back-end system, which will drive further efficiencies and improved customer experience.”

Across the wider business, Paragon Banking Group posted a 5.2% rise in pre-provision profits and a 2.1% increase in underlying profits to £149.4 million. The total loan book grew 4.9% to £16 billion, with total lending up 11.4% to £1.38 billion, driven by growth in both Development Finance and Buy-to-Let Mortgages.

Paragon Banking Group Chief Executive Officer Nigel Terrington said: “We delivered another strong financial and operational performance in the first half of 2025, reflecting our disciplined approach and consistent track record of execution.

“With strong momentum and a resilient business model, we are well placed to navigate the evolving external environment and remain optimistic about the remainder of the financial year and beyond.”