Paragon SME Lending hits £3.6bn milestone after 10 years backing UK businesses

Paragon Bank’s SME Lending division is celebrating a decade of backing UK small and medium-sized businesses after surpassing £3.6 billion in total lending since its acquisition of Five Arrows Leasing Group in 2015.

The milestone reflects ten years of sustained expansion by the specialist lender, part of the FTSE 250 Paragon Banking Group, which now supports more than 16,000 SMEs across the UK, a 23% rise in the past three years. Its finance has helped businesses invest in essential assets across manufacturing, construction, agriculture, transport and other vital sectors.

Paragon acquired Five Arrows Leasing Group in November 2015 as part of a diversification strategy. Since then, the SME Lending loan book has grown from £212 million at acquisition to £877 million at the end of the last financial year.

Over the decade, the division has quadrupled its business portfolio, digitalised its operations and embedded innovation at the centre of its offer. Upgrades to its digital infrastructure – most notably the launch of its introducer portal – have cut application approval times by 60%, with nearly 90% of new SME lending applications now initially processed online. Improved system performance has also enabled the lender to raise its auto-decisioning limit to £150,000, giving more SMEs faster access to critical funding.

Diversification has been a core pillar of Paragon’s strategy, with growing emphasis on supporting SMEs’ transition to net zero. The bank has broadened its funding for renewable and environmentally focused assets, including wind turbines, biomass boilers and rooftop solar panels. A new partnership offering SMEs solar installation with no upfront costs – including installation and maintenance – marks Paragon’s latest step in helping businesses adopt sustainable technology.

John Phillipou, Managing Director of Paragon SME Lending and Chair of the Finance & Leasing Association, said the milestone highlights the division’s evolution into a modern, tech-driven specialist lender:

“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, Phillipou said Paragon’s strengthened foundations and commitment to regulatory excellence position the division to scale up further:

“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.”

Paragon Banking Group CEO Nigel Terrington said SME Lending’s success reflects the Group’s long-term strategy to broaden its business mix:

“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.”