Paragon records increase in SME lending
02/06/2026
Paragon Bank’s Southampton-headquartered SME Lending business grew new lending by 5.1pct during the first half of its financial year, driven by greater use of the Government Growth Guarantee Scheme (“GGS”) and improvements driven by its digitalisation programme.
Unveiling its half-year results for the six months to 31 March 2026, Paragon recorded £259.5 million of new SME lending, up from £247 million during the same period last year.
Paragon provided £30.5 million of GGS-backed loans to SMEs during the half-year, a 66.7pct increase on the same period in 2025, while asset-based lending was 6.8pct higher than at the year-end at £159.3 million.
The division’s digitalisation programme continued to deliver benefits in the period, improving both offer and conversion rates, with around two thirds of applications progressing to offer.
More external business partners were granted access to the division’s new business portal, enabling them to input cases directly, and reducing the handling required within the business. This resulted in 70pct of applications for core business finance products in the period being entered directly, compared to 63pct last year.
SME Lending’s net loan book grew 8.5pct year-on-year to £925.8 million.
Overall, Paragon’s Commercial Lending division, which encompasses Development Finance, SME Lending, Structured Lending and Motor Finance, generated £645 million in new lending, up from £568 million the year before.
John Phillipou, Paragon Bank Managing Director of SME Lending (pictured above), said, “We have continued to support SMEs with the funding they need to invest and grow, with good momentum in new lending during the first half driven in part by increased use of the Government Growth Guarantee Scheme.
“Alongside this, our digitalisation programme is continuing to improve the experience for brokers and customers, helping us process applications more efficiently and convert more opportunities into completed lending.”
Overall, Paragon Banking Group recorded underlying profit before tax of £145.7 million for the period, with a 3.8pct increase in the Group’s net loan book.
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