Paragon’s SME Lending sees growth in new loans and lending activity

Paragon Bank has announced a 7.3% increase in lending in its SME Lending division, in addition to an expansion of the business line’s loan book.

Unveiling its full-year results for the 12 months to the end of September 2024, the division, which provides asset-based and specialist finance across a range of sectors, saw lending increase to £480.7 million.

Additionally, the division recorded loan book growth of 7.9% to £817.5 million. 

Asset leasing volumes rose by 15.4% over the year to £330.7 million, outperforming the 1.1% increase in new leasing business, excluding cars and high value items, reported by the Finance and Leasing Association over the same period.

Meanwhile, its short-term lending to professional services firms stood at £135.2 million.

Paragon reported that a growing proportion of business came through the division’s broker portal, which utilises auto-decisioning and AI to improve proposal response times. It now accounts for 69% of the division’s applications and has enabled an increase in the number of applications for smaller loan values.

“We have recorded consistent growth since the pandemic, driven by our improved digital offering and the bolstering of our client-facing teams.”

“We have ambitious growth plans and will soon embark on upgrading our back-end systems, giving us a strong platform to accelerate our expansion,” he added.

Overall, Paragon Banking Group recorded a 5.4% increase in operating profits before fair value items to £292.7 million and a 5.6% increase in its net loan book to £15.7 billion.

Paragon’s Commercial Lending division, which encompasses SME Lending, together with Development Finance, Structured Lending and Motor Finance, recorded a 9.6% increase in new lending to £1.24 billion and now represents 45% of Paragon’s total new lending. The Commercial Lending loan book ended the period 16.1% higher at £2.3 billion.