UK specialist banking group Paragon Banking Group’s SME lending business has reported new lending of £230.2m ($294.2m) in the first half (H1) of the financial year 2024, up by 4.6% from £220m reported a year ago. 

For the six months ending on 31 March 2024, the overall underlying profits for the entire group rose by 13.5% to £146.3m from £128.9m in H1 2023.  

According to Paragon, its SME lending sector, which offers leasing for business assets and unsecured cash flow lending, among other products, has seen an uptick in business introduced via its online broker portal.  

The portal, which was launched in 2021 and later enhanced with additional functions, now features auto-decisioning capabilities that expedite fund distribution to customers. 

Asset leasing volumes, excluding government-backed loans, saw a significant rise of 15% to £152.9m, up from £133m in the previous year.  

However, short-term lending to professional services firms outside government schemes fell 8.9% to £70.5m from £77.4m in the comparable period of 2023. 

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Paragon’s SME lending arm also includes the Commercial Lending division. This division reported a slight increase in volumes to £589.8m from £574.4m in H1 2023.  

The growth in SME and structured lending was somewhat offset by lower activity in motor finance and development finance operations.  

Commercial Lending now represents 48% of the group’s new lending. 

Despite the growth in certain areas, the total new loans in the commercial lending businesses grew by only 2.7% compared to the same period in 2023.  

The general economic climate has been affecting customer demand and completion levels across the sector. 

Paragon Bank SME lending managing director John Phillipou said: “We are pleased to record an increase in our new lending, particularly given the challenging environment SMEs faced in 2023.  

“UK SMEs are resilient and flexible, adapting to the pressures of the past few years to grow their businesses. We are pleased to be able to support them to achieve their ambitions.”