The lender said this demonstrated its growing lending appetite and “strategic diversification”, enabling it to support larger and more complex development projects by giving SME developers access to funding.
Paragon said as high street banks were tightening lending restrictions for SMEs, it was “bucking the trend” by stepping in for firms.
Neal Moy, managing director of development finance at Paragon Bank, said: “Raising our maximum loan size to £60m is a clear signal of our robust position in the market and long-term commitment to supporting SME developers and the wider housing market.
“At a time when many lenders are pulling back, we’re stepping forward to finance ambitious projects, building long-term partnerships with our customers to deliver the varied homes and communities the UK needs. This increase reflects our custom-centric ethos and confidence in the sector as we diversify into new markets such as purpose-built student accommodation (PBSA), build to rent (BTR) and later living.”
He added: “SMEs bring a huge amount of value to the development sector, creating quality, thoughtfully designed and sustainable homes [that] are built to last, and we’re here to invest in their growth and ensure they have the right support they need to thrive.”
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This change follows Paragon Bank reporting a 7.5% lift in new development finance lending in the first half of the year, with a 44% annual growth in its new business pipeline. This year, the lender also secured £27m through the British Business Bank’s Growth Guarantee Scheme, bringing its lending capacity to £55m.
