Paragon Bank review – business finance, accounts & loan options compared

Last checked and updated on January 20, 2023

Paragon Bank was formed in 1985 under the name National Home Loans Corporation, indicating this lender’s initial speciality. While Paragon still trades heavily in mortgages and offers business savings accounts, we are interested in the lending streams and financial support this bank offers. While Paragon Bank be able to assist your business?

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What services does Paragon Bank Business Finance offer?

If you are seeking business financial aid from Paragon Bank, you can investigate one of three core offers:

Asset Financing

If you need a cash injection to purchase or improve assets within your business, Paragon Bank offer a variety of funding streams. These include:

SectorWhat’s on offer?
ConstructionFunding for equipment required for large-scale construction projects, including cranes
VehicleHiring or funding of a fleet of commercial vehicles for companies that work within the transport industry
AgricultureFunding for any equipment that may be required to operate at full capacity in the agricultural or farming fields
AviationAccess to funds for private aircraft for frequent and VIP travellers
ManufacturingFinancial support to invest in and maintain the tools of a trade required in any industrial workplace
TechnologyFinance and lease hire for the latest and greatest technology that will help your business remain relevant and produce your best work
Paragon Bank loan options explained

Invoice Financing

Invoice financing is a great way to meet running costs and prevent a business cash flow crisis, leveraging payments due on outstanding invoices. Options here include:

Type of invoice financeWhat is it?
Invoice factoringParagon Bank releases up to 95% of the value of an outstanding invoice as a loan. Paragon then take over credit control of the invoice, sending you the remaining value – minus a fee – when the customer settles the invoice.
CHOCCCHOCC (Customer Handles Own Credit Control) is the same arrangement as invoice factoring, except you continue to chase and receive the outstanding invoice funds. You can settle with Paragon upon payment of the invoice.
Invoice discountingAnother variation on invoice factoring. Paragon purchases a percentage of an outstanding invoice value, pays you these funds within 24 hours, and you pay Paragon the full value of the invoice upon receipt of funds.
List of invoice financing products from Paragon Bank

By claiming the funds due on an invoice before it is paid, you can maintain credit control and prevent your expenses from piling up due to delays in customers settling bills.

Development Finance

If your business is planning to expand and you’ll need a larger base of operations, you need some financial assistance to cover a deposit on a new office, or you wish to start considering a business property purchase on empty land, Paragon Bank will always be thrilled to assist. Remember, property purchases remains the core business interest of this lender.

What can I use funding from Paragon Bank Business Finance for?

With the varying financial offers available through this lender, you are likely to find a loan or financing that will suit just about any need. Just ensure you apply for the most relevant product as per your needs. If you’re seeking a cash injection to meet payroll costs or to bridge expenses until invoices are cleared, look into Invoice Financing. If you have a particular large-scale purchase in mind, ensure you apply for Asset Finance.

Will I be eligible to borrow from Paragon Bank Business Finance?

This is a specialist lender, and as thus only typically works with some industries. While anybody will be welcome to open a savings account or apply for a mortgage, lending streams for Invoice Financing are usually reserved for the following sectors.

  • Courier services
  • Engineering
  • Haulage
  • Manufacturing
  • Plant hire
  • Print
  • Recruitment
  • Wholesale

You are welcome to chance your arm and see if you can still obtain financing from Paragon Bank, but investigate alternatives at the same time to avoid disappointment. Your application is considerably less likely to make it beyond the drawing board.

How do I apply for financing from Paragon Bank Business Finance?

All lending completed through Paragon is bespoke to your unique needs and situation, so an application is not as simple as filling in a form and waiting to be accepted or declined. You’ll need to arrange a conversation with a representative at Paragon Bank, who will take over the process and guide you in the right direction.

The bank’s website has a specialist enquiry form on each page, where you can leave your details and wait to be contacted by a representative. If you prefer a more proactive approach, call or email Paragon using the following details:

  • For Asset Finance, call 01489 775693
  • For Development Finance, email [email protected] or call 020 7160 2400
  • For Invoice Finance, email [email protected] or call 01489 776250

Naturally, a telephone conversation will help you get to the heart of your needs faster and speed up the application, but to stress, you will not be offered a concrete arrangement by the end of your call.

What are the advantages of borrowing from Paragon Bank Business Finance?

Paragon Bank has been in operation for many years, and has thus built a sturdy reputation within the financial industry as a trusted name.

There are multiple options for credit lines through Paragon Bank, so your business will likely find some way to access the financial support that you need.

Paragon Bank can be a great partner for a larger SME that is looking to expand, especially with this lender’s connections to the realm of property.

What are the drawbacks of borrowing from Paragon Bank Business Finance?

Despite the name, Paragon Bank is not actually a bank – it’s a private enterprise that specialises in money lending, especially buy-to-let mortgages. While Paragon is still regulated by the FCA, and deposits of up to £85,000 are protected by the FSCS, some companies may prefer to stick with a more straightforward partnership. 

While Paragon Bank offers a wide range of lending streams for businesses, this is not the bread and butter of this provider. You may want to work with a more traditional lender that has a greater focus on business customers and cash flow.

If patience is a virtue you do not possess, Paragon Bank may prove to be a frustrating partner. Many people complain about understaffing and extremely long waits when attempting to speak to a customer services representative on the telephone.

As this lender only works with some industries, your business may not qualify for lending.

What fees and charges are associated with borrowing from Paragon Bank Business Finance?

Every lending stream taken up with Paragon Bank will have its own set of fees and charges. Ensure you discuss these before committing to any financial agreements, and read the small print of any contracts you may be offered.

What is Paragon Bank Business Finance’s reputation among other customers?

Paragon Bank has a score of 3.2 from 5 on TrustPilot. The site calls this Average, but to be honest, that’s pretty impressive for a company that specialises in such a difficult subject as money lending. Just be aware that most of the reviews pertain to savings accounts – discussion about business lending streams is in short supply. 

Summary

Business finance may not be Paragon Bank’s first and primary area of interest, but this is a long-standing and reliable lender that should always be considered when seeking a short-term cash flow release. If you can tolerate the potential attempting upselling of property, and you’re offered a competitive interest rate, seriously consider utilising Paragon Bank’s invoice financing or asset funding models.

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Important – The information provided in our articles is intended to be for general purpose use only, and not advice for you or your business. We strive to publish accurate information, but encourage you to fact-check and seek expert guidance. You should always speak to a qualified professional to get tailored advice about how to operate your business under your specific requirements and circumstances.