We sat down with John Phillipou, the MD of Paragon Bank’s SME Lending division, to discuss what 2023 looks like for UK SMEs.

John Phillipou recently marked three years as Paragon Bank Managing Director of SME Lending by recording a 33% increase in lending to SME customers to over £440 million. We sat down with John to discuss his outlook for the year ahead.

What role will SME’s play in the UK’s economic recovery?

SMEs are the backbone of the UK economy and the resilience they have shown over recent years is inspiring. They have met challenge after challenge with determination and I’m proud of the role Paragon has played in this process.

With 2023 set to present SMEs with fresh challenges, our job is to provide them with stability. If businesses are facing uncertainty, then it is vital that they can access the funding they require to provide confidence for their financial planning – and we look forward to working with clients, both new and old, to see them through to better times.

What trends do you expect to see in the year ahead?

The refinancing of unencumbered assets and the financing of used equipment are two trends we expect to see next year, and this is understandable. Businesses will be making pragmatic decisions to support their balance sheets and provide themselves with the option of seeing how the year develops before committing to some investments – but it is never too soon to start researching what financial support is available and we will be pleased to discuss their requirements with them throughout the start of 2023.

How is Paragon supporting SMEs?

Understanding our client’s businesses and delivering bespoke funding solutions is central to who we are. Thanks to our team of financing specialists throughout the country, we are able to visit SMEs in person to gain first-hand knowledge of who they are, their goals, and the support that they need.

Also, we understand that time is precious to SMEs. Our new asset finance broker portal provides an efficient application process and real-time tracking, which enables our clients to manage their applications on the go with 24/7 access across all devices – including generating quotes and documents at a time that suits them, and get things done quickly with E-signature.

Our commitment to supporting SMEs is demonstrated by the 33% increase in lending to SME customers recorded in our newly published full-year results. Totalling £446.4 million for the year, our track record of backing UK SMEs is clear – and we are ready to continue doing so in the year ahead.

What do you think is important for SMEs to remember about the UK economy?

For all the challenges we and the wider global economy may face, we should remember some of the country’s underlying strengths. We are a G7 nation with a population of over 60 million, a developed infrastructure, and we are one of the world’s leading financial markets. This creates a strong basis from which the economy can recover.

We have been through tough times over recent years and while the current economic situation this is another hurdle in front of SMEs, I am confident it is one they are ready to overcome.

Sustainability has become an increasingly important issue in recent years – do you think this will change in 2023? 

Sustainability remains a key priority for SMEs and that commitment will survive the current economic challenges, but the timeframe in which a firm’s sustainability goals are achieved may change.

There is also the question of when new, green technology will become available. We know that clients in the manufacturing and construction sectors are looking to invest in new alternatives and are waiting for them to become available – and we can’t wait to start supporting them when they do.