The facility will support a portfolio of over £100m of financing for the automotive sector, specifically independent, smaller business, used car dealerships to help fund their stock.
It is the first time the bank has provided a pricing incentive on the guarantee to encourage the funding of electric and hybrid vehicles into the portfolio.
The guarantee is aimed at allowing Paragon to continue supporting LE Capital by increasing the quantum of financing.
The size of the facility is designed to enable LE Capital to double the number of dealerships it serves across the UK, as well as support larger facilities to independent and franchise dealers and offer more competitive pricing.
The deal marks the first time the ENABLE guarantee has been used in a specialty finance structure.
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Michael Strevens, head of structured FI solutions at British Business Bank, said: “This has been a transaction of firsts on multiple fronts. This is the first time we have used pricing to promote electric and hybrid vehicles, the first time we have used the guarantee for specialty finance, and the first time we have worked with LE Capital.
“We look forward to seeing this finance help independent car dealerships expand and grow, whilst also encouraging their transition to net zero.
“We are also delighted that our guarantees are now proven to support specialty finance providers, such as Paragon, provide significantly larger funding lines.
“These larger funding lines will provide a consistent and stable foundation to accelerate their smaller business lending clients’ growth."
Jamie Pickering, structured lending manging director at Paragon Bank, added: “This is Paragon Bank’s largest structured lending facility to date and showcases our desire to support SME lenders to expand their capacity.
“The ENABLE programme gave us the ability to enhance our support for LE Capital, helping the company to double its funding capability into the used car dealership market and to also accelerate the adoption of electric and hybrid vehicles in the used market.”
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