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British Business Bank agrees over £100m ENABLE Guarantee transaction with LE Capital and Paragon Bank

Press release 04 February 2025

  • The senior facility, provided by Paragon Bank, will support a portfolio of over £100m of financing in the automotive sector, specifically to used car dealerships to fund their stock
  • The facility will enable LE Capital to double the number of dealerships it serves across the UK and offer more competitive pricing
  • This is the first time the British Business Bank has provided a pricing incentive on the guarantee to encourage the funding of electric and hybrid vehicles into the portfolio.

The British Business Bank has agreed to use its ENABLE Guarantee programme to support a senior facility of up to £100m provided by Paragon Bank to LE Capital. For the first time, the British Business Bank has provided a pricing incentive on the guarantee to encourage the funding of electric and hybrid vehicles into the portfolio.

The guarantee has allowed Paragon Bank to continue its support to LE Capital by significantly increasing the quantum of financing. The facility will support a portfolio of over £100m of financing to independent, smaller business, used car dealerships to help fund their stock.

The size of the facility will enable LE Capital to double the number of dealerships it serves across the UK, support larger facilities to independent and franchise dealers and offer more competitive pricing to both existing and new customers.

This is the first time the guarantee has been used in a specialty finance structure. It is also the first ENABLE Guarantee transaction that the British Business Bank has supported Paragon with, which significantly increases the amount of funding Paragon can provide to smaller business lenders.

The ENABLE Guarantee programme is designed to encourage additional lending to smaller businesses. Participating institutions are incentivised by a government-backed guarantee supporting a defined portfolio of debt finance in return for a fee.

The ENABLE Guarantee programme is open to all UK banks, UK branches of foreign banks, asset and asset-based finance providers as well as certain other categories of lenders which lend, or intend to lend, to viable small and medium-sized enterprises operating in the UK. 

LE Capital is one of the UK's leading stock funders, with a comprehensive network of partnerships with online and physical auction houses to support dealer wholesale purchasing. Since 2017, they have supported customers in over 100,000 transactions and funded over £750m in stock.

Founded in 1985, Paragon Bank is a UK-based specialist lender and savings bank offering a range of products and services. They have provided over £14.7bn of loans to customers and served 1.5m customer accounts.

Michael Strevens, Head of Structured FI Solutions, 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.

George Stancliffe, CEO of LE Capital said:

Independent dealerships in the UK often rely on stock funding to grow revenues and expand operations. This new facility, supported by the British Business Bank, will allow us to double our funding capacity in the UK, offering larger facilities to independent and franchised dealerships, while providing more competitive pricing to our existing and future customers. We are excited to continue our journey with Paragon Bank and the support of the British Business Bank's ENABLE Guarantee programme marks an important step into a new phase of growth.

Jamie Pickering, Paragon Bank Structured Lending Managing Director, said:

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.

Further Information

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Notes to editors

About the British Business Bank

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank’s core programmes support over £17.4bn 1  of finance to almost 64,000 2 smaller businesses.

As well as increasing the supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of finance options available to smaller businesses. The British Business Bank Finance Hub  provides independent and impartial information to businesses about finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.

The British Business Bank is also responsible for administering the government’s three Coronavirus loan schemes and its Future Fund, together responsible for delivering £80.4bn in finance to 1.67m businesses. These schemes are now closed to new applications.

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. Wholly owned by HM government, the Bank and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at British Business Bank

The transaction described above does not constitute or imply any endorsement, warranty or recommendation by the UK Government, the British Business Bank plc, its subsidiaries or any other party of LE Capital UK or Paragon Bank or their products or services.

About LE Capital

LE Capital is a tech-enabled finance provider offering hassle-free stock funding to independent car dealerships across the UK. Since 2017, it has provided over £750m of funding into the automotive market and financed over 40,000 vehicles. Its unique stocking product offers same day pay outs and provides its customers with access to purchase stock from most of the major auction houses in the UK.

About Paragon Bank

Founded in 1985, Paragon Bank is a UK-based specialist lender and savings bank offering a range of products and services to consumers, SMEs and landlords. It has a loan book of over £15.4 billion and serves 1.5 million customer accounts.

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