Paragon launches light industrial development finance product

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Paragon light industrial

Paragon Development Finance has launched a new light industrial funding product aimed at experienced developers delivering units of 5,000 sq ft or less.

The facility offers funding of up to £10 million over terms of up to 24 months and is designed to support SME developers responding to rising demand for modern, flexible industrial space across the UK.

Demand for small industrial units remains strong. Occupational demand reached 37.4 million sq ft in 2025, the highest level since 2022 and 12% above the pre-pandemic five-year average.

Occupier appetite is particularly high among SMEs, trades firms, e-commerce retailers and hybrid businesses seeking functional, flexible and well-located space.

ONS data also points to continued demand in the sector. Quarterly business demography figures released in January show that business creation activity increased towards the end of 2025, with more than 71,000 new businesses launched between October and December, a 10% rise year-on-year.

This increase in active enterprises highlights improving conditions for SMEs and reinforces the need for accessible industrial space as more businesses start up and scale.

Neal Moy, Managing Director of Development Finance at Paragon Bank, said:

“Our new light industrial product reinforces our commitment to supporting ambitious SME developers and responding to structural shifts reshaping the UK’s industrial landscape.

Across the country, there is an undersupply of small, flexible and well-located industrial units, with SMEs increasingly looking to grow, improve their logistics capability or bring production closer to home.

By providing specialist finance of up to £10 million over 24 months, we are enabling developers to deliver the high-quality units that modern businesses need to operate, grow and scale.”

He added:

“This new product builds on a series of strategic moves we’ve made over the last year, including a growing footprint in later living, care, PBSA and Build to Rent, as well as raising our loan limit from £35 million to £60 million.

Light industrial finance is the next step in ensuring our developer partners have the support, clarity and long-term relationship focus they expect from Paragon.”

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