"We've been talking to Birmingham for much of the summer about a long term loan. But for the moment we've got him for a month," Parkinson told BBC Radio Essex.
"Birmingham have been very fair to us. At first they didn't want to let him go as they wanted to sort out their signings first.
But then we got a call last Friday saying he could come. We'll see how Craig settles in and take it from there."
Fagan spent a similar spell at Bristol City last season where in six appearances he scored one goal for the Robins, ironically in the home game with Colchester!
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