Defence Innovation Loans for solutions to defence problems

Innovate UK Loans Ltd and the Defence and Security Accelerator (DASA) are working together to offer Defence Innovation Loans, providing an opportunity for small and medium-sized enterprises (SMEs) with solutions to defence problems.

SMEs will be able to apply for a Defence Innovation Loan of between £100,000 and £1 million with a below-market interest rate of 7.4 per cent per annum. 

First introduced in 2021, Defence Innovation Loans facilitate the growth of smaller organisations by funding defence innovation. Since then, eight companies have successfully secured a total of £6 million.

Almost all of these companies have gone on to secure further private investment worth a total of £16.9 million, creating 54 new jobs in defence innovation across the UK.

An example of this is VRAI, who secured a Defence Innovation Loan to help commercialise their data capture and analysis technology. Tested by the RAF, this technology enabled trainers to access and develop individual training programmes for trainee pilots.

The 2025-26 Defence Innovation Loan cycle one is open until 13th May, when cycle two will open.