The Defense and Security Accelerator (DASA), in collaboration with Innovate UK, is offering Defence Innovation Loans to assist small and medium-sized enterprises (SMEs) in bringing their defence-related innovations to market.
These loans range from £100,000 ($133,701) to £1m and carry a 7.4% annual interest rate, which is lower than the market rate.
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The funds can cover up to the full cost of eligible projects that aim to commercialise solutions addressing defence challenges.
The loans are exclusively available to UK-registered SMEs; individuals, academic entities, research organisations, and large corporations do not qualify, noted DASA.
Additionally, only individual businesses may apply—collaborative applications involving multiple organisations will not be considered for funding, although subcontracting is permissible under certain conditions.
DASA will undertake a comprehensive evaluation of applications submitted for Defence Innovation Loans, in line with its standard competition procedures. This assessment will be conducted by defence stakeholders and will scrutinise the proposed solution’s desirability, feasibility, and viability.
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By GlobalDataThe appraisal process will use specific criteria tailored to Defence Innovation Loans to ensure that the innovations not only meet defence needs but are also practical and financially sustainable.
DASA also said that prospective innovations should be relatively advanced—Technology Readiness Level (TRL) 6 or higher—to ensure that they can be commercialised within the loan’s term. Applicants must also demonstrate a clear defence need for their innovative solution.
Introduced in June 2021 to support smaller entities in developing their business alongside their innovations, the programme has since facilitated eight companies in securing a total of £6m.
These companies, including VRAI, QUICKBLOCK, Silicon Microgravity have subsequently attracted £16.9m in private investments and generated 54 new jobs within the UK’s defence innovation sector.
Silicon Microgravity CEO Francis Neill said: “DASA have been absolutely fundamental in helping to get Silicon Microgravity to the stage where we will shortly be commercialising what is becoming recognised as world-leading technology in gravity sensing and inertial navigation.”
In March 2025, UK Prime Minister Keir Starmer and Secretary of State for Defence John Healey inaugurated a new hub for SMEs and proposed setting spending targets to support SMEs by June 2025.
