Defence Innovation Loans

Defence Innovation Loans

Invests through United Kingdom Defence Innovation Loans in mature defence innovations to support late-stage commercialization.

Defence Innovation Loans is a repayable loan programme co-delivered by the Defence and Security Accelerator (DASA) — now integrated into UK Defence Innovation (UKDI) as of February 2026 — and Innovate UK Loans Ltd. The programme provides below-market-rate financing to UK SMEs holding mature, later-stage defence innovations who need capital to reach full commercialisation. Loan amounts range from £100,000 to £1 million per applicant.

To qualify, applicants must be UK-registered SMEs with innovations assessed at Technology Readiness Level 6 or above, demonstrating a credible intent to commercialise the solution within the loan term. The interest rate is 7.4% per annum during the repayment period and 3.7% during the project period. The project period extends up to 5 years (interest-only, no capital repayments), the repayment period up to 5 years, giving a maximum 7-year overall term. Up to 100% of eligible project costs can be covered.

As of May 2026, the programme is paused while UKDI develops a new improved service; FY26/27 Cycle 1 closed on 14 April 2026 and no new cycle has been announced. The most recent cycles ran approximately every 4–6 weeks during FY25/26. Applications require parallel submissions to UKDI's Online Submission Service and to the Innovate UK submission portal; both parts are assessed at a combined Decision Conference. Companies interested during the pause are directed to contact their local UKDI Innovation Partner.