As Make UK Defence and Lloyds launch a new practical guide to help SME manufacturers in defence supply chains, Dave Atkinson, UK Head of Manufacturing, SME & Mid‑Corporates at Lloyds, reflects on a new era for the industry.
In June, the government published its long-awaited Defence Investment Plan, which builds on 2025’s Strategic Defence Review, setting out a 10-year vision for defence spending with small and medium-sized businesses at the centre.
You don’t need existing defence credentials to be considered. Indeed, new entrants are valued for bringing fresh thinking to longstanding challenges. But supplying the defence sector presents particular challenges, from extra accreditations to elevated security requirements, which can be tricky to navigate.
In response, Lloyds has joined forces with Make UK Defence – the manufacturers’ organisation that champions the UK’s defence supply chain – to create A Practical Guide to Working in Defence, which includes real life insights from businesses that have successfully established themselves in the defence supply chain.
It’s a great starting point, but there are also many well-established organisations that are working to create practical routes for capable manufacturers to access this expanding market. Joining relevant trade bodies and attending industry events can help build industry knowledge and create valuable connections.
Financial support
And it’s important to approach this opportunity with your eyes wide open. You don’t need a perfect, finished plan; what matters is showing you understand the strategy you’re trying to execute and the implications it carries. The right finance partner should then be able to help structure the most appropriate support around your specific needs.
That might mean working capital facilities to help manage increased cash flow requirements. Products like Asset Finance, Hire Purchase and our Capital Import Finance proposition can also work when investing in new machinery before contracts are fully executed.
It’s also worth exploring the British Business Bank’s Growth Guarantee Scheme and UK Export Finance (UKEF), which can provide additional support for businesses pursuing defence opportunities overseas.
As my colleague Ralph Edwards, Head of Trade Commercialisation, Business & Commercial Banking at Lloyds, notes, turning export opportunity into sustainable growth depends on having the right financial support in place. And Lloyds is focused on supporting UK businesses with connected trade finance, international payments and FX risk management to help manage risk, protect working capital and trade internationally with greater confidence.
The next step
A fundamental question for any manufacturing business considering defence work must be whether this opportunity aligns with your capabilities and strategic direction.
What’s required is thorough preparation, appropriate resourcing, realistic timescales and commitment to building the relationships that underpin success in this sector. That can translate into real opportunities for SME manufacturers.
