£100m fund proposed to strengthen UK aerospace supply chain

The British Business Bank has submitted a firm proposal to the UK Government for a £100m aerospace supply chain fund designed to help British suppliers invest, scale up and compete for future aircraft programmes.

Unveiled during the Farnborough International Airshow 2026, the proposed debt fund would combine public and private investment to strengthen manufacturing capability and resilience across the UK aerospace sector.

The British Business Bank has been working with the Government, ADS, Airbus, GKN Aerospace and Rolls-Royce to develop and support the proposal.

If approved, the fund would provide structured capital to high-potential UK suppliers seeking to increase output, develop their capabilities and secure a larger share of future domestic and international aerospace work.

Closing the scale-up finance gap

Access to finance remains a persistent challenge for smaller aerospace companies. Suppliers frequently need to make substantial investments in equipment, facilities, skills and certification long before new programmes begin generating revenue.

The long development cycles associated with aerospace can also make conventional lenders cautious, leaving otherwise competitive businesses without the capital needed to expand.

The proposed fund is intended to address this gap by offering debt finance structured around the particular requirements of aerospace manufacturing.

“The continued success of the UK’s aerospace sector depends on the capacity, resilience and competitiveness of the supply chain that sits behind it,” said Louis Taylor, CEO of the British Business Bank.

“This fund will help strengthen the aerospace supply chain by giving high-potential UK suppliers the capital they need to scale, invest and compete for future aircraft work.”

Taylor added that combining public and private investment could support high-value manufacturing jobs and help more UK businesses secure positions within global aerospace supply chains.

Building capacity for future aircraft programmes

The proposal supports the Government’s Industrial Strategy and the ambitions of the Aerospace Growth Partnership, which brings government and industry together to improve the competitiveness of the UK aerospace sector.

It would complement existing support for research and development through the Aerospace Technology Institute Programme. The Government committed £975m over five years in 2024 to extend the programme and support the development of more efficient and lower-emission aircraft technologies.

While ATI funding is focused principally on technological innovation, the proposed supply chain fund would address the capital required to turn those advances into manufacturing capacity.

That distinction will be important as suppliers prepare for higher production rates and compete for work on future aircraft programmes. Investment in innovation alone will not secure new business unless companies can also demonstrate the facilities, workforce and financial resilience required to deliver at scale.

The Government and British Business Bank will now continue working with industry to determine the proposed fund’s structure, investment criteria and delivery route. Further details are expected once that work has progressed.

For ADS members, the proposal represents a potentially important new source of growth capital, but the fund has not yet received final government approval. Its eventual impact will depend on the terms offered, the eligibility criteria and how quickly finance can reach suppliers ready to invest.