• The British Business Bank is teaming up with Airbus, GKN Aerospace, Rolls-Royce, and ADS to develop a proposed £100 million debt fund for UK aerospace suppliers.
• Key details such as the fund’s structure, investment criteria, and delivery method are still being worked out.
• This move follows the Bank’s 2025 pledge to create specialist debt funds for supply chains as part of the UK’s Industrial Strategy.

The British Business Bank is planning a £100 million fund to support UK aerospace suppliers, working with the government and four major industry partners. At this stage, it is still just a proposal, not an active fund.

Today, the government-owned development bank confirmed it is working with Airbus, GKN Aerospace, Rolls-Royce, and the trade group ADS on a proposed debt fund for UK aerospace suppliers. The aim is to provide “high potential UK suppliers the capital they need to scale, invest and compete” as they prepare for future aircraft programs.

The announcement leaves out key details such as the fund’s structure, investment criteria, delivery method, and closing date. The Bank says it is still working with the aerospace industry to finalise these points and will share more information when the plan is ready. The £100 million is a target, not money that has already been allocated.

Why choose debt over equity, and why it matters

This is a proposed debt fund, not an equity fund, which affects who can apply.

Debt financing is best for manufacturers with steady revenue and contracts who need money for equipment, working capital, or growth without giving up ownership. It usually does not suit early-stage or pre-revenue companies, who often need equity or grants.

The fund appears to target established suppliers already in the supply chain, not new entrants.

Louis Taylor, chief executive of the British Business Bank, says the sector’s continued success “depends on the capacity, resilience and competitiveness of the supply chain that sits behind it,” and that the fund would help suppliers “scale, invest and compete for future aircraft work.”

He added that bringing together public and private investment would “support high-value manufacturing jobs and help more UK businesses play a larger role in global aerospace supply chains.”

Part of a broader trend

The Bank is not acting alone. In June 2025, the British Business Bank pledged £6.6 billion to the UK’s Industrial Strategy, including plans for new specialist debt funds to attract private investment into key sector supply chains. Advanced manufacturing and defence, both closely linked to aerospace, are among the eight sectors selected.

The proposed aerospace fund is one of the first concrete steps toward this promise, though it remains a proposal.

This plan is part of the Bank’s broader strategy to support sectors that require significant capital and long-term investment but often lack enough private venture capital. Tech Funding News has already covered the Bank’s £50 million commitment to Longwall Ventures’ deep tech fund, which includes aerospace and defence, and its £600 million effort to bring pension capital into UK scale-ups. Aerospace supply chains need long qualification processes and substantial capital, making them important but often overlooked by private investors.

The proposal is also part of a broader European effort to reduce reliance on a small number of or foreign suppliers in key manufacturing areas. This issue has become more important in Europe’s aerospace and defence sectors.

TFN will continue to monitor for more details, including the size of each investment, who will manage the fund, who can apply across the supply chain, and how long it will take to move from proposal to launch.