UK manufacturers can draw on a powerful mix of government support: Made Smarter for digital adoption, innovation grants (Innovate UK) and R&D tax relief for new products and processes, capital and regional grants, and government-backed finance — including Growth Guarantee Scheme asset finance, which is well suited to funding machinery. Grants usually need match funding and combine well with finance. Match the funding to the project.
Key takeaways
- Made Smarter supports manufacturers adopting digital technology.
- Innovate UK grants and R&D tax relief reward product and process innovation.
- Asset finance (backed by the Growth Guarantee Scheme) suits equipment funding.
- Capital, regional and green grants can support investment and decarbonisation.
- Grants usually require match funding and combine well with finance.
- Match the funding route to the specific project.
Manufacturing is a priority for UK economic policy, and established manufacturers have access to one of the richest mixes of government support of any sector — from digital-adoption programmes to innovation grants, capital funding and government-backed finance. The key is matching the right funding to the right project. This guide sets out what is available to UK manufacturers, who is eligible, and how to access it.
The support available to manufacturers
Manufacturers can draw on several complementary forms of support:
| Support | Best for |
|---|---|
| Made Smarter | Adopting digital and automation technology. |
| Innovate UK grants | Developing new or improved products and processes. |
| R&D tax relief | Rewarding qualifying research and development. |
| Asset finance (GGS-backed) | Funding machinery, equipment and vehicles. |
| Green / net-zero grants | Energy efficiency and decarbonisation. |
Made Smarter: digital adoption
Made Smarter supports manufacturers to adopt digital technologies — automation, data and connected systems — funding technology projects alongside advice and skills support to boost productivity. It is delivered through regional programmes, so availability varies by area. For manufacturers looking to modernise, it is often the first place to look.
Innovation: grants and R&D tax relief
Manufacturers that develop new or improved products and processes can tap two routes. Innovate UK grants fund innovative R&D projects, usually with match funding and through competitive competitions. R&D tax relief rewards qualifying research and development through the tax system — and crucially, process and product development in manufacturing can qualify, because it is the activity, not the sector, that matters. The two interact, so plan them together.
Funding equipment and machinery
For capital investment in machinery, asset finance is often the most suitable route — and it can be backed by the Growth Guarantee Scheme. The asset typically provides security, the cost is spread over its useful life to protect cash flow, and the government guarantee improves access. Eligible manufacturing SMEs can also use the scheme for term loans, overdrafts and invoice finance. Where a capital grant is available, it can fund part of the cost alongside finance.
For a major machinery investment, combine a capital or technology grant for part of the cost with Growth Guarantee Scheme asset finance for the rest — protecting cash flow while you modernise.
Energy efficiency and net zero
Manufacturing is often energy-intensive, so green and net-zero grants are particularly relevant — supporting energy-efficiency and decarbonisation measures that also cut running costs. These can combine with finance for larger projects, and align with both cost savings and growing supply-chain expectations on sustainability.
Who is eligible and how to apply
Eligibility varies by programme and may depend on your size, sector, location and project, with much support aimed at established manufacturing SMEs. To access it:
- Check your regional Made Smarter programme for digital adoption.
- Use your local growth hub and the business support finder to find grants.
- Explore Innovate UK competitions and R&D tax relief for innovation.
- Speak to accredited lenders or a broker about asset finance and the Growth Guarantee Scheme.
- Plan match funding and combine grants with finance where it makes sense.
The bottom line
UK manufacturers have access to a deep mix of government support — Made Smarter for digital adoption, Innovate UK grants and R&D tax relief for innovation, asset finance and the Growth Guarantee Scheme for equipment, and green grants for decarbonisation. The art is matching the right funding to each project and combining grants with finance where it helps. Start with your regional Made Smarter programme and growth hub, and speak to a broker for equipment finance, to build the funding package your manufacturing business needs.
Frequently asked questions
What government funding is available for manufacturers?
UK manufacturers can access a mix of support, including Made Smarter for digital adoption, innovation grants (such as Innovate UK), capital and regional grants, R&D tax relief, and government-backed finance such as the Growth Guarantee Scheme and asset finance. The right mix depends on your project.
What is Made Smarter?
Made Smarter is a UK programme that supports manufacturers to adopt digital technologies — funding technology projects alongside advice and skills support — to boost productivity and competitiveness. It is delivered through regional programmes.
Can manufacturers get innovation grants?
Yes. Innovation funding such as Innovate UK grants can support manufacturers developing new or improved products and processes, while R&D tax relief can reward qualifying research and development. Both are relevant to manufacturers innovating in their processes or products.
How can I fund manufacturing equipment?
Options include asset finance (which can be backed by the Growth Guarantee Scheme), capital grants where available, and government-backed term loans. Asset finance is often well suited to equipment because the asset provides security and the cost is spread over its life.
Can manufacturers use the Growth Guarantee Scheme?
Yes. Eligible manufacturing SMEs can access the Growth Guarantee Scheme through accredited lenders for term loans, overdrafts, asset finance and invoice finance, with a government guarantee that improves access.
Who is eligible for manufacturing funding?
Eligibility varies by programme and may depend on your size, sector, location and project. Much support targets established manufacturing SMEs investing in technology, innovation or capacity. Check each programme’s criteria.
Do manufacturing grants require match funding?
Often, yes. Grants toward technology or capital projects typically cover part of the cost, with the business funding the rest, possibly with finance. Confirm the match requirement before applying.
Can I claim R&D tax credits as a manufacturer?
Potentially, if you undertake qualifying research and development — seeking an advance in science or technology by resolving uncertainty. Process and product development in manufacturing can qualify; the activity, not the sector, determines eligibility.
Can I combine grants and finance for a manufacturing project?
Yes, commonly. A grant might cover part of a technology or capital project, with asset finance or a government-backed loan funding the rest, subject to the rules and any subsidy limits.
How do I find manufacturing funding?
Check your regional Made Smarter programme, your local growth hub, the government’s business support finder, and sector bodies, and speak to accredited lenders or a broker about finance. These can signpost grants and finance relevant to manufacturing.
Are there grants for energy efficiency in manufacturing?
Yes, green and net-zero grants can support energy-efficiency and decarbonisation measures, which are particularly relevant to energy-intensive manufacturing. These can combine with finance for larger projects.
How long does manufacturing funding take?
Grants involve an application and assessment process and take longer than finance. Finance such as asset finance or a government-backed loan can be quicker. Plan ahead, especially for grant-funded elements.
Can a broker help manufacturers fund equipment?
Yes. A broker can arrange asset finance or a government-backed facility for equipment and help structure a package alongside any grant. This is often the practical route for funding machinery.
Ready to compare your options?
Get a free, no-obligation quote in about two minutes — soft search only, no impact on your credit score.
Get your free quoteThis article is general information, not financial advice. Eligibility, rates and terms vary by lender and your circumstances. The Loans Hub is a finance broker, not a lender.
