Overview of Grants Available for Manufacturing Equipment
UK manufacturers can access several government funding streams in 2026: Made Smarter (50% co-funding for automation and robotics, available in several English regions); Innovate UK Smart Grants (R&D and innovation project funding); and Local Growth Hub grants, which vary by LEP area and are often available for capital equipment purchases up to certain thresholds.
Grants are non-repayable but competitive and time-limited. Amounts typically range from £5,000 for micro-grants to £500,000+ for large Innovate UK awards. Most require businesses to match fund a portion of the project cost.
How to Combine Grants with Asset Finance
The most effective approach is to treat grant funding as a deposit reduction. If you are purchasing a £100,000 robot arm and receive a £20,000 Made Smarter grant, you finance the remaining £80,000 under Hire Purchase. This means:
- Lower monthly payments than financing the full £100k
- Full ownership at the end of the HP term
- Eligibility for full expensing (100% first-year allowance) on the HP financed asset
- Grant receipt does not usually affect HP lender decisions
Timing matters: most lenders require the grant confirmation letter before drawdown. Doulton Bridging Finance structures the facility so grant receipt aligns with asset delivery.
£100k Robot Arm - Grant + HP Combined
Asset cost: £100,000 collaborative robot arm Made Smarter grant: £20,000 (50% of eligible costs) HP finance: £80,000 over 60 months at 7.2% Monthly payment: approx. £1,580/month Tax position: Full expensing on £80,000 HP asset in Year 1 Effective net cost after tax relief: approx. £54,400 (assuming 25% CT rate) DBF arranged: HP with Shawbrook, grant application support via regional Made Smarter Hub