The UK’s small manufacturers are being urged to scale – and grants could help make it happen

Joe Phelan, money.co.uk business loans expert says:

“SMEs are the backbone of the UK manufacturing sector, with around 250,000 businesses driving economic growth. Together, they contribute approximately £186 billion to the UK economy.

However, despite this immense contribution, many SMEs are struggling to scale up due to challenges around finance, skills, and limited knowledge of the resources available to them.

So what can be done?

The hidden barriers stalling SME growth

A recent report by Make UK and Civitas highlights a crucial issue: many SMEs simply aren’t aware of the support designed to help them grow.

For instance:

• 44% of manufacturers are unaware of Be the Business (a government-backed initiative offering business mentoring and leadership training).

• 37% have no knowledge of the British Business Bank (which provides finance and investment to SMEs).

• 33% are unfamiliar with Made Smarter (a scheme helping businesses adopt digital technology).

• 31% don’t know about HVMC (the High Value Manufacturing Catapult, which supports innovation in manufacturing).

Even Horizon Europe, a €95 billion EU programme for research and innovation, is unknown to more than two-thirds of UK manufacturers.

The report estimates that closing this knowledge gap could unlock an additional £9.2 billion in annual investment for the UK’s manufacturing sector.

Which leads to an obvious question: what solutions exist — or could be introduced — to help SMEs bridge this gap and scale effectively?

How can SMEs start scaling today?

If you’re an SME looking to scale, the first step is knowing what’s available. Here are some key initiatives and upcoming proposals that could help:

1. Take advantage of existing schemes

SMEs can access a range of support, from grants and finance schemes through organisations like Be the Business and the British Business Bank to loans and investment options tailored for small businesses.

Assistance is also available for digital transformation, technology adoption, staff training through levy funds, and guidance on international trade and market entry.

You may be eligible for more than you expect.

2. Stay ahead with potential new grants

Beyond existing support, SMEs should keep an eye on future growth-focused initiatives proposed in the Make UK/Civitas report.

These include a super-growth allowance offering enhanced tax relief on equipment and production investments, an enhanced Growth Enterprise Investment Scheme (GEIS) with fewer restrictions for fast-growing businesses, and AI-powered funding tools that could match SMEs with the right grants and finance at the right time.

While these proposals are not yet in place, staying informed could help businesses take advantage of new opportunities as they emerge.

3. Make use of expert guidance

Keeping up with funding opportunities can be challenging, but SMEs don’t have to do it alone. Seeking advice from organisations like Be the Business, Made Smarter, and local Growth Hubs can provide tailored support on grants, investment options, and scaling strategies.

Industry networks, trade associations, and professional advisors can also help businesses navigate funding complexities and identify the best opportunities for growth.

The UK needs SME manufacturers to grow

The UK’s manufacturing sector is a powerhouse, contributing nearly £200 billion to the economy annually. With SME manufacturers making up 99% of the sector, their success is crucial to the country’s economic future.

Encouragingly, 64% of SME manufacturers plan to expand over the next decade, with the potential to add £83 billion to the UK economy. However, achieving this growth isn’t guaranteed – it’ll require access to the right finance, skills, and market opportunities.

With the right support, the UK could transform its manufacturing landscape, driving innovation, job creation, and global competitiveness.

The opportunity is there. The challenge is ensuring SMEs can seize it.”