Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTSzu Ping ChanSat, June 20, 2026 at 12:30 PM GMT+2 8 min readIllustration: Whitehall street sign being pulled apartJames Thomas is creating Britain’s answer to Starlink.The entrepreneur was once stranded at sea with no mobile signal, an experience that led him to develop a floating 5G network for the defence industry to help soldiers and others in hostile environments stay connected.Demand for his product is growing, but big orders must be matched by ample cash flow to keep the lights on.While Jet Connectivity, Thomas’s company, may benefit from fast-paying customers and some loan support from the government-backed Innovate UK, he says access to more capital is now the difference between growth and stagnation.Thomas’s story isn’t unusual. While much of the banking trouble faced by defence companies has focused on ESG rules (environmental, social and governance), a bigger barrier is regulation.That’s because current Basel banking rules often make defence firms with long project cycles, complex supply chains, and a reliance on a small number of customers look riskier to lenders.As a result, banks are required to hold more capital against these loans, making them less attractive than lending to more stable borrowers. This can mean reduced lending or higher borrowing costs.Enter the Defence, Security and Resilience Bank (DSRB), a £100bn “bomb bank” championed by Mark Carney, the Canadian prime minister.Its backers argue the institution could help entrepreneurs such as Thomas fund their projects more easily.However, efforts within Whitehall to join the bank have repeatedly been stymied by the Treasury.The tussle between the Ministry of Defence and Downing Street has epitomised the growing acrimony within government as ministers struggle to finance a long-term defence investment plan.The DSRB works by bringing in large investors, working alongside national institutions such as the British Business Bank to provide sovereign-backed credit guarantees, meaning governments pledge to underwrite any loans.The hope is that these guarantees will make it less risky to lend to defence companies and significantly increase funding.DSRB insiders claim that instead of the current bank-capital model, where £1 of capital supports around £12 of lending, it could more than double that to around £1 supporting £30 of lending, potentially unlocking billions of pounds in extra finance for the sector.MPs from across the political spectrum are becoming increasingly interested in the idea.Alex Baker, who sits on the defence select committee, argues that billions of pounds in extra defence spending will offer little benefit to British firms unless they can secure the finance they need to scale up.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info