How has HSBC's lending policies impacted European defense companies?

HSBC continues to enforce strict exclusions on arms producers and dual-use startups, prohibiting the "financing and provision of advisory services" to clients manufacturing conventional weapons.

Why are some European defense startups now looking to the US market for financing?

Financing barriers from European banks, who are deterred by geopolitical sensitivities and reputational concerns, have forced some affected companies like Portugal-based drone maker Tekever to seek opportunities in the more welcoming US market.

Home / Business and Economy / Europe's Defense Startups Face Uphill Battle to Access Credit Amid Banking Curbs

Europe's Defense Startups Face Uphill Battle to Access Credit Amid Banking Curbs

Q: What is the Nato Innovation Fund's role in the European defense startup financing landscape?

The Nato Innovation Fund conducted a study that found almost 10% of the 75 largest European banks by assets and market value still have policies restricting financing for conventional weapons and startups involved in developing dual-use technologies.

10 Nov

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Summary

10% of top European banks restrict financing for defense and dual-use startups
HSBC and Revolut maintain strict exclusions on arms producers and dual-use tech
Financing barriers force some companies to seek opportunities in the US market

Europe's Defense Startups Face Uphill Battle to Access Credit Amid Banking Curbs

As of November 10, 2025, Europe's defense technology startups are struggling to access credit from the region's major banks, even as many lenders have relaxed restrictions on lending to the sector. A study by the Nato Innovation Fund has found that almost 10% of the 75 largest European banks by assets and market value still have policies restricting financing for conventional weapons and startups involved in developing technologies with both military and civilian applications.

Some prominent exceptions remain, with HSBC and banking startup Revolut continuing to enforce strict exclusions on arms producers and dual-use technologies. This is despite a broader trend of lenders, including BNP Paribas and Danske Bank, becoming more vocal in their support for the defense industry.