Department of Defense Launches Direct Loan Product

On Monday, the Office of Strategic Capital (OSC) launched the Department of Defense’s first direct loan product to provide equipment finance to U.S. businesses that need flexible financing to unlock growth opportunities, expand manufacturing, and modernize operations. 

With this initial credit offering, OSC is implementing its congressionally authorized lending authority to enable transformational investment in critical technologies and supply chains.

It was the National Defense Authorization Act, HR2670, which included the OSC, and became Public Law No: 118-31. (All Actions) 12/22/23.

Congress appropriated funds for OSC in March 2024 to loan up to $984 million to eligible companies in this NOFA. The NOFA will finance companies' equipment needs to help them scale production.  There are 31 covered technology categories*, identified as promising critical technologies and assets in the National Defense Authorization Act for Fiscal Year 2024 (FY24 NDAA).  

"The OSC is not unique in its mission, Ryder said. Other innovation organizations within the department, such as the Defense Advanced Research Projects Agency, also known as DARPA, and the Defense Innovation Unit are also working to support the development of critical technologies."  Secretary of Defense Establishes Office of Strategic Capital > U.S. Department of Defense > Release

Established by Secretary of Defense Lloyd J. Austin III in December 2022, the Office of
Strategic Capital has a mission to attract and scale private capital for national and economic
security priorities. Follow the work of the Office of Strategic Capital at https://www.osc.mil.

The Notice of Funding Availability (NOFA) in the Federal Register lays out eligibility criteria,
describes the application process for OSC loans, and ensures that companies are fully prepared to apply for OSC equipment finance loans.

OSC will officially open the application period in early 2025. Applicants should review the
NOFA and related resources on the OSC website at https://www.osc.mil prior to beginning the application process.
For additional information on this first direct loan product, please visit the following resources:

• Notice of Funding Availability on the Federal Register
• Defense.gov press release on NOFA launch
• OSC website, with additional information on OSC debt financing, eligibility, and the application process
• OSC Credit Program Flyer

Please reach out to OSC.Loan.Application@osc.mil with specific questions regarding the NOFA
and application process.

*Per 10 U.S.C. 149(e), the Covered Technology Categories are:

• (A) Advanced bulk materials;
• (B) Advanced manufacturing;
• (C) Autonomous mobile robots;
• (D) Battery storage;
• (E) Biochemicals;
• (F) Bioenergetics;
• (G) Biomass;
• (H) Cybersecurity;
• (I) Data fabric;
• (J) Decision science;
• (K) Edge computing;
• (L) External communication;
• (M) Hydrogen generation and storage;
• (N) Mesh networks;
• (O) Microelectronics assembly, testing, or packaging;
• (P) Microelectronics design and development;
• (Q) Microelectronics fabrication;
• (R) Microelectronics manufacturing equipment;
• (S) Microelectronics materials;
• (T) Nanomaterials and metamaterials;
• (U) Open RAN;
• (V) Optical communications;
• (W) Sensor hardware;
• (X) Solar;
• (Y) Space launch;
• (Z) Spacecraft;
• (AA) Space-enabled services and equipment;
• (BB) Synthetic biology;
• (CC) Quantum computing;
• (DD) Quantum security; and
• (EE) Quantum sensing.

Edit:8:11am pst - added caption to image

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