The Department of Defense (DoD) has announced a significant funding opportunity for U.S. companies involved in developing critical technologies. Through the Office of Strategic Capital (OSC), the DoD aims to issue up to $984 million in direct loans to support the production and scaling of technologies deemed essential for national security and economic competitiveness.

Overview of the DoD's New Loan Program
The OSC's inaugural Notice of Funding Availability (NOFA) outlines the eligibility criteria and application process for private companies interested in securing a share of this funding. Loans will range from $10 million to $150 million, with total funding available through September 26, 2026.
This initiative aligns with the National Defense Authorization Act (NDAA), which specifies the OSC's role in facilitating investments in 31 critical technology categories identified for their potential impact on national security. These categories include autonomous mobile robots, cybersecurity, microelectronics, mesh networks, and quantum computing, among others.
Background of the DoD Loan Program
The Office of Strategic Capital was established in December 2022 and officially authorized by Congress in December 2023 through the NDAA. This program marks the first instance of the OSC issuing loans since its inception, representing a strategic effort to bolster U.S. technological innovation and resilience in the face of global competition.
Key Industries of Interest for the DoD
The OSC seeks to invest in various industries critical to U.S. national security, including but not limited to:
- Autonomous systems
- Cybersecurity
- Data analytics and fabric
- Advanced microelectronics
- Quantum technology
- Supply chain technologies
- Energy storage
- Biotechnology
Check out the full list of industries of interest for the loan program.
Funding Details
The $984 million available under this NOFA comes from the Further Consolidated Appropriations Act, 2024, and is aimed at funding projects focused on equipment modernization, refurbishment, and expansion within these critical technology sectors. The OSC aims to attract private capital alongside public funds, promoting a collaborative approach to financing innovative projects.
Loan Terms and Conditions
The OSC will provide direct loans with variable interest rates determined by market factors and the credit risk of each transaction. Key terms include:
Loan Amounts: Between $10 million and $150 million.
Interest Rates: Based on prevailing market conditions and credit risk.
Maturity Dates: Tailored to specific projects.
Prepayment: Loans can be prepaid without penalty.
Loan Eligibility Criteria
Eligible applicants include individuals, corporations, partnerships, governmental entities, and tribal governments. Notably, applicants must demonstrate a minimum of three years of operating history, though exceptions may be made for projects that strongly align with OSC objectives.
Enhancing Innovation through Strategic Investments
By launching this loan program, the DoD aims to further enhance innovation in the U.S. industrial base, similar to the over $1 billion the DoD allocates annually for Small Business Innovation Research (SBIR) funding. This initiative complements existing programs such as the Air Force's AFWERX open topic funding as well Air Force and private sector investment programs such as TACFI and STRATFI, the Defense Innovation Unit's (DIU) expedited funding efforts, and the Army's SBIR Catalyst program, all of which seek to drive technological advancements and maintain a competitive edge for the United States.
Next Steps
Interested parties are encouraged to visit the official announcement on the Federal Register website to learn more about the application process and eligibility criteria. The first part of the loan application is due by January 2, 2025, with select entities invited to submit a second application.
For more detailed guidance on navigating this funding opportunity, feel free to set up a call with us at Akela Consulting.
About Akela Consulting
At Akela Consulting, we specialize in helping innovative small American tech companies secure SBIR and other R&D funding from U.S. Federal government agencies. Our dedicated team provides trusted advisory services to navigate the complexities of federal funding opportunities, ensuring that your organization can effectively compete and thrive in today’s dynamic technological landscape.
