WASHINGTON — Today, the U.S. Small Business Administration (SBA) and the U.S. Department of War (DoW) announced a historic initiative to expand American military capacity, capability, and resilience by establishing the Smaller War Plants Commission (SWPC). Created through a new Memorandum of Understanding (MOU), the Commission will marshal federal resources to expand production capacity, eliminate burdensome regulations, accelerate innovation, and provide targeted capital and support to small business suppliers. Together, the agencies are putting the full weight of the federal government behind the small businesses that comprise more than 70% of the defense industrial base — ensuring the manufacturers, suppliers, and innovators that support our warfighters have the resources to build, grow, and keep America’s military the strongest in the world.
“Since our nation’s earliest days, American battle readiness has run through small businesses — from the local factories to the labs that forge the Arsenal of Freedom. But over the last fifty years, foolish trade deals and globalist policies shipped American jobs and manufacturing power overseas — eroding the domestic productive capacity that underpins American military might and surrendering our critical supply chains to China,” said SBA Administrator Kelly Loeffler. “Under President Donald J. Trump, the Smaller War Plants Commission will end the era of dependence by putting the full weight of the federal government behind the small businesses that power our defense industrial base. This historic partnership with the Department of War will help small firms expand, innovate, and hire to deliver world-class, Made in America capabilities to our warfighters. With the strong leadership of Secretary Pete Hegseth, the most lethal fighting force in the world will be backed by the world’s most nimble industrial base — offering our warfighters an asymmetric advantage, and our nation peace through strength.”
“The American military is already the strongest fighting force the world has ever known. President Trump has made clear that we will keep it that way — not by accepting a hollowed-out industrial base, but by building an arsenal that can outproduce, out-innovate, and outlast any adversary,” said Secretary of War Pete Hegseth. “The Smaller War Plants Commission marks a historic commitment by this Administration to put the full weight of the federal government behind the small businesses powering America’s Arsenal of Freedom. We are restoring the industrial dominance that made the United States the decisive force of the twentieth century and applying it to the threats of this century. By marshaling capital, private investment, and contracting opportunities behind the companies that build the ships, munitions, electronics, components, and capabilities our warfighters rely on, we will supercharge the industrial strength that underwrites our military advantage.”
The Smaller War Plants Commission draws its name from the Smaller War Plants Corporation, a World War II-era SBA predecessor that was formed to build the defense industrial base by helping small businesses secure financing, government contracts, and technical assistance for essential military production. Its credit and contract authorities ultimately flowed through successor agencies and the Small Defense Plants Administration before being transferred to the SBA in 1953.
The newly established Smaller War Plants Commission serves as the federal government’s central coordinating body to expand the defense industrial base by investing in small suppliers. The Commission will develop a comprehensive inventory of small business production capacity for the Civil Reserve Manufacturing Network (CRMN). Both agencies will work to identify and eliminate costly or complex regulations that impede small manufacturers and deploy support to clear operational bottlenecks.
The SBA will work to strengthen access to capital and other federal support for small businesses across the defense industrial base. Consistent with applicable law and program requirements, the agencies will prioritize defense-critical NAICS sectors and industrial focus areas for enhanced access to SBA lending, capital-investment, contracting, and technical-assistance tools. This effort will support capacity in critical areas including munitions and their components, drones and one-way attack systems, microelectronics, strategic and critical minerals, shipbuilding and repair components, sensors, batteries, castings and forgings, and textiles.
Eligible small manufacturers will also be able to access SBA’s Made in America Loan Guarantee through the International Trade Loan program, which provides a 90% federal guarantee—compared with the standard 75% guarantee in SBA’s flagship 7(a) program—to help finance equipment, facility modernization, inventory, acquisitions, and domestic capacity expansion.
Under the framework, the agencies will:
- Mobilize strategic capital and market access: Pair enhanced SBA loan guaranties — up to 90 percent where authorized — with targeted investment and contracting opportunities for priority manufacturers, helping them finance expansion, secure demand, and scale critical domestic capacity.
- Map the industrial base: Use the Civil Reserve Manufacturing Network to identify the manufacturers, production capabilities, and supply-chain gaps most vital to national defense.
- Cut red tape: Deploy joint teams to identify and remove the regulatory and operational barriers that delay production, limit growth, and keep small manufacturers from delivering for America’s warfighters.
- Hold Washington accountable: Deliver regular reports to President Trump on industrial strength, supply-chain readiness, federal investment, and progress toward rebuilding the Arsenal of Freedom.
This joint effort ensures taxpayer dollars directly bolster the domestic defense supply base, driving long-term resilience and securing American military readiness for generations to come.
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About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of entrepreneurship. As the leading voice for small businesses within the federal government, the SBA empowers job creators with the resources and support they need to start, grow, and expand their businesses or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.