Pentagon, SBA sign agreement to advance support for small manufacturers in the defense industrial base

The agreement aims to increase access to private capital and financing for small manufacturers to help them increase production. Kelly Loeffler, administrator of the Small Business Association, speaks in August 2026 after the SBA and Defense Department established the Smaller War Plants Commission to identify supply chain gaps in the defense industry and coordinate support for small and mid-size businesses. (Small Business Administration) WASHINGTON — The Defense Department signed an agreement Monday with the Small Business Administration that aims to increase access to private capital and financing for small manufacturers, which represent about 70% of the defense industrial base. The memorandum of agreement sets up a mechanism to help small- and mid-size contractors grow their businesses, increase production and strengthen domestic supply chains, the SBA said.

The MOA will assist family-owned manufacturers, regional factories and technology startups, among other private businesses, with greater access to private capital. The government has prioritized investments for the makers of munitions and defense systems, shipbuilding components, microelectronics, autonomous systems, critical minerals and logistics, the SBA said in a news release. The capital must be used to expand domestic production capacity. This includes building or modernizing factories, purchasing heavy industrial equipment or raw materials to fulfill defense contracts. The MOA also seeks to bridge the “valley of death” that tech startups without outside financing may