- The SWPC will feature enhanced loan guaranties of up to 90 percent
- The program is the latest SBA effort to shore up the small business DIB
- Hear more about DIB small business programs at the 2026 FedCiv Summit on Oct. 29!
The U.S. Small Business Administration is tapping a World War II defense industrial base effort with its Smaller War Plants Commission program to make the nation an arsenal of democracy once again.
SBA in August announced the SWPC, an innovative DIB program that will pair enhanced loan guaranties, up to 90 percent, with targeted investment and contracting opportunities for priority manufacturers. This is compared to the standard 75 percent guaranty in SBA’s 7(a) program to help finance equipment, facility modernization, inventory, acquisitions and domestic capacity expansion.
The SWPC draws its name from the Smaller War Plants Corporation, a SBA predecessor created in the early 1940s to build the DIB by helping small businesses secure financing, government contracts and technical assistants for essential military production. Its contract and credit authorities flowed through successor agencies and the Small Defense Plants Administration before being transferred to SBA in 1953.
The effort also has the support of a pair of Wash100 Award winners.
“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,” said Kelly Loeffler, SBA administrator and 2026 Wash100 awardee.
“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,” said Pete Hegseth, Secretary of War and two-time Wash100 Award winner.
So how does the SWPC’s innovative investment strategies have the potential to transform small defense businesses and rejuvenate the DIB? Let’s dive into four key insights for GovCons.
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What are Key Insights for GovCons About the Smaller War Plants Commission?
1. Investment in Technologies Essential to 21st Century Combat
The SWPC is focused on targeted investment for the technologies critical to U.S. combat success in the 21st century. These include:
- Munitions and associated components
- Unmanned aircraft systems and one-way attack systems
- Microelectronics
- Critical and strategic minerals
- Shipbuilding and repair components
- Sensors, batteries, castings and forgings
- Textiles
The SWPC is the federal government’s latest program to spur innovation of UAS as the technology has become essential tools on the modern battlefield, including in Ukraine. The Army has created its Drone Dominance program, an acquisition effort to accelerate the delivery of one-way attack drones with plans for $1 billion in investment over two years to purchase over 200,000 systems.
2. Leverage the Civil Reserve Manufacturing Network
The SWPC will leverage the new Civil Reserve Manufacturing Network, a lesser known, but incredibly critical, Pentagon small business program designed to mobilize the commercial industrial base. The CRMN was created in December by the fiscal year 2026 National Defense Authorization Act to create a distributed network of U.S. manufacturers interested and willing to work with the DOW to convert their commercial production capacity for defense production in times of crisis or conflict.
The CRMN has its roots in an April 2025 Defense Science Board report which found that DOW processes, such requirements definition, acquisition and financing, needed be changed. This would allow for the U.S. and allies to tap their significant capabilities beyond their traditional DIBs and be prepared for protracted conflict with multiple adversaries in multiple theaters of operations.
The CRMN is modeled on a similar existing effort—Air Force’s Civil Reserve Air Fleet. This works with commercial airlines to provide additional airlift supply in emergencies, Defense News reported. The CRAF activated in 2021 to support the U.S. evacuation of Afghanistan.
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3. Supported By Influential Stakeholders
The SWPC effort is endorsed by the National Small Business Association, an advocacy group that calls itself the nation’s first and oldest small business advocacy organization. The NSBA said in an Aug. 26 statement that it supports efforts that strengthen the role of small businesses in U.S. national security and manufacturing.
Ensuring small businesses have access to capital, contracting opportunities and a regulatory environment that allows them to grow, the NSBA said, will be critical to building a more resilient and competitive domestic defense industrial base.
“The Smaller War Plants Commission puts small businesses at the center of a renewed federal effort to expand America’s defense manufacturing capacity, with a particular focus on capital access, contracting opportunities and removing barriers to growth,” the NSBA said.
A 2025 Wash100 Award winner and executive of a small DIB business supports the SWPC program. Earl Stafford, Aperio Global CEO, told ExecutiveGov that he supports any effort on behalf of the federal government to enhance, accelerate and support the impact of small business across the board for warfighters.
“Anything that helps close the chasm of innovation for the federal government with the warfighter, I’m all for,” Stafford said.
4. More SBA DIB Initiatives
The SWPC is yet another SBA effort under President Trump in his second term to shore up small businesses in defense-essential industries. The SBA in August announced its first-ever Critical Suppliers Prize Competition, a contest to improve U.S. manufacturing and critical industry supply chains by expanding capacity at important choke points.
The competition will award up to $20 million in non-dilutive capital, including as many as six prizes with a maximum of $6 million each, to small businesses that demonstrate the capacity to rapidly scale domestic production through measurable and enduring supply chain solutions.
Contestants must have a business strategy that provides concrete deliverables on one of the following critical industry supply chain priorities:
- Advanced metals manufacturing, including rapid tooling and precision casting and forging.
- Advanced materials manufacturing, such as large format additive manufacturing
- Energy systems, energetics and components, like nuclear energy and battery energy storage systems.
The DOW and SBA did not return requests for comment prior to publication.
