The United States Department of War has offered up to $820 million in loan financing to Performance Drone Works to build domestic manufacturing capacity for critical drone components, part of a federal push to rebuild American supply chains for unmanned systems.
The Office of Strategic Capital announced the conditional loan on Friday. The money, together with private capital raised alongside it, will fund a high-volume plant supplying components to Performance Drone Works and other American manufacturers, the office said. The parts are meant for Group 1 and Group 2 unmanned aircraft, the smaller classes of drone that have become central to the fighting in Ukraine.
The Alabama-based company, known as PDW, said the financing would establish domestic production of technologies now dependent on foreign-controlled supply chains, including propulsion and power systems. The aim is to reduce that dependence, with much of the world's drone-component supply concentrated in Chinese firms.
The commitment forms part of a wider federal drive to loosen China's grip on drone manufacturing. President Donald Trump signed Executive Order 14307, "Unleashing American Drone Dominance," in June 2025, directing agencies to expand domestic production and reduce dependence on foreign systems. The Department of War has since made unmanned systems a procurement priority.
"Achieving Secretary Hegseth's mandate for drone dominance requires a secure and resilient industrial base here at home," said Emil Michael, Under Secretary of War for Research and Engineering. He said the office was strengthening the supply chain so that American manufacturers could deliver the capabilities the military needed.
David A. Lorch, who directs the Office of Strategic Capital, said PDW would be one of several component producers to receive loan commitments under the executive order. Expanding domestic production would benefit manufacturers across the sector and improve supply-chain resilience, he said.
PDW builds unmanned systems at Drone Factory 01, a 90,000-square-foot site in Huntsville. The award comes as the Pentagon moves to field cheap, expendable drones at scale, a shift driven by their heavy use in Ukraine and, more recently, in the Middle East.
The loan is the latest in a run of large commitments from the Office of Strategic Capital, which was created under the Biden administration and given lending authority through the 2024 defence authorisation act.
The office agreed a $725 million loan with Energy Fuels in June to process rare earth elements, and a $700 million joint commitment with two rare-earth firms last November. The scale of the drone loan sits well above the office's original design, which envisaged direct loans of up to $150 million.
Friday's commitment is conditional. PDW must still satisfy legal and technical due-diligence requirements before the loan reaches financial close, the office said.
