Pentagon, SBA plan to boost aid to smaller defense companies

By Mike Glenn - The Washington Times - Tuesday, August 25, 2026

The Pentagon and the Small Business Administration on Tuesday announced plans to establish a modern equivalent of the World War II-era Smaller War Plants Corp. to boost domestic production of military components.

In a message posted on X, Defense Secretary Pete Hegseth and SBA Administrator Kelly Loeffler said the new Smaller War Plants Commission will supercharge funding for small manufacturers that make up 70% of the nation’s defense industrial base.

“American battlefield readiness runs through our small businesses, and it always has,” Mr. Hegseth said. “The vehicles, the planes and even the rifles in our warfighters’ hands rely on a supply chain of hundreds of specialty producers.”

Congress created the Smaller War Plants Corp. in June 1942 to support small firms that lacked the capital, equipment, and access to major wartime contracts held by large companies. It provided them with loans and leased production equipment needed for the war effort.

“Our message is clear: President Trump is ending the era of dependence on foreign supply chains,” Mr. Hegseth said. “This historic, long-term commitment will reinforce the industrial depth that stands proudly behind the strongest military on earth.”

The Smaller War Plants Corp. was the predecessor to the SBA.

“America must build what our military needs when it needs it, right here at home. That’s where our most innovative, agile businesses come in,” Ms. Loeffler said. “Today, the SBA oversees nearly $500 billion in a small business portfolio, and we’re bringing our proven capital access and investment model together with the Department of War.”

She said the joint venture with the Pentagon will boost funding to small defense-related businesses, letting them tool up, expand operations and innovations, and increase hiring to “deliver capability to the warfighter.”

“The era of offshoring the production of power projection to our adversaries is over,” Ms. Loeffler said. “The world’s strongest military will be backed by the world’s most nimble industrial base, offering our warfighters asymmetric advantage and our nation peace through strength.”