In short: the Office of Strategic Capital (OSC) is the Pentagon's lender. It makes long-term direct loans to companies building production capacity in technologies the Department of Defense considers critical, from magnets and battery materials to drones and semiconductors. It lends where commercial banks will not lend enough or for long enough, and it expects to be repaid. Since late 2025 it has moved from a handful of US$150m-sized loans to conditional commitments of up to US$1.5bn.
Where OSC fits
OSC was set up in December 2022 and given statutory lending authority in the National Defense Authorization Act for fiscal year 2024. Like other federal credit programmes, it works under the Federal Credit Reform Act. Congress appropriates the expected cost of the loans (the credit subsidy), not their face value, so a modest appropriation supports a much larger loan book.
Its first notice of funds availability, published on 30 September 2024, offered direct loans of US$10m to US$150m from about US$984m of lending authority. The loans paid for building, expanding or modernising facilities that make products in the 31 covered technology categories listed in the 2024 NDAA. Applicants were assessed on three things: eligibility under the statute, contribution to national security, and creditworthiness.
The rest of this guide covers the terms seen in OSC's conditional commitments, how an OSC loan ranks against bank debt and equity, and the diligence points for borrowers and co-lenders. It is free with a work email, along with the register downloads and the in-house counsel tools.
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Questions
What is the Office of Strategic Capital?
A Department of Defense office, set up in December 2022 and given statutory loan authority in the 2024 National Defense Authorization Act, that makes direct loans to companies building facilities and supply chains for technologies the Pentagon treats as critical.
How big are OSC loans?
Its first notice of funds availability, in September 2024, offered loans of US$10m to US$150m from about US$984m of lending authority. Conditional commitments announced since late 2025 run from US$80m to US$1.5bn.
Is an OSC conditional commitment a loan?
Not yet. It is an agreement in principle subject to conditions, such as raising a set amount of equity and signing definitive loan documents. The register lists these commitments but leaves them out of funded totals until they close.
Sources
- Wolfspeed Form 8-K exhibit 99.1: OSC conditional commitment (October 2026)
- Department of War release: OSC conditional commitment to Wolfspeed
- ExecutiveGov: DoD Office of Strategic Capital issues first notice of funding availability (September 2024)
General information on public law and market practice as at 28 Oct 2026, not legal advice on any transaction.