Pentagon offers up to $820 million loan to drone maker Performance Drone Works

The Pentagon's Office of Strategic Capital has conditionally committed up to $820 million in loan financing to Performance Drone Works, a Huntsville, Alabama-based maker of small unmanned aircraft systems. The money is meant to help the company scale up domestic production of drone components, including propulsion systems, power and control units, and vision systems.

According to the office, the loan is meant to cut vulnerabilities in the supply chain for drone parts, much of which currently comes from overseas. David Lorch, the office's director, said the commitment supports a presidential executive order aimed at expanding American drone manufacturing capacity. He added that more loans to other component producers are expected to follow.

The agency behind the loan was established four years ago. It was originally authorized to lend just under $1 billion, but that ceiling has since been raised to more than $210 billion under the current administration. Its loans are also designed to draw private investment into the companies that receive them.

Performance Drone Works already supplies small drones to the Army, including a system used under a program evaluating requirements for future medium-range reconnaissance aircraft. The company runs a 90,000-square-foot facility called Drone Factory 01. The new financing would support both its own manufacturing and that of other domestic producers of small drone categories.

The company still has to complete financial, legal and technical due diligence before the loan is finalized, the report said.