The Pentagon’s Office of Strategic Capital has offered Neros a conditional loan of up to $450 million to expand U.S. production of unmanned aircraft and the components used to build them. The Department of War announced the proposed financing on Monday, November 2, 2026.
Neros, a California-based maker of the Archer attack drone, said it plans to contribute $165 million in equity to the project. If the financing is released, the combined investment would total $615 million. The company has said the expansion would put it on a path to produce one million drones a year by 2028.
Loan remains subject to conditions
The financing is not yet a completed loan. Neros must first satisfy financial, legal, technical and due diligence requirements before funds can be disbursed. The Office of Strategic Capital and Neros did not disclose the interest rate, repayment term or release schedule.
The proposed loan would support an expansion of Neros’ factory in Torrance, California. The planned facility would produce complete drones and ground control stations, along with motors, flight controllers, radios, thermal sensors and batteries.
| Item | Announced figure or status |
|---|---|
| Potential Pentagon loan | Up to $450 million |
| Neros equity contribution | $165 million |
| Combined planned investment | $615 million |
| Production target | One million drones a year by 2028 |
| Financing status | Conditional; pending required reviews |
“Neros has already demonstrated an ability to design, manufacture, and deliver exceptional small unmanned aircraft systems. OSC’s investment will turbocharge Neros’ ability to manufacture drones and components critical for the production of drone systems.”
David A. Lorch, director of the Office of Strategic Capital, said the investment is intended to strengthen the domestic industrial base for small unmanned aircraft. The office was established to provide financing to industries considered important to military supply chains.
Focus on domestic components
The planned factory would not be limited to final assembly. According to the Department of War announcement, the production effort is intended to cover several systems and subcomponents that can otherwise create dependence on overseas suppliers. The office said the goal is to reduce U.S. drone makers’ reliance on foreign-made parts and to make compliant components available to other U.S. and allied manufacturers as well as to Neros.
The initiative reflects a broader push to increase domestic capacity for small unmanned aircraft. The proposed financing would support production of:
- Complete unmanned aircraft and ground control stations
- Motors and flight controllers
- Radios and thermal sensors
- Batteries
Neros was founded in 2023 by former drone racers Soren Monroe-Anderson and Olaf Hichwa. Its Archer system is a first-person-view attack quadcopter operated by a pilot using video goggles. The company has supplied the platform for U.S. military training, including joint Army and Marine activity in South Korea on August 5, 2026.
The announcement leaves the final scale and timing of the expansion dependent on the outstanding reviews and the eventual release of the loan. For now, the one-million-unit figure is a company production target, while the Pentagon financing remains conditional rather than an executed loan.
