The Office of Strategic Capital (OSC) has released a Notice of Funding Opportunity for its new National Security Fund Finance (NSFF) Program, a fund-level financing initiative designed to attract and scale private capital for critical minerals and materials supply chains vital to U.S. national security. The opportunity is directed at qualified, professionally managed debt investment fund managers, not individual operating companies.
Through NSFF, OSC plans to provide large-scale credit facilities to eligible fund managers that will combine federal financing with private capital to invest in companies addressing critical mineral supply-chain gaps, shortages, and vulnerabilities.
OSC's Opportunity at a Glance
Detail | Information |
|---|---|
| Announcement | Notice of Funding Opportunity, released on August 19, 2026 |
Eligible applicants | Professionally managed U.S. debt investment fund managers |
Funding instrument | Multi-draw term loan credit facility |
Potential facility size | $500 million to $1 billion, capped at the lesser of the requested amount or 125% of total fund equity capitalization |
Proposal deadline | November 1, 2026, at 5:00 p.m. EDT |
Expected selection for diligence | By January 10, 2027 |
Expected conditional commitments | On or before March 10, 2027 |
What NSFF Funds
NSFF is not a grant program, direct investment program, or conventional solicitation for critical-mineral companies. Instead, it provides loans to qualified fund managers, which use the credit facility alongside private capital to make debt investments in eligible portfolio companies.
Eligible investments must address shortages, gaps, and vulnerabilities in critical minerals and materials supply chains that are important to U.S. national security. The program also includes associated technologies, supply chains, and production processes within its scope.
All credit-facility advances must be invested in eligible assets, defined as first-lien or second-lien cash-pay senior secured loans. Equity investments are not permitted, except where equity is acquired and retained through a workout or restructuring.
Key Investment Restrictions
Fund managers should examine the proposed facility terms closely. NSFF imposes several core investment restrictions:
100% critical-minerals focus: All advances must support eligible portfolio companies addressing critical minerals and materials supply-chain vulnerabilities relevant to U.S. national security.
Dual-use requirement: Funded technologies cannot have solely defense applications.
Private-capital orientation: Eligible investments must be in industrial or commercial sectors that are not solely or predominantly capitalized by the federal government.
Portfolio concentration limits: No portfolio company group may represent more than 8.5% to 10% of total capitalization.
Restricted-entity prohibitions: Fund managers and portfolio companies cannot invest in, be controlled by, or conduct prohibited business with restricted entities, including entities tied to certain sanctioned parties, foreign adversaries, or specified foreign ownership and control risks.
National-security requirements: Investments must support U.S. access to critical minerals and materials, including through reshoring, production-direction rights, or related protections, while mitigating foreign ownership, control, and influence risks.
This is a highly structured federal credit program, not simply an incentive for investors to pursue critical minerals exposure. The NSFF facility is designed to give OSC visibility into both fund-level management and portfolio-level investment decisions.
Who is Eligible for NSFF
Applicants must be professional managers of debt investment funds formed under U.S. state law and authorized to conduct the proposed investment activities. OSC expects applicants to demonstrate substantial U.S. leadership, operations, assets under management, investment history, financial reporting capabilities, cybersecurity practices, and relevant experience in critical minerals and materials supply chains.
Applicants are also expected to possess relevant registrations, accreditations, and certifications, including registration as an SEC investment adviser where applicable. Firms that qualify as restricted entities are ineligible.
The program’s required scale will also sharply limit the eligible applicant pool. To access a credit facility, a fund must have a target fund commitment amount of at least $500 million and raise at least 35% of that target at first close.
What OSC Will Evaluate for NSFF Proposals
OSC will assess eligible proposals against six primary evaluation areas:
Economic and national security alignment, including demonstrated investment activity or commitment to invest in critical minerals and materials supply chains.
National security objectives, including foreign ownership restrictions, domestic headquarters or domiciliation, restricted-entity covenants, reshoring, and production-direction rights.
Proven investment strategy and track record, including prior performance, fundraising history, underwriting discipline, portfolio results, and the ability to raise the required private capital.
Firm structure, including whether fund manager and investor incentives align with OSC’s mission.
Likelihood of reaching a definitive credit facility agreement, including the scope of requested changes to OSC’s proposed terms.
Creditworthiness, including a reasonable prospect of timely repayment of principal and interest.
OSC will favor firms that accept the proposed term sheet as written. Applicants may propose changes to specific terms, but must explain why each change would materially advance OSC and NSFF program interests.
Key Dates
November 1, 2026, 5:00 p.m. EDT: Complete proposals due to [email protected].
January 10, 2027: OSC expects to select parties for further due diligence and negotiation
March 10, 2027: Conditional commitments are expected on or before this date
A conditional commitment does not authorize performance. Final financing remains subject to due diligence, negotiated credit-facility documentation, federal approvals, availability of appropriations, and Office of Management and Budget concurrence.
Why the NSFF Program Matters
The NSFF Program is a significant signal of how the Department of War intends to use financial tools, alongside procurement and traditional federal funding mechanisms, to build domestic capacity in strategically critical industries. Rather than funding individual projects directly, OSC is attempting to mobilize institutional private capital at a scale aligned with the financing needs of critical minerals and materials supply chains.
For fund managers, the opportunity is substantial but demanding. A competitive proposal will need to do more than identify promising critical-mineral investments. It must demonstrate a proven debt-investment strategy, a credible capitalization plan, rigorous risk and compliance infrastructure, and a portfolio approach that directly advances U.S. national-security objectives.
For operating companies, the immediate implication is different: NSFF could create a new source of debt capital for businesses involved in extraction, processing, refining, recycling, advanced materials, supply-chain technology, and related industrial capabilities. Companies should begin identifying debt fund managers whose investment strategies and portfolio construction could align with the program’s restrictions and national-security priorities.
EverGlade is a national advisory firm helping innovators and investors navigate the federal funding and financing ecosystem. We support companies across the funding lifecycle, from early-stage strategy through proposal development, negotiations, and program execution.
For additional information on where your capabilities could plug into this program, schedule a conversation with our team.
