The Secret Weapons Facility (SWF) is located in Germany in the town of Kugelstadt and is the test bed for new weapons such as the Venom gun, and other top secret experiments. It also houses an underground submarine pen.
The more visible parts of the SWF above the ground include a weapons factory, which is heavily damaged by Allied bombings during the events of Return to Castle Wolfenstein, and a trainyard with an adjacent warehouse. Which make the entire part of Mission 4.
The main facility lies hidden underground and that is where the most important research takes place. X-creatures like Lopers are probably created for weapon experiments, like the test for the Venom gun's firing rates.