SBIR: Frequently Asked Questions

The Small Business Innovation Research (SBIR) program is a key federal initiative designed to foster technological innovation and support small businesses in conducting R&D with commercial potential.

This FAQ provides essential information about eligibility, funding phases, application procedures, and compliance requirements to help businesses navigate the SBIR program successfully.

The Small Business Innovation Research (SBIR) program is a federally funded initiative that encourages domestic small businesses to engage in research and development (R&D) with commercialization potential. It provides funding through a competitive process to support technological innovation.

Eligible applicants must be for-profit small businesses with 500 or fewer employees, located in the United States, and majority-owned by U.S. citizens or permanent residents. The principal investigator must be primarily employed by the small business during the award period. See the SBIR eligibility criteria.

It’s important to note that some funding agencies have specific eligibility requirements in addition to the Small Business Administration (SBA) definition requirements. Some registrations also require companies to have registered physical addresses, with a P.O. box not sufficing.

The SBIR program consists of three phases:

Phase I: Focuses on proving the feasibility of an idea or technology. Funding typically ranges from $50,000 to $275,000 for 6-12 months.

‍Phase II: Expands upon Phase I results to further develop the technology. Funding can go up to around $2 million for up to two years.

Phase III: Seeks commercialization of the developed technology. No direct SBIR funding is provided, but businesses are encouraged to secure private sector or government funding.

Businesses must respond to solicitations issued by participating federal agencies. Applications are submitted through the agency’s designated portal, and each agency has specific guidelines and deadlines. It is important to carefully review the solicitation requirements before submitting a proposal. We recommend working with grant application experts, like Grantify, for advice and to maximise your chances of success.

Eleven different federal agencies participate in the SBIR program.

Proposals are reviewed based on criteria such as technical merit, commercial potential, and the qualifications of the research team. Agencies use peer review panels, technical experts, and commercialization specialists to assess applications.

The SBIR program supports innovative R&D projects in a variety of fields, including aerospace, healthcare, energy, cybersecurity, artificial intelligence, biotechnology, and more.

Yes. A business can receive multiple Phase I and Phase II awards for different projects, provided that each proposal meets the eligibility and evaluation criteria. Yoy can receive subsequent SBIR awards for the same project, e.g. Phase I and then Phase II. 

Note that if you’ve already obtained SBIR funding, there are limits to the number of successive grants that a company can be awarded without progressing to the next stage.

SBIR awards can be either grants or contracts, depending on the agency. For instance, the Department of Defense (DOD) offers contracts in addition to grants.

Grants are typically more flexible and focus on advancing scientific research, while contracts are procurement-based and require adherence to specific deliverables and milestones.

Phase III of the SBIR program does not provide direct funding. However, awardees are encouraged to seek private investment, partnerships, or government procurement opportunities to transition their technology to market.

Timelines vary by agency, but the review and selection process for Phase I typically takes 4-6 months from submission to award. Phase II review timelines are similar, however, awards may take an additional 6-12 months, depending on when you submit your application.

Yes, for Phase I, small businesses must conduct at least two-thirds (66.67%) of the R&D work, meaning no more than one-third (33.33%) can be subcontracted. For Phase II awards, the small business must perform at least half (50%) of the R&D work, allowing up to 50% to be subcontracted.

Yes. Small businesses can collaborate with universities, research institutions, federally funded research and development centers (FFRDC), or other companies as subcontractors if they adhere to the subcontracting limits. Universities often provide technical expertise and facilities to support SBIR projects. Note that partnering is mandatory for the STTR but not for SBIR. Read more about the differences between SBIR and STTR.

Awardees can seek additional funding through matching grants, private investment, or federal funding mechanisms such as SBA loans, venture capital, or strategic partnerships.

The permitted activities for SBIR funds vary greatly depending on the federal agency. For instance, for the NSF, equipment is not allowed at Phase I, but for the NIH, spending on equipment in the budget isn't recommended, but is possible with the right justification. Similarly, foreign travel can be allowed for NIH – again, under very specific, justified circumstances – but it is not allowed for the NSF.

Due to the specific variants, we recommend you speak to a Grant Expert for more information.

Yes, Intellectual Property (IP) is protected under the SBIR (Small Business Innovation Research) program.

Yes, resubmissions are allowed in the SBIR program, but there are some points to keep in mind. For example, for the NIH SBIR, resubmissions are allowed, but applicants are required to address reviewer feedback in an ‘Introduction to Resubmission’ section. Whereas for the NSF, direct resubmissions are not allowed. Instead, applicants must submit a new proposal with substantial improvements.

If you win an SBIR award, certain information about your project will be made publicly available, such as company name, location, project title, abstract and summary, funding amount, and agency and topic. However, sensitive technical details and proprietary information remain protected, such as detailed technical data, financial information, and confidential commercialization plans.

The use of SBIR funds for legal fees, including patents, will vary depending on the agency. For example, for the NIH, legal fees are not covered, however, they are permitted with the NSF.

The frequency of application deadlines depends on the agency, with some releasing a solicitation for a single deadline once a year, while others have multiple deadlines throughout the year.

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