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Small Business Innovation Research Program (SBIR): How it Works and How to Qualify

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Small Business Innovation Research Program (SBIR): How it Works and How to Qualify

By plester, Former Contributor
Published: July 7, 2014 Updated: July 7, 2014

Small businesses are the key to advancing America’s economy by bringing cutting-edge, high-impact technologies to the marketplace that improve health care, strengthen our military and protect the environment. However, small businesses often have difficulty competing with larger technology companies due to lack of capital for research and development (R&D) work that is critical for moving products from the planning to deployment stages. 

To help entrepreneurs successfully commercialize their products and services, the federal government established the Small Business Innovation Research/Small Business Technology Transfer program, commonly known as SBIR. Eleven federal agencies including the departments of Health and Human Services, Defense and Energy participate in SBIR, which provide small businesses competitive funding for projects that meet government research needs and boost technological innovation in the public and private sectors. The Small Business Administration doesn’t directly administer the SBIR funding awards, but it oversees and manages the SBIR program by coordinating with other agencies, reviewing progress and reporting to Congress.

Much like the product development process, SBIR is structured in phases:

  • Phase 1 establishes the technical merit, feasibility and commercial potential of products or services and lasts for six months.
  • Phase 2 supports continued R&D efforts and extends up to two years. Funding levels are based on the success of Phase 1 work.
  • Phase 3 enables the small businesses to commercialize products or services. Although SBIR does not fund Phase 3, some federal agencies may provide additional financial assistance for products and services that help achieve government research goals.

To be eligible for SBIR assistance, businesses must:

  • Be organized for profit and be located in the United States.
  • Be at least 50% owned and controlled by U.S. citizens or permanent residents.  
  • Have no more than 500 employees.
  • Not be controlled by a venture capital firm, hedge fund or private equity firm that owns a majority of the stock.

Learn more about eligibility requirements and explore open and future solicitations from agencies throughout the federal government to find SBIR funding opportunities for your small business. Also, go to SBIR.gov for more information about the program including small business success stories, free upcoming events and webinars and email updates from the Small Business Administration.

About the Author:

Paul Lester

Former Contributor

I am an author for the the SBA.gov Community, writing about topics that matter to you as a small business owner. Our ongoing goal is to improve this site to meet your needs, so we're happy to receive your feedback and participation. Thanks for joining our online Community here at SBA.gov!


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We believe or corporation is eligible for SBIR assistance and our products will qualify for R&D grant monies, but we need a good SBIR grant writer for application submission. Can anyone suggest anyone?
Great article, thanks for sharing this with us. I totally agree, small businesses are the way of the future, we need to take more care in our family run and local businesses. Sometimes the giants can get too big for their boots and it harms not only locals to the business but people in other countries as well.
Great read. Thank you for the information.
Very helpful blog post. Funding for research and development is definitely a problem for many small firms. I am definitely interested in a program like this and I am grateful for the information. Thank youfor letting folks know about this!
Lacking funding for research and development is definitely a problem for many a small business, mine included. I am definitely interested in a program like this and I am grateful for the information. Thank you.
I would like to learn about a previous experience working with SBIR. Can somebody shear his experience and provide tips? Fernando Perez Manger
Seems like a good program. I just highly doubt most businesses have a chance of getting this. There's always a perk for the organization giving the grant.
The SBIR and its sister STTR programs are great ways for small businesses to procure funding for R&D - not to mention ways for new businesses to fund new ideas. And, not only can you help these departments solve some of their needs and get funding to do it, but, these government entities will become some of your first customers - not a bad trade off.


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