Small Business Research Grants: SBIR and STTR Explained

The only federal grants reserved for small businesses: what SBIR and STTR fund, the three phases, which agencies run them, who qualifies, and how they differ from other grants.

Who qualifies: U.S. small businesses, 500 or fewer employees, majority U.S.-owned
Phases: I (feasibility), II (development), III (commercialization, no SBIR funds)
STTR difference: A research institution partner must do part of the work
Agencies: Eleven, each with its own topics and deadlines
Where to look: Each agency's SBIR page; many also post on Grants.gov

What SBIR and STTR are

The Small Business Innovation Research and Small Business Technology Transfer programs set aside a share of the research budgets of the largest federal agencies for small businesses developing new technology. They are the one place in federal grants where a for-profit company is the intended applicant. The money funds research and development toward a product or process the government or the market needs; it is not a general business grant.

The three phases

Phase I tests whether the idea works: a short project, typically six months to a year, with awards that vary by agency and are often in the low hundreds of thousands of dollars. Phase II develops it, usually two years, with awards that can reach into the millions depending on the agency. Phase III is commercialization, funded by the market, by agency procurement or by private money, not by SBIR dollars. Agencies set their own amounts and topics, so read the agency's solicitation rather than assuming a figure.

SBIR vs STTR

In STTR the small business must partner with a nonprofit research institution, such as a university or a federal lab, which performs a set minimum share of the work. In SBIR the business does the research itself, though it may use consultants. The eligibility rules on ownership and size are otherwise alike.

Who qualifies

A for-profit U.S. business with 500 or fewer employees, including affiliates, majority owned and controlled by U.S. citizens or permanent residents (or by other qualifying small businesses, and in some agencies by venture capital firms within limits). The principal investigator must be primarily employed by the business during the project. The business must register in SAM.gov and with SBA's company registry before applying.

How to find and apply

The eleven participating agencies each publish solicitations with their topics and deadlines, several times a year for the largest (Defense, Health and Human Services, Energy, NASA, the National Science Foundation). Many post on Grants.gov, where our grants search picks them up under small businesses; Defense solicitations run through its own site. Applications follow the agency's system (eRA Commons for HHS, Research.gov for NSF, and so on) and are reviewed for technical merit, the team and commercial potential.

Sources

SBA, SBIR/STTR program policy directive and eligibility guide
SBIR.gov, participating agencies
Agency SBIR program pages (NIH, NSF, DOE, DoD, NASA)

Checked October 2026. Thresholds and rules change; each source above is the official page.