SBIR Grant Guide 2026: Everything You Need to Know Before Applying

December 13, 2025 · 11 min read

Rachel Nguyen

The Small Business Innovation Research program is the largest source of early-stage technology funding in the United States. Since its creation in 1982, SBIR has awarded over $60 billion to small businesses developing innovations that address federal research needs and have commercial potential.

If you are a small business founder, a researcher considering a startup, or a grant writer supporting tech companies, this guide covers everything you need to know about the SBIR program in 2026 -- from basic eligibility through the nuances of each participating agency.

What Is the SBIR Program?

SBIR is a federal set-aside program. Congress requires every federal agency with an extramural R&D budget exceeding $100 million to reserve a percentage of that budget for small business awards. In fiscal year 2026, the set-aside rate is 3.2%, which translates to roughly $4 billion in total SBIR funding across all participating agencies.

The program has a companion called STTR (Small Business Technology Transfer), which requires a formal partnership with a research institution. This guide focuses on SBIR, but many of the principles apply to STTR as well.

SBIR serves three policy objectives simultaneously: it stimulates technological innovation in the private sector, it helps federal agencies meet specific R&D needs, and it increases the commercialization of federally funded research. That third objective -- commercialization -- has become increasingly central to how agencies evaluate proposals.

Eligibility Requirements

To be eligible for an SBIR award, your company must meet all of the following criteria at the time of award:

Organized for profit. Nonprofits, universities, and government entities are not eligible as prime applicants. (They can participate as subcontractors or consultants.)
Located in the United States. The company must have a place of business in the U.S., and the research must be performed domestically.
Majority U.S.-owned. At least 51% of the company must be owned and controlled by one or more individuals who are U.S. citizens or permanent resident aliens. There are additional ownership rules for companies owned by other businesses, venture capital firms, or hedge funds.
500 employees or fewer. This includes employees of affiliates. The SBA uses its affiliation rules to determine whether related entities count, which matters if your company has investors with portfolio companies in similar spaces.
Principal Investigator employment. The PI must be primarily employed by the small business at the time of award and during the project. For Phase I, the PI must spend a minimum of one-third of their effort on the project. For Phase II, the minimum is typically one-half.

One important nuance: companies that are majority-owned by venture capital operating companies (VCOCs), hedge funds, or private equity firms may still participate in the SBIR program at agencies that have opted into the 2012 SBIR/STTR Reauthorization Act provisions. DOD, NIH, DOE, NSF, and NASA accept applications from VCOC-backed companies, but the rules are complex and the disclosure requirements are significant.

The Three Phases of SBIR

Phase I: Feasibility

Phase I is a proof-of-concept phase. The goal is to demonstrate the scientific and technical feasibility of your proposed innovation. You are answering one fundamental question: can this work?

Phase I awards are typically six to twelve months in duration. Award amounts vary by agency:

DOD: Up to $275,000 (some topics allow higher amounts)
NIH: Up to $295,386 (total costs for FY2026)
NSF: Up to $275,000
DOE: Typically $200,000 to $250,000
NASA: Up to $150,000

The proposal itself is relatively concise -- usually 15 to 25 pages depending on the agency. You need to describe the problem, your proposed innovation, the technical objectives you will accomplish in Phase I, the qualifications of your team, and a preliminary commercialization plan.

Success rates vary by agency and topic area. Across the program, roughly 15-20% of Phase I proposals receive funding, but this number masks significant variation. Some DOD topics fund 50% of applicants; some NIH institutes fund fewer than 10%.

Phase II: Full R&D

Phase II is where you build and test. If Phase I proved the concept is feasible, Phase II funds the full research and development effort. The deliverable is typically a working prototype or a demonstrated technology.

Phase II awards are substantially larger:

DOD: Up to $1,800,000 (with some topics allowing more)
NIH: Up to $2,000,000
NSF: Up to $1,000,000
DOE: Typically $1,000,000 to $1,600,000
NASA: Up to $850,000

Duration is typically 24 months, though some agencies allow extensions. Most agencies require a completed Phase I before applying for Phase II, though some (notably DOD through its Direct to Phase II program) allow companies with equivalent feasibility data to skip Phase I.

The commercialization plan becomes much more important at Phase II. Reviewers want to see evidence of market validation: letters of intent from potential customers, partnerships with manufacturers or distributors, and a realistic timeline to revenue.

Phase III: Commercialization

Phase III is the commercialization stage, and it is the most misunderstood part of the program. Phase III does not involve any SBIR set-aside funding. Instead, it refers to the work of transitioning your SBIR-funded technology into commercial products or government procurement.

Phase III can take several forms:

A federal agency purchases your product or service using non-SBIR funds
You secure private investment to bring the technology to market
You license the technology to a larger company
You win a follow-on government contract based on the technology you developed

Federal agencies are required to give preference to SBIR Phase III awardees when procuring the technology developed under the SBIR project. This "SBIR protection" means that a prior SBIR award gives you an advantage in competing for related government contracts.

The 11 Participating Agencies

Each agency runs its SBIR program differently. Understanding these differences is essential for choosing where to apply and how to tailor your proposal.

Department of Defense (DOD)

DOD is the largest SBIR funder by dollar volume. The program is decentralized across the military services (Army, Navy, Air Force, Space Force) and defense agencies (DARPA, MDA, DTRA, SOCOM, and others). DOD releases solicitations on a rolling basis, with three major open topics periods per year.

DOD SBIR is heavily oriented toward specific technology needs. Each topic is written by a government scientist or program manager who has a defined problem. Your proposal needs to address that specific topic, not a general research direction.

One distinct feature of DOD SBIR: the program increasingly emphasizes "Phase II enhancements" and rapid transition pathways. If a DOD customer commits matching funds, your Phase II award can be significantly increased.

National Institutes of Health (NIH)

NIH SBIR funding comes through individual institutes and centers (NCI, NHLBI, NIAID, etc.), each with its own research priorities. NIH uses the omnibus solicitation model, which means there is a standing solicitation open year-round with three receipt dates annually: January 5, April 5, and September 5.

NIH SBIR is distinctive because proposals are investigator-initiated. You do not need to respond to a specific topic. Instead, you identify a health-related problem and propose an innovative solution that falls within the mission of one or more NIH institutes.

NIH also has the most rigorous peer review process of any SBIR agency. Proposals are scored on Significance, Investigator(s), Innovation, Approach, and Environment, using the standard NIH 1-9 scoring system.

For a deeper dive into NIH SBIR strategy, see our guide on advancing from Phase I to Phase II and crafting a winning commercialization plan.

National Science Foundation (NSF)

NSF runs America's Seed Fund, which combines SBIR and STTR under a single brand. NSF is unique in that it funds a very broad range of technology areas -- essentially anything that falls within NSF's mission of advancing science and engineering.

NSF uses a two-step application process. First, you submit a Project Pitch (about two pages) describing your innovation and its commercial potential. If the pitch is invited, you submit a full proposal. This system saves time for both applicants and reviewers.

NSF places heavy emphasis on the broader impacts of the technology and the strength of the commercial opportunity. They also run the I-Corps program, which provides entrepreneurship training to SBIR awardees.

Department of Energy (DOE)

DOE SBIR topics are organized by program offices: Advanced Scientific Computing Research, Basic Energy Sciences, Biological and Environmental Research, Fusion Energy Sciences, High Energy Physics, and Nuclear Physics, among others.

DOE releases one or two solicitations per year with defined topic areas. Awards tend to be technically demanding, and DOE reviewers expect a high level of scientific rigor. If your innovation involves energy technology, advanced materials, nuclear science, or computational science, DOE is a natural fit.

NASA

NASA SBIR topics are aligned with the agency's technology taxonomy and mission directorates. Topics cover areas from propulsion systems and life support to Earth observation and data processing.

NASA runs a competitive program with a strong emphasis on technology readiness levels (TRLs). Phase I is expected to advance the technology from approximately TRL 2-3 to TRL 4-5, and Phase II should reach TRL 5-6.

Other Participating Agencies

The remaining six agencies run smaller but significant SBIR programs: USDA (agricultural technology, food safety, rural broadband), EPA (environmental technology, pollution prevention, water treatment), DOT (surface transportation safety, autonomous vehicles, infrastructure monitoring), DHS (border security, cybersecurity, first responder technology), Department of Education (educational technology and learning platforms), and Department of Commerce through NIST (measurement science, advanced manufacturing, standards development). These agencies tend to be less competitive than the Big Five, making them attractive options for first-time applicants whose technology aligns with their missions.

The Application Process, Step by Step

1. Register Your Company

Before you can submit an SBIR proposal, you need:

A SAM.gov registration with an active Unique Entity ID (UEI). Start this process immediately -- it can take up to four weeks.
A Grants.gov account (for NIH, NSF, and some other agencies) or a DSIP account (for DOD submissions through the Defense SBIR/STTR Innovation Portal).
An SBA Company Registry profile. This is where you certify your small business status and provide ownership and control information.

2. Find the Right Solicitation

Each agency publishes its solicitations differently:

DOD: DSIP (defensesolutions.gov) -- three major open periods per year, plus continuous submissions for some components
NIH: Omnibus solicitation on Grants.gov -- open year-round with three annual deadlines
NSF: Project Pitch portal -- open continuously
DOE, NASA, USDA, EPA, DOT, DHS, ED, DOC: Periodic solicitations on Grants.gov or agency-specific portals

Read the solicitation thoroughly. Pay attention to the topic descriptions, evaluation criteria, budget limits, and formatting requirements. Small deviations from the guidelines can disqualify your proposal.

3. Write and Submit Your Proposal

A typical SBIR proposal includes:

Technical proposal (research plan, specific aims, methodology, anticipated results)
Commercialization plan (market analysis, customer discovery, go-to-market strategy, intellectual property position)
Budget and budget justification (detailed cost breakdown with narrative explanations)
Biographical sketches of key personnel
Facilities and equipment description
Letters of support from potential customers, partners, or end users

For detailed writing strategies, read our guide on tips for writing a successful SBIR proposal.

4. Wait for Review

Review timelines vary dramatically by agency:

DOD: 3-6 months from submission to award notification
NIH: 5-9 months (proposals go through study section review, council review, and funding decisions)
NSF: 4-6 months
DOE: 4-8 months

Use this time productively. Continue your customer discovery, refine your technology, and build relationships with program managers at the agency.

Tips for First-Time Applicants

Talk to the Program Manager

At most agencies, you can contact the topic author or program manager before submitting. This is not a formality -- it is one of the most important things you can do. A five-minute conversation can tell you whether your idea is a good fit for the topic, what the reviewer will be looking for, and whether there are aspects of your approach that need adjustment.

At DOD, topic authors are listed on each topic page. At NIH, contact the relevant institute's SBIR program director. At NSF, the program directors are responsive to pre-submission inquiries.

Start with One Agency

Do not try to submit to five agencies simultaneously on your first attempt. Pick the agency that is the best fit for your technology and learn its system thoroughly. Each agency has its own culture, review criteria, formatting requirements, and expectations. Master one before branching out.

Invest in the Commercialization Plan

Many first-time applicants treat the commercialization plan as an afterthought. This is a mistake. Across all agencies, the weight given to commercialization has increased significantly over the past decade. Reviewers want to see that you have talked to potential customers, that you understand the competitive landscape, and that you have a credible path from R&D to revenue.

For NIH SBIR applicants, we have a dedicated guide on building a winning commercialization strategy.

Budget Accurately

Underbudgeting is as bad as overbudgeting. If your Phase I proposal requests $150,000 but the maximum is $275,000, reviewers may wonder whether you have scoped the project correctly. Conversely, padding the budget with unnecessary costs signals inexperience. Every line item should be justified by the technical work you are proposing.

Get External Feedback

Before you submit, have someone outside your team read the proposal. Ideally, find a reviewer who has served on an SBIR review panel or who has won SBIR awards. They will catch issues that are invisible to you because you are too close to the technology.

Common Mistakes That Get Proposals Rejected

Ignoring the topic. At agencies like DOD, where topics are specific, your proposal must clearly address the stated need. Reviewers are assigned to topics -- if your proposal does not match, it will be rated poorly regardless of the quality of the science.

Writing a journal article instead of a proposal. An SBIR proposal is not an academic paper. The emphasis is on innovation, feasibility, and commercialization -- not on exhaustive literature reviews or theoretical foundations. Keep the academic context brief and focus on what you are going to build and why it matters.

Weak or absent commercialization plan. Every year, technically strong proposals fail because the applicant did not take commercialization seriously. Show real market evidence: customer interviews, letters of intent, competitive analysis, and revenue projections.

Not reading the solicitation carefully. Formatting errors, missing required sections, incorrect font sizes, or exceeding page limits can result in your proposal being returned without review. This is an entirely preventable failure.

Underestimating the timeline. If your Phase I proposes 12 months of work but the agency allows only 6, your timeline is a red flag. Scope the project to fit the constraints of the phase.

Resources for SBIR Applicants

SBIR.gov: The central portal for all SBIR and STTR information, including solicitations, award data, and program guidance.
SBA Office of Technology: Oversees the government-wide SBIR/STTR programs and publishes policy directives.
Agency SBIR offices: Each agency maintains a program office that provides guidance, webinars, and direct support to applicants.
FAST (Federal and State Technology) program: SBA-funded organizations in most states that provide free SBIR proposal development assistance, mentoring, and training.
I-Corps: NSF's entrepreneurship training program, available to SBIR awardees across all agencies.

The SBIR program is one of the few federal funding sources available to for-profit companies, and it comes with no equity dilution and no repayment obligation. Whether you are developing a medical device, a defense technology, a clean energy solution, or an educational platform, there is likely an agency and a topic that fits your work.

The proposals that win are the ones that clearly address a real problem, propose a technically sound and innovative approach, and demonstrate a viable path to commercialization. If you can articulate those three things, you are in a strong position.

Tools like Granted AI can help you move from RFP to finished proposal faster -- analyzing solicitation requirements, coaching you through each section, and generating drafts you can refine. When you are competing against thousands of proposals, efficiency matters.

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