Illinois Puts $5 Million Behind State Matching for Federal SBIR Awards
March 30, 2026 · 2 min read
Claire Cummings
Illinois is doubling down on its innovation economy with a $5 million state matching program that gives SBIR and STTR winners up to $75,000 on top of their federal Phase I awards — and up to $250,000 for Phase II. Applications are accepted on a rolling basis through June 30, 2026, or until the funds run out.
The program, administered by the Illinois Department of Commerce and Economic Opportunity, expects to make approximately 100 awards this fiscal year. It is one of the most generous state SBIR matching programs in the country and represents a growing trend of states competing to retain federally funded startups.
How the Matching Works
The state disburses funds in two tranches. Seventy-five percent of the match arrives upon verification of the federal Phase I award and acceptance of the state application. The remaining 25 percent is released when the company submits its Phase II proposal and delivers its Phase I final report.
That structure is deliberate: it incentivizes companies to pursue Phase II while using Phase I results, rather than pocketing the match and walking away.
Eligibility Requirements
Applicants must be for-profit businesses headquartered in Illinois, with their principal place of business in-state. They must have received a federal SBIR or STTR Phase I award within the past 12 months and certify that at least 51 percent of proposed Phase II research will take place in Illinois. Companies can receive one grant per fiscal year and no more than five total under the program.
The DCEO application portal accepts submissions on a rolling basis. Companies that have already submitted their Phase II application before applying to the state program are ineligible.
The State Competition for SBIR Talent
Illinois is not alone. Multiple states now offer SBIR matching programs, recognizing that federal small business research awards generate outsized economic returns. But Illinois's $250,000 Phase II match and $5 million program budget put it in the top tier nationally.
For small businesses that recently won Phase I awards from any federal agency, this is effectively free money — contingent only on staying in Illinois and pursuing Phase II. Companies tracking SBIR opportunities and state-level funding can find comprehensive deadline calendars and strategy guides on the Granted blog.