Federal Agencies That Grant SBIR Funding

The Small Business Innovation Research (SBIR) program is a competitive federal grants and contracts program established by Congress under the Small Business Innovation Development Act of 1982. Federal agencies with extramural R&D budgets over $100 million are required to set aside a percentage of that budget for SBIR awards. In fiscal year 2024, that mandatory set-aside rate was 3.2% of extramural R&D budgets.

SBIR awards are structured in three phases. Phase 1 ($100,000–$300,000 typically) funds feasibility research — does the concept work? Phase 2 ($500,000–$2,000,000 typically) funds full R&D to develop the technology. Phase 3 is commercialization — no SBIR funds, but the company transitions the technology into agency programs, commercial products, or additional contracts.

To qualify as an SBIR applicant, a company must be a for-profit U.S. small business, be more than 50% owned by U.S. citizens or permanent residents, and have fewer than 500 employees. The principal investigator must spend at least 51% of their time on the SBIR project during Phase 1.