About this programme
SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) are the U.S. government's equity-free R&D funding programmes, branded on the official site as "America's Seed Fund." They have run since 1982 and are coordinated government-wide by the U.S. Small Business Administration (SBA), which sets policy, guides how each participating agency runs its own solicitations, and reports programme progress to Congress.
The money itself does not come from the SBA. Eleven federal agencies (each with its own budget, topic priorities and solicitation calendar) fund SBIR/STTR awards directly through a contract, grant, or cooperative agreement with the small business. A company applies to a specific agency's specific topic, not to a single central SBIR office.
STTR is a companion programme to SBIR that requires the small business to formally partner with a U.S. research institution (a university, nonprofit research organisation, or federally funded R&D centre) on the funded work, splitting the R&D effort between the two. SBIR carries no such partnership requirement.
Because the funding is non-dilutive, a company keeps full ownership and does not give up equity or repay the award as debt. It is intended to de-risk early-stage technology R&D toward eventual commercialisation, not to fund general operations.
How it works
Phase I: proof of concept. The statutory guideline caps a Phase I award at normally not more than $150,000, with a period of performance of six months for SBIR or one year for STTR. Agencies may adjust this upward — as of April 2026, participating agencies can issue Phase I awards up to $323,090 without needing an SBA waiver.
Phase II: full R&D. The statutory guideline caps Phase II at normally not more than $1,000,000 over a two-year period of performance. As of April 2026, agencies can issue Phase II awards up to $2,153,927 without an SBA waiver. Only companies that completed a Phase I award are generally eligible to compete for Phase II.
Phase III: commercialisation. Neither SBIR nor STTR funds Phase III directly — the official FAQ states this explicitly for both programmes. Phase III covers work that pursues commercialisation objectives arising from the Phase I/II R&D, which may include follow-on, non-SBIR/STTR funding such as agency production contracts.
STTR-specific work split: the small business must perform at least 40% of the R&D effort, and the partnering research institution must perform at least 30%. The research institution must be a U.S. nonprofit scientific/educational institution or a Federally Funded R&D Centre (FFRDC).
The award instrument (contract, grant, or cooperative agreement) and the exact process vary by agency — each of the 11 participating agencies runs its own topics and solicitation calendar rather than one shared calendar.
Who can apply
The applicant must be a for-profit small business (not a non-profit) with a place of business located in the United States, and the SBIR/STTR-funded work itself must be performed in the U.S.
Size standard: the business, including its affiliates, must have not more than 500 employees.
Ownership and control: the business must be more than 50% directly owned and controlled by one or more individuals who are U.S. citizens or permanent resident aliens (subject to additional ownership-structure rules published by SBA for other entity types).
The proposed project's principal investigator must have the small business as their primary place of employment at the time of award.
For STTR specifically, the small business must have a formal partnership (via subcontract or cooperative arrangement) with a single, eligible U.S. research institution for the funded work.
Applicants can face affiliation determinations if a university or a larger business is materially involved in preparing the proposal or acts as a subcontractor — this can affect the small-business size determination.
How to apply
- Register for a Unique Entity ID (UEI) through SAM.gov — this is required before a company can receive an SBIR/STTR award.
- Browse the participating agencies on sbir.gov to understand each agency's mission and current R&D priorities.
- Search open topics and solicitations across agencies (sbir.gov aggregates them) to find one that matches the technology.
- Read the full solicitation from the agency carefully before preparing a proposal — the official guidance specifically warns that administrative mistakes in the proposal can cause disqualification.
- Prepare and submit the proposal directly through the funding agency's own SBIR/STTR application process, before the solicitation's stated closing date.
- If awarded Phase I, complete that award and then apply separately for Phase II funding with the same or a related agency topic, if pursuing continued R&D.
Documents you’ll typically need
- Unique Entity ID (UEI) from SAM.gov
- Technical/research proposal responding to the specific agency topic in the solicitation
- For STTR: a formal partnering agreement/subcontract with the eligible U.S. research institution covering its share of the R&D
Frequently asked
What is the difference between SBIR and STTR?
Both are equity-free federal R&D funding programmes coordinated by the SBA, with the same Phase I/II structure. STTR specifically requires the small business to formally partner with a U.S. research institution, which must perform at least 30% of the funded R&D while the business performs at least 40%. SBIR has no such partnership requirement.
Is SBIR/STTR funding equity-free?
Yes. The official site describes it as "equity free funding" — the government does not take an ownership stake and the company is not required to repay the award as it would a loan.
How much can a Phase I or Phase II award be worth?
The statutory guideline is normally not more than $150,000 for Phase I and not more than $1,000,000 for Phase II. Agencies can currently (as of April 2026) issue awards above that up to $323,090 for Phase I and $2,153,927 for Phase II without needing a separate SBA waiver.
Is there SBIR/STTR funding for Phase III?
No. Both programmes explicitly do not fund Phase III. Phase III covers commercialisation work following on from Phase I/II R&D, which is typically pursued through other funding such as agency production contracts, not SBIR/STTR awards.
Who actually funds the award — the SBA or the agency?
The funding agreement (contract, grant, or cooperative agreement) is between the small business and the participating federal agency running that topic, not the SBA. The SBA sets programme-wide policy and guides how the 11 participating agencies run their own SBIR/STTR programmes, but the money and the solicitation come from the agency.
What size and ownership rules apply?
The business, including affiliates, must have no more than 500 employees, be organised for profit, have a U.S. place of business, and be more than 50% directly owned and controlled by individuals who are U.S. citizens or permanent resident aliens. The project's principal investigator must be primarily employed by the small business.
What do I need before I can apply?
A Unique Entity ID (UEI) from SAM.gov is required to receive an SBIR/STTR award. From there, applicants find a matching topic from one of the 11 participating agencies and apply directly through that agency's own solicitation process before its closing date.
Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.