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Learn the Basics of SBIR


The funding you need for innovation and research begins with research.


The Small Business Innovation Research (SBIR) program is a highly competitive federal program that provides funding to small businesses to support research and development that has the potential for commercialization. Through a competitive awards-based program, SBIR enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization.

The mission of the SBIR program is to support scientific excellence and technological innovation through the investment of federal research funds in critical American priorities to build a strong national economy. The program has four-goals:

  • Stimulate technological innovation
  • Meet Federal research and development needs
  • Foster and encourage participation in innovation and entrepreneurship by socially and economically disadvantaged persons
  • Increase private-sector commercialization of innovations derived from Federal research and development funding.

Each year, federal agencies with extramural research and development budgets that exceed $100 million are required to allocate 2.5 percent of their R&D budget to these programs. Currently, 11 federal agencies participate in the program.

The SBIR Program is structured in three phases:

Phase I
The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of a technology. SBIR Phase I awards normally do not exceed $150,000 total costs for six months.

Phase II
Phase II continues the research and development efforts initiated in Phase I. Only Phase I awardees are eligible for a Phase II awards, which normally do not exceed $1 million total costs for two years.

Phase III
Small businesses in Phase III pursue commercialization objectives resulting from the Phase I and II research and development activities. The SBIR program does not fund Phase III.

SBIR Eligibility
Only United States small businesses are eligible to participate in the SBIR program. Business must meet all of the following criteria at the time of Phase I and II awards:

  • Must be a for-profit entity and have an established place of business located in the United States
  • At least 51 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States, or at least 51 percent owned and controlled by another for-profit business concern that is at least 51 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States
  • No more than 500 employees, including affiliates.

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