NIH SBIR/STTR: Small Business Innovation Research and Technology Transfer

Federal funding for small businesses developing biomedical innovations

Last verified: April 2026

Key Facts

Mechanism Type

Small Business Innovation Research / Small Business Technology Transfer

Phase I Budget

Approximately $275K total costs (adjusted annually; check current solicitation)

Phase I Duration

6 to 12 months

Phase II Budget

Approximately $1.8M total costs (adjusted annually; check current solicitation)

Phase II Duration

Up to 2 years

Company Size

Under 500 employees

US Ownership

51% or more owned by US citizens or permanent residents

STTR Difference

Requires formal collaboration with a US research institution (minimum 30% effort)

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The SBIR and STTR programs are the primary federal mechanisms for funding small businesses to develop and commercialize biomedical technologies. NIH participates in both programs with a combined annual budget of over $1 billion. SBIR grants go to small businesses (under 500 employees, majority US-owned) and require the principal investigator to be primarily employed by the company. STTR grants require a formal partnership between a small business and a US research institution, with the research institution performing at least 30% of the work. Both programs follow a phased structure: Phase I for feasibility/proof of concept and Phase II for full development. Budget caps are adjusted annually by NIH; always check the current SBIR/STTR solicitation for exact figures.

SBIR vs. STTR

The two programs are similar but differ in partnership requirements and PI employment rules.

SBIR — PI must be primarily employed (more than 50% effort) by the small business. The company performs at least 67% of the work (Phase I) or 50% (Phase II)
STTR — PI may be employed by either the small business or the research institution. Requires a formal collaboration agreement where the small business performs at least 40% and the research institution performs at least 30%
NIH mechanism codes — SBIR: R43 (Phase I), R44 (Phase II). STTR: R41 (Phase I), R42 (Phase II)
Intellectual property — the small business retains IP rights under both programs

Phase Structure

The phased structure is designed to reduce risk by validating feasibility before committing larger resources to development.

Phase I — establish technical feasibility and proof of concept. Expected to produce preliminary data supporting a Phase II application
Phase II — full development based on Phase I results. Larger budget and longer timeline for product development, testing, and moving toward commercialization
Phase IIB — a competitive renewal of Phase II providing additional development support. Available only to Phase II awardees who need additional time or resources
Commercialization plan — Phase II applications must include a commercialization plan describing the market, competition, regulatory path, and business strategy

Application and Review

NIH SBIR/STTR applications are reviewed by dedicated study sections (primarily ZRG1 panels) using the same five review criteria as other NIH grants: Significance, Investigator(s), Innovation, Approach, and Environment. In addition, reviewers evaluate the commercialization potential and the company's ability to carry out the proposed work. The Commercialization Plan is reviewed as an additional element in Phase II applications. NIH also considers the broader impact of the technology on public health.

NIH SBIR

NIH STTR

SBIR grant

STTR grant

small business grant

biotech funding

commercialization

R41

R42

R43

R44