SBIR grants provide federal funding to small businesses for innovative research and development.

If you’re skeptical of all the ads promising “free grant money for small businesses!” you should be. But here’s a federal grant program that is the real thing – the Small Business Innovation Research, or SBIR, program. SBIR grants provide small businesses with millions in federal funding every year – but not every business is eligible or a good fit, and the competition is fierce.

SBIR grants are specifically reserved to provide critical funding to small businesses engaged in innovative or high-tech research and development. R&D efforts must be aimed at generating new, commercially-viable products. The federal government issues these grants in order to ensure the nation’s companies have the necessary financial resources to pursue innovative research, and to develop and take new products to market. SBIR grants are not for business expansion or start-up costs, or anything other than research and development.

The specific types of projects supported vary by federal agency. For example, the National Institutes of Health awards SBIR grants for health and medical projects; the Department of Energy awards SBIR funding for projects that aim to develop new, alternative energies and related initiatives. Funding interests are revised and announced on an annual basis. These announcements are published on grants.gov as they become available.

In all, 11 federal departments participate in the SBIR program, including the Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), National Science Foundation (NSF), and Department of Defense (DOD). A complete list can be found at sbir.gov.

In addition, 5 departments participate in the Small Business Technology Transfer, or STTR, program. The SBIR and STTR programs are very similar, with the main difference being the applicant organization(s). While SBIR grants are awarded solely to small business concerns, under the STTR program the small business partners with an academic institute or nonprofit organization for the purposes of the proposed project.

Together, these 2 programs award about $2 billion per year to eligible small businesses.

What are the eligibility requirements for SBIR grants?

Eligibility requirements for SBIR awards vary somewhat by agency. General requirements include: must be a for-profit company located within the U.S., and with fewer than 500 employees. To determine your company’s eligibility, review the requirements published by your target agency, or visit sbir.gov.

What is the application like, and what are the deadlines?

The SBIR application is complex. A complete application package typically includes a 10 – 30 page proposal explaining the project rationale, research design, methods, expected results, and follow-up studies; a detailed budget and budget narrative; commercialization plan; supplementary documents detailing project resources, equipment, and personnel; and other agency-specific documentation.

Many small business concerns that have not previously completed a funded SBIR application will find the help of a small business or SBIR grant writer to be invaluable. SBIR consultants, or SBIR grant writers, specialize in SBIR grants and can assist with writing the proposal, designing a budget, the submission process, and other aspects of preparing a winning application.

Deadlines also vary by agency. The NIH, one of the biggest grantors of SBIR funding, has 3 deadline cycles per year – April 5, August 5, and Dec. 5. Information on deadlines, as well as application packages and instructions, can be found on each agency’s Web site.

If your small business is involved in research and development, or is planning R&D activities in the future, it’s worth looking into applying for SBIR funding.