The National Institutes of Health funds game-changing ideas in health and wellness through the SBIR and STTR programs.

The National Institutes of Health (NIH), under the guidance of the U.S. Department of Health and Human Services (HHS), funds small businesses to bring their innovations to the marketplace. The NIH provides funding through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

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As we’ve all seen, scientific discoveries and emerging technologies have the power to improve health and save lives.

And while a collection of federal agencies are charged with deploying such advancements to the masses, the innovative minds found within the small business sector often perform the research and development legwork necessary to make these medical breakthroughs possible.

Therein lies the inspiration behind the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs offered by the National Institutes of Health (NIH), the nation’s medical research agency.

A part of the U.S. Department of Health and Human Services (HHS), the NIH offers up to $1.2 billion in small business funding through its Seed Fund. This mission cultivates diverse ideas and strives to empower scientists and entrepreneurs to bring their discoveries to patients.

Netting that monumental amount of cash for your project is a challenging endeavor, but we’re here to guide you through the process and tell you everything you need to know.

How to Access $1.2 Billion in Small Business Funding from NIH’s Seed Fund

The SBIR and STTR programs are collectively known as America’s Seed Fund. Each of these programs plays a crucial role in NIH’s overall mission to transform innovative ideas into real-world applications, all in service to the health and wellness of the country.

SBIR and STTR set aside $1.2 billion in non-dilutive funding—that is, any capital received by a small business concern or startup that doesn’t require the forfeiture of equity or ownership of their idea.

America’s Seed Fund through the NIH supports early-stage small business research and development. To access these funds, your small business must possess a firm grasp of eligibility, the application process, and the inner workings of all three phases of the SBIR and STTR programs.

By the end of this article, you’ll have a complete understanding of what it takes to achieve funding.

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What Is The NIH SBIR Program?

The NIH utilizes the SBIR program to facilitate the spread of helpful products across the public health spectrum. Along with the STTR program, the NIH SBIR program delivers funds that small businesses need to perform research and development and kick-off commercialization efforts for any innovations related to the field of health. In addition, like with the other federal agencies involved with SBIR and STTR, the NIH promotes small business sustainability through these programs.

Overall, awards allocated by the NIH are intended to:

  • Utilize the skills of small businesses to meet federal research and development needs
  • Stimulate technological innovation through the power of funding
  • Increase commercialization in the private sector
  • Encourage innovation among socially and economically disadvantaged small business and women-owned business concerns

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What is the Difference Between NIH SBIR and STTR?

While both SBIR and STTR are built specifically for small businesses, a few differences place the two programs into separate categories.

The first significant difference has to do with research partners and their role in the award programs. SBIR not only permits but encourages research partnerships as an integral part of the process. However, it is not a requirement of SBIR programs. On the other hand, STTR actively requires small businesses to collaborate with a nonprofit research institution. This distinction makes for a unique application process for each program.

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Another difference between the two programs relates to the employment status of the Principal Investigator (PI), who acts as the project lead and heads the communication efforts between the small business and the federal agency.

In the SBIR program, the PI must be primarily employed by your small business at the time of the award and during the entire project period. However, in the STTR program, the PI can claim employment by either your small business or the partner research institution.

For further details into the requirements and differences between the NIH SBIR/STTR programs, check out the NIH Grants Policy Statement, chapter 18.5.

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Am I Eligible for the NIH SBIR Program?

Eligibility requirements for the NIH SBIR program mirror the criteria put forth by all other federal agencies. These eligibility requirements include:

  • Must be a small business in the U.S. with no more than 500 employees, including affiliates.
  • It must be a for-profit business.
  • Must be more than 50 percent owned and controlled by U.S. citizens or permanent resident aliens.
  • The bulk of the ownership and work must reside with the grant recipient, though you may have business partners and contract out a minor share of the work. 

However, it’s crucially important to remember that each federal agency has a unique set of standards beyond the above requirements. For a complete look at NIH SBIR eligibility, read the Eligibility Criteria for NIH Seed.

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How is the NIH SBIR program funded?

All SBIR grants, including those from the NIH, are federally funded. This means the money comes from the American taxpayer—which serves as even more incentive to create an innovation with the country’s best interests in mind.

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What are the NIH SBIR Phases?

The SBIR and STTR programs are divided into three phases, each with its own set of standards and possible funding.

Phase I

Feasibility and Proof of Concept

Establishes the technical merit, feasibility, and commercial potential of the small business’ proposed research and development efforts while determining the quality of performance of the awardee organization before it receives any further federal support in Phase II.

Phase II

Research and Development

Continues the research and development initiated in Phase I. Funding in the second phase is based on the results of Phase I, along with the scientific and technical merit and commercial potential of the project. Therefore, only Phase I awardees are eligible for a Phase II award. 

Phase III/Phase IIB

Commercialization

Where appropriate, Phase III (also known as Phase IIB) enables the pursuit of commercialization resulting from the progress of phases I and II. The NIH SBIR/STTR programs do not fund Phase III. Instead, funding must be gathered from third-party, private investments. 

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What is the NIH Fast-Track Program?

The NIH has built-in a Fast–Track application process into its system for scientifically meritorious projects with an exceedingly high potential for commercialization. Fast-Track expedites the award decision and funding of both SBIR and STTR Phase II applications by allowing the submission and review of Phase I and II grant applications at the same time.

Fast-Track differs slightly from Direct-to-Phase II applications, which allows small businesses to move directly to Phase II only if they performed the equivalent of Phase I research before submission of the application.

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What Agencies are Within the NIH?

The NIH consists of 27 different components, referred to as both institutes and centers. These agencies boast a specific research agenda, often focusing on particular diseases or body systems. These agencies are


How do I Apply for NIH SBIR/STTR?

The NIH SBIR/STTR application process consists of numerous touchpoints along the journey toward funding. Therefore, it’s essential to follow the process step-by-step to increase your chances of winning an award.

The Application Process

  • Find a Funding Opportunity. NIH advertises funding opportunities by posting grant solicitations or funding opportunity announcements (FOAs). In addition, applicants can choose to submit to an omnibus or targeted solicitation—view SBIR and STTR funding opportunities here
  • Prepare Your Application. After you zero in on a topic, access application forms via the NIH online application preparation and submission system
  • Submit and Follow Application Status. You’ll need to keep tabs on your application after submitting it to ensure there were no errors made during the submission process. The NIH service desk can assist with this effort. 

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When are the Applications Due for NIH SBIR/STTR?

Throughout the calendar year, there are three due dates for NIH SBIR/STTR applications. Standard application due dates are September 5, January 5, and April 5. Due dates that fall on weekends or federal holidays move to the next business day.

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What NIH Topics are Available?

Open topics can be found using the SBIR/STTR search engine. Simply refine your search only to include “National Institutes of Health,” and the page displays open topics with all the information you need to get started. 

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What is NIH’s Technical and Business Assistance (TABA) Program?

Powered by the NIH, the Technical and Business Assistance (TABA) program helps small businesses identify the most pressing needs in the research and development of their product.

TABA delivers funding over and above your SBIR/STTR grant to use for assistance with the commercialization of your innovation.

There are three main components of NIH’s TABA program:

  1. TABA Funding: Provides applicants and grantees access to crucial technologies, product sales support, intellectual property protection, market research, and planning.
  2. TABA Needs Assessment: Provides a complimentary assessment report via a third-party vendor working on NIH’s behalf for Phase I and II/IIB grants and contracts.
  3. TABA Consulting Services: Carries out the purposes of TABA Funding with expert assistance in reimbursement planning, regulatory affairs, intellectual property, and market analysis.

Some limitations do exist for TABA Funding. This program does not support research and development activities otherwise supported by the grant funds.

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What are the NIH SBIR Accounting Requirements?

Much like the other federal agencies that award funds through SBIR/STTR, the NIH has some intricate accounting principles that you must follow to receive the funds you need to carry out your project.

The NIH requires small businesses to show an approved budget for each project, along with an accounting report demonstrating how the funds were spent in accordance with your approved budget.

A robust accounting system is necessary to correctly account for approved expenses while excluding any extraneous, unapproved costs. You’ll also need a diligent time-tracking tool to capture and allocate employee costs adequately. Again, this is critical to maximizing grant benefits.

Working with Team 80 helps you set up and maintain a healthy accounting system and procedures, so you can stay focused on the task at hand—perfecting your innovative idea for the NIH.

Free Consultation for NIH SBIR Accounting Services
Team 80 CEO Sarah Sinicki

Sarah Sinicki

Team 80 CEO

Sarah is a leader focused on serving small businesses in various industries. She has worked with a multitude of companies over the last 25 years and loves helping business owners find success. Sarah is genuinely committed to unburdening Team 80 clients so that they have the freedom to focus on their business. In her free time, you can find her spending time with her husband, two kids, and her Yorkies, Marley and Ziggy. When she is not helping business owners, you can find her in a Reb3l Groove class dancing it out. Sarah is also an avid Colorado Avalanche fan, so if you ever want to talk about hockey, she’s your gal.

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