Overview of the NIH Small Business Innovation Research (SBIR) Program
- josh84483
- 1 day ago
- 8 min read
Updated: 2 hours ago
What Is the NIH SBIR Program?
Annually, the National Institutes of Health (NIH) awards more than one billion dollars to American small businesses through their Small Business Innovation Research (SBIR) grants. These grants are distributed through various NIH institutes and centers (IC) to companies proposing the most innovative and commercially viable life science technologies.
Accessing grants is undeniably challenging. Most grants flow to research institutions that maintain dedicated grant offices and employ teams of graduate students who write dozens of proposals annually to sustain their operations. The SBIR program offers a distinct advantage: it's exclusively for small businesses, meaning companies don't have to compete against these well-resourced academic institutions. That said, applying to SBIR grants remains demanding, especially for small companies already stretched thin balancing research work with day-to-day business operations. However, the effort is well worth it—SBIR provides a uniquely accessible pathway to non-dilutive federal funding for eligible small businesses.
Fundamentally, the main priority of the SBIR mechanism is commercialization. This grant is to be used for technology that will be sold and used in the near future. There are plenty of grants that allow for more knowledge and academic based research, but the SBIR simply is not one of them. In fact, in Phase II proposals, a full commercialization strategy is required to prove that the company understands the market, competition, and has a clear strategy to take the project that they are proposing from the lab to the real world. The federal government is using U.S. tax dollars to fund home grown life sciences research boosting our national scientific landscape as well as our economy.
NIH SBIR Topics
Does your research fit in one of these categories? If so, an NIH SBIR could be a good fit!
Medical Devices – diagnostic tools, monitoring equipment, surgical technologies
Pharmaceuticals – drug discovery, delivery systems, formulation platforms
Biotechnology – gene therapy, cell therapy, molecular tools
Digital Health – AI diagnostics, wearables, mobile health apps, EHR integrations
Assistive Tech – aging-in-place technologies, rehab tools
Behavioral Health – digital therapeutics, addiction tools, mental health platforms
If your innovation has the potential to improve human health, it likely fits within NIH’s mission.
NIH SBIR Deadlines
The NIH has 3 cycles in which they accept proposals. The deadlines are: September 5th, January 5th, April 5th (or the next business day if these dates fall on a weekend or federal holiday)
NIH SBIR Phases Explained: Phase I, Phase II, and Fast Track
Phase I - $314,363 for 6-24 months of feasibility, technical merit and commercial research
Phase II - $2,095,748 for 12-36 months to continue research after demonstrating progress toward Phase I milestones (completion of Phase I is not required to apply)
Fast Track - The option to submit Phases I and II as one proposal, reduces potential gap in funding between stages of research but also requires Phase II to be fully planned prior to initiating Phase I which is often difficult
Direct to Phase II - A project that is underway and has feasibility data equivalent to the milestones that would be seen in a Phase I study is eligible to go directly for Phase II funding
These are not absolute funding limits. Different NIH institutes can exceed standard budget caps in certain situations. Namely for specific waiver topics that are outlined by the agency which focus on what they deem the most significant topics for that award cycle. While it is not always necessary to contact a program officer when pursuing an SBIR, especially a Phase I, if you are looking to go beyond the standard budget limits, this is something you might want to consider.
These are not absolute funding limits. Different NIH institutes can exceed standard budget caps in certain situations.
Eligibility for NIH SBIR Grants
To be eligible to apply for NIH SBIR funding you must meet all of the following criteria:
U.S.-based, for-profit small business.
500 or fewer employees.
At least 51% owned by U.S. citizens or permanent residents.
Principal Investigator (PI) must be primarily employed by the small business (for SBIR).
What does the SBIR budget fund?
Allowable expenses include:
Personnel salaries
Consultants & subcontractors
Materials and supplies
Equipment (with justification)
Prototyping and testing
Indirect costs (facilities, utilities, admin)
Clinical trials (if applicable)
NIH SBIR Application Process: Step-by-Step
Understanding the Omnibus Solicitation and Targeted FOAs
What the heck is an omnibus anyway? "Omnibus" is just a broad, catch-all category that bundles all submissions together.
The R43/44 mechanism is the SBIR Omnibus Solicitation to which all general SBIR grants applications are submitted to. As it is a general mechanism, all grants are received by the same committees and are sorted by the NIH post-submission based on the project so applicants do not need to declare which institute they are submitting to and are not beholden to specific project requirements or topics set by a specific institute like other awarding mechanisms. While there are clear guidelines on budgets, timelines, and milestones, researchers are encouraged to use their unique knowledge and expertise to formulate the ideal research strategy that will lead their research to commercialization.
A brief explanation of terms:
Omnibus = Submit your own ideas (broadest)
PAR = Submit ideas within defined interest areas (moderate focus)
RFA = Address specific research questions with set-aside funding (most targeted)
Omnibus Solicitation: This open, broad-based Funding Opportunity Announcement (FOA) accepts health-related ideas that do not fall under a specific topic. Ideal for investigator-initiated proposals.
Program Announcements with Special Review Criteria (PARs): Targeted within a defined area of interest (e.g., technologies to improve diagnostics of neurological diseases, pharmaceutical interventions for Parkinson's disease, medical devices for stroke rehabilitation), but still flexible FOAs that allow investigator-initiated ideas within those focus areas. They often include structured review processes and additional review criteria specific to the program's objectives.
Requests for Applications (RFAs): Highly specific topics with allocated funding and defined deadlines. RFAs are typically more competitive and urgent.
Tip: Use the Omnibus if your innovation doesn’t match a targeted topic. But always check if a PAR or RFA better aligns with your work.
SBIR Registration Requirements: What You Need Before You Apply
You must complete several registrations before submitting your application. This process can take 4–6 weeks, so plan early:
EIN (Employer ID Number)
UEI (via SAM.gov) – replaces DUNS
SAM Registration
eRA Commons (for NIH-specific submission)
SBA Company Registry
For more on how to register for SBIR you can read our article on SBIR Registration.
Tip: Incomplete registration is a common cause of missed deadlines.
Application Review and NIH “Paylines”
Once grants are submitted, they go through multiple rounds of review before the final funding recipients are notified. The first round of review, the Scientific Merit Review, conducts an initial review and determines which projects will move on to the second and final round of review by the Advisory Council. At this stage, proposals that will not move forward to the Advisory Council are referred to as “Not Discussed” and are not given a numerical impact score. “Not Discussed" means the proposal scored in the bottom half and will not receive detailed discussion or scoring, though reviewers still provide written feedback. Generally, the top half of submissions move to the second round and are given an impact score (10 being the best, 90 being the lowest) and funding decisions are made based on this. It should be noted that all proposals that are reviewed by the scientific merit review committee are given a thorough summary statement written by the reviewers providing critical feedback, questions, and advice for future submissions. When used productively, these summary statements are like gold and can lead a proposal that is backed by great science to major awards, even after a not discussed or a low score on a first attempt.
Each NIH institute sets official or unofficial "paylines"—the highest impact scores they'll typically fund—which fluctuate annually based on application volume and budget allocations. These numbers vary WILDLY across institutes: 2025 SBIR paylines range from highly competitive mid-20s at National Institute of Diabetes and Digestive and Kidney Diseases (remember, a lower score is better) to the more accessible 50+ range at National Institute on Drug Abuse, while some institutes don't publish paylines at all.
However, paylines aren't absolute cutoffs. Projects sometimes receive funding despite falling outside these ranges, often through direct discussions between research teams and program officers to address reviewer concerns without requiring full resubmission.
Impact score cutoffs for NIH paylines: The highest impact score (on a scale of 10-90, where lower is better) that an institute will typically fund
Rejection and Resubmission
Finally, that brings us to resubmission. The SBIR mechanism (and most NIH grants in general) allows for one resubmission of each proposal within 37 months of the initial submission. This second attempt is absolutely key to the success of many awarded grants. Using the summary statement provided by the committee after the first go around, you can mold your updated iteration of the proposal to meet what the committee is looking for exactly and you can answer their questions directly. Having expertise from key opinion leaders in the field gives the type of insight that companies pay thousands of dollars for consultants to provide and when taken seriously, can change the entire trajectory of a proposal.
Time to Funding
The post-award technicalities for winners can be addressed down the line but are fairly standard negotiations and paperwork tasks.
Within the context of non-dilutive funding, SBIRs rise to the top in terms of speed to funding, with turnaround times on a successful proposal of about 6-9 months from the submission deadline to project start date. Other mechanisms often take 12+ months from submission deadlines to see any funding and often only occur once or twice a year.
Transitioning to Phase II: What to Expect
To secure Phase II funding, you must demonstrate technical feasibility from Phase I and present a strong commercialization plan.
Key expectations:
Data proving Phase I success
Market analysis and go-to-market strategy
Detailed milestones and timeline
Solid IP strategy
NIH also offers Fast-Track and Direct-to-Phase II options under certain FOAs.
Common Mistakes That Sink NIH SBIR Applications
Avoid these frequent errors that derail applications:
Misaligned project with NIH’s mission or Institute or Center priorities
Vague or overly ambitious Specific Aims
Weak preliminary data
Inadequate commercialization strategy
Budget errors or unjustified costs
Ignoring human subjects or clinical trial rules
Submitting without consulting a Program Officer (when applicable)
No AI, No Problem
In 2025 news, the NIH has announced that due to the use of AI in submissions, they have changed their policies and procedures. Notably, each Principle Investigator (PI) will be limited to six submissions to the NIH annually. Quite honestly, six submissions is a very healthy number of submissions for a single PI annually (keep in mind, non-NIH funding mechanisms also exist!) but this rule came into effect following the recent surge in AI usage which allowed some PIs to submit up to 40 submissions annually. While the specific limit can be argued in either direction, six seems to be a reasonable number where an SBIR-eligible entity is concerned.
Non-Dilutive Funding Outside of the NIH
Speaking of non-NIH grants, there are quite literally hundreds of millions more in non-dilutive funds to be acquired out there. Most notably, the Department of Defense funds hundreds of life sciences research projects through their CDMRP programs which feature mechanisms just as, if not more, robust as the NIH. The technical specifications of the DoD life sciences grants can be saved for a further discussion but they are absolutely not to be skipped. The key to a strong non-dilutive funding strategy is diversification through different institutions including the NIH, DoD, NSF and other smaller organizations.
NIH vs. Other Agency SBIRs: What Makes NIH Unique?
Feature | NIH (Health) | DoD (Defense) | NSF (Science/Tech) | DoE (Energy) |
Mission Focus | Improve public health | Meet defense needs | Advance foundational science | Energy innovation |
Review Process | Peer-reviewed, scientific | Relevance to military goals
| Technical & market-focused | Mission alignment + tech |
Commercialization | Public benefit focus | Acquisition/ mission use | Market-driven | Application in energy sector |
Timelines | 9–12 months typical | Sometimes Faster than NIH | Similar to NIH | May Vary |
NIH stands out for its emphasis on rigorous peer review, scientific merit, and alignment with public health.
Summary
The NIH SBIR program is challenging to win and difficult to navigate for busy startups, but when you have compelling technology with significant health impact and the right application expertise, it can be a game-changing catalyst to help bring your innovation to market with funding that comes without giving up equity. Akela Consulting specializes in helping deep-tech startups successfully navigate SBIR programs across agencies like NIH, unlocking non-dilutive funding opportunities designed specifically for innovative U.S. small businesses.
About the Author
Alexis Goldstein, MPH
Alexis is a life-science grant writing professional with five years of experience crafting successful proposals for deep-tech health innovations. She specializes in navigating federal funding opportunities, including SBIR and BAA programs from agencies such as the NSF, DoD, NIH, ARPA-H, and BARDA.
