NIH SBIR Program: Essential FAQs for Applicants

Section 1: Program Eligibility and Basics

Q1. What is the NIH SBIR program and how is it structured?

The NIH Small Business Innovation Research (SBIR) program is a federal grant initiative that funds early-stage R&D at U.S. small businesses with commercial potential. It’s designed to de-risk innovation that aligns with NIH’s mission to improve public health. The program follows a phased approach:

• Phase I supports feasibility studies for up to $275,000 (typically 6–12 months).
• Phase II funds further development (typically $1.8–2 million over two years).

Some projects may be eligible for Fast-Track (combined Phase I + II) or Direct-to-Phase II if feasibility has already been demonstrated outside NIH funding. These are reviewed as integrated submissions or advanced entries, respectively.

Q2. Who can apply for NIH SBIR funding?

To be eligible, the applicant must be a U.S.-based, for-profit small business with fewer than 500 employees and be at least 51% owned by U.S. citizens or permanent residents. Venture-backed firms can qualify under certain structures, but no single VC can own more than 50%.

The small business must perform the majority of the research and be the official applicant—not a university or individual. All work must occur within the U.S. unless justified and approved.

Q3. Can a university researcher serve as Principal Investigator on an SBIR?

Yes, but only if the researcher reduces their academic employment to ≤49% or takes a leave of absence, making the company their primary employer during the award. This requirement ensures the PI is committed to executing the SBIR project.

Alternatively, academic founders may appoint another full-time team member as PI and serve in a different role. All key personnel must register with eRA Commons under the company profile.

Q4. What’s the difference between SBIR and STTR – and how do I choose?

SBIR offers greater flexibility in collaborations, while STTR requires a formal partnership with a nonprofit research institution. The table below outlines key differences:

Section 2: Partnerships, Subcontracting, and PI Criteria

Q5. Can I include universities or CROs as collaborators in my SBIR proposal?

Yes—collaboration is common and often strengthens your application. You can partner with universities, contract research organizations (CROs), or other businesses to access expertise, facilities, or resources your small business lacks.

However, NIH SBIR rules impose limits:

• Phase I: No more than 33% of the research effort can be subcontracted.
• Phase II: Up to 50% may be subcontracted.

To comply, make sure your small business conducts the majority of work in-house. Collaborators should provide Letters of Support and be listed in the budget with specific roles and costs. If your collaborators are receiving funds (as a subcontract), their institutions must also be registered in SAM and eRA Commons.

Q6. What are the PI employment rules for NIH SBIR applicants?

The SBIR Principal Investigator (PI) must be primarily employed by the small business at the time of award and throughout the project. This means they must commit more than 50% of their time (typically measured in person-months) to the business—not to a university or any other employer.

Q7. If I want to stay employed at a university, should I consider STTR instead?

Possibly. STTR allows the PI to be primarily employed either by the small business or by the nonprofit research institution. If you’re an academic founder who intends to maintain your university position, STTR may be the more compliant path—provided the work split (≥40% company, ≥30% institution) also makes sense for your project.

Section 3: Funding Levels, Solicitations & Strategy

Q8. What’s the typical budget for Phase I and Phase II NIH SBIR awards?

NIH typically supports Phase I projects with up to $275,000 total costs and Phase II projects with $1.8–$2 million over two years. These totals include direct costs, indirect costs (F&A), and a 7% small business profit (fee).

The actual amount you request must align with your project scope and be clearly justified. Reviewers expect budgets that reflect a practical path to your proposed outcomes—excessive or poorly justified requests often signal weak planning.

Q9. Are there exceptions to the standard SBIR budget limits?

Yes. NIH maintains a list of SBA-approved “budget waiver topics” that allow applicants to exceed standard caps. These typically cover high-cost areas like therapeutic discovery, diagnostic tools, or advanced software platforms.

To request a waiver, your topic must match one listed in the FOA, and your justification must be strong, detailed, and aligned with the project’s R&D needs. Be sure to consult the latest Omnibus Solicitation and waiver topic list on the NIH SEED website.

Q10. What is the NIH Omnibus Solicitation and how does it work?

The Omnibus is a broad annual opportunity through which NIH accepts SBIR/STTR proposals across all eligible topic areas. It covers most of NIH’s institutes and centers, each with its own research interests.

Applicants use this route to submit investigator-initiated ideas without responding to a narrow topic. Standard receipt dates are January 5, April 5, and September 5.

Q11. How do I find targeted SBIR funding opportunities?

NIH also issues targeted Funding Opportunity Announcements (FOAs) and Request for Applications (RFAs) that focus on specific priorities (e.g., Alzheimer’s diagnostics). These typically offer set-aside funds and may include specific requirements like preliminary data or clinical trial readiness.

NIH also releases an annual SBIR Contracts Solicitation—these differ from grants and are issued by HHS Acquisition Offices. Contract topics are highly specific, and submission is via a different process.

Q12. Should I contact a Program Officer before applying?

Absolutely. NIH strongly encourages applicants to email a Program Officer (PO) at the appropriate institute before submitting. Share a 1–2 page non-confidential summary with your project’s aims, target market, and technical approach. A PO can help you assess fit and avoid mismatches that may lead to rejection.

Talk to a Program Officer early
Reach out at least 6–8 weeks before the deadline to get valuable feedback on your topic fit and submission strategy.

Section 4: Application Process & Requirements

Q13. What documents are required in an NIH SBIR Phase I application?

NIH SBIR uses the SF424 grant format, with additional requirements specific to small businesses. A complete Phase I submission typically includes:

• Project Summary/Abstract & Project Narrative
• Specific Aims page (1 page)
• Research Strategy (6 pages max)
• Budget and Justification (R&R Detailed Budget)
• Biosketches for PI and key personnel (NIH format)
• Facilities & Other Resources
• Letters of Support from collaborators or advisors
• SBA Company Registry PDF (required)

Additional forms are needed for human subjects or animal studies, and a Data Management & Sharing Plan is now required for all proposals generating scientific data.

Q14. What registrations do I need to complete before submitting?

You’ll need to register your company with multiple federal systems before applying—and some steps can take several weeks. Start early.

Q15. What makes a good Specific Aims page for SBIR?

This one-page document is often the most critical part of your application. It should:

• Define the problem and its public health significance
• Present your innovation as a solution
• List 2–3 clear, testable Specific Aims
• Include a short paragraph on expected outcomes and Phase II direction

Avoid academic jargon. Focus on feasibility, clarity, and the end product’s path to commercialization.

Q16. Do I need Letters of Support—and what should they include?

Yes. Letters of Support strengthen your proposal by confirming partnerships, access to facilities, or product interest. Ideal letters include:

• Collaborator letters confirming their specific role and availability
• Market interest letters from potential users, customers, or partners

Make each letter specific, 1 page max, on official letterhead. Upload all letters as one combined PDF.

Section 5: Review Process, Resubmissions & Resources

Q17. How are SBIR applications reviewed by NIH?

NIH follows a two-stage peer review process. First, your application is evaluated by a Scientific Review Group (SRG) of experts who score it on five standard NIH criteria:

• Significance: Does the innovation address an important health need or market gap?
• Investigator(s): Is the team capable of executing the proposed work?
• Innovation: How novel is the proposed solution or technology?
• Approach: Are the methods sound and achievable in scope and timeline?
• Environment: Does the company have access to needed facilities and resources?

For SBIR proposals, commercialization potential is considered under Significance. This includes market understanding, product vision, and the value proposition for end users.

Clarification:
NIH reviewers evaluate the commercial impact of your product as part of the “Significance” score—even in Phase I.

The SRG assigns an Overall Impact Score (1 = exceptional, 9 = poor). Strong scores proceed to NIH Institute Advisory Councils for final funding decisions.

Q18. What happens if my application isn’t funded? Can I resubmit?

Yes. You’re allowed one resubmission (A1) of the same project. The resubmission must include a 1-page “Introduction” that directly addresses reviewer critiques from the summary statement.

Tips for a strong resubmission:

• Don’t be defensive; acknowledge weaknesses and show how you’ve addressed them
• Add new preliminary data or letters to strengthen your case
• Clarify aims, methods, or team qualifications as needed

Your revised application will go through a new review cycle—sometimes with the same reviewers.

Q19. What resources are available to help first-time NIH SBIR applicants?

NIH offers several support options:

• Applicant Assistance Program (AAP): Free proposal coaching for eligible first-time small businesses
• NIH SEED webinars: Frequent events on proposal strategy, commercialization, and funding basics
• Sample applications: Institutes like NCI and NIAID publish redacted examples
• eRA Commons and Grants.gov tutorials: Walkthroughs for common submission steps

You can also reach out to local Small Business Development Centers (SBDCs) or state-level SBIR support hubs for personalized help.