NIH SBIR Phase I Application: Step-by-Step Guide

Introduction

The NIH Small Business Innovation Research (SBIR) Phase I program provides non-dilutive funding to support the early development of innovative technologies with strong commercial potential. Targeted at small, U.S.-based businesses, Phase I awards are designed to evaluate the scientific and technical feasibility of a concept before more substantial investment in Phase II.

A successful Phase I application demonstrates more than just a promising idea—it shows that the team understands how to align its innovation with an unmet need in healthcare, navigate NIH processes, and lay the groundwork for commercialization. This guide will walk you through every critical element of a strong Phase I proposal, from eligibility and registration through Specific Aims and budget justification. Whether you’re applying through the Omnibus FOA or a targeted solicitation, these steps will help you prepare a competitive application.

Verify Eligibility

Before starting the NIH SBIR Phase I application, you must confirm that your business qualifies as a Small Business Concern (SBC). The company must be a for-profit entity with no more than 500 employees, primarily located and operating in the U.S. Ownership must be at least 51% U.S. citizens or permanent residents—or another qualified SBC. Ownership by venture capital firms is permitted under SBIR rules, provided no single VC or combined group owns more than 50%.

The Principal Investigator (PI) must commit more than 50% of their time to the small business during the award period. Additionally, at least 67% of the total research and development work (measured by budget) must be done by the SBC itself; subcontractors may only handle up to 33%.

Confirming eligibility early prevents wasted effort and disqualification later in the process. When in doubt, review the SBIR Policy Directive or contact NIH SEED for clarification.

Complete Required Registrations

Before you can submit an NIH SBIR application, your business must complete several registrations across federal systems. These registrations can take six weeks or more and must be finished before the application deadline. Failing to complete even one can prevent submission entirely, so start early and track your progress.

Each system has specific verification steps and login credentials. Store all credentials securely and allow extra time for any necessary corrections. A common mistake is an unaffiliated PI account in eRA Commons, which will trigger a submission error.

Identify the Right FOA and Institute

The NIH doesn’t have a single SBIR program office—instead, its 27 Institutes and Centers (ICs) each manage their own SBIR funding aligned to their scientific missions. This makes selecting the right Funding Opportunity Announcement (FOA) and IC critical to your application’s success.

Most applicants use the NIH Omnibus Solicitation for SBIR and STTR programs, which accepts investigator-initiated proposals across all areas relevant to NIH. This parent FOA (typically labeled something like PA-XX-XXX) is ideal for general innovations in health, diagnostics, therapeutics, or medical devices. Be sure to check the list of participating ICs to ensure your chosen Institute accepts proposals through the Omnibus route.

Alternatively, targeted FOAs—known as Requests for Applications (RFAs) or Program Announcements (PAs)—focus on specific topics and may offer set-aside funds or special review criteria. These are especially useful if your work aligns with a priority initiative.

To choose the right IC and FOA:

• Match your technology area with the IC’s mission (e.g., cancer with NCI, heart disease with NHLBI).
• Read prior award abstracts in NIH RePORTER to see which IC funds projects like yours.
• Reach out to NIH SEED or a Program Officer if you’re unsure.

Getting this match right ensures your application lands with reviewers who understand your technology—and care about your outcomes.

Engage Program Officers Early

One of the most strategic moves you can make in the NIH SBIR process is engaging a Program Officer (PO) early—ideally before you start writing your full application. POs are NIH staff who oversee SBIR portfolios in their Institutes, and they are invaluable allies for assessing fit, scope, and feasibility.

To initiate contact, draft a one-page Specific Aims document summarizing your innovation, the unmet need, and your Phase I objectives. Then email the PO listed under your chosen FOA with a short introduction and attach the document. Be clear and professional—highlight why you believe your project aligns with their Institute’s mission.

During the call or email exchange, you can ask whether your project:

• Fits the selected FOA and Institute priorities
• Is appropriately scoped for Phase I (not overly ambitious)
• Raises any red flags regarding study design or budget

POs can’t write or edit your proposal, but they can flag risks, suggest a better-suited Institute, or advise if you need a clinical trial designation. Their insights often shape stronger, more fundable applications.

After submission, the relationship doesn’t end. You can follow up with your PO to discuss your Summary Statement and get guidance on resubmission strategies if needed.

Write a Winning Specific Aims Page

The Specific Aims page is arguably the most important part of your NIH SBIR Phase I application. It serves as a standalone pitch that should immediately convey what problem you’re solving, why it matters, how your innovation works, and what you plan to accomplish in Phase I. Reviewers often decide how they feel about your proposal based on this single page.

The structure should be tight and purposeful:

• Opening paragraph: Define the unmet need or clinical/scientific problem (Significance).
• Middle paragraph: Introduce your innovative solution and its advantages (Innovation).
• Aims list: Outline 2–3 Specific Aims that will test feasibility in Phase I.
• Closing paragraph: Explain the broader impact and what Phase I results will enable in Phase II.

Each aim should be concrete, measurable, and achievable within the Phase I period (typically 6–12 months). Avoid overly ambitious goals or jargon-heavy language. Use plain, clear prose to show that your team understands the problem, has a practical solution, and a realistic plan to prove feasibility.

A strong Specific Aims page hooks reviewers, gives them a roadmap for what’s to come, and signals that you understand how to execute a focused, feasible project.

Develop a Strong Research Strategy

The Research Strategy is your opportunity to convince reviewers that your project is scientifically valid, technically feasible, and appropriately scoped for a Phase I effort. It consists of three required sub-sections: Significance, Innovation, and Approach—each playing a distinct role in framing your project.

Significance

Explain the problem you are addressing and its broader health, clinical, or scientific impact. Use statistics or references to support the importance of the need. Make the case that solving this problem matters, and that there is a meaningful gap in current solutions.

Innovation

Describe what makes your product or approach novel. This could be a new technology, a unique application of existing technology, or a novel integration of components. Be specific about how your approach is better, faster, cheaper, or more effective than current alternatives.

Approach

This is the most detailed section, where you walk reviewers through how you will execute each Specific Aim. Include:

• Technical methods and experimental design
• Materials and equipment to be used
• Milestones and success criteria (quantitative if possible)
• Potential pitfalls and your contingency plans

Use subheadings tied to each Specific Aim (e.g., “Aim 1: Design prototype device”) to structure your narrative clearly. You can include figures or schematics to help communicate your design or workflow, keeping them within the 6-page limit. Discuss how the team’s expertise and facilities support the plan.

Keep your scope Phase I-appropriate—feasibility, not full development or clinical validation. A realistic, tightly scoped approach with clear criteria for success builds reviewer confidence and sets you up for a strong Phase II proposal.

Demonstrate Commercial Potential

While a detailed commercialization plan isn’t required for Phase I NIH SBIR proposals, reviewers are still instructed to assess whether your innovation has a credible path to market. Demonstrating early awareness of how your technology could reach users strengthens your application significantly.

Briefly describe:

• Target customers and end-users (e.g., hospitals, diagnostics labs, patients)
• Market size or need, with rough estimates if available
• Competing products and how your solution is superior
• Intellectual property status—filed or granted patents, licensing strategies
• Regulatory considerations, especially if FDA approval will be required
• Potential partners, strategic alliances, or customer feedback if available

You don’t need formal market research at this stage, but showing that you understand the path to commercialization gives reviewers confidence that Phase I results won’t sit on a shelf.

Clarification

NIH doesn’t require a full Commercialization Plan in Phase I, but reviewers still evaluate the project’s potential to lead to a viable product or service.

Where applicable, mention letters of support from potential customers or partners to show external interest. These add credibility and suggest momentum toward Phase II and eventual market entry.

Prepare a Realistic Budget and Justification

Creating a credible and NIH-compliant budget is essential to demonstrating that your project is both feasible and fundable. NIH Phase I SBIR budgets typically cap at $275,000 total costs (including direct, indirect, and up to 7% fee), though certain topics allow for higher limits if justified and approved.

Your budget should align directly with the work described in your Specific Aims and Approach. Include only necessary costs that support Phase I feasibility. Key budget categories include:

• Personnel: Salaries based on time commitment (e.g., 4 person-months for PI)
• Fringe benefits
• Equipment: Items over $5,000—must be well-justified
• Supplies: Lab consumables, prototyping materials
• Consultants and subcontractors: Detail their role and budget share
• Other direct costs: Travel, publication fees, etc.
• Fee/Profit: Up to 7% of total costs (optional)

You must justify each line item in the Budget Justification attachment. For example:

“Dr. Smith (PI) – 4 person-months – will oversee project execution, manage deliverables, and lead experimental design for Aims 1 and 2.”

Also, be mindful of SBIR workshare rules: the small business must perform at least 67% of the total work by budget. Subcontractor costs must not exceed 33% of the total.

A budget that is either too inflated or unrealistically low can hurt your credibility. Show that you understand what resources are required—and that you can manage funds responsibly to complete your Phase I work.

Include Complete Biosketches

A well-structured NIH biosketch helps reviewers quickly assess whether your team is equipped to execute the proposed work. Each senior/key person listed in the application must include a biosketch in the current NIH format (up to 5 pages), including consultants if they are critical to the project.

The biosketch includes:

• Personal Statement: Tailored to the SBIR project, highlighting relevant experience
• Positions and Honors: Chronological summary of career roles and recognitions
• Contributions to Science: Up to five areas of impactful work with selected citations
• Selected Publications or Patents: Most relevant outputs related to the proposed work

In the context of SBIR, it’s important to also highlight entrepreneurial experience or industry roles, not just academic credentials. For example, if a co-founder has brought previous technologies to market or managed R&D in a startup, that should be front and center.

Use the NIH SciENcv tool to generate compliant biosketches if needed, and double-check for formatting errors. Ensure all biosketches are attached and that each person listed in your budget and Research Strategy is accounted for.

A cohesive, qualified team gives reviewers confidence that your innovation has both scientific rigor and commercialization potential.

Gather Strong Letters of Support

Letters of support are a powerful way to validate your proposal and provide third-party credibility. These letters are not formal commitments but should show meaningful collaboration, access to resources, or interest in your innovation.

Common sources of letters include:

• Consultants or subcontractors: Confirm their role, expertise, and agreed compensation
• Key collaborators: Academic partners, CROs, or labs offering services or equipment
• Mentors or advisors: Especially valuable for first-time founders or early-stage teams
• Potential customers or partners: Expressing interest or intent to pilot the technology

Each letter should be on institutional letterhead and signed. Ideally, it references the SBIR project by name and summarizes the contribution or interest clearly. For example:

“Our company is interested in piloting the proposed mobile diagnostic platform if Phase I feasibility is demonstrated.”

Letters that echo or reinforce your budget justification—e.g., for consultant hours or subcontractor work—add coherence and reduce reviewer skepticism.

Aim for quality over quantity. A few specific, well-aligned letters are far more impactful than a generic stack. They also help reviewers assess the likelihood of successful execution and post-Phase I traction.

Submission Mechanics and Common Errors

Submitting an NIH SBIR Phase I application requires precision and timing. Applications are submitted electronically through Grants.gov and ASSIST, NIH’s submission portal. All system registrations (SAM, Grants.gov, eRA Commons, SBA) must be completed and active before submission.

Key steps include:

• Download the correct FOA application package from Grants.gov.
• Fill out all required forms, including the SF424, budget, biosketches, and attachments.
• Upload to ASSIST, validate the submission, and track confirmation messages.

Common errors to avoid:

• Unaffiliated PI eRA account: The PI must be affiliated with your organization or the submission will fail.
• Inconsistent organization names or addresses across registrations.
• Last-minute submission: Grants.gov and ASSIST validations can take hours—or longer if issues arise.

Best Practice

Submit at least 48 hours before the deadline to allow time for system errors or missing documents.

After submission, you’ll receive a confirmation from eRA Commons. Monitor your status closely and be prepared to respond quickly if NIH requests additional documents or clarifications.