Small Business Award

Questions and Answers Table of Contents

Where can I find basic information on small business awards?

Find basic information on small business awards at our Small Business Awards page, which includes Advice Presentations for SBIR and STTR, and our Small Business Innovation Research and Small Business Technology Transfer Grants SOP.

How do I apply for a small business award?

NIH does not accept printed applications that use the PHS 398 for small business awards.

Instead, submit your SBIR or STTR application through Grants.gov by scrolling down the SBIR funding opportunity announcement or the STTR funding opportunity announcement and selecting the button that says "Apply for Grants Electronically."

Remember to read the full announcement before beginning your application. Find more advice in the NIH Grant Cycle: Application to Renewal and Advice Presentations for SBIR and STTR.

What constitutes a small business?

A small business is independently owned and operated and not dominant in its field. It has no more than 500 employees and it controls the facilities in which it conducts a major part of NIH-supported research. See the Basics module of Advice Presentations for SBIR and STTR.

Can a foreign business own an SBIR-funded company?

No. According to the Omnibus Solicitation for SBIR/STTR Grant Applications, a company or subsidiary must have majority ownership by U.S. citizens and a principal place of business in the U.S. It must also conduct all grant-funded research in the U.S.

Should I apply for a small business award if my goal is to patent a product?

Yes. You can pay for patent costs out of a fee that you request for your Small Business Innovation Research or Small Business Technology Transfer grant, but you cannot pay directly from grant funds.

Is it easier to get a small business award than an R01?

No.

How important is research design in a small business award application?

Very important. Reviewers will give the Research Design and Methods section of your small business application the most weight when evaluating your proposal. Read more information in the Grantsmanship module of Advice Presentations for SBIR and STTR.

What's the difference between an SBIR and an STTR?

An SBIR grant requires that a principal investigator is employed primarily by a small business. An STTR grant doesn't make that demand, but it does require that the grantee collaborate with a university or other nonprofit research institution.

For more differences, see the SBIR and STTR Comparison Chart and the Basics module of Advice Presentations for SBIR and STTR.

Can I apply for more than the normal award amount?

Yes, but NIAID will not fund a phase I proposal for more than $300,000 a year for up to two years. NIAID will not fund a phase II proposal for more than $1 million a year for up to two years or three years for phase II advanced technology.

Do I own the intellectual property from my STTR award?

In general, grantees own the rights to data and inventions resulting from any grant-supported project. See the Basics module of Advice Presentations for SBIR and STTR for more information on how to handle intellectual property issues for STTR awards.

Do I need to protect my intellectual property in the grant application?

We strongly recommend that you acquire at least a provisional patent before you apply. See the Basics module of Advice Presentations for SBIR and STTR. Also read the NIH Grants Policy Statement (12/03) for more information on intellectual property rights.

After I have filed a provisional patent, how long do I have to file a patent application?

You have one year to file a patent application. Read more about provisional patents on the Basics module of Advice Presentations for SBIR and STTR.

Does NIH often use its march-in rights to take away intellectual property?

No. NIH may use march-in rights only if an awardee fails to achieve practical application of an invention. Furthermore, NIH has never exercised this right because of the lengthy administrative process. For more information, see Appendix D of the June 4, 1998, Report of the NIH Working Group on Research Tools.

How much of my small business research project may I outsource?

You may outsource up to 33 percent of your project for a phase I SBIR award or 50 percent for a phase II SBIR. For an STTR award, you may outsource no more than 60 percent of your project.

While you may have some leeway with this requirement in an SBIR grant, the maximum outsource level for STTR grants is not negotiable.

Even though the normal phase I for STTRs is six months, can I ask for 12 months of funding?

You can, and we recommend that you do so. See the Basics module of Advice Presentations for SBIR and STTR.

What is a Fast-Track proposal?

The SBIR Fast-Track process requires phase I and phase II proposals in the initial application. In contrast, a normal SBIR application includes only a phase I proposal, and an applicant sends a phase II proposal only if a phase I award is made. We do not recommend applying for a Fast Track award. See the Basics module of Advice Presentations for SBIR and STTR for an explanation.

Does Fast-Track save a lot of time?

Because a Fast-Track proposal contains both phases I and II, people often think it saves a lot of time. However, a Fast-Track proposal typically requires four times more work than a phase I application. For more information, view the Basics module of Advice Presentations for SBIR and STTR.

How do I apply for an advanced technology SBIR award?

See the Research Objectives section of the SBIR funding opportunity announcement for instructions on how to apply for the NIAID Advanced Technology SBIR (NIAID-AT-SBIR) award.

Can NIAID fund advanced technology SBIR applications for $1 million a year?

NIAID will consider SBIR advanced technology NIAID phase II applications for up to three years at up to $1 million a year. See the NIAID-AT-STTR program announcement.

Are reviewers more likely to find problems with bigger applications?

The more you expand your application, the more likely you are to say something to which reviewers object. Your best strategy is to limit your phase I goals to those necessary to support your phase II application. For more advice, see the Grantsmanship module of Advice Presentations for SBIR and STTR.

Is it generally better to go for a more complex award, such as an advanced technology award?

There appears to be no difference in the success rates of applications submitted within normal guidelines and those requesting more time or more funds.

Can I submit multiple SBIR applications for the same product?

Yes. See the Grantsmanship module of Advice Presentations for SBIR and STTR for an example.

Can I submit an unsolicited SBIR application?

No. You can apply for an SBIR award only in response to the NIH Omnibus Solicitation or to an NIAID solicitation for program announcements or requests for applications. See High-Priority Topics: Concepts and Initiatives questions and answers.

Can my small business application include a clinical trial?

No. You must submit an application for an Investigator-Initiated Clinical Trial Planning and Implementation Grant (R34, U01) for the clinical trial. See our Investigator-Initiated Clinical Trial Planning and Implementation Grants questions and answers. Read How does the R34 process apply to SBIR and STTR applicants?

You can apply for small business funding for the nonclinical trial parts of your research. If your small business award includes a clinical trial and is eligible for funding, we will remove the clinical trial part, reduce your budget, and bar you from spending funds on a clinical trial.

What is the most common reason a small business fails to get an award?

For applications that do score within the fundable range, the most common reason for failing to get an award is not meeting just-in-time requirements. The Timeline module of Advice Presentations for SBIR and STTR lists common reasons that a small business application does not receive a score within the fundable range.

Can I renew a phase II SBIR award?

NIAID accepts applications for phase II renewal SBIR awards for projects that have made significant progress along the critical path to FDA approval. Phase II renewal applications may request a maximum of $1 million a year for up to three years.

We allow some flexibility in the SBIR 50 percent cap on consultant and contractual costs if you justify the expenditure. In your renewal application, respond to the additional review criteria listed in the Application Review Information section of NIH's SBIR-STTR Omnibus Solicitation.

Can I change my SBIR award to an STTR?

No. Once we award a phase I small business award, you cannot switch between SBIR and STTR mechanisms.

Can small business award funds be spent on research in a foreign country?

No. Although funds can be spent directly, in your application you can request and justify a fee of up to 7 percent of your total grant. The fee belongs to the company, so you may use it to pay for costs outside the U.S.

Can I use small business award funding to help support the collection of samples from a foreign country?

You may not spend any STTR funds outside the U.S. unless you receive approval from the NIH Small Business Office. Obtaining this approval is usually a lengthy and unsuccessful process, so we don't recommend it.

Another option is to request a fee as stated in the question above.

Can I use small business award funding to analyze patient-derived samples collected in a foreign country?

You may use STTR funding to analyze samples from a foreign country, but the analysis must be performed in the U.S.

Are there other funding opportunities besides SBIR for commercializing innovations?

Search the NIH Funding Opportunities Relevant to NIAID and contact other institutes. Note that you will face strong competition with funding opportunities that are open to large companies and academic investigators.

How do I submit a final report for my phase I small business award?

See Section VI of the PHS 2590 Instructions and Section 5.4 of SBIR/STTR Application Guide SF 424 (R&R).

Can an SBIR or STTR budget include a consulting fee for an expert who helps prepare the grant application?

No, but if you get funded you can request and receive a fee of up to 7 percent of your total grant, which you can use for expenses not allowed in the grant budget, such as foreign consultants, marketing research, and patent applications.

Can a university be a minority co-owner of a small business, or can it only be a subcontractor?

A university can be either a minority co-owner or a subcontractor. Keep in mind funding for subcontracting is limited. See Providing Consent to Subcontract for more information.

I plan to leave my organization for another academic job but want to continue working as the PI. Which grant type will give me a better chance at doing that: an SBIR or STTR?

All NIH grants, including SBIR and STTR, are awarded to the PI's institution. If the PI moves to a new institution, both the original and new institution have to agree to transfer the grant

. NIH program staff also have to agree to the transfer. An SBIR grant may be easier to transfer because only two institutions are involved, whereas an STTR grant has a partner institution. Keep in mind that each case is unique.

Can I use my allowed SBIR fee to pay for reporting or other administrative assistance, and are these costs direct or indirect costs?

Yes, you can use your 7 percent fee to pay for consultants to file required reporting or administrative grant assistance. But this fee is not considered a direct or indirect cost to the grant. Check out our Small Business Awards page for more information.

What if my question wasn't answered here, or I'd like to suggest a question?

Email deaweb@niaid.nih.gov with the title of this page or its URL and your question or comment. We answer questions by email and post them here. Thanks for helping us clarify and expand our knowledge base.