NIH SBIR / STTR — Small Business Innovation Research and Small Business Technology Transfer

NIH SBIR Phase II

Supports United States biomedical small businesses advancing successful feasibility work into scale-up development.

NIH SBIR Phase II awards provide non-dilutive grant funding for small businesses to continue and scale the R&D work initiated under a Phase I award, with the goal of advancing innovations toward commercialization. The budget cap for Phase II is $2,153,927 for a project period of one to three years. Phase II applicants must have completed a Phase I award (or qualify for Direct-to-Phase II if feasibility has been independently demonstrated without a prior NIH Phase I). Applicants may submit a Phase II application up to six standard receipt dates after the expiration of their Phase I budget period, providing considerable flexibility. NIH's SBIR and STTR programs together set aside more than $1.4 billion annually, with Phase II representing the larger share of funded dollars per award. The programs were reauthorized on April 13, 2026, and NIH is rebuilding parent NOFOs ahead of the next standard receipt date of September 5, 2026.

Eligibility for Phase II mirrors Phase I: US for-profit small businesses with the Principal Investigator employed more than 50% by the company, with majority ownership (>50%) by US citizens or permanent residents. Outsourcing is permitted up to 50% of Phase II research work — a higher threshold than Phase I's 33% limit. Venture-capital-majority-owned companies may participate through a special VC opt-in form. Twenty-four of NIH's 27 Institutes and Centers participate, each with its own topic priorities and budget guidance. Some ICs offer Phase IIB Strategic Breakthrough awards for projects requiring extraordinary development effort beyond the standard Phase II scope, with higher award ceilings. The Fast-Track mechanism allows simultaneous Phase I and Phase II submission for applicants with sufficient preliminary data.

Phase II applications are submitted through the parent SBIR announcement to the most relevant NIH IC, which independently scores and funds applications based on scientific merit, commercial potential, and alignment with IC priorities. Standard receipt dates are September 5, January 5, and April 5. Applications exceeding the $2,153,927 cap must align with SBA-approved waiver topics and require prior contact with IC program staff. Upon completion, Phase II awardees may apply for the Commercialization Readiness Pilot (CRP) program, which provides up to $4,191,495 in additional late-stage development funding.