SBIR STTR Extended_What Small Business Owners Need to Know

Good news for innovators: the House Committee on Small Business recently voted to extend the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for one more year. These programs are critical for small businesses that do research and development, so understanding what they are and what this extension means could open up important opportunities. Let’s dive in!

What Are SBIR and STTR?

• The SBIR program (Small Business Innovation Research) and STTR (Small Business Technology Transfer) are federal programs designed to help small businesses secure non-dilutive funding (grants or contracts) to do early-stage R&D, with the goal of later commercializing innovative products and services. These are competitive programs across many federal agencies.
• SBIR allows small businesses to act independently or subcontract part of their research; STTR requires the small business to partner with a nonprofit or research institution (such as a university or federal lab).
• To be eligible, a business usually must be U.S.-based, majority-owned by U.S. citizens or permanent residents, employ no more than a certain number of people (often 500 employees or fewer), and conduct research or development that meets the intention of the funding agency.

Governments (through 11 federal agencies for SBIR, and 5 for STTR) set aside portions of their R&D budgets to award grants or contracts under these programs. The Small Business Administration (SBA) coordinates these programs at the national level.

The Latest: Extension for One Year

• According to a press release from the House Committee on Small Business (September 9, 2025), the SBIR and STTR programs are set to expire on September 30, 2025.
• The Committee passed H.R. 5100: “To extend the SBIR and STTR programs, and for other purposes”, which would extend these programs for an additional year. The vote was unanimous in Committee: 27-Yea, 0-Nay.
• Chairman Roger Williams emphasized that the extension is necessary “to ensure our nation’s greatest innovators continue to receive the resources they need to keep America competitive.”

What This Extension Means for Small Business Owners

1. More Time to Apply & Plan
   Because the programs were expiring, small businesses might have delayed submitting proposals or starting new R&D projects. With the extra year, there’s breathing room to plan, prepare proposals, and align product development timelines without fearing an immediate lapse in funding availability.
2. Continuity of Funding
   Research & development can take time. The extension means that agencies will continue to accept proposals under SBIR and STTR without interruption through this additional period. That continuity prevents gaps in funding that could disrupt project timelines or R&D pipelines for early-stage technologies.
3. Certainty in Budgeting & Staffing
   If your startup or small business has been budgeting around possible SBIR/STTR grants or contracts, this extension provides a predictable horizon. You can make staffing or resource decisions, labs or equipment purchases, and partnerships with more confidence that there will be support coming.
4. Changes & Reauthorizations May Be Coming
   Because the extension is only for one year, it signals Congress may still be considering reforms or longer reauthorizations. Small businesses should stay alert to possible changes in eligibility, funding levels, or administrative rules. Preparing proposals that align with best practices now could help position you favorably if changes occur.
5. Opportunity to Strengthen Proposals
   With more time to apply, you can sharpen your proposal processes—better define commercialization pathways, ensure your research institution partnerships (for STTR) are solid, and make sure IP and staffing are clearly outlined. Given the competitive nature of SBIR/STTR, stronger proposals tend to receive higher priority.

Key Things to Keep in Mind

• Even with the extension, funding is still competitive. Agencies have limited budgets, so only the strongest proposals are likely to be funded.
• Some agencies may issue solicitations (calls for proposals) earlier or with limited deadlines, so monitor agency websites (e.g., NSF, NIH, DoD, DOE) for announcements.
• Understand which program is right for you (SBIR vs STTR) depending on whether you partner with research institutions or not.
• Make sure your business meets eligibility requirements, including ownership, size, and principal investigator constraints.

The extension of SBIR/STTR programs for one year is a win for small businesses focused on innovation and R&D. It buys extra time, provides continuity in funding, and offers more stability in planning. If you’ve been considering applying, now is a prime window to build a strong application, refine your commercialization approach, and position yourself well for the competitive process. As the legislation moves forward, we’ll continue staying close to any key developments at the Financial Pantry. And while you’re with us, be sure to check out our Knowledge Center for information on how our custom loan products can help address your financial needs.

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