Business Federal Grants

There are federal grants for business is available. However, most federal business grants are for companies that are larger and have about 500 or more employees. Looking for federal grants for businesses that are smaller is more difficult. However, there is federal funding for small businesses engages in research and development activities.

Research and Development (R&D) is a major area for federal grants for businesses that are larger and smaller. While a large portion of R&D grant money goes to large businesses, Congress has enacted set asides for small business product research. About 3% of federal business grants are set aside for businesses under 50 employees or smaller.

There are two federal business grant programs:

Small Business Innovation Research (SBIR) is an allocation of the total federal research funding that goes to small business. SBIR winners are small firms with less than 25 employees.

SBIR grants are awarded in two phases of the research and development process. The first phase, a grant of up to $150,000, is given for research of a promising new concept or technology. Businesses who win a Phase I can apply for Phase II funding, which is Research and Development (R&D) to commercialize the product or technology. However, there is no SBIR funding to manufacture and market the new product.

Eleven federal agencies that engage in research have SBIR programs such as: Department of Agriculture, Department of Defense, Department of Energy, Department of Education, Department of Transportation, and more.

Small Business Technology Transfer (STTR) is another business federal grant program. The STTR helps businesses conduct research, but must partner with a non-profit research institution. The purpose of this grant is to help bridge the gap between academic research and practical applications of new knowledge. This is an opportunity for a business to access research and knowledge in universities and research institutes.

There are only five federal agencies that give STTR grants: Department of Defense, Department of Energy, Department of Health and Human Services, National Aeronautics and Space Administration, and National Science Foundation. Each of these agencies release grant announcements and give awards.

The grant process is similar to the SBIR in that there are three phases of these grants. The award maximums of STTR grants are smaller than the SBIR. Phase I STTR grants are capped at $100,000 and Phase II grants have a $750,000 maximum.

For More Information on SBIR/STTR

The federal government has a web site devoted to government grants for business at SBIR.gov. Both SBIR and STTR grants are described on this web site.