The SBIR program, also known as America’s Seed Fund, is designated for businesses with 500 or fewer employees and provides non-dilutive funding provided by any one of several government agencies, including the National Institutes of Health. The STTR is similarly structured, although it comes with a requirement that the small business partner with a non-profit research institution, such as an academic research office at a college or university. The SBIR program came into being in 1982 while the companion STTR program was formalized 10 years later.
The U.S. Senate passed the Small Business Innovation and Economic Security Act (S. 3971) March 3, 2026, while the House of Representatives passed the bill two weeks later, on March 17. These two programs are now reauthorized for five years, through fiscal year 2031, although federal agencies must now scrutinize applications more closely for any potential security risks. The Government Accountability Office has reported on security risks associated with government grants on several occasions, such as the Jan. 28, 2026, report stating that foreign adversaries may attempt to obtain proprietary data via STTR and SBIR grants.
The previous authorization for the SBIR and STTR programs expired at the end of fiscal year 2025, leaving the programs in limbo for more than six months. Three congressional committees oversee these programs, including both House and Senate committees for small businesses and the House Committee on Science, Space and Technology. The emergence of competing bills for reauthorization may have complicated the process of renewing these two programs.
S. 3971 allows participating federal agencies to set their own specific limits on the number of phase I and II applications an applicant can file, an authority these agencies previously lacked. These limits were added to the legislation to address the emergence of entities described as proposal mills, which are seen as a source of drag on the proposal review process. Each participating agency must establish those limits at least 90 days before the start of fiscal year 2027, or July 3, 2026.
According to one analysis, SBIR and STTR grants amounted to roughly $3 billion per year between fiscal years 2021 and 2025. However, those grants led to additional funding outside of these two programs that amounted to a five-year total of more than $30 billion to grant recipients.
Scott Whitaker, President and CEO of AdvaMed, said in an April 14 statement that the legislation “is great news for medtech small businesses and startups,” describing the two programs as “invaluable to early-stage medtech companies.” Whitaker said these two programs are essential in filling the financing gaps experienced by smaller medical technology companies, adding that the majority of AdvaMed’s membership is made up of emerging and small businesses.
Whitaker stated that the renewal of these programs would serve patients by providing lifesaving and life-enhancing medical technologies, adding, “the certainty of these programs will promote the next era of transformational medtech at small businesses nationwide.”