SBIR Business Assistance Grants
Posted 22nd May 2014 at 03:15 PM by imarkedy
SBIR (Small Business Innovation Research) business assistance grants can come in many forms and used for a variety of purposes but mostly technology related development. In this post we’ll explore, briefly, options for those seeking to either build or expand business using not only SBIR but grants in general. In another article written some time ago, we faced down and destroyed the argument which teaches government grants aren’t available to ‘for-profit’ businesses and new startups.
Anyone who has sought out grants in the past has heard this urban myth; “grants are only geared towards non-profit organizations” - really? Just last week, I visited my car mechanic in a historic district of Denver, Colorado. Across the street from his business was a new ‘eatery’ which, in conjunction with the City of Denver, is remodeling a long abandoned space and expects to open soon.
For those continuing to insist that government grants are only awarded to non-profits, please answer the following questions;
1. Why did the City of Denver, through the Office of Economic Development (OED), contribute $100,000 to remodel the space to be used by this for-profit eatery?
2. Being a for-profit business; why wouldn’t the City of Denver REJECT any form of financial assistance in favor of a non-profit?
3. Why are other FOR PROFIT businesses, in this same area, receiving government grants?
More questions could be asked but any who continue to deny, being faced with these facts, especially so-called professional grant writers, are either incompetent, without integrity or both. I digress. For those searching for start-up or expansion capital, government grants are an awesome opportunity to locate funds which, although ongoing monitoring from these agencies is involved, will likely never require repayment! There are also other options, non-grant based, which businesses can take advantage of such as ‘forgivable loans’.
Although outside the scope of this article, these loan types are worth checking into. The end in mind with any government involvement, especially as it concerns for-profit businesses, is to stimulate the local economy and create jobs. Hearkening back to the Denver eatery; there is little doubt several jobs will be created which, in turn, improves both the community and lives of those employed.
This isn’t only a local initiative either and can be found in most communities across the United States. An example of this is an awesome economic growth plan offered by the great State of Nebraska called the Business Innovation Act (BIA for short). It provides funding, to businesses, for the express purpose of developing new technologies that, in turn, create job opportunities across the state.
The program has the following goals;
1. Provide technical assistance capital
2. Available to Nebraska organizations, companies and institutions
3. For new technology development
4. Testing of developed products
5. Helps expand small business opportunities
6. Meant to foster partnerships between entrepreneurs and the state
Let this opportunity (SBIR) not be misunderstood as something one has to develop some world changing, high tech gadget to receive. Think of it like this; whatever your area of expertise - is there a process etc. which can make life easier for a demographic the government (federal, state and local) has identified as needing assistance? This program, although government funded, is administered by the Small Business Administration (SBA for short) and reserves contracts and grants for companies fitting the definition of small business.
Although exact figures are hard to come by, approximately $2.5 billion is awarded to competing companies each year with the Department of Defense (DOD for short) being the largest awarder of contracts. The good news is your company doesn’t have to be a behemoth and as well-entrenched as Halliburton to get your piece of the pie. Over half of these awards are made to firms with fewer than 25 people on-staff and a third to organizations with fewer than 10.
Here are more program goals as defined by the participating 11 federal agencies;
1. Spur technological innovation in the small business sector
2. Meet the research and development needs of the federal government
3. Commercialize federally funded investments
Further; SBIR agencies award contracts and grants in a three phase development program;
- Phase 1; consists of the start-up and awarding agencies may make awards of up to $150,000 to competitive companies for about 6 months of exploration. The exploratory phase is meant to research the technical feasibility of an idea or technology.
- Phase 2 awards grants of up to $1 million and for as long as two years in order to facilitate the expansion of Phase 1 project results. Key to this phase is developers evaluate the potential for commercialization of the project. Phase 2 grants are awarded only to Phase 1 winners.
- Phase 3 can only be described as hard core development and deployment of technologies! This is the time when projects move out of a lab into the marketplace. No additional funds are awarded during this phase. This is the time when those who’ve advanced to this development stage must “put company resources into the project”.
This isn’t only true of Phase 3 SBIR programs but most government based grants; entrepreneurs and small business must be prepared to financial invest in any project they bring forth for funding. Here is the key; investment, especially for those defined as ‘very-small’ businesses, doesn’t necessarily have to be cash intensive and can consist of ‘sweat-equity’. As SBIR grants are concerned, cash is going to be required to get any product or service to market, however. Explore not only SBIR grants but government grants in general as they may be viable options to either build or expand your business.
B.D. Dale
Government Grants Instructor
Anyone who has sought out grants in the past has heard this urban myth; “grants are only geared towards non-profit organizations” - really? Just last week, I visited my car mechanic in a historic district of Denver, Colorado. Across the street from his business was a new ‘eatery’ which, in conjunction with the City of Denver, is remodeling a long abandoned space and expects to open soon.
For those continuing to insist that government grants are only awarded to non-profits, please answer the following questions;
1. Why did the City of Denver, through the Office of Economic Development (OED), contribute $100,000 to remodel the space to be used by this for-profit eatery?
2. Being a for-profit business; why wouldn’t the City of Denver REJECT any form of financial assistance in favor of a non-profit?
3. Why are other FOR PROFIT businesses, in this same area, receiving government grants?
More questions could be asked but any who continue to deny, being faced with these facts, especially so-called professional grant writers, are either incompetent, without integrity or both. I digress. For those searching for start-up or expansion capital, government grants are an awesome opportunity to locate funds which, although ongoing monitoring from these agencies is involved, will likely never require repayment! There are also other options, non-grant based, which businesses can take advantage of such as ‘forgivable loans’.
Although outside the scope of this article, these loan types are worth checking into. The end in mind with any government involvement, especially as it concerns for-profit businesses, is to stimulate the local economy and create jobs. Hearkening back to the Denver eatery; there is little doubt several jobs will be created which, in turn, improves both the community and lives of those employed.
This isn’t only a local initiative either and can be found in most communities across the United States. An example of this is an awesome economic growth plan offered by the great State of Nebraska called the Business Innovation Act (BIA for short). It provides funding, to businesses, for the express purpose of developing new technologies that, in turn, create job opportunities across the state.
The program has the following goals;
1. Provide technical assistance capital
2. Available to Nebraska organizations, companies and institutions
3. For new technology development
4. Testing of developed products
5. Helps expand small business opportunities
6. Meant to foster partnerships between entrepreneurs and the state
Let this opportunity (SBIR) not be misunderstood as something one has to develop some world changing, high tech gadget to receive. Think of it like this; whatever your area of expertise - is there a process etc. which can make life easier for a demographic the government (federal, state and local) has identified as needing assistance? This program, although government funded, is administered by the Small Business Administration (SBA for short) and reserves contracts and grants for companies fitting the definition of small business.
Although exact figures are hard to come by, approximately $2.5 billion is awarded to competing companies each year with the Department of Defense (DOD for short) being the largest awarder of contracts. The good news is your company doesn’t have to be a behemoth and as well-entrenched as Halliburton to get your piece of the pie. Over half of these awards are made to firms with fewer than 25 people on-staff and a third to organizations with fewer than 10.
Here are more program goals as defined by the participating 11 federal agencies;
1. Spur technological innovation in the small business sector
2. Meet the research and development needs of the federal government
3. Commercialize federally funded investments
Further; SBIR agencies award contracts and grants in a three phase development program;
- Phase 1; consists of the start-up and awarding agencies may make awards of up to $150,000 to competitive companies for about 6 months of exploration. The exploratory phase is meant to research the technical feasibility of an idea or technology.
- Phase 2 awards grants of up to $1 million and for as long as two years in order to facilitate the expansion of Phase 1 project results. Key to this phase is developers evaluate the potential for commercialization of the project. Phase 2 grants are awarded only to Phase 1 winners.
- Phase 3 can only be described as hard core development and deployment of technologies! This is the time when projects move out of a lab into the marketplace. No additional funds are awarded during this phase. This is the time when those who’ve advanced to this development stage must “put company resources into the project”.
This isn’t only true of Phase 3 SBIR programs but most government based grants; entrepreneurs and small business must be prepared to financial invest in any project they bring forth for funding. Here is the key; investment, especially for those defined as ‘very-small’ businesses, doesn’t necessarily have to be cash intensive and can consist of ‘sweat-equity’. As SBIR grants are concerned, cash is going to be required to get any product or service to market, however. Explore not only SBIR grants but government grants in general as they may be viable options to either build or expand your business.
B.D. Dale
Government Grants Instructor
