Restart of US small-business research grants may be too late for some

Two grant programs to help researchers launch small businesses and bring new products to market have been reauthorized after a nearly 7-month gap, the first in the history of the programs. But for some who rely on the programs, the damage has already been done.

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are reauthorized every 3 years. The programs were due to be reupped in September, but they instead got caught up in a debate, led by Senate Committee on Small Business and Entrepreneurship chair Joni Ernst (R-IA) and ranking member Ed Markey (D-MA), about their use by foreign adversaries and issues with the application process. The problems began shortly after Markey introduced a reauthorization bill last May.

On Oct. 1, the programs officially lapsed. On March 3, Ernst introduced a 5-year reauthorization bill that ultimately passed both chambers.

President Donald J. Trump signed the bill on April 13.

That doesn’t erase the losses faced by businesses during the gap, says Amber Lockridge, a postdoctoral scientist at the National Institutes of Health who had been coleading a campaign to reauthorize SBIR at 27 UNIHTED, a biomedical-research advocacy group. Eleven federal agencies administer the grants; the Department of Health and Human Services is the second largest, after the Department of Defense, with a budget of $1.2 billion.

The NIH, for example, was unable to implement two of its three annual application dates this year—Jan. 5 and April 5—for SBIR and STTR grants. The next is not scheduled until Sept. 5. Some investigators who applied in September 2025 still haven’t heard whether their grants were approved. And researchers who already had grants awarded have not been able to draw funds since the programs lapsed in October.

For small businesses with little backup funds to rely on, that gap can be difficult to recover from, Lockridge says.

“When you’re talking about small businesses that are in this high-risk situation of the early stage of development, that is a really long time to waste,” she says. “Even after things start to get moving again, the harms of that delay still persist.”

Paused trials and lost staff after SBIR gaps

One such business is Robot Nose, which has won multiple SBIR and STTR grants from the Department of Energy (DOE) and the National Nuclear Security Administration. The company’s president, Jerome Moore, says he intended to apply in December for an extension, known as phase IIA or IIB, to expand a study of an X-ray lens for laboratory microscopes.

That study is now on hold, Moore says. The company has also slowed work on an STTR-supported study with Argonne National Laboratory.

He is awaiting the next application date from the DOE, which may not be until December—a “significant funding gap” that will result in work being paused, he says. And he expects a crush of applications and more competition due to the long gap.

Still, he’s relieved the program is back.

“It’s better late than never,” Moore says.

For Amy Baxter, CEO of Pain Care Labs, the delay has meant a lost clinical trial. In 2019 Baxter received an SBIR grant to develop a wearable vibrating device that stimulates muscle restoration to reduce back pain, as an alternative to opioids.

In 2023 she was awarded a 3-year “fast track” grant from the NIH to validate a tool called Dose Opioid Source Evaluation, designed to help the Food and Drug Administration evaluate devices that can prevent opioid use disorder by reducing or sidestepping the drugs altogether. She was using the funds for a clinical trial at Johns Hopkins University.

That study has now “collapsed,” Baxter says: the Hopkins researcher running it couldn’t afford to continue without the funding.

Even with the funding reauthorized, Baxter says, the tool’s future is uncertain: she will likely not start the study up again, in part because the team has moved on to other projects.

“When you have a broken trust with patients for reasons outside your control, that is devastating,” she says.

Another funding hit in difficult times

Without a restart date for the programs, small businesses had to make decisions about whether to lay off workers, scale back or cancel projects, and potentially even close their companies, Lockridge says.

“That’s not something where, just because the prospect of SBIR and STTR funding returns, that that’s going to be a solution overnight,” she says.

That may be particularly true as the lapse in the programs came amid an already difficult funding environment, in which federal science agencies have lost thousands of staff and applications have become increasingly competitive. Moore, for one, came close to losing a postdoctoral researcher who was dependent on the STTR grant. Argonne agreed to cover the researcher through the end of his 2-year term, “but it was unnerving getting to this point,” Moore says.

“In ordinary times, it would’ve been no problem to find” other funding for the postdoc, he says. “Now we have to scramble a little bit harder. That’s been frustrating.”

The SBIR lapse was the second hit for Baxter’s Hopkins colleague, Baxter says: her husband had already lost his job due to US Agency for International Development (USAID) layoffs.

“I will be glad it’s funded again,” Baxter says, “but it’s too little too late for me and many people I know.”