NIH SBIR Funding Fell 17% in FY2026: What It Means for FY2027

SBIR/STTRNon-Dilutive Funding
Written By Robert Wegner

Quick answer

NIH SBIR and STTR funding fell about 17% in fiscal year 2026, from roughly $1.27 billion to $1.06 billion in grant awards, based on BW&CO's analysis of NIH RePORTER data. The number of awards fell about 21%, from 1,803 to 1,421. The main cause was the six-month lapse in program authority: NIH made no SBIR or STTR grant awards from October 2025 through April 2026. For FY2027, the reauthorization lets agencies carry unspent FY2026 SBIR and STTR funds forward, and HHS now limits each company to nine applications per fiscal year.

Key takeaways

  • NIH overall: NIH awarded about 56,600 grants in FY2026, about 7,400 fewer than in FY2024, according to an October 2026 AAMC analysis.
  • NIH SBIR and STTR: Grant awards fell from 1,803 in FY2025 to 1,421 in FY2026. Dollars fell from about $1.27 billion to about $1.06 billion.
  • New companies and projects: New (Type 1) SBIR and STTR awards fell from 799 to 644, a drop of about 19%.
  • Timing: Every FY2026 NIH SBIR and STTR grant award in RePORTER was issued between May and September 2026.
  • FY2027 outlook: Unspent FY2026 SBIR and STTR funds may be used in FY2027, and the nine-application cap rewards focused, well-qualified submissions.
Talk to an expert

How much did NIH grant funding drop in FY2026?

NIH made about 56,600 grant awards in FY2026, down from about 58,500 in FY2025 and about 64,000 in FY2024, according to the Association of American Medical Colleges. That is roughly 7,400 fewer awards than in FY2024, a decline of about 12%.

The drop in award count is not the same as a drop in spending. AAMC reports that NIH obligated all of its funds in FY2025 and FY2026. NIH's FY2026 appropriation was about $47.5 billion, roughly 1% above FY2025. The gap comes largely from multiyear funding, where NIH pays several years of a grant up front. That moves money out the door faster but supports fewer projects in a given year.

What happened to NIH SBIR and STTR funding in FY2026?

The small business side fell further than NIH as a whole. BW&CO pulled every NIH SBIR and STTR grant award recorded in NIH RePORTER for FY2025 and FY2026. Here is what changed:

  • Total awards: 1,803 in FY2025 and 1,421 in FY2026, a decline of about 21%.
  • Total grant dollars: about $1.27 billion in FY2025 and about $1.06 billion in FY2026, a decline of about 17%.
  • New awards: 799 in FY2025 and 644 in FY2026, a decline of about 19%.
  • SBIR Phase I awards (R43): 432 in FY2025 and 342 in FY2026.
  • STTR Phase I awards (R41): 211 in FY2025 and 148 in FY2026.

For context, NIH's overall award count fell about 3% from FY2025 to FY2026 using the AAMC figures. NIH SBIR and STTR awards fell about 21% over the same period.

Why did NIH SBIR awards fall so sharply?

The SBIR and STTR programs expired on September 30, 2025. Congress did not reauthorize them until the Small Business Innovation and Economic Security Act (S. 3971) was signed on April 13, 2026. During that gap, agencies could not make new SBIR or STTR awards.

The RePORTER data shows the effect clearly. In FY2025, NIH issued about 360 SBIR and STTR grant awards between October and April. In FY2026, it issued none in that window. From May through September, NIH's FY2026 pace was close to its FY2025 pace for the same months. NIH did not make up the awards that would normally have gone out in the first seven months of the year.

Will unspent FY2026 SBIR funds carry over to FY2027?

They can. Under the reauthorization, agencies with SBIR or STTR funds remaining at the end of FY2026 may use those funds for SBIR or STTR in FY2027. The law permits this but does not require it, and NIH has not published a carryover figure. Founders should treat a larger FY2027 pool as possible, not certain.

The underlying set-aside has not changed. Agencies must still reserve 3.2% of their extramural research budget for SBIR and 0.45% for STTR.

How many NIH SBIR applications can a company submit?

HHS now limits each small business to nine SBIR and STTR applications or proposals per fiscal year, across all HHS components, including NIH. The limit counts new and resubmitted Phase I, Fast-Track, and Direct to Phase II applications. It applies to due dates on or after April 13, 2026, under NIH notice NOT-OD-26-090.

For most founders, nine is not a hard ceiling. It does change the math for companies that relied on volume. Each application now uses one of a limited number of slots, so choosing the right institute, topic, and mechanism matters more than before.

What should biotech and medtech founders do now?

  • Plan for the January 5 and April 5 receipt dates. These are NIH's next standard SBIR and STTR due dates. Confirm the date in the specific funding opportunity you plan to use.
  • Choose your nine slots deliberately. Map each planned application to an institute, a mechanism, and a company milestone before you start writing.
  • Revisit applications that stalled during the lapse. If you held a submission or a resubmission during the gap, check whether it fits the current funding opportunities.
  • Look at Phase IIB if you already hold a Phase II. NIH's new Phase IIB Strategic Breakthrough Award (PA-27-101) allows up to $30 million total with a 100% third-party match, though most institutes set lower limits.
  • Prepare for foreign risk review. The reauthorization expanded due diligence on foreign affiliations, investments, and licensing ties. Screen your team, owners, and partners early.
Plan your FY2027 NIH SBIR strategy

How BW&CO calculated these numbers

BW&CO queried the NIH RePORTER API in October 2026 for all NIH projects with SBIR and STTR grant activity codes (R41, R42, R43, R44, U43, U44, and SB1) in fiscal years 2025 and 2026, and summed reported award amounts. RePORTER does not include SBIR and STTR contracts, and NIH updates RePORTER data after the fact, so final FY2026 totals may change slightly. NIH-wide grant counts come from the AAMC analysis reported in October 2026.

Program names are used for identification only. BW&CO is not affiliated with or endorsed by the sponsoring agencies.

Frequently asked questions

Did NIH SBIR funding decrease in 2026?

Yes. NIH SBIR and STTR grant awards totaled about $1.06 billion in FY2026, down from about $1.27 billion in FY2025, based on NIH RePORTER data. The number of awards fell from 1,803 to 1,421.

Why were there fewer NIH SBIR awards in FY2026?

SBIR and STTR authority expired on September 30, 2025 and was restored on April 13, 2026. NIH made no SBIR or STTR grant awards from October 2025 through April 2026, so a full year of awards was compressed into May through September.

Is the SBIR program still active in 2026?

Yes. The Small Business Innovation and Economic Security Act reauthorized SBIR and STTR through September 30, 2031.

Can unused FY2026 SBIR funds be spent in FY2027?

Yes, the reauthorization allows agencies to use remaining FY2026 SBIR and STTR funds in FY2027. It is permitted, not required, and NIH has not published a carryover amount.

How many SBIR applications can I submit to NIH per year?

Nine. HHS limits each small business to nine SBIR and STTR applications or proposals per fiscal year across all HHS components, including new and resubmitted Phase I, Fast-Track, and Direct to Phase II applications.

When is the next NIH SBIR deadline?

NIH's standard SBIR and STTR receipt dates are September 5, January 5, and April 5. The next standard dates are January 5 and April 5, 2027. Always confirm the date in the specific funding opportunity.

Sources

Related: 2026 NIH SBIR/STTR program changes, SBIR and STTR guide, and BW&CO's foreign risk scanner.

Robert Wegner
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