Quick answer: Several states pay extra cash on top of a federal SBIR or STTR award for the same project. In the five states below, the match runs up to $250,000 depending on the state and phase. North Carolina and Montana fund compliant applications first come, first served while money lasts. Maryland, Kentucky and Alabama review applications competitively. Most programs care where your company and work are located, not where you're incorporated.
Key takeaways
There are two models: first come, first served (NC, MT) or competitive review (MD, KY, AL).
Deadlines usually run from your federal award date, so the clock starts the day you win.
Payment timing varies. North Carolina pays 75% up front, Maryland pays in one transfer, and Kentucky reimburses after you spend.
A Delaware C corp isn't automatically out. States test where your people and work are.
The application mostly reuses documents you already have.
Have a federal SBIR or STTR award? We help companies apply for their state match, with no fee unless the state funds it. Talk to an expert
State SBIR matching funds: what five states pay
North Carolina, One NC Small Business Program (FY2027). Phase I: 50% of the award, up to $75,000. Companies in counties hit by Hurricane Helene can get $25,000 more. Phase II: No separate Phase II match. How it's awarded: First come, first served. Compliance review only.
Alabama, Innovate Alabama Supplemental Grant. Phase I: 50% of the award, up to $100,000. Phase II: 50% of the award, up to $250,000. How it's awarded: Reviewed, in rounds. Alabama-based companies only. Next round not yet announced.
Maryland, TEDCO SBIR/STTR Matching Funds. Phase I: 25% of the award, up to $25,000. Phase II: 25% of the award, up to $75,000. How it's awarded: Competitive, quarterly.
Montana, SBIR/STTR Matching Funds Program. Phase I: $60,000 per approved application, one per state fiscal year, paid in stages. Phase II: The final payments of that same $60,000 come after you submit your Phase II proposal. How it's awarded: Rolling, first come, first served.
Kentucky, KY Innovation SBIR/STTR Matching Funds. Phase I: Up to $100,000. Phase II: Up to $150,000 a year, for up to two years. How it's awarded: Competitive.
Figures are from each program's website or most recent solicitation as of October 2026. North Carolina's figures are from its FY2027 solicitation, which runs from July 2026 to June 2027 with $1.92 million for matching grants. Not in one of these five states? SSTI keeps a state-by-state guide, linked in the sources below.
Does every award get matched?
No. It depends on which model your state uses.
North Carolina and Montana fund every compliant application until the money runs out. North Carolina's FY2027 solicitation says applications that meet its requirements are approved on a rolling, first-come, first-served basis. In FY2026 the state made 32 matching awards totaling about $2.37 million, and it has $1.92 million available this year. Montana approves applications on a rolling basis at the department's discretion until that fiscal year's funds are gone. Apply late in the year and the pot may be empty.
Maryland, Kentucky and Alabama score applications. TEDCO's March 2026 round funded seven companies for a total of $371,875. Kentucky describes its match as competitive, and Innovate Alabama says applicants are "proven through scientific review." In those states, a federal award makes you eligible. It doesn't make you funded.
How the money pays out
It's real money, but when it lands varies a lot, and for a small company that matters.
North Carolina pays 75% once you prove the Phase I award. The last 25% comes through a second application after your Phase I report is accepted, your Phase II proposal is received and your final Phase I payment is documented. Montana pays half when Stage 1 (your Phase I application) is approved and the rest in two pieces tied to your Phase II proposal. Maryland sends the full award in one transfer. Kentucky's match is reimbursable, which means you spend the money first and get paid back for eligible costs. If cash flow is your bottleneck, money up front is worth more to you than a larger reimbursement.
All of it is non-dilutive, so you give up no equity. For an early-stage company, it's runway between federal payments.
Paperwork and deadlines
In the programs above, the state application is mostly paperwork you already have. North Carolina's Stage 1 asks for your Phase I proposal, the federal award notice, the solicitation pages for your topic, your articles of incorporation and bylaws, a North Carolina Certificate of Good Standing no older than 90 days, two notarized certifications, and the names of any consultants who helped you win the Phase I. Montana asks for a budget, a short narrative and your federal award documents, then your Phase I final report and Phase II proposal later.
Applications usually stall on small things: an expired certificate, a missing notarization, or a link where the state wanted the actual solicitation pages. The bigger risk is the calendar. Montana wants Stage 1 within 180 days of your Phase I start date. Maryland requires your federal award to fall within the six months before you submit.
Do I have to be incorporated in the state?
Usually not. The test is where your company operates and where the work happens. Montana requires registration with the Montana Secretary of State, a principal place of business in Montana, and at least 51% of the Phase II research done there. North Carolina requires a notarized certification that at least 51% of the Phase I work happens in the state. Maryland requires more than half your workforce and your principal operations in Maryland, and you repay the award if you don't stay qualified for two years. Kentucky will consider companies based in Kentucky or willing to relocate there.
So a Delaware C corp isn't automatically out. It needs to be registered to do business in the state, do the work there, and stay long enough to meet any residency rule. Moving states just to collect a match won't work. These programs exist to keep jobs in-state, and the eligibility rules are written to enforce that.
Will the state help find a customer?
Not through the matching program. The match pays for R&D. Finding a customer or agency that will buy or use the technology is a separate problem, and some states run separate programs for it. Maryland's DefTech, for example, connects companies with federal labs. If transition is your real constraint, ask your state's SBIR office what else it runs, and spend the match on the milestone that customer cares about, like a test, a qualification step or a prototype they can evaluate.
Is it worth applying?
If you have the federal award and you already operate in a state with a match, apply. For most companies the effort is small relative to the amount. I wouldn't move a company just to collect a match, because the residency rules make that expensive and the federal award is the bigger prize.
The companies in the best position are doing real work near a customer in a matching state. If your transition partner is in North Carolina and you put staff there, future Phase I awards may qualify for the North Carolina match. If you hold an STTR Phase II with an Alabama university partner and you're Alabama-based, Innovate Alabama's Phase II supplement fits that case when the next round opens.
What to do next
Find your state's program and check when its deadline starts counting, whether it's first come or competitive, and how it pays. Then get your documents together before the window opens. In a first-come state, apply early in the state's fiscal year.
Apply for your state match, with no fee unless it's funded
We help companies apply for state SBIR and STTR matching funds on a contingency basis. If the state doesn't fund your application, you owe us nothing. If it does, our fee is typically 10% of the funded amount, though it varies by state, and we agree on it in writing before we start. We review your situation against the program's rules, including its rules on consultant fees, assemble the documents and submit a clean package. The state makes the award decision.
Talk to us about your state match
FAQ
What are state SBIR matching funds? Extra non-dilutive cash some states pay companies that win a federal SBIR or STTR award. In the five states covered here, the match runs up to $250,000 depending on the state and phase.
Is every SBIR award matched? No. North Carolina and Montana fund compliant applications first come, first served until funds run out. Maryland, Kentucky and Alabama review applications competitively.
Can a Delaware C corp get a state match? Often, if it's registered to do business in the state and the work happens there. North Carolina requires at least 51% of Phase I work in-state, and Montana requires at least 51% of Phase II research in-state.
When is the money paid? It varies. North Carolina pays 75% after you prove the Phase I award, Maryland pays the full award in one transfer, and Kentucky reimburses eligible costs after you spend them.
How soon do I have to apply? Windows usually run from your federal award. Montana wants Stage 1 within 180 days of your Phase I start, and Maryland requires the award to fall within the six months before you apply.
Program names are used for identification only. BW&CO is not affiliated with or endorsed by any state agency named here. Program amounts and rules are as published in October 2026 and change often.