North Carolina SBIR/STTR Phase I Incentive Funds Program: Complete FY 2026-2027 Solicitation Guide
Executive Summary
The One North Carolina Small Business Program reimburses North Carolina companies for up to $12,000 of the money they spend preparing and submitting a federal SBIR or STTR Phase I proposal. It is not a competitive grant, it is a reimbursement. If your company is eligible, your proposal was received by a participating federal agency, and your paperwork is complete, you get paid. You do not have to win the federal award to qualify.
The FY 2026-2027 solicitation (Funding Opportunity Number NCBSTI-FY2627I) was released on September 14, 2026 by the North Carolina Board of Science, Technology & Innovation. It covers qualifying federal Phase I proposals submitted from July 1, 2026 through June 30, 2027, and it is funded at $210,000 total. Awards are made on a rolling, first-come, first-served basis until that money runs out.
At a Glance
Program name: One North Carolina Small Business Program, SBIR/STTR Phase I Incentive Funds Program
Funding Opportunity Number: NCBSTI-FY2627I
Administering agency: North Carolina Board of Science, Technology & Innovation, supported by the Office of Science, Technology & Innovation at the N.C. Department of Commerce
Authorizing statute: N.C. Gen. Stat. Section 143B-437.80
Release date: September 14, 2026
Solicitation period: July 1, 2026 through June 30, 2027
Closing date: June 30, 2027 at 11:59 p.m. EST, or earlier if funds are exhausted
Total funds available: $210,000
Maximum award: $12,000 per company
Reimbursement rate: 75 percent of eligible costs in Development Tier 1 and Tier 2 counties, 50 percent in Tier 3 counties
Award basis: Rolling, first-come, first-served, non-competitive
Submission system: CyberGrants, with online applications available as of September 14, 2026
What the Incentive Program Actually Does
Writing a competitive SBIR or STTR Phase I proposal is expensive before a single dollar of federal money arrives. Companies spend real cash on consultants, staff time, literature searches, dedicated lab or prototyping space, and supporting materials, and they spend it with no guarantee that the agency will fund the work. Federal SBIR success rates at most agencies sit well under 20 percent, so most of that spend is a sunk bet.
North Carolina created the Incentive Funds Program to take some of that risk off the table. The state reimburses a percentage of documented proposal preparation costs, which lowers the cost of entering the competition and makes it rational for a company to submit more proposals, to more agencies, at higher quality. The program goals written into the solicitation are explicit: increase the number and quality of North Carolina Phase I applications, pull in applicants from economically distressed counties, and raise the state's presence at federal agencies where North Carolina is underrepresented in Phase I awards, with the Department of Defense named as the specific example.
The practical effect for a founder is straightforward. Your out of pocket cost to run a serious federal proposal effort drops by half or by three quarters, capped at $12,000, and the check arrives whether or not the agency funds you.
Who Is Eligible
Company requirements
To qualify, an applicant must certify under oath, signed by an authorized official, that all of the following are true:
The applicant is a for-profit small business with its principal place of business in North Carolina
The applicant has not received concurrent funding from another source that duplicates the purpose of the Incentive award
The applicant will conduct at least 51 percent of the activities described in the Phase I proposal in North Carolina, and will maintain significant North Carolina operations for the entire Phase I project if the federal award is made
The applicant has a formal written policy addressing conflicts of interest
The applicant has no overdue tax debts at the federal, state, or local level
The company must also have been registered with the North Carolina Secretary of State either before it submitted the federal SBIR or STTR application, or at least 90 days before it applies to the Incentive Program. Companies on the state's Suspension of Funding list are not eligible, and previous One NC Small Business Program recipients must be current on all prior award reporting.
Proposal requirements
The proposal must be a Phase I or Fast Track SBIR or STTR proposal submitted to a participating federal agency
The federal agency must have issued official notification of receipt during the solicitation period, meaning between July 1, 2026 and June 30, 2027
Proposals submitted between July 1, 2026 and the September 14, 2026 release date are still accepted, as long as all other eligibility requirements are met and funding remains available
What does not qualify
Direct to Phase II applications
Phase II applications
Proposals received by the federal agency outside the solicitation period
For STTR applications, the Board will only reimburse the fraction of expenses directly incurred by the small business applicant in the collaboration, not costs borne by the research institution partner.
Funding Allowance: How Much You Get Back
Reimbursement rates by county tier
Your reimbursement percentage depends on the North Carolina Development Tier designation of the county where your business is located. Tier designations are updated by the Department of Commerce every November and take effect the following January, so verify your county's current tier before you apply.
Development Tier 1 and Tier 2 counties: 75 percent of eligible documented expenses, capped at $12,000
Development Tier 3 counties: 50 percent of eligible documented expenses, capped at $12,000
What that looks like in practice
A company in a Tier 1 or Tier 2 county that documents $16,000 in eligible proposal preparation expenses receives the full $12,000, because $16,000 multiplied by 0.75 equals $12,000.
A company in a Tier 3 county needs to document $24,000 in eligible expenses to reach the same ceiling, because $24,000 multiplied by 0.50 equals $12,000.
If you document less than those thresholds, you receive the applicable percentage of whatever you actually documented. A Tier 3 company with $8,000 in documented eligible expenses receives $4,000.
Resubmissions
If a proposal that already received an Incentive award is revised and resubmitted, that resubmission is eligible for one additional award of up to $6,000, which is 50 percent of the statutory maximum. Eligible expenses on a resubmission are narrower than on an original: only additional data collection beyond what was gathered for the first proposal, and proposal preparation consulting fees paid to others.
Award limits
One Incentive award per company during this solicitation period
Ten Incentive awards per company over its lifetime
A grant to a business partnered with a North Carolina public institution of higher education does not count against the lifetime maximum, subject to budget constraints
Eligible and Ineligible Expenses
Reimbursable costs
Proposal preparation consulting fees paid to others. This is the single most important line item for most applicants. Fees paid to an outside grant consulting firm to develop and write the Phase I proposal are explicitly reimbursable
Salaries paid to individuals directly involved in preparing the Phase I proposal, not to exceed the rate stated in the federal proposal budget, with proof of payment required
Typing and word processing services
Project related supplies and postage
Database search fees for project related literature searches
Rental of space or equipment directly related to preparing the federal proposal, such as dedicated lab space or a prototyping facility
Educational program fees directly related to preparing the federal proposal
USPTO utility patent application filing, search, examination, issue, and maintenance fees, for patents submitted within 36 months of the Phase I proposal submission and directly related to it
Non-reimbursable costs
Travel
Equipment purchases over $300
Facility or leasehold improvements
Legal fees, including legal fees associated with preparing a patent
Fringe benefits
Indirect costs, including rent paid for general operations
In-kind services or deferred salaries
Documentation standards
Expenses that are incurred but not properly documented will not be reimbursed. Every receipt, invoice, or service contract must show that it was billed to the applicant with the applicant's address, the vendor name and address, the invoice date, a unique invoice number, quantity and description of the item or service with reference to the applicable SBIR or STTR proposal, unit price where applicable, total amount, and terms or due date.
Salary reimbursement requires proof of payment. That means pay stubs showing employee name, pay period dates, hours worked, rate of pay, total paid, and date and method of payment. In place of a pay stub or payroll service report, you can submit bank statements confirming the transaction plus the front and back of cleared company checks. If the hours you are claiming are less than the total hours on the pay stub, you must also submit a work log or certified statement identifying the hours that were directly related to federal proposal preparation.
USPTO receipts require payer name, payment date, payment amount, patent number, application number, fee code, fee code name, and attorney docket number.
Timeline and Key Dates
July 1, 2026: Start of the eligible solicitation period. Federal Phase I and Fast Track proposals received by an agency on or after this date can qualify
September 14, 2026: FY 2026-2027 Incentive solicitation released and online applications opened in CyberGrants
Rolling, from September 14, 2026 forward: Complete applications are reviewed and approved first-come, first-served as they arrive
Within 15 days of any request: Deadline to return supplemental materials requested by the Board or OSTI staff, or the application may be rejected without further review
June 30, 2027 at 11:59 p.m. EST: Final deadline, or earlier if the $210,000 is exhausted before that date
Within 30 days of federal Phase I award or denial notification: Final Report due in CyberGrants
Three months after your fiscal year end: State Grant Compliance reporting due for the fiscal year in which you received or expended the award
Note that a separate FY 2027 Matching Funds Program solicitation is listed by N.C. Commerce with a December 14, 2026 release date. That is a different program with a different application. See the section below.
How to Apply
All applications are submitted electronically through CyberGrants, the Board's grant management system, linked from the One North Carolina Small Business Program page on the N.C. Commerce website. The system assigns an Application Reference Number when you begin. Applications missing any required response, document, or piece of information are considered incomplete and will not be funded.
The state requires DocuSign for electronic signatures. If you do not want to use DocuSign, you must use a wet signature. In-state virtual notarization is acceptable if it complies with the North Carolina Remote Electronic Notarization Act.
Required Application Documents
A completed Grant Application and Agreement, generated by CyberGrants, including the sworn and signed eligibility attestation
A Certificate of Existence or Certificate of Authorization from the North Carolina Secretary of State, issued no more than 90 days before your application date. This is the Certificate of Good Standing from the Secretary of State, not from the Department of Revenue, and first-time requesters need to create an Online Services account to obtain it
A copy of the relevant pages of the federal SBIR or STTR Phase I solicitation showing the topic description, closing date, and topic reference number. A link to the solicitation does not satisfy this requirement
A copy of the entire Phase I or Fast Track federal proposal, including the SF424 where applicable, submission cover, abstract, budget pages, key personnel, facility and performance site information, and the SBIR/STTR information page
Evidence that the federal agency received your proposal, such as written or electronic confirmation showing the date of receipt
A Supplier Electronic Payment Request Form with bank account verification
A completed Certified Expense Table with supporting documentation in CyberGrants
Copies of all receipts and supporting documents for every expense you are claiming
If your federal proposal contains proprietary or classified material that is not relevant to your Incentive eligibility, you may exclude it, but you must submit a notarized statement from an authorized official attesting that the excluded material is proprietary or classified and that economic harm or a violation of federal classification rules would result from submitting it. Applications that attempt to restrict dissemination of large amounts of information may be rejected.
How Applications Are Reviewed
There is no scoring panel and no competitive ranking. Applications are checked for compliance with the solicitation requirements and approved on a rolling, first-come, first-served basis through the end of the period or until funds are exhausted. Incomplete or non-compliant applications are rejected without further review, though the Board or OSTI staff may at their discretion request supplemental materials, which must come back within 15 days.
Once approved, the state issues payment electronically to the account listed on your Supplier Electronic Payment Form. If this is the first state payment your company has received, it may arrive as a paper check.
Reporting Requirements After Award
Recipients file a Final Report through CyberGrants within 30 days of being notified that the federal Phase I contract was awarded or denied. The report asks for the award date and contract amount if funded, an explanation if the contract was awarded but not accepted, whether the company will continue the research with its own resources if it was not funded, what material effect the Incentive award had on the firm, general comments on the program, and a summary of progress toward the original aims with significant results and any related publications.
Recipients that receive, use, or expend less than $1,000,000 in state funds in their fiscal year must also file State Grant Compliance reports within three months of fiscal year end, including a certification sworn by the treasurer and one other authorized officer, a State Grants Compliance report, and a Schedule of Grantee Receipts and Expenditures on a cash basis. Reporting delinquency is grounds for placement on the State Suspension of Funding list, which blocks future awards.
How Competitive Is It, Really
The program is non-competitive in the sense that applications are not scored against each other. The real constraint is the money. At $210,000 total and a $12,000 ceiling, this solicitation funds as few as 17 companies if applicants max out their awards.
Recent Incentive Program history gives a sense of the pace:
FY 2026: 18 awards totaling $116,553
FY 2025: 51 awards totaling $418,863
FY 2024: 49 awards totaling $317,316
FY 2023: 48 awards totaling $345,562
FY 2022: 50 awards totaling $358,986
Across every year the Incentive Program has operated, 306 awards totaling roughly $1.8 million have gone out. Historical average awards have run well below the $12,000 ceiling, which means more than 17 companies will likely be funded this cycle. It also means companies that documented their expenses thoroughly captured substantially more than average. The two variables you control are how early you file and how completely you document.
What Comes Next: the Matching Funds Program
The Incentive Program is one half of the One North Carolina Small Business Program. The other half is the SBIR/STTR Phase I Matching Funds Program, authorized under N.C. Gen. Stat. Section 143B-437.81, which awards matching funds to North Carolina companies that have actually received a federal SBIR or STTR award. Its purpose is to bridge the funding gap between the final Phase I payment and the first Phase II payment, and to let companies intensify the Phase I research so they compete better for Phase II.
The Matching program is dramatically larger. In FY 2026 it made 32 awards totaling $2,368,507, and since 2006 it has made 662 awards totaling more than $42 million. Since its inception, the combined One NC Small Business Program has funded 525 North Carolina small businesses.
The sequence for a North Carolina company is therefore: submit your federal Phase I proposal, file for Incentive reimbursement of your proposal costs, and if you win the federal award, file for Matching funds. These are separate applications with separate solicitations and deadlines.
Common Mistakes That Cost Companies the Award
Waiting. First-come, first-served with a hard funding cap means a complete application in October is worth more than a perfect one in May
Thin receipts. An invoice without a unique invoice number, a vendor address, or a reference to the specific SBIR proposal is an invoice that does not get reimbursed
Unproven salary claims. Claiming founder or staff time without pay stubs, cleared checks, or bank records, and without a work log separating proposal hours from other hours
A stale Certificate of Existence. It expires for these purposes at 90 days, and first-time requests take time to process
Submitting the wrong proposal type. Direct to Phase II and Phase II applications are not eligible, no matter how strong they are
No conflict of interest policy on file. The solicitation includes a sample policy in its appendix. There is no reason to be missing this one
Missing the 15 day supplemental materials window after the Board requests additional information
How BW&CO Helps
BW&CO Consulting is a non-dilutive federal funding advisory firm that has helped clients secure more than $350 million in government funding across NIH, NSF, DoD, NASA, DOE, and ARPA-H. Innovation Funding Simplified is not a slogan for us, it is the workflow.
For North Carolina companies, the two programs stack in a way that is worth being deliberate about. Proposal preparation consulting fees paid to an outside firm are an explicitly reimbursable expense under this solicitation, which means the state will cover 50 to 75 percent of what you spend on professional proposal development, up to the $12,000 cap.
When a company engages BW&CO to develop its federal SBIR or STTR Phase I proposal, we prepare and submit the North Carolina Incentive Funds application on your behalf at no additional cost. You focus on the science and the federal submission. We handle the expense table, the receipts package, the Certificate of Existence timing, the attestations, and the CyberGrants filing, and we file it early enough to matter.
Frequently Asked Questions
What is the One North Carolina SBIR/STTR Phase I Incentive Funds Program?
It is a North Carolina state reimbursement program that pays qualified North Carolina small businesses back for a portion of the costs they incurred preparing and submitting a federal SBIR or STTR Phase I proposal. It is authorized under N.C. Gen. Stat. Section 143B-437.80 and administered by the North Carolina Board of Science, Technology & Innovation. The FY 2026-2027 solicitation number is NCBSTI-FY2627I.
How much money can my company receive?
Up to $12,000. Companies in Development Tier 1 and Tier 2 counties are reimbursed 75 percent of eligible documented expenses, and companies in Tier 3 counties are reimbursed 50 percent. To hit the $12,000 ceiling, a Tier 1 or Tier 2 company needs $16,000 in documented eligible expenses and a Tier 3 company needs $24,000.
What is the deadline for the FY 2026-2027 solicitation?
June 30, 2027 at 11:59 p.m. EST, or earlier if the available funds are exhausted first. Because awards are made first-come, first-served against a $210,000 pool, the practical deadline is whenever the money runs out.
Do I have to win the federal SBIR award to get this money?
No. Reimbursement is triggered by proof that a participating federal agency received your qualifying Phase I or Fast Track proposal, not by whether the agency funds it. You do have to file a Final Report within 30 days of learning whether the federal award was made or denied.
Are SBIR consulting fees reimbursable under this program?
Yes. Proposal preparation consulting fees paid to others are the first item on the solicitation's list of reimbursable costs. Fees paid to an outside grant writing or proposal development firm qualify, as long as they are properly invoiced and documented.
Are Direct to Phase II or Phase II proposals eligible?
No. The FY 2026-2027 Incentive solicitation covers Phase I and Fast Track proposals only. Direct to Phase II and Phase II applications are explicitly excluded.
Is a Fast Track proposal eligible?
Yes. Fast Track proposals are eligible alongside standard Phase I proposals, provided the federal agency issued official notification of receipt during the solicitation period.
What proposals fall inside the eligible window?
Proposals for which a participating federal agency issued official notification of receipt between July 1, 2026 and June 30, 2027. Proposals submitted between July 1, 2026 and the September 14, 2026 release date are still accepted if all other eligibility requirements are met and funding remains available.
How do I find out which Development Tier my county is in?
The N.C. Department of Commerce publishes current County Distress Rankings, also called Tier designations. Tiers are recalculated each November and take effect the following January, so confirm your county's current designation before applying rather than relying on a prior year.
How many times can my company apply?
Once during this solicitation period, and no more than ten times over the life of the company. Awards to a business partnered with a North Carolina public institution of higher education do not count toward that lifetime limit, subject to budget constraints.
What if my proposal was declined and I want to resubmit?
A single resubmission of a proposal that already received an Incentive award can receive one additional award of up to $6,000. Eligible expenses on the resubmission are limited to additional data collection beyond what was gathered for the original proposal, plus proposal preparation consulting fees paid to others.
What expenses are not reimbursable?
Travel, equipment purchases over $300, facility or leasehold improvements, legal fees including patent preparation legal fees, fringe benefits, indirect costs such as general operating rent, and in-kind services or deferred salaries.
Do I need to be registered with the North Carolina Secretary of State?
Yes. Your company must have been registered with the North Carolina Secretary of State either before you submitted the federal SBIR or STTR application, or at least 90 days before you apply to the Incentive Program. Your application must include a Certificate of Existence or Certificate of Authorization issued no more than 90 days before the application date.
How is this different from the NC SBIR/STTR Matching Funds Program?
The Incentive Program reimburses what you spent writing the proposal and does not require a federal win. The Matching Funds Program, authorized under N.C. Gen. Stat. Section 143B-437.81, awards matching money to companies that have already received a federal SBIR or STTR award, to bridge the gap between Phase I and Phase II. They are separate programs with separate solicitations, and a company can use both in sequence.
How competitive is the program?
Applications are not scored against each other, so there is no competitive review. The constraint is the $210,000 funding pool and the first-come, first-served rule. Historically the Incentive Program has made between 18 and 51 awards per year, with average awards well under the $12,000 cap.
When should I apply?
As soon as you have official confirmation that the federal agency received your Phase I proposal and you have assembled complete expense documentation. Because funds are awarded in the order complete applications arrive, filing early in the period is a meaningful advantage over filing in spring.
Talk to Us Before You Spend the Money
The companies that capture the full $12,000 are the ones that decided how they would document the spend before they started spending. If you are a North Carolina company planning a federal SBIR or STTR Phase I submission this cycle, or you have already submitted one since July 1, 2026, we can tell you quickly whether you qualify and what your reimbursement is likely to be.
