SBIR and STTR Funding for Digital Health and Wearable Startups (2026 Guide)

Facts checked October 27, 2026.

Are SBIR and STTR authorized right now?

Yes. On April 13, 2026, the Small Business Innovation and Economic Security Act (S. 3971, Public Law 119-83) was signed into law. It reauthorized SBIR, STTR and related pilot programs through September 30, 2031, ending a roughly six-month lapse [2][3][4]. The law also lets agencies carry FY2026 SBIR/STTR funds that were required to be spent into FY2027 [3].

What is the difference between SBIR and STTR?

• SBIR: the small business does most of the R&D.
• STTR: requires a formal collaboration with a research institution, such as a university or nonprofit.

Both programs use the same NIH budget guidelines [5]. STTR suits an academic founder or a lab-spun technology. Employment rules for the PI differ. Under NIH's SBIR parent announcement, the PD/PI's primary employment must be with the small business at the time of award and during the project (with multiple PIs, at least one must meet this) [10]. Applicants whose project needs a research-institution partner use the STTR parent, PA-27-102 [10]. Other agencies set their own PI and employment rules, so check the current solicitation for your target agency. SBIR.gov links to each participating agency's program [1].

What are the phases?

• Phase I: feasibility or proof of concept.
• Phase II: full R&D or prototype development. At NSF, only Phase I awardees are eligible [7].
• Phase III: work that "derives from, extends, or completes" earlier SBIR/STTR work but "is funded by sources other than the SBIR/STTR programs" [11].
• Agency-specific variants:
• Fast-Track at NIH and NSF [6][7]
• Direct to Phase II at NIH, for projects that have already shown feasibility without a Phase I award [5]
• NIH Commercialization Readiness Pilot (CRP) [5]
• NSF Phase IIB supplements [7]

How much can you get?

Amounts are total costs, including the small-business fee [5][6]. Confirm the limits in the specific funding opportunity before you build a budget.

Which agencies fund digital health?

• HHS:
• NIH institutes match neurology and wearables work: NINDS, NIA, NIMH, NHLBI and NIBIB, among others.

• CDC and FDA take part through NIH's SBIR parent announcement, PA-27-100 ("NIH, CDC and FDA Small Business Innovation Research Grant", released May 28, 2026, expiring April 6, 2027). The STTR parent, PA-27-102, is NIH-only. Standard due dates are September 5, January 5 and April 5 [10][12].

• NSF: deep-tech, including AI, sensors and digital health platforms, under NSF 26-510 [6].

• Department of Defense (now styled Department of War): publishes its own SBIR/STTR topics in release cycles. Check the current topics on DoD's SBIR/STTR site (https://www.dodsbirsttr.mil) or SBIR.gov's topic search (https://www.sbir.gov/topics) [14].
• The full list of 11 agencies is on SBIR.gov [1].

Who is eligible?

Broadly, a for-profit U.S. small business with no more than 500 employees including affiliates. There are special rules for majority venture-backed companies [5]. Companies with many prior Phase II awards must meet commercialization benchmarks [5].

Key requirements

• Registrations: SAM.gov, the SBA Company Registry, and the agency portal. NSF uses Research.gov [7]. NIH requires SAM (which issues the UEI), eRA Commons, Grants.gov and the SBA Company Registry (which issues the SBC Control ID). Login.gov is used to sign in, and NIH says to allow 6 weeks or more [13].
• A budget within the agency or institute limit, with a fee normally not exceeding 7% at NIH [9].
• PI eligibility and the STTR research-institution partner agreement.
• Research-security and foreign-influence disclosures. These were strengthened under P.L. 119-83 [2].
• For human-subjects work: IRB, a data management and sharing plan, and HIPAA if PHI is involved.

Checklist for wearable and digital-health startups

• Choose the agency and institute based on mission fit, not just budget size. Read the open topics and talk to a program officer.
• Decide SBIR vs STTR (is there an academic partner, and where is the PI employed?).
• Start registrations now. They take weeks.
• Write specific aims as testable feasibility milestones, such as sensor accuracy against a reference standard.
• Plan validation with the V3 framework (verification, analytical, clinical) and a realistic sample size.
• Map the regulatory path (wellness vs device; if a device, 510(k)/De Novo plus FDA cybersecurity) and include it in the commercialization plan.
• Budget for IRB, data security, and the device or data-platform costs.
• Line up letters of support from clinical sites, the device vendor, or customers.

How PAHL helps

Palo Alto Health Labs advises on the scientific and technical core of digital-health SBIR/STTR proposals:

• study design and validation plans for wearables and neurology aims;
• the data architecture and security plan; and
• regulatory framing.

We don't guarantee funding, and we aren't a grant-writing firm. Book a 30-minute scoping call.

Sources (accessed October 27, 2026)

1. SBIR.gov, About: https://www.sbir.gov/about
2. Congressional Research Service, "Small Business Research Programs Reauthorized After Six-Month Lapse" (IN12705, July 13, 2026): https://www.congress.gov/crs-product/IN12705
3. Public Law 119-83 (April 13, 2026): https://www.govinfo.gov/content/pkg/PLAW-119publ83/pdf/PLAW-119publ83.pdf
4. SBA, "Administrator Loeffler Applauds SBIR-STTR Reauthorization" (April 13, 2026): https://www.sba.gov/article/2026/04/13/administrator-loeffler-applauds-sbir-sttr-reauthorization
5. NIH SEED, Understanding SBIR/STTR (budget and timelines); NIH SEED, Eligibility Criteria: https://seed.nih.gov/small-business-funding/small-business-program-basics/understanding-sbir-sttr · https://seed.nih.gov/small-business-funding/small-business-program-basics/eligibility-criteria
6. NSF 26-510 solicitation (posted May 22, 2026): https://www.nsf.gov/funding/opportunities/small-business-innovation-research-small-business-technology/nsf26-510/solicitation
7. NSF SBIR, Eligibility and Requirements; NSF, How to Apply 2026: https://seedfund.nsf.gov/solicitation-eligibility/ · https://nsf-gov-resources.nsf.gov/files/NSF-how-to-submit-sbir-sttr-proposal.pdf
8. NIH SEED, SBIR/STTR Funding Opportunities (points to the current NIH institute and center funding considerations, including topics eligible for budget waivers): https://seed.nih.gov/small-business-funding/find-funding/sbir-sttr-funding-opportunities. Check the current solicitation and the NIH institute's page for the current list.
9. NIH Grants Policy Statement 18.5.4, Allowable Costs and Fee (revised March 2026): https://grants.nih.gov/grants/policy/nihgps/HTML5/section_18/18.5.4_allowable_costs_and_fee.htm
10. PA-27-100, NIH, CDC and FDA Small Business Innovation Research Grant (Parent SBIR [R43/R44] Clinical Trial Optional), Section I and Section III (PD/PI primary employment), full announcement on Simpler.Grants.gov: https://files.simpler.grants.gov/opportunities/d1ba49e5-3684-4420-849a-ab2330ec493e/attachments/743ad4bd-fc28-450e-9249-1008f37490af/PA-27-100-Revised-Full-Announcement.html
11. SBA, SBIR and STTR Policy Directive (October 2020), definition of Phase III: https://www.sbir.gov/sites/default/files/documents/SBA_SBIR_STTR_POLICY_DIRECTIVE_OCT_2020_v2.pdf (Note: this is the 2020 directive. A post-P.L. 119-83 revision was not checked.)
12. NIH SEED, SBIR/STTR Funding Opportunities; NIH Grants, Parent Announcements: https://seed.nih.gov/small-business-funding/find-funding/sbir-sttr-funding-opportunities · https://grants.nih.gov/funding/explore-nih-opportunities/parent-announcements
13. NIH SEED, Register Your Company; NIH Grants, Registration for Investigators and Other Users (Login.gov): https://seed.nih.gov/small-business-funding/how-to-apply/before-you-apply/register-company · https://grants.nih.gov/grants/how-to-apply-application-guide/prepare-to-apply-and-register/registration/investigators-and-other-users.htm
14. DoD SBIR/STTR Innovation Portal; SBIR.gov, Topics: https://www.dodsbirsttr.mil · https://www.sbir.gov/topics

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