Federal Small Business Grant Program Expires | New

WEST LAFAYETTE, Ind. (WLFI) – Since 1982, more than 180,000 small businesses in the United States have received financial assistance from the federal government’s Small Business Innovation Research Program. Now, with the program set to expire at the end of the month, research firms in Greater Lafayette are urging Congress to extend it.

The SBIR program is a three-phase process for small businesses. The first phase verifies the merits, feasibility and commercial potential of a business proposal. The second phase builds on these results with additional funding. The third phase allows the company to research options for selling its products in the market.

Lawmakers worry that some companies will take advantage of the funding, sometimes receiving hundreds of grants under the program without seeking additional funding from outside sources or attempting to commercialize a product.

Sherine Abdelmawla’s business in West Lafayette has received three SBIR grants. As CEO of Akanocure Pharmaceuticals, she and her team have worked in cancer research and more recently to find ways to stop future viral pandemics like COVID-19.

She says that although a small portion of companies abuse the system, the overall results have been positive.

“The Ministry of Defense made an assessment,” Abdelmawla said. “They found that for every dollar invested in a company – the SBIR company – [the Department] got $22 back. That’s a huge rate of return.”

The SBIR program has provided nearly $100 million to Indiana small businesses alone in the past four years. The $3 billion program is due to expire on September 30 if Congress does not reauthorize it.

Paul Dreier is the CEO of the medical research company Novilytic, in West Lafayette.

The company, which has received four SBIR grants, uses nanotechnology to monitor the quality of drugs as they are developed.

Dreier says the positives of SBIR far outweigh the negatives.

“Eighty-nine percent of all award winners bring new technology and create new jobs to our country, which increases our tax base,” Dreier said. “There’s no place in the commercialized world where you get that kind of yield.”

Novilytic’s chief technology officer, Fred Regnier, says the SBIR program is one of the main reasons the United States leads the world in medical research.

“We’re the envy of the world because we have a federal government that funds research like that — that comes from universities and so on — that’s way ahead of everyone else,” Regnier said. “We have money that allows us to market it.”

As Congress weighs its options, Dreier hopes lawmakers understand what’s at stake.

“Please focus on fixing the problem,” Dreier said. “Don’t throw this away because you are throwing away one of our greatest benefits that no other country offers its citizens.”

Abdelmawla says she contacted US Senator Todd Young, who sits on the small business committee, urging him to extend the program.

If House and Senate lawmakers fail to reach an agreement by the Sept. 30 deadline, the program could still temporarily operate under a funding measure known as the continuing resolution.

Ryan H. Bowman