# SBA Proposes SBIR Commercialization Thresholds

The Small Business Administration (SBA) proposed stricter commercialization standards for firms that received more than 25 combined SBIR/STTR Phase II awards during the five prior completed fiscal years. Covered firms would need at least 33% of revenue from sources other than Phase I and Phase II funding for the FY2027 assessment, rising to 50% for FY2028; firms that fall short would be barred from submitting new Phase I or Direct-to-Phase-II proposals for one year. Comments are due October 31, 2026 (2 days from the current date), and the signal states that the standard takes effect November 15, 2026 (17 days from the current date). This could affect small-business contractors’ eligibility and planning for future SBIR/STTR proposal submissions.

- Firms with more than 25 combined Phase II awards in the specified lookback period should assess whether they are covered and evaluate their non-SBIR/STTR revenue against both thresholds.
- Companies wishing to comment have until October 31, 2026, to submit feedback on the proposed standards.
- SBIR/STTR participants should account for the potential one-year proposal restriction when planning Phase I and Direct-to-Phase-II submissions and commercialization strategies.

**Jurisdictions:** federal
**Topics:** Regulatory Compliance, Grants & Funding
**Published:** October 28, 2026

### Government Entities
- Small Business Administration (SBA)
- SBA Office of Investment and Innovation

### Sources
- [SBIR program finally gets a commercialization standard with teeth - Washington Technology](https://www.washingtontechnology.com/opinion/2026/10/sbir-program-gets-reforms/416867) - Washington Technology