Nevada County Picayune and Gurdon Times Newspaper Archive

Federal funds are available to test feasibility of new ideas

People have good ideas all the time. The problem is how to get them from the idea stage into production.

Fear not, there is an answer.

Mildred Holley, lead consultant with the Arkansas Small Business Development Center at the University of Arkansas at Little Rock, recently told about federal programs designed to help those who have ideas get from the idea to an actual product.

The ASBDC, she said, has outreach programs for technical based businesses and industries. These programs, with federal funds, help those with ideas find out, first, if it's feasible, then how it can be constructed and made into a marketable product.

She said the Small Business Innovation Research Program is one of the best kept secrets in the state, even though it's been around for 20 years, as it was established in 1982.

Under this program, there is $1.5 million available in federal funds for research and development of an idea. A small business, she said, can get up to $800,000 for the research and development of a concept.

This, she said, is done in three phases. The first one examines the feasibility of the idea, with the recipient of the grant money getting six months and up to $100,000 to see if the idea would be worth further pursuit.

The government's reasoning, she said, is to foster technology in small businesses, and small businesses are the only businesses that can apply.

What makes these programs even better, is those applying don't have to have a PhD to participate, nor does the business actually have to exist as such.

The applicant must submit a proposal to the SBIR. If it's approved, then the applicant will have to form the business. Additionally, applicants can submit multiple proposals, Holley said, but not for the same project.

For the federal government, small business is defined as having fewer than 500 employees, thereby making most businesses in the state eligible.

The business must also be a for-profit entity and be 51 percent owned by a U.S. citizen.

If a research grant is awarded, the business can transfer the research program to a university or other institution, but this will require 30 percent of the funds awarded to go to the research institution.

In the second phase, the money gets bigger, but so do the responsibilities.

If the first phase shows the idea to be feasible, then funds are available to create a prototype and see if it would be possible to market it commercially.

Up to $700,000 is available for this portion, and the business has up to two years to get the product or technology prototype built.

Once the prototype has been constructed and is shown to work the way it was intended, phase III begins.

However, there is no SBIR money available for the third phase, which is to get the product/technology into production for commercialization. But, Holley said, there may be non-SBIR money to be found.

Arkansas, she said, is a minor participant in this program, as only 23 businesses have been involved during its 20 year existence.

"A lot of people have never heard of these programs," she said, "and banks won't fund small businesses for research and development initially. This type of funding is risky."

To help get the word out in Arkansas about the programs, the state is one of five involved in an outreach tour. Eleven federal program managers will be in Little Rock on Dec. 9, to explain what they do, and all of them deal with the SBIR.

The SBIR program design is highly competitive, and a federal "shopping list" exists detailing what agencies want.

Federal agencies involved in the SBIR program include the Department of Defense, National Institute of Health, NASA, the Department of Energy, the National Science Foundation, the Department of Agriculture, the Environmental Protection Agency, the Department of Education, the Department of Commerce and the Department of Transportation.

For more information about the programs, Holley can be contacted at 1-501-324-9043, or send an email to mxholey@ualr.edu.