Non-Dilutive Capital: Grants, SBIR and R&D Tax Credits
This guide is for founders and CEOs who want to fund R&D without giving up more equity. It covers federal grants, R&D tax credits, Section 174A and state incentives, and how to combine them so they extend runway year after year.
What's in the guide
- The four capital pillars: grants, tax credits, state and local incentives, and industry programs
- What changed for 2026, including Section 174A expensing, 100% bonus depreciation and Form 6765 Section G
- The four-part test for qualified research under IRC §41(d)
- Qualified research expenses: wages, cloud computing for development and testing, contract research at 65%, and supplies
- Federal R&D credit value, the simplified credit, and the $500K a year payroll tax offset for qualified small businesses
- SBIR and STTR Phase I and Phase II award amounts for 2026
- Sample state R&D credit rates and how state credits add to the federal benefit
- Stacking grants with credits without double-counting funded wages, plus common qualification mistakes
Questions this guide answers
How much is an SBIR Phase I award?
The guide lists SBIR Phase I at $323K for feasibility work and Phase II at $2.15M for development. The program was reauthorized on April 13, 2026 and runs through September 30, 2031.
How much is the R&D tax credit worth?
The guide estimates 6% to 10% of qualified R&D spend comes back as a federal credit, before §280C. In R&D-credit states, state credits typically add about 10% to 50% on top.
Can a startup use the R&D credit if it has no taxable income?
Yes. Qualified small businesses with under $5M in receipts can apply up to $500K a year of the credit against payroll taxes, for up to five years.
What is the four-part test for the R&D credit?
Each business component must have a permitted purpose, be technological in nature, aim to eliminate uncertainty, and involve a process of experimentation. All four must be met.
Can I claim the R&D credit on wages paid by an SBIR grant?
Generally no. Wages funded by SBIR, STTR or other grants usually cannot also count toward the R&D credit, so funded wages need to be separated.
How Strativ helps
Non-dilutive capital is one of Strativ's core practices. We screen eligibility, estimate the credit and Section 174A impact, coordinate grants with credits so nothing is double-counted, and build the documentation before you file. Final tax positions are confirmed with your CPA.
Request the full guide for the complete one-page reference, or book a call to talk through your situation.
