Non-dilutive funding options for small companies

Non-dilutive funding is money that does not cost owners any equity. For a small US company the main sources are: tax credits you are already owed (the R&D credit can offset up to $500,000 a year of payroll tax for qualifying young companies), federal R&D awards (SBIR and STTR), loans (bank and SBA-backed), revenue-based financing, and selling or licensing assets, which for some established companies includes de-identified business records. Speed and fit differ a lot.

The options compared

Option	What it is	Who it fits	Speed	Cost
R&D payroll tax credit	Research credit applied against payroll tax	Qualified small businesses: under $5M gross receipts and no receipts before the last 5 years	With your tax filings	Preparation fees only
SBIR / STTR awards	Federal R&D funding, equity-free	US small businesses doing R&D that fits an agency topic	Months	Proposal effort; no repayment
SBA-backed loans	Bank loans partly guaranteed by the SBA	Companies that can show repayment ability	Weeks	Interest and fees; often a personal guarantee
Revenue-based financing	Advance repaid as a share of revenue	Companies with steady recurring revenue	Days to weeks	Fixed fee or cap, often costly
Customer prepayments	Discounts for paying a year upfront	Companies with loyal customers	Immediate	The discount
Asset sales	Selling equipment, IP, domains	Companies with unused assets	Weeks	Lost asset
Data licensing	Licensing de-identified copies of business records to AI developers	US companies with 20–30+ staff and several years of records	Weeks to months	No equity or repayment

R&D credit against payroll tax

The Inflation Reduction Act raised the amount a qualified small business can apply against payroll tax from $250,000 to $500,000 a year, for tax years beginning after December 31, 2022. A qualified small business, per the Form 6765 instructions, is a corporation or partnership with gross receipts under $5 million for the year and no gross receipts in any year before the five-year period ending with that year. That covers many young startups that have no income tax to offset.

SBIR and STTR

SBIR.gov describes these as equity-free, non-dilutive federal funding for American small businesses. Phase I funds proof-of-concept work, typically over 6 to 12 months, with awards between $50,000 and $323,000. Phase II continues the R&D, usually only for Phase I awardees, over about 24 months with awards between $650,000 and $2.2 million. Phase III is commercialization and carries no SBIR funding. Topics are set by each agency, so check whether your work fits a current solicitation.

Licensing business records

Some AI developers pay companies for de-identified copies of email, chat, documents, tickets and CRM history. micro1 publishes a range of $100K to $3M+ per approved package for companies with 30 or more full-time employees; Nyne says its deals are commonly worth $100K or more for operating companies with 20 or more US employees and three years in business. These figures are the buyers’ own, as of November 2026, and are not guaranteed. Payment comes after the buyer receives and accepts the data, so it is not a fix for next week’s payroll.

Choosing

1. Size the gap and the deadline.
2. Collect what you are owed first.
3. Cut costs that do not destroy value: unused seats, not your records.
4. Check fit for grants, licensing and asset sales in parallel.
5. Borrow for what remains, knowing the repayment terms.