Changes to a federal small business funding program expected to be signed into law shortly will open the door for venture-backed companies to receive new government investments that were previously off limits.

The changes will allow the National Institutes of Health, the Department of Energy, and the National Science Foundation to award as much as 25 percent of funds allocated to the Small Business Innovation Research program to small businesses that are majority-owned by venture capital operating companies. Other federal agencies would be allowed to award as much as 15 percent of their SBIR funds to VC-backed companies.

The changes “will help to ensure that small U.S. venture-backed companies have increased access to capital for meritorious cutting edge early-stage research,” wrote the National Venture Capital Association, in a letter to Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell.

The Small Business Innovation Research Reauthorization, an amendment to the National Defense Authorization Act, [http://www.gpo.gov/fdsys/pkg/BILLS-112s1867es/pdf/BILLS-112s1867es.pdf] extends the SBIR program for six years from its current expiration date, December 16.

Nearly a third of the 252 companies that have developed U.S. Food and Drug Administration-approved biologics have received at least one SBIR or Small Business Technology Transfer award, according to the Biotechnology Industry Organization.

“The importance of supporting continued advancements in science has never been more important as companies are struggling to recover from the economic crisis, and accelerate research, growth, and hiring,” says Jim Greenwood, BIO’s president and CEO. “At the very earliest stages of development, alternate sources of financing, such as SBIR grants, have been instrumental in furthering research and development in biotechnology.”