Convicted felons, like everyone else, often want to change their lives for the better by starting a business once they have served their time. And yet, they may have a more difficult time of it, since there is some prejudice against ex-convicts.
You might wonder: can I even start my own business? Can I qualify for grants or loans? Is it even worth the effort?
Let’s explore your options as an ex-convict looking to turn over a new leaf.
Can You Own a Business if You are Convicted of a Felony?
Before we talk about small business grants and loans for felons, let’s first determine whether a felon is qualified to start a business.
The good news is that there are no laws against an ex-convict owning a business! That means you’re only limited by your own imagination when it comes to running a business.
That being said, starting a business requires money, and you may not have the kind of capital you need to realize your dreams. Fortunately, there are options to help you secure that money.
Small Business Grants for Felons
Our first stop on this journey to finding funds for your business is a look at small business grants. Grants offer free money that doesn’t have to be paid back the way business loans do.
Grants are offered by city and state governments, as well as the federal government. Also, private corporations, nonprofits, and foundations offer grants.
Each grant will target a specific audience. Some are for small businesses in general, while others may target a specific type of business owner, like a minority, woman, or veteran. Some are for businesses in particular industries. Know that grants often have heavy competition, so you’ll want to review the requirements carefully before applying and make sure you check all the boxes with your application.
Here are a few grants you may want to consider.
Nav’s Small Business Grant
Every quarter, Nav’s small business grant provides up to $10,000 to businesses looking to overcome a challenge.
FedEx Small Business Grant Contest
FedEx offers $25,000 grants to businesses each year. You’ll need to capture your business’s story via video to apply.
National Association for the Self-Employed (NASE) Growth Grants
NASE Growth Grants are offered to members of the organization National Association for the Self-Employed who are looking to take their business to the next level. These grants are worth up to $4,000 and can be used for all types of activities, like purchasing new equipment, hiring help, and creating promotional material.
Can Felons Qualify for Federal Grants?
In addition to grants offered by private companies like those above, local and federal governments also offer grant programs, and your past felony conviction isn’t a barrier to qualifying.
You can search for federal government grants on Grants.gov. You may also want to check with your local government to see if there are other programs you qualify for.
Can Felons Get Small Business Loans?
If you’re curious about small business loans, know that your criminal record isn’t necessarily a barrier to getting the funds you seek.
There are a wide variety of small business loans you may qualify for, whether you’re launching a startup or looking to build an existing business. Even if you have low credit scores, there are lenders you may qualify for loans with.
Small Business Loans for Felons
Taking out a loan for your financial needs can ensure you have the capital you need for your business.
If you have excellent credit, you might consider a loan from the Small Business Administration (such as the SBA microloan program). There are no eligibility restrictions around having a felony record, and the loans have some of the lowest interest rates of any financing options available.
Here are some loans to consider.
Qualifying businesses can borrow up to $50,000 with the SBA microloan program. Some may require a background check for ex-convicts.
Kapitus Short-Term Loans
Kapitus has a variety of lending options, from equipment financing to revenue-based financing. Borrow up to $500,000.
Newtek Long-Term Loans
Newtek provides loan programs to suit every kind of business. You can borrow $1,000 to $15 million.
Other Resources for Small Business Owners with a Felony
Beyond the resources we’ve listed above that provide small business loans and grants that ex-convicts may qualify for, here are a few other resources to help you launch or grow your business.
Inmates to Entrepreneurs
Inmates to Entrepreneurs provides entrepreneurship programs to people with criminal records. There are several in-person and online courses to help you decide what kind of business you want and learn how to find customers.
HelpforFelons.org provides a variety of resources to give felons a second chance, including reentry programs and lists of grant opportunities and loans. Whether you want to start a business or go back to school, there are a variety of financial assistance options, from federal education loans to small business grants.
Small Business Development Centers
Another helpful resource for your business is your local Small Business Development Center (SBDC) and SCORE. These SBA resource partners provide free access to mentoring, workshops, and assistance in creating a business plan, developing your business idea, and inspiring you to start your own business. You can also get guidance about where to seek business funding.
Another option for raising funds for your business is crowdfunding. You create a crowdfunding campaign to raise money for your business or for a specific project or product. Anyone who’s interested can contribute to it. Crowdfunding marketplaces include Indiegogo, GoFundMe, and Kickstarter.
How Will You Make Your Entrepreneurial Dreams Come True?
If you’re ready for a second chance, starting your own business could be the ticket. Carefully research your options for financing and choose the one that best fits your needs.
And remember: anything, absolutely anything is possible!
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