Grants and Loans for felons can be a challenge to find, that’s why we’ve created this content to help you out. Statistics reveal that over 60% of former inmates experience a year-long struggle to find employment following their release, with their earnings amounting to approximately 40% less than the general population. These figures become even more alarming when we consider that more than half of incarcerated individuals have dependent children.
Re-entering society after incarceration presents ex-felons with unique obstacles in their pursuit of livelihood.
Embarking on the journey of starting a small business demands significant dedication, and having access to capital can significantly contribute to its success. Many entrepreneurs rely on personal savings or supplemental income from other jobs to finance their ventures. Unfortunately, former felons often find themselves lacking these resources.
To overcome this hurdle, small business grants emerge as a potential solution, providing the necessary capital without the burden of repayment. However, it is important to note that the allure of grants being non-repayable also means that competition during the application process can be fierce.
Government grants are typically awarded to a range of organizations engaged in government-funded programs and projects. Such organizations include:
- State and local governments
- Universities
- Research laboratories
- Law enforcement agencies
- Non-profit organizations
- Businesses
3 Business Grant Resources for Felons
1. Usgrants.org
Usgrants.org is comprehensive hub for discovering and applying to government grants, stimulus packages, and funding opportunities offered by local, state, and federal government agencies. To get started, sign up for their website to get access to Small Business Grants, Pell Grants, College Grants, Housing Grants, Veteran Grants and Grants for Women.
2. Grants.gov
Grants.gov serves as a platform aiding small business owners, including those with felony records, in identifying grant possibilities from over hundreds federal grant programs. Grants.gov is an official government website and the process to register starts by first creating an account, where you can provide your pertinent details. Once signed up, you gain access to search for grants that align with your eligibility criteria and you can conveniently submit your applications online.
3. State and Local Grants
Seek Assistance from State/Local Small Business Development Centers (SBDCs):
Reach out to your local SBDC, which offers guidance and resources for entrepreneurs. SBDC advisors are knowledgeable about local grants and funding options specifically designed for individuals with felony records. Their expertise can be invaluable in navigating the application process.
Connect with Community Organizations and Re-entry Programs
Get in touch with community-based organizations, non-profits, or programs that assist individuals with criminal backgrounds in starting businesses. These organizations may have insights into local grants or resources specifically aimed at supporting entrepreneurs with felony records.
Network with Supportive Professionals:
Engage with professionals in your local business community who can provide advice and connections. Attend networking events, conferences, or workshops where you can meet potential mentors or advisors with experience in accessing grants. Their firsthand knowledge can help identifying local grant opportunities.
4 Business Loans for Felons
- SBA Microloan
Through the SBA microloan program, eligible businesses have the opportunity to secure loans of up to $50,000. It’s important to note that certain lenders may conduct background checks for individuals with prior convictions.
2. Kapitus Short-Term Loans
We recommend Kapitus as an option as well because they have personalized business financing options from $10,000 to $500,000.
3. Equipment and Real Estate Loans
Additional forms of business loans available for felons include commercial real estate loans and equipment financing. These loans are classified as self-secured, meaning that the asset being financed, such as the equipment or the real estate, acts as collateral. In the event of loan default, the lender retains the right to seize and sell the collateral.
The presence of collateral covering the loan amount provides lenders with a higher level of assurance and a form of “guarantee” for repayment. Consequently, the significance of an individual’s criminal history diminishes. Lenders specializing in equipment financing or real estate often prioritize the condition of the underlying asset over a borrower’s criminal record.
4. Online Short-Term Loans
Online lenders offer a viable avenue for felons to explore when seeking business loans. Platforms like UpStart, Lending Tree, and other online lenders tend to be more lenient than traditional banks when it comes to eligibility criteria. These lenders typically do not require flawless credit to qualify, and they are generally willing to consider borrowers with criminal histories as long as they meet other eligibility requirements.
Recommended Actions
For individuals with felony backgrounds seeking loans or grants, consider the following recommendations to improve your chances:
- Research specialized grant and loan programs for individuals with criminal records.
- Develop a strong business plan highlighting your skills and commitment.
- Seek legal counsel to understand relevant laws and disclosure requirements.
- Work on improving your personal credit score.
- Build a supportive network of mentors and advisors.
- Utilize community resources and programs.
- Showcase your rehabilitation efforts and commitment to personal growth.
By following these steps, you can enhance your prospects of obtaining funding opportunities despite your felony background. Remember that each funding opportunity may have its own specific requirements and considerations. Be transparent and honest in your applications while highlighting your qualifications, commitment, and potential for success as an entrepreneur. Persistence, preparation, and seeking appropriate support are key to increasing your chances of securing loans or grants with a felony background.
What do you think about this blog post? Have you or someone you know been in the situation of trying to get a loan or a grant with a felony? What about other grants and loans for felons to start their own businesses? What was that like, and what happened? Please tell us in the comments below.
