Small Business Grants For Felons (2024)
If you are a convicted felon serious about starting a business, your best chance to succeed is to get a business grant. The good news is that there are a variety of business grants for felons available from both private institutions and the federal government.
Here, we will break down different types of loans you can get to start a small business and how to go about it the right way.
How Does A Loan Work?
A loan is money that you borrow with the agreement that you will repay the amount borrowed with interest. The interest is the percentage of money you are charged to get the money. Usually, if you have good credit, you can get a lower interest rate.
However, small business loans are available even for felons with really bad credit, you will just have much higher interest to pay back. When you apply, the financial advisor will go over all these important details with you.
Where Can A Felon Get A Business Loan?
There are a number of institutions that may be able to offer you a loan.
Small Business Administration
SBA offers a number of different types of loans that you can qualify for even with a felony conviction. However, previous experience indicates that its very difficult or nearly impossible to get a large business loan from SBA. Felons have a lot more success getting a Micro loan through SBA’s MicroLoan Program, which focuses on giving loans under $50,000. The average reported loan is about $13,000. Note that SBA does not loan the money, rather it works with a number of approved lenders and guaranteed a portion of the loan.
Different lenders will have different eligibility criteria and types of loans they offer. However, in general, to qualify you must have a complete business plan and a clear proposition on how you will use the money. Note, that the turn around time can be as long as 5 to 8 months, so you should explore other opportunities, while you wait.
These micro loans can only be used for:
Capital
Supplies
Inventory
Fixtures
Equipment / Machinery
Microfinance Funds From The State
Most states offer some type of financing/small business loans for residents looking for start up funds. These can be relatively small amounts of money, under $5,000-8,000, but this can be just what you need to get your feet off the ground. For example, one of the best funded programs is California Opportunity Fund, but something similar may be available in your local area. One big advantage is that the turn around time for getting approved and actually seeing the money is often much quicker compared to SBA loans.
Funding For Amazon Sellers
If you have ever considered starting your own online business and selling products on Amazon, it may be easier to accomplish than you think. In recent years, Amazon started a loan program for its marketplace sellers, where they basically help you finance your online store with them. Why? Because the more sellers Amazon has, the more money they make! To qualify, you already need to be a seller, but this loan can help you significantly grow your business. They offer competitive rates, no paperwork to fill out and very quick turn around times.
Local Producer Loan Program
If your business idea is in any way related to farming or food, Whole Foods offers a Local Producer Loan Program. It has started in 2007, and the company has made over $22 million in loans to date. These loans are primarily for local small farmers and food artisans. They offer loan amounts between $10,000-100,000
and low fixed interest rates.
The money can NOT be used for operating expenses. It can be used for business expansion and capital expenditures, such as buying more animals, new equipment and infrastructure, or expanding crops. You must make monthly payments on this loan.
Private Banks
If you have good credit, you may be able to get a loan from a bank. However, this is not the case for the majority of people with a felony. Just in case, you may want to check out Lending Tree, which is a go to service between top lenders and borrowers. You can easily compare different types of personal and business loans offered, their interest rates repayment terms, as well as qualification criteria.
What Is A Grant?
The main difference between a grant and a loan is that you don’t need to pay back they money given as a grant. Its FREE. A loan you do need to pay back, and usually with interest. Grants are given out on a NEED BASIS. In other words, programs have criteria (usually its financial hardship) that determine whether or not someone qualifies to get this free money.
There are a number of grants available to felons who want to start their own small business. Private companies, as well as state and federal government have various programs that you may qualify for.
You can learn what about the business grants that you may be able to secure, as well as apply online at grants.gov. You can also call their support at 800-518-4726 to get live assistance and get started with this processes.
Getting Money Through Crowdfunding Websites
A trend that has been rapidly growing in recent years is to get money from online crowdfunding sites. Here you have the benefit of avoiding high interest rates, being disqualified for bad credit, or for being a felon. Everyone has an equal chance to convince people to fund them. All you need is a great story that explains why you deserve the money, videos that present your product or service and a strong social media engagement that will spread your campaign to as many people as possible.
The best sites to work with are:
Kickstarter
This is an American public-benefit corporation based in Brooklyn, New York which has built a global crowdfunding platform focused on creativity. The company’s stated mission is to help bring creative projects to life.
Go Fund Me
This site is very similar to Kickstarter, and to date, it has helped different people raise over 3 billion dollars for their needs.
IndieGoGo
This platform is geared specifically toward entrepreneurs. You can get financing to bring your business product or idea to life. There is also help/tutorials on how to create a good product, marketing, and how to launch a successful crowdfunding campaign.
How Do I Get Started?
Because there is so much information out there about getting a start up loan it can be very confusing to figure out what you need to do. We strongly suggest getting help from one or more of these reliable resources:
Visit Career One Stop, these are centers that are sponsored by the US Department Of Labor, where you can go to get help with seeking employment as well as applying for federal grants or loans to start a business.
Go to a local Small Business Development Center. This none profit organization provides free counseling on how to start and finance a small business. They have volunteer expert advisors in the fields of law, accounting, and marketing who can help you get your ideas together and create a business plan.
Finally, check out SCORE – a 50 year old none-profit organization that has been providing Free mentoring for people who want to start a business. They have branches nation wide, so look for one near you.
Additional Resources
If you are serious about becoming your own boss, check out your guides:
How A Felon Can Start A Business
Entrepreneurship Education Programs
About The Author
Joe Hunter
Joe is the founder of HireFelons.org. Having had friends and co-workers who have a felony conviction, Joe Hunter decided to use his expert knowledge in starting a successful business to launch HireFelons.org and teach as many former felons as possible how to earn a decent income, when finding a traditional job is simply not an option.
i have multiple felonies. i have been locked up for a year and am getting released in december. i am interested in any and all work. i will be in dayton ohio. my email is jefferydunbar360@gmail.com . i have worked in kitchens and i have construction experience from hanging to finishing drywall and painting is my niche.
Try Construction Companies they hire all the time. Go to a community college and learn a specific trade. Take care. God Bless.
I have been recently charged with felonies.. I was never in a place in my life where I wasn’t able to help people in some capacity. Over the past 20 years I’ve opened my door to felons & addicts in a way to help set them on the right path. Now that have felonies it’s set my financial life into ruins. My job prospects are totally limited locally. (not complaining) I have 15yrs clean & continue to work a sober maintenance program. I’ve been somewhat of a local advocate for people going through the system for many years. I’m 42 years & helping another addicts is what landed me with the felonies I have now. Even though this has happened.. It’s opened my eye’s to want to help on bigger scale. Insteas of opening my door.. Why not open an entire house!? I realized that I can’t run a halfway house safely from my home! The local police seem to only see what they want instead of doing a complete investigation. I’m not angry about my situation.. A little more determined now to find a way to start a real halfway house. This county is in desperate need of that. Considering I’m not finished with the trial & have yet to be exonerated I still see prospects of opening a rehabilitative type halfway house. Everyone has needed help at one time or another and so many are being released from prison without anywhere to live. That’s my biggest concern especially now when halfway house’s are at max occupancy here. The Governor here set a reprieve in place due to the pandemic & people are waiting for release. We have a religiously based halfway house. Meaning all the men there must follow the owers Christian based teachings & attend Christian church. Even through religion is big in my life we can’t force anyone to attend a religious event when it is against their own beliefs. Not even sure if our county would allow another halfway house. They tend to protest things of that nature. Everyone is scared of the unknown. But I whole heartedly believe that helping people has been my motivation & reason for living. How could I possibly go about finding funding locally. How could I go about getting around the local naysayers? Keeping up the good fight is why I live & breathe. I want to give back & keep giving. Do u have any guidance on starting a nonprofit? How would I begin this? How could I get other’s involved? How could I gain support of the community? Obviously I have a ton of questions lol any advice would be wonderful. Thx in advance any & all answers or comments.. Very much appreciated..
Hello. I strongly feel you are probably most needed in social work. People need to hear advice from someone who has been there. Keep trucking on and always chase your dreams.
Hello Megan, I think this is awesome. I currently with a a building people not prisons program myself 🙂
I just recently opened a staffing agency that is a 2nd chance employer. I am passionate about it because I to am a convicted felon. I am a single mom, felon, recovering addict that just wants to help people find work instead of them losing hope and turning back to old behaviors. I think a job is one of the most important things when trying to start a new life or stay sober. I have been focusing on helping people find jobs that will lead to careers where they can have a more promising future and benefits for their families. I also am very involved with resume building classes. I have them in my office free of charge once a month. I need to lknow how to get help fast financially. This is a bad time of year for the staffing world. Companies have met there budgets for the year and it is horribly slow. I need to get 5 to 10 loan to get through until after the 1st of the year. I have already invested 50k and AI cant affords anymore. Any ideas??
Hello Megan, I feel so lost in the world I too have a past and I thought getting in a clean and sober path was my biggest success however landed in a 5 year depression afterwards from not being able to secure gainful employment. I am now in school full time and still feel unsure on what to go for. I’m taking social work, political science, and all the liberal arts. I still feel like I’ll never really get a stable job. I have 5 children have been in recovery for 7 1/2 years and my record is pretty bad from 2012z how did you start your business. I actually landed a small job working for a non profit similar to what your doing and felt like that was the best job I’ve ever had. I absolutely loved. That’s my passion is helping others in all aspects of life. Do you have any suggestions even in what to go to school for?
I wish u were located in North Carolina I need to meet someone who’s been in my shoes I hve 1 felony and it’s ruined me as far as getting a good job I need just one chance to show people i am not tht person but everyone is so closed minded
from NC myself and I too have 2 felonies. I am very skilled in different trades however since the pandemic everyone wants employees but just not a felon…. SMH.. I am in the process of getting a program together myself. Women here need help… Not trying to be ugly but men have so many programs and women have very few recourses. The primary ones who usually have children and need to secure housing, food, and clothing. I just don’t understand society.. They always scream that we need to be productive citizens of the community.. We just are never given the chance
Ms. Robertsds, at this stage of my life I would have never dreamed I would be in this position. I recently was convicted of a felony, having just turned 55 years old myself. I am an educated woman with both an Associate degree in Business Management and a Bachelors’s in Finance. I reside in North Carolina, where I have recently found it is a felony to allow someone else to utilize your identification, even if you are with them in a pawn shop.
Due to this, I am no longer employable in my field and find myself taken back by such. Should you know of resources that I can utilize, if you would please pass them along as of right now, I am unemployed and at a crossroads as to what to do in my own career path. I sincerely wish we had a way to put my skill set with yours and expand your own pathway in North Carolina.
I look forward to hearing from you.
Sincerely,
Kimberly
WOW! I didn’t know there were so many things a (former convicted) felon could get to help the person to open an opportunity for owning and operating a business. I’m in need of funding, but the worst thing is: “I’m on SSDI due to physical limitations, so would I qualify for any of the benefits for starting an online business and program that can help other people with starting a business using the funds from the recommended sources mentioned in this article?” I have been told by the local authorities (police department) that I should ask the governor of my state to have my conviction “sealed or expunged” because I have been out of prison for more than 25 years and without any conviction that would hinder me from getting a job online and offline. Please send any information to me so I know the best avenue of approach. I also have received a doctorate degree since being released (D. Th.), and I actively help out in different community events.
It depends on the state where you live if you are able to apply for an expungement or pardon. If you live in the South you can pretty much forget it. Have better chance in the Northeast region of the country.
I’m a felon, I only had a theft charge and I flattened my sentence so I’m not on probation of any kind. I have gotten my G.E.D and I’m currently in college and I’m going to become a H.V.A.C tech I’m 36 years old and a single parent and after college I plan on starting my own business so if anyone has any ideas on how to do this please let me know. I made a mistake in life and I have paid for it and don’t feel like I should be punished over and over for it so please…..any ideas would be great
Work at a good hvac place and become good at it and learn how things run at that level (service) and other parts of the industry. Notice things that can work better in the hvac industry that are not being taken care of industry wide (maybe at the manufacturer level, or distribution or at your service level) or maybe there is more business than your company can handle, so starting a similar one in the future would thrive. When you get perspective of the industry and your role in it, you will learn to see the inefficiencies and underserved segments and you build a business based on that. Start small (out of your house small) and grow as slow as possible and learn skills now to depend less on others; social media and other marketing and ad methods. Save money for startup because getting any funding is really tough with a record. Set up an LLC and get things orgNized from before you begin. Business plan should be in place and keep updating it and changing as necessary. build a relationship with a bank and you’ll be able to get a credit line you can build on.
I think things like Kickstarter and GoFundMe are especially good for felons, namely ones who are showing a sincere effort to turn their lives around, because people love “comeback” stories like that.
Some guy is starting his own bakery? Meh. A former felon is getting his life together and started a bakery? Great story, take my money!
I’m a felon my charge is from 2006, I have custody of my 6yr old little girl. I’m trying to start my own restaurant here in itasca tx. Only competition out here is sonic and location is right off an interstate.. they guy I’m trying to get the building from, was able to open 14 more stores around the dallas ft worth area after starting from this building. I’m lookin to succeed the same way. Not only for me but for my little girl also