Grants For Felons, SBA Programs & More Funding Options

What grants are available for individuals with felonies?

Starting a business can be expensive and challenging — especially for individuals who have been convicted of a felony. However, there are several resources available to help secure funding for small business and personal development needs. Here are some of the best options for individuals seeking grant opportunities.

Grants.gov

Grants.gov operates a federal government grant database that is accessible through a browser or mobile app. You can search the database by keyword, funding type, eligibility, category and other criteria.

You’re better off casting a wider net by using more general search terms when looking for grants on this website. For example, a search using the keyword “felons” yielded no results, but “startup” did. Look for grants geared toward entrepreneurs, small businesses, industry, gender and heritage, instead of those intended specifically for formerly incarcerated people. You can apply for grants directly from Grants.gov. [Learn More: The Best Business Grants for Women]

Department of Labor grants

The U.S. Department of Labor has grant programs to help people who have criminal records. These grants cover housing, small business expenses and other costs. Anyone is eligible to apply for the grants, so competition can be fierce.

Federal Student Aid grants

Sometimes, starting a business requires training or additional education. To make this more obtainable and affordable, the federal government offers grants and student aid. The Federal Supplemental Educational Opportunity Grant is a federal grant for undergraduate students who exhibit “exceptional” financial need. Awards range from $100 to $4,000. You can’t use the money to start a business, but you can get the training needed to operate one successfully. [Read more about how to start a business with $0.]

Keep in mind that it may be difficult to get a grant. Priority is given to Federal Pell Grant recipients first, and there are specific guidelines and eligibility requirements for incarcerated individuals.

“Like any business grants, they are never easy or common,” said Danny Fitzgerald, executive director for the Small Business Development Center (SBDC) in San Diego. “The trick for many [with a felony conviction] is getting regular loans.”

GrantWatch

GrantWatch is an online database that houses information on various business grants for all types of business owners, including those previously convicted of felonies. The system contains data on more than 28,000 funding opportunities. There are free membership options for partial access to the database or paid memberships for full access. Either way, this is an excellent resource for those looking to secure grant funding. [Related article: Small Business Grants for Minorities]

State and regional small business grants

Many states, counties and cities offer small business grants, including ones geared toward previously incarcerated individuals or that do not restrict applications based on criminal record. Some organizations in your region with such grants could include local government websites, economic development centers and local religious organizations. 

National Association for the Self-Employed (NASE)

NASE Growth Grants are given to small businesses every year. Grants can be up to $4,000 for business needs, such as marketing, advertising, hiring personnel and expanding facilities. The NASE has provided $1 million worth of grants to members since 2006. 

What Small Business Administration programs are available for felons? 

The Small Business Administration (SBA) offers programs, such as free training and loans, designed to help entrepreneurs get their businesses up and running. Depending on your situation, some or all of the programs may be right for you.

Boots to Business

Boots to Business is an entrepreneurial and educational training program provided by the SBA. Through this two-day, in-person course, participants get an overview of what entrepreneurship is and learn business ownership fundamentals. They are exposed to the skills and resources needed to write a business plan and launch an enterprise. Following the completion of Boots to Business, participants get access to the SBA’s B2B Revenue Readiness online course in partnership with Mississippi State University.

Run in conjunction with the Boots to Business program is the Boots to Business Funding Opportunity, which is awarded exclusively to Boots to Business participants. Through this program, the SBA provides support to the business for five years.

SBA microloans

Microloans are a popular way for people with little or no credit history to access small business loans. The SBA’s microloan program provides small businesses with loans of up to $50,000. The SBA partners with nonprofit community-based organizations to issue and administer the loans. The average microloan is around $13,000, with interest rates averaging between 8 percent and 13 percent. Proceeds from the SBA’s microloans can be used for working capital, inventory or supplies, furniture or fixtures and machinery or equipment.

The SBA’s microloan program is particularly attractive for previously incarcerated entrepreneurs because most approved lenders aren’t looking for an excellent credit score or an expansive credit history. “Microlenders are comfortable in credit-building situations,” Fitzgerald said.

Small Business Development Centers

SBDCs are partnered with the SBA and provide access to free workshops, mentoring and other valuable resources that will help formerly incarcerated people succeed in the small business world. These centers, nearly 1,000 locations throughout the country, can help aspiring entrepreneurs develop a business plan and grow their own small businesses. They provide no-cost business consulting and low-cost training to new and existing businesses.

What are other funding options for felon business owners?

Raising capital and using a microloan are common ways formerly incarcerated individuals can start a business, but they aren’t the only avenues. Depending on the support system of the individual, they may be able to tap friends and family for loans. Alternatively, aspiring entrepreneurs can choose a business that they can get up and running with little capital, such as painting or landscaping.

Angel investors

Angel investors are people who back startups and small businesses by putting their own money on the line, usually in exchange for a share of the company. Unlike some lenders, they’re not just in it for the money — many genuinely want to help entrepreneurs succeed and see their businesses thrive. Outside of funding, angel investors can offer valuable resources, such as mentorship, networking opportunities and industry expertise to help startups succeed. 

Business credit cards

Business credit cards give small business owners a handy way to manage cash flow and cover necessary expenses. Unlike personal credit cards, business cards come with perks designed just for entrepreneurs, like higher credit limits, rewards on business purchases and the option to get free employee cards connected to the account. Plus, they make it easier to keep your business and personal spending separate, which helps with bookkeeping and spotting potential tax write-offs.

Crowdfunding

Crowdfunding has become a popular way to test a business idea or raise funding. Through these digital platforms, you present your idea, list how much you are looking to raise and launch your campaign. Individuals can invest in your company in exchange for stock or gear. Most business owners don’t get rich through crowdfunding, but it is a way to raise some startup capital.

“The challenge with crowdfunding sometimes is, you can get lost in a sea of funding requests,” said Michael Brooks, associate director of program operations at the Alabama Small Business Development Center Network. “America loves a good recovery, redemption story. If you have a good story to tell, it’s possible you’ll get interest.”

Popular crowdfunding sites for business owners include Indiegogo and Kickstarter.

Kapitus short-term loans

Kapitus can provide revenue-based financing, financing for small businesses, equipment financing and factoring. Its small business loans come with premium rates and fixed terms for qualifying businesses. To qualify, your business must be at least two years old, earn $250,000 in annual revenue, have a minimum FICO score of 625 and be located in the U.S. Kapitus has provided about $5 billion in capital to 50,000 small businesses during the past 10 years. This is a great resource for loans for those looking to take their business to the next level.

Newtek

Newtek can assist with both short- and long-term funding needs by combining their financing products. They offer a wide range of loan sizes, from $1,000 to $15 million, with payback terms from five to 25 years. Additionally, there are limited or no repayment penalties. Newtek will lend to businesses of various industries with two to three years of tax returns, for-profit businesses and businesses with repayment ability from earnings.

What business resources are there for people convicted of felonies?

Taking advantage of training programs while incarcerated can pay off, as they help build valuable skills for employment and business opportunities. Skilled trades like plumbing, HVAC and carpentry are in high demand, according to Bill Collins, a SCORE mentor, who suggests that learning these trades can open doors to job opportunities and business ownership.

Numerous resources are available to support ex-felons who want to establish themselves as successful entrepreneurs, making it possible to turn acquired skills into a viable path toward a new career.

CareerOneStop

CareerOneStop offers various resources to help formerly incarcerated entrepreneurs pursue business opportunities and is backed by the U.S. Department of Labor. This resource can help with job searching, tips for locating state-specific resources and support on finding employers open to hiring individuals with criminal records. It also offers tips on how to discuss past convictions with potential employers. 

Defy Ventures

Defy Ventures offers valuable second-chance programs aimed at supporting formerly incarcerated individuals as they embark on life outside of prison. Aspiring business owners can take part in an entrepreneur boot camp or a business accelerator program, where they receive hands-on training and mentorship.

Georgetown Pivot Program

The Georgetown Pivot Program is a year-long program that provides a weekly stipend and various funding opportunities while participants work toward earning a college certificate in business and entrepreneurship. Applicants must be at least 25 years old, have a high school diploma and be prepared to attend online and in-person classes. 

Help For Felons

Help For Felons is an organization dedicated to supporting formerly incarcerated individuals with every part of their lives. Among these are lists of grant opportunities and loans. Help For Felons also provides a large variety of financial assistance options, including education loans at the federal level to small business loans and grants.

Inmates to Entrepreneurs 

Inmates to Entrepreneurs provides in-person and online courses designed to help former inmates become entrepreneurs. Through Inmates and Entrepreneurs, ex-felons receive the training needed to determine what kind of business they want to run and how to reach potential customers. Courses are taught by successful entrepreneurs from around the country.

LEAP Virtual Entrepreneurial Academy

LEAP is dedicated to supporting previously incarcerated women as they reintegrate into society. Their virtual course offers a unique opportunity for women to gain business skills over a three-month program. At the end of the course, participants pitch their business plans for a chance to win cash prizes. Best of all, LEAP covers all program costs. 

Project ReMADE

Project ReMADE empowers formerly incarcerated individuals by teaching them necessary skills and connecting them with industry professionals. Participants work closely with three professional mentors to develop their business plans. At the program’s conclusion, they present their ideas to a panel, gaining valuable exposure and potential support for their ventures.

SCORE

SCORE is a mentorship program dedicated to supporting small business owners through free, confidential professional guidance and a wealth of educational resources. Entrepreneurs can connect with expert mentors across the U.S. via in-person meetings, phone calls and online platforms, gaining insight into business operations and strategies. SCORE also offers a variety of free online events, on-demand courses and an extensive library of guides and templates. All of these resources can help business owners navigate challenges and roadblocks along their entrepreneurial journey.

Small Business Development Centers

Small Business Development Centers (SBDCs) offer free and low-cost support to previously incarcerated individuals. Their training and workshops cover essential topics like daily business management, legal issues and business plan development. Additionally, your local SBDC can assist you in identifying business grants that you may qualify for, making it easier to secure funding for your venture.

Why do felons struggle to find business funding?

It can be difficult to find business funding following a felony conviction for several reasons. For example, the individual may have a poor credit rating. While serving time in prison, inmates are not able to build credit, nor can they gain experience in the business world. Both are often qualifications for securing a small business loan. As a result, formerly incarcerated individuals can struggle to get started in the small business world, although success is certainly within reach.

There aren’t many government grants specifically for those convicted of felonies. In the past, there were more social programs, but today, a convicted felon must compete with other business owners for grants and other types of financial assistance. [Related article: Best Business Loan and Financing Options of 2024]

“We have a decades-old prejudice built in us,” said Collins. “It is difficult to get grants, difficult to get loans and difficult to get financing.”

Some states do have training and grant programs specifically targeted at those recently released from incarceration. However, the dollar amount tends to be small and the programs aren’t widespread. Nonetheless, there are still funding resources for people with felony convictions, and understanding the available options can help these individuals start their journey into entrepreneurship.

Donna Fuscaldo contributed to this article. Source interviews were conducted for a previous version of this article.