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Updated Jan 03, 2024

Grants for Felons

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Sean Peek, Senior Analyst & Expert on Business Ownership

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Finding a job after incarceration has long been a challenge. Having a felony on your record carries a huge stigma when you are seeking employment. 

One second-chance option is to join the ranks of small business owners across the United States, although that path also presents challenges with training and funding. However, government agencies and nonprofits have stepped up to lend some support. From grants to microloans, here’s a look at the aid available for felons who want to start a business.

What grants are available for felons? 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 felons or ex-prisoners. You can apply for grants directly from 

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.

Keep in mind that it may be difficult to get a grant. Priority is given to Federal Pell Grant recipients first and felons are ineligible for that program.

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


GrantWatch is an online database that houses information on various business grants for all types of business owners, including felons. 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: Top Business Grants for Minorities]

State and regional small business grants

Many states, counties and cities offer grants to small businesses, including ones that are geared toward ex-felons or that do not restrict applications based on criminal record. Some organizations in your region that could have such grants 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. 

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 can assist with both short-term 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 of 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.

FYIDid you know

While there is an abundance of grants at the federal level, look for grants locally, in your state, region or county, which are geared toward supporting small businesses.

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 the course, participants get an overview of what entrepreneurship is, learn business ownership fundamentals and are exposed to the skills and resources needed to write a business plan and launch an enterprise. It is a two-day program that’s normally run in person. 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% and 13%. 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 felons 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.

Did You Know?Did you know

Microloans are available to people who have little or no credit history. This may be helpful for ex-felons, who may lack credit history due to being incarcerated.


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 the Alabama SBDC 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.

Small Business Development Centers

SBDCs are partnered with the SBA and provide access to free workshops, mentoring and other valuable resources that will help ex-felons 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 funding options for felon business owners?

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

Ultimately, it pays to take advantage of any training programs available while you are incarcerated, as you can gain skills that can help you find employment and launch a business.

For example, skilled trades such as plumbing; heating, ventilating and air conditioning (HVAC); and carpentry, are seeing high demand right now, Bill Collins, a mentor for SCORE, told and gaining those kinds of skills is a good way to get jobs and a path toward business ownership.

There are a lot of resources for ex-felons looking to establish themselves as successful business owners. 

Inmates to Entrepreneurs 

Inmates to Entrepreneurs provide 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.

Help For Felons

Help For Felons is an organization dedicated to supporting ex-felons 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.

Why do felons struggle to find business funding?

It can be difficult for ex-felons to find business funding and there are several reasons why this is the case. For example, an ex-felon 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, ex-felons can struggle to get started in the small business world, although success is certainly within reach.

There aren’t many government grants specifically for felons. 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 recently released felons. 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.

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

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Sean Peek, Senior Analyst & Expert on Business Ownership
Sean Peek has written more than 100 B2B-focused articles on various subjects including business technology, marketing and business finance. In addition to researching trends, reviewing products and writing articles that help small business owners, Sean runs a content marketing agency that creates high-quality editorial content for both B2B and B2C businesses.
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