The 13 Best Small Business Grants For Felons Who Want To Start A Small Business
If you have a criminal record and want to go into business for yourself, read this guide to the best business grant opportunities available for felons.
Having a criminal record has its own set of challenges, but past mistakes don’t have to haunt you forever. More companies are helping formerly incarcerated individuals re-enter the workforce, while many former felons are choosing to forge their own paths by starting their own businesses.
According to a RAND study, more than 3.8% of small business owners in the U.S. have a criminal record, while about 1.5% have a felony charge.
Your criminal record shouldn’t stop you from owning a business, but you may encounter roadblocks when getting started, specifically when it comes to funding. Fortunately, there are opportunities out there, even if you have a felony. One such opportunity is a grant — money you can use to start your business that doesn’t have to be repaid. Sound too good to be true? While grants are extremely competitive, it is possible to get one to kickstart your business.
In this post, we’re going to look at small business grants available to felons, alternative funding options, and other resources to help you get started.
Table of Contents
What Small Business Grants Are Available For Felons?
Felons are eligible to apply for most small business grants, provided they meet all requirements set by the grant program. While grants may target specific demographics or industries, the applicant’s criminal record typically isn’t a consideration for most programs.
The Best 13 Small Business Grants For Felons
While grant opportunities specifically for felons are scarce, there are a number of small business grants that felons and ex-felons may qualify for through federal and local governments, private corporations, nonprofits, and foundations. Start your search with these 13 options.
1. Government Grants Available For Felons Starting A Business
Federal Grants For Felons
Grants.gov is a great resource for finding federal grants. Although you won’t specifically find grants for felons or ex-felons, there are thousands of federal grant opportunities contained within this government database. In addition to grants, the website has an abundance of resources to help you better understand everything from policies and eligibility to grant terminology. A mobile app is also available.
Federal Pell Grants
Pell Grants are educational grants that are used to pay for tuition and other school-related costs and fees. While this isn’t a small business grant, a Pell Grant can be used to attend a higher institution to learn skills and earn a degree that can be useful when launching a business. Pell Grants, unlike student loans, do not have to be repaid and are based on financial need.
SBA 8(a) Business Development Program
While the Small Business Association (SBA) 8(a) program isn’t a grant program and isn’t for brand new businesses, this is a resource to keep on your radar as your business grows. The SBA 8(a) program supports socially and economically disadvantaged small businesses that have been in operation for at least two years. This nine-year program provides training, technical assistance, business development assistance, mentorship opportunities, and more. Perhaps the biggest draw of the program is that millions of dollars in government contracts are set aside for program participants. In order to participate, your business must be certified by the SBA. Check out our guide to the 8(a) program to learn more.
City & State Grants For Felons
Minority Business Development Agency Business Centers
The U.S. Department of Commerce’s Minority Business Development Agency is a federal agency that focuses on the growth of minority-owned businesses. The MBDA has numerous Business Centers located throughout the nation that help minority business owners find funding opportunities, connect with strategic partners, and secure business contracts. You can connect with your local MDBA Business Center to learn more about the resources available to help you start your business.
State Trade Expansion Program
The State Trade Expansion Program (STEP) is a program funded by the SBA. Under this program, the SBA provides funding to state and local governments to assist small businesses in expanding into international markets. With this funding, small businesses can learn how to export, create international marketing campaigns, participate in training and workshops, and more. You can learn more about available opportunities and eligibility by reaching out to your local entity that has received STEP funding.
2. Private Corporation Grants For Felons
Incfile Fresh Start Business Grant
Incfile’s Fresh Start Business Grant program is designed for any U.S. resident aged 21 or older that wants to start their own business. The winner of this contest receives $2,500 to put toward startup costs, as well as a free Incfile plan that includes incorporation services, Registered Agent services, and tax consultation. You can apply by submitting a short online application, a video about your business idea, and a business plan between September 30 and December 31.
EnrichHER Small Business Grants
EnrichHER provides small business grants of $5,000 to U.S.-based business owners, particularly women and people of color. Grant applications are available on a rolling basis, with the current round of applications due by December 1, 2022. It is worth noting that there is a $37 fee to apply for this grant.
Fast Break For Small Business
If you’ve already launched your business but need help to keep moving forward, consider applying with the Fast Break for Small Business program. LegalZoom, the NBA, WNBA, and NBA G League have teamed up for this small business grant program, which is administered by Accion Opportunity Fund. Under this multi-year program, $10,000 grants and LegalZoom products will be awarded to eligible small business owners. Eligible small businesses must be in operation for at least six months to qualify. This grant program focuses specifically on underserved business owners, including women, minorities, immigrants, and low- to moderate-income business owners.
NASE Growth Grants
The National Association for the Self-Employed awards $4,000 Growth Grants every quarter. If you have a business plan and an identifiable business need, you could be eligible for this grant. To qualify, you must also be a member of the NASE. Membership starts at $11.95/month, and there are discounted membership rates available for students, veterans, and members that purchase an annual membership.
FedEx Small Business Grant Contest
If your for-profit small business has been in operation for at least six months, you can apply to the FedEx Small Business Grant Contest. You could potentially win up to $50,000 as well as FedEx Office services to grow your small business. You can sign up to be notified about important contest dates through the FedEx Small Business Grant Contest website.
Hello Alice partners with numerous companies including Amazon, Alibaba, DoorDash, Mastercard, and FedEx to offer small business grants to new and established businesses. You can check out current grant offerings through the Hello Alice website, and you can even sign up to receive notifications of new grant opportunities.
3. Nonprofits & Foundations Offering Grants For Felons
U.S. Chamber Of Commerce Dream Big Awards
If you’ve started your business and have been in operation for at least one year, you may be eligible to apply for the Chamber of Commerce Dream Big Awards. A top prize of $25,000 is up for grabs each year for the Small Business of the Year winner. There are several award categories, including emerging businesses, minority-owned businesses, and women-owned businesses. While the 2022 application period is already closed, you can sign up to receive notifications for upcoming application dates and details.
Amber Grant Foundation
WomensNet’s Amber Grant Foundation gives out monthly grants to eligible women-owned businesses. Grant opportunities include $10,000 monthly grants, $25,000 year-end grants, mini-grants up to $2,000, and more. The application process is short and easy, and winners are announced on the 23rd of the following month.
Other Small Business Funding Options For Felons
In addition to grants, there are other small business funding options available. While these funds will typically have to be repaid over time, these funding options offer financial opportunities to launch a small business, even for applicants with a criminal background.
Can A Felon (Or Former Felon) Get A Small Business Loan?
It is possible for a felon or former felon to get a small business loan assuming they meet all lending requirements. This may include income or revenue requirements, personal credit score and history, collateral, and debt-to-income ratio. While getting a startup loan from a bank or traditional lender may be difficult, if not impossible, there are some alternative funding options to consider.
Crowdfunding is a form of fundraising that’s quickly rising in popularity among aspiring entrepreneurs. With crowdfunding, ordinary people invest their funds in your business. This can be through donations, or you may be required to repay funds over time, provide some sort of reward (i.e., one of your products), or give ownership stakes to investors. Requirements for your crowdfunding campaign vary based on the platform you choose. Start your search with our top picks for crowdfunding platforms.
The SBA Microloan program provides up to $50,000 to start or grow a small business. These loans are given by certain nonprofit community organizations known as SBA intermediary lenders. Lending and credit requirements vary by lender. A search function to find an intermediary lender in your area is available through the SBA website.
Short-term loans typically have less stringent requirements than banks in terms of revenue and credit score requirements, and funds are usually disbursed quickly. The trade-off is that these loans have shorter repayment terms (typically 18 months or less) and rates and fees may be much more expensive than traditional installment loans. However, borrowers that need fast funding and may not meet the requirements for a bank loan can use short-term loans to get the money they need to start their business. Kick off your search for funding with our top five best short-term loans for small businesses.
Personal Loans For Business
Being approved for a small business loan can be challenging, regardless of your criminal background. That’s because many lenders require a minimum time in business, business revenue, and sometimes a business credit score. If your business is in its very early stages, it’s challenging to meet these requirements. Instead of applying for a small business loan, you can apply for a personal loan that you can use for your startup expenses.
It is important to note that borrowing amounts may be low, and you will be personally liable if the loan goes into default. Additionally, you will have to meet income and credit requirements to score the best rates and terms. However, if you have problems obtaining funding elsewhere, this could the right option for you.
Other Startup Funding Options
While you may have to do your research, there are plenty of funding options out there for new businesses. This includes equipment financing, business credit cards, and even sourcing funds from friends and family. Take a look at our top eight startup loan options to find out more about funding opportunities. And if you want to avoid a credit check, start with our post on the best small business loans that don’t require a credit check.
Additional Free Resources For Felons Starting A Business
Small business grants aren’t the only resources available for felons looking to start a business. These additional resources include everything from educational opportunities to information about housing, government programs, and felon-friendly job opportunities.
The Last Mile
The Last Mile is a program for individuals that are currently incarcerated. This program is designed to train inmates on Web Development Fundamentals and MERN Development. Paid apprenticeships are also available to further enhance these skills. There are currently 17 in-prison programs across six states.
Inmates To Entrepreneurs
Inmates to Entrepreneurs offers online programs targeted at felons that want to start or grow a business. Free virtual and in-person resources include the self-paced online course Starter U and an eight-week entrepreneurship course. Participants will learn about topics including marketing, business finance, sales, and more.
Defy Ventures offers a variety of programs for felons, including entrepreneurship training, Entrepreneur Bootcamp, Business Accelerator, and alumni programs. These programs are designed to provide felons with the confidence, skills, and connections needed to increase their chances for success after release. Defy Ventures has chapters located across six states.
Project ReMADE is a Standford Law School program that provides former inmates with a 12-week entrepreneurship course taught by students at Stanford Law School and Standford Graduate School of Business. These future entrepreneurs added bi-weekly classes that cover topics such as public speaking, accounting, and marketing. Participants work with a mentor team throughout the course to develop a business plan. At the end of the course, participants attend a completion ceremony and present their business plans to a panel of local executives.
Help For Felons
Help For Felons provides abundant resources for felons, inmates, and ex-offenders. In addition to highlighting grant opportunities, this organization also provides information on felon-friendly jobs, government assistance, housing, insurance, and more.
SBA Small Business Development Centers
SBA Small Business Development Centers (SBDCs) are a great free resource for new business owners. At your local SBDC, you can receive business training, technical assistance, and advice to help launch a startup or to expand an existing business. SBDCs can help you tackle business issues from acquiring capital to managing finances and increasing productivity. You can search for your local center directly through the SBA website.
The SBA’s SCORE program offers additional resources to new business owners, regardless of criminal history. SCORE connects business owners with volunteer mentors who address topics including business planning and financing through email, phone, or video chat. SCORE also offers up other small business resources at no cost, including webinars, online workshops, training, and courses. You can find a SCORE mentor near you by searching by zip code on the SBA website.
Best Small Business Grants For Felons: Final Thoughts
Funding a small business is challenging for anyone, even without a felony on your record. Fortunately, there are many resources to help you get started. From small business grants that give you free money to launch or expand your business to mentorships and webinars, take advantage of all of the free resources available to you to increase your odds of starting and operating a successful business.
Looking for more grant resources? Look no further than Merchant Maverick!