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NGExpert financial copywriter
Page written by Chris Godfrey. Last reviewed on February 28, 2024. Next review due October 1, 2025.
Life after prison can be very difficult for people who have been incarcerated. Many employers will conduct a background criminal check before offering a job, which often results in refusal. Even the option of starting their own business can be tough for entrepreneurs with a conviction, as many traditional lenders shy away from providing loans to those with a criminal record. Without the cash to run a business and few jobs available, it’s no wonder that 60% of former inmates are still unemployed one year after release.
One alternative to this dilemma is grant funding. Available from non-profits, foundations, organizations and Government sources, grants for felons can be a crucial source of funds to get a startup off the ground or grow an existing business. Although qualifying rules can be strict, and the sums available may be smaller than commercial financing, business grants for felons do not need to be repaid and credit scores and other typical loan requirements usually do not apply.
Some grants for felons are explicitly targeted at ex-convicts, while others are designed to support communities that are traditionally under-resourced and/or closed off from most commercial financing. Grants are interest-free and carry no debt burden. However, take note that the grant application process can be very slow and awarded funds may have restrictions on their use.
Provided by Missouri-based Determination Incorporated, the Rise Up Get Started Grant Program gives felons a pathway to building their own business. Participants take part in a year-long program – receiving coaching, mentoring and community support. They also get assistance to write their business plan and create a budget. At the conclusion of the program, participants will have $300 saved for their business, plus a grant award of $750 to create a launch fund of more than $1,000.
Launched in 2018, the Georgetown Pivot Program is a one-year, full-time professional development program for career-orientated individuals who have previously been incarcerated. Participants gain experience and valuable skills with internships and coaching as well as working towards a post-program future of gainful employment or starting their own business. During the program, students receive a weekly stipend from the D.C Department of Employment Services, while those who choose to pursue their own business can enter their idea at Pivot’s Pitch Competition where they may win startup funding from investors. A total of $15,000 in grant funding was awarded in 2022.
Program applicants must be aged 25 and above with a high school diploma or GED and who were last incarcerated within the past five years. Preference is given to D.C. residents. Up to 20 individuals are invited to participate in each program cohort.
The Transform Business Grant supports entrepreneurs in systemically marginalized groups, including those who have been incarcerated. Applicants may receive a $1,000 microgrant and take part in a customized, year-long business strategy and development program. Applicants must be US-based and demonstrate a financial need. Citizenship or immigration status have no bearing on your application.
LEAP’s Virtual Entrepreneurial Academy teaches business skills to previously incarcerated women. Over a 12 weeks course, students learn the nuts and bolts of starting a micro-business. Topics include essential financial, marketing, and legal business concepts. Students who successfully complete the course create their own business plan, which they can pitch to investors for a chance to win cash prizes. Graduates of the Entrepreneurship Academy are also eligible to apply for up to $1,000 in financing for their business
LEAP offers two academies per year and classes meet online Tuesday and Thursday evenings. You must have access to a computer to take part. (If you don’t own one, your local library may lend you one).
Although it is not specifically targeted to felons, the WomensNet Amber Grants awards multiple grants per year to women wishing to start or grow their own business. $10,000 is offered monthly in three separate categories (total of $30,000 per month available). Participants who win a monthly prize also automatically qualify for the draw for an annual $25,000 award – with three prizes available, one for each award category.
You can apply for any of these grants by completing an online application and paying a $15 entrance fee.
The National Association for the Self-Employed (NASE) provides business growth grants of up to $4,000 to members. Since 2006, nearly $1,000,000 has been awarded, with grants used for marketing, advertising, hiring employees, expanding facilities and other specific business needs. A criminal record or conviction is not a barrier to entry, but you must be a member of NASE to participate. (Membership fees may apply).
If you’re an felon seeking to launch your own business, the Bizee Fresh Start Business Grant may get you off to a flying start. Grant winners receive free membership to Bizee’s Gold plan, which includes incorporation services in your state, free registered agent services for a year and a free tax consultation, plus a $2,500 grant. To apply, you must complete an online application, create a two-minute video explaining how entrepreneurship will impact your life and submit a sample business plan.
Yes, although there are few federal, state, or local grant programs specifically tailored to those who have been incarcerated. Options include:
Business loans may provide an alternative source of funding for felons. Online lenders will typically be the best option for this type of financing, but you may pay higher interest rates and fees than you would with traditional banks. Credit checks are standard with most commercial financing, but depending on the type of loan you choose, you may not need to provide collateral:
The most common type of commercial loan. You receive a single, lump-sum cash injection and then pay it back in regular instalments over a fixed period of up to 25 years. Collateral may be required.
A business loan that functions like a high-value credit card. Withdraw as much as you want when you want from a loan facility up to the limit of your borrowing. You only pay interest on the sum you withdraw, not the whole line – which can significantly reduce your borrowing costs. Collateral may be required.
Also known as account receivables financing. Borrow against the value of your unpaid invoices. The lender will usually provide up to 95% of the invoice value within a few days or even hours of the bill being raised. Your invoices act as security for the loan, no added collateral is required.
Equipment loans use the asset you’re financing as security – no added collateral is required. You use the equipment as you pay for it and the lender maintains a lien on the machinery. Once you pay the loan back, the lender releases the lien, and you own the equipment outright.
Nonprofit and community-based lenders can provide SBA Microloans to business owners who may struggle to secure standard business financing. This includes those who have been previously convicted. Available up to $50,000, SBA microloans also come with more relaxed qualifying rules and can usually be secured with FICO scores as low as 500, or even with no credit score at all. Be aware that these type of business loans often require a personal guarantee that makes you personally responsible for the debt.
Working with business finance experts can make all the difference when applying for grant funding. Contact Swoop to discuss your borrowing needs, get help with your application and to compare top quality business grants and loans from a choice of providers. Put the past behind you. Register with Swoop today.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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