grants for convicted felons to start a business

Small Business Grants For Felons

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Imagine rebuilding your life after a felony conviction and realizing that starting a small business could change your life. But, as you explore the funding possibilities, your criminal history presents obstacles.

With this in mind, we present many different grant programs, loans, and resources designed to give felons a second chance. With these, you’ll learn how to find financial support for your business idea to achieve entrepreneurial success in spite of your past.

What Are Small Business Grants for Felons?

While looking for business loans for felons, you should check out options available in the Department of Labor and Employment and Training Administration. These institutions have some programs for felons as well as for ex-felons. In the case, if you aren’t a felon but want to qualify for the certain program, you can qualify for small business loans for ex-felons.

Small business loans for felons sometimes hold educational purposes. Pell Grants are almost the only available grants for educational purposes. Drug-addicted felons can’t qualify for this program but they can change the situation after completing a drug rehabilitation program.

Among loans for felons to start a business, offers from the US Small Business Administration deserve particular attention. SBA isn’t available for all felons! You won’t qualify for them only because you are a felon. If traditional SBA loans aren’t suitable, you can consider SBA Microloans that offer less than $50,000. They also offer grants for felons. All felons can also qualify for payday loans. Still, the interest rates are very high and you should be ready for unprofitable loan terms.

Top 5 Business Grants in April 2024

Convicted felons who want to start a business venture can receive grants from organizations to help them grow and develop. They’re given through federal and state agencies, non-profit organizations, foundations, and corporations.

Unlike loans, grants don’t have to be repaid, so they’re great for start-ups and expanding companies.

You can use this money for things like development, marketing, hiring employees, and buying equipment or inventory. Keep in mind that your eligibility will differ depending on the organization providing funding and what you need the money for.

1. Government –

This E-Government website acts as a hub for federal agencies to post funding opportunities that you can apply for. doesn’t provide loans exactly. Instead, it’s a platform you use to find and apply for grants for convicted felons to start a business.

With more than 1,000 grant programs and more than $500 billion in grants awarded each year, you have a good chance of getting money.

While some of the more appealing grants might restrict those with a criminal record, there are options for everyone. To find out if you’re eligible for a grant you like the look of, go to the website and read the instructions for each funding program.

2. FedEx Small Business Grant Contest

This FedEx grant program was initiated in 2012 to help small business owners. It works through a combination of public voting and a judging process. You can apply if your business has less than 99 employees and has been operating for at least six months.

During the submission, you’ll be asked some questions about your business, goals, and how you’ll use the grant money. Once the application period closes, the voting phase begins, where the public can vote for their favorite businesses.

The total prize pool is shared among the top 10 winners, where each will receive $30,000 plus discounts on FedEx services.

3. GrantWatch

While this platform doesn’t award grants or provide funding, it lists many different types of grants for which you can search and apply. You can use this directory if you’re a non-profit organization, former felon, or religious organization.

To access grant listings on GrantWatch, you’ll need to subscribe to one of their account types. Each subscription works on a weekly, quarterly, monthly, or annual term, and costs range from $18 to $199.

With a subscription, you can access benefits like an extensive private grant database, accurate and current grant information, as well as detailed reports on the top 13 best small business grants and loans available to you.

4. State and Regional Grants

These are financial help programs to support business owners within their jurisdictions. They work by offering non-repayable funds to kickstart economic growth and job creation. People use them for many different things, such as startup costs, buying tools or land, repairs, and expansion.

Unlike federal grants, which are quite strict, these are more flexible and could bring in anywhere from a few thousand dollars to several hundred thousand dollars.

You can find out what states offer small business grants available in your area by checking with your state agencies and other local resources.

5. Federal Business Grants

This type of funding has awarded about $158.7 billion to business development in 2022. There are three main types of federal government grants for felons, each catering to many business needs.

For example, low-income grants, specific industries, Pell grants to reimburse business costs, or matching grants, for which you’d need to contribute a certain amount of your own money to match the money they give you.

The application process involves competitive bidding, where you’d need to submit a proposal outlining your project and its potential impact. You’ll also have to follow any restrictions set by the granting agency to make sure the funds are used for what they were intended for.

How To Apply For Most Small Business Loans for Felons

Applying for a loan instead of a grant could be a better option for several reasons. The best grants for felons are limited, and competition can be high. On the other hand, small business loans provide the chance to get larger amounts of funding, and they’re more readily available to felons.

When applying, have a detailed business plan and a good credit score to increase the chance of getting one.

1. SBA Microloans

These loans are provided by non-profit community-based lenders and help many felons start their own businesses with amounts up to $50,000. The average interest rate on SBA microloans is between 8% and 13%. However, specific rates and requirements will depend on the lender.

They can be repaid over six years, so you’ll have plenty of time to take your business to the next level. Plus, you can use them for things like cash flow, stock, supplies, or tools.

The criteria for eligibility generally include collateral, personal guarantees, and a credit score (620-640) which is more forgiving than other lenders. These types of loans are really helpful for female and minority-owned businesses and those in low-income communities.

2. Online Loans

Felons are also offered small personal loans online, which provide an alternative and more accessible way to start or grow a business. You’ll find that these have more flexible qualification criteria compared to traditional banks. Online lenders have a faster process for applying and approving funds, too.

They’re also less restrictive when it comes to credit score and collateral. People with bad credit can qualify for business loans with the same repayment terms and interest rates as other applicants. Although, the fees will be higher.

To get the best business grant for you, always research and compare the different online lenders so you don’t get hit with excess fees and a loan you won’t be able to repay.

3. Business Credit Cards

With these, felons get a second chance at financial stability by building a strong credit history, making it easier to get larger loans in the future. You can buy and pay for things with a revolving line of credit up to the amount you have available.

Whether you pay off your balance in full each month or carry a balance and pay interest on the amount to pay is up to you. If you keep your credit utilization low and make payments on time, you’ll pay for your company costs as well as increase your credit score.

The average loan amount on business cards can go as high as $56,000. And while the average APR is around 17%, a higher or lower rate depends on your business credit score.

Helpful Business Sources for Felons: Government and Federal Grant Program Information

These small business resources are perfect for anyone looking to take their business to the next level. They not only provide free information on business funding options for felons but also education loans, mentorship, and networking opportunities.


Online organizations like this one help prisoners reintegrate back into society and even find companies that hire felons after they’re released from prison. Although the website itself doesn’t offer grants, it’s a great place where felons can start looking for guidance.

By visiting their website, you’ll access a list of helpful information like how to develop a plan for your business, what you need to do to qualify for a grant from the government, and tell you what other grants are available for felons.

2. Inmates to Entrepreneurs

This company operates in-person and through online courses designed to give you the skills and knowledge needed to start and run a successful business. Although Inmates to Entrepreneurs doesn’t directly provide grants, it’ll direct you toward other helpful resources like Small Business Development Centers (SBDCs), crowdfunding platforms, and angel investors.

Thanks to them, you gain valuable skills, as well as meet people who have been through the same experiences as you, including felons.

3. Business Development Centers (SBDCs)

The SBDC network is funded by small business innovation research programs put together by the government and schools. With the help of them, you’ll meet experts in your field and learn things like:

  • How to develop a business plan
  • Market research data and resources
  • Identifying target markets
  • Creating effective marketing strategies
  • Financial analysis and planning
  • Understanding your finances
  • Developing budgets
  • Planning for future growth
  • Training and workshops
  • Seminars and courses on business management, marketing, and finance
  • Networking opportunities with local businesses, potential partners, suppliers, and customers

4. Crowdfunding

If you’re a felon, crowdfunding can be helpful because you can get funding without having to rely on traditional lenders. It’s also a great way to put yourself out there and get other people behind your ideas, all while boosting credibility.

It works through an online platform, with which you’ll pitch your business ideas to the public and receive financial support from people who want you to succeed. There are several crowdfunding platforms, such as Kickstarter, Indiegogo, and GoFundMe. And if you create a  compelling campaign, you’ll attract all sorts of backers who can contribute unlimited amounts of money.

5. Angel Investors

These investors can help felons with any type of business in exchange for equity or a percentage of the company. More often than not, they’re entrepreneurs or professionals themselves who want to support emerging businesses.

They might also have an interest in your industry or sympathize with your struggles. To find grants from an angel investor, you can join online networks that connect entrepreneurs with potential investors. Make sure you have a solid business strategy and learn how to pitch it (presentation, video, or one-on-one meetings).

6. Free Grants for Felons

This is a federally sponsored program run by the Small Business Administration (SBA). Through this scheme, you’ll overcome job limitations and rejections, all while getting your foot on the entrepreneurial ladder.

Aside from grants for felons from the government, this resource will also help you with housing, childcare, energy bills, and food. Because starting a business requires stress-free living.

This financial support will be instrumental in helping you deal with any difficulties you’re facing, as well as give you a good chance of finding stability and success.

Why Do Felons Struggle to Find Small Business Funding?

The struggle is rooted in societal attitudes, institutional barriers, and personal challenges. When you’ve paid your dues and want to make a new beginning by starting your own business, it sure is frustrating. But what exactly makes it so difficult for felons to find people that help with business funding?

  1. Stigma and prejudice. Some lenders and investors are afraid to lend money to people with criminal records, fearing potential risks and the public’s reaction.
  2. Limited credit history. Felons can have limited or no credit history due to their time spent in prison.
  3. Court debts. There may be outstanding court debts at play, which can further hinder funding possibilities.
  4. Restrictions on grant and loan eligibility. Not all grants are open to felons. Some have specific criteria that exclude certain crimes.
  5. Lack of trust from potential lenders and investors. Criminal records can create the perception that a company owned by a felon is unreliable, so some lenders won’t invest.
  6. Lack of business knowledge and experience. Due to the time spent incarcerated, there may be a gap in their professional development. When developing a new business model, this inexperience can hinder the ability to demonstrate their potential for success.

What You Should Know About Grants for Felons

It’s not easy adjusting to life after serving time, let alone starting a business. A good way to quell any negative thoughts is to consider the many thousands of federal grants available for felons looking to make it on their own. Here’s all you need to know about them to get started.

  1. Definition. They’re financial assistance programs intended to help people with criminal backgrounds start or grow a business.
  2. Purpose. They encourage self-sufficiency by providing ex-offenders with the resources they need to succeed as entrepreneurs once they return to society.
  3. Types of grants. There are various types of grants on offer, including federal, state, and local grants from the government, as well as private foundation grants and those from non-profit groups.
  4. Application process. Each lender has their own style, but many involve submitting a business proposal, personal statement, and financial documentation.
  5. Business blueprint. To secure a grant, you’ll need to have something that demonstrates your plans to a tee.
  6. Persistence. It can get a bit disheartening if you come up against constant rejection. But follow this advice, and someone should come up soon.

Grants For Felons: Final Thoughts

Business grants are all about supporting you on your entrepreneurial journey. Grants like and the FedEx Grant Contest, along with state, county, and city governments and organizations, offer valuable resources. And remember, there are always other alternative options, like loans and crowdfunding.

To get approved, work hard to develop a thorough business strategy and be prepared to discuss it in detail. It’s a good idea, too, to keep track of your finances and, above all else, stay positive.

Although finding and securing funding for felon-owned businesses can be challenging, you can overcome these obstacles and successfully establish your businesses.

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Grants for Felons FAQs

Despite facing challenges due to criminal records, there are grants, loans, and resources all over the internet offering help to overcome barriers and become entrepreneurs. Through them, people can get money for business costs, help with funding applications, and networking opportunities.

Yes, felons can receive government grants, although they may face some limitations depending on the nature of the grant and the specific requirements. These grants come from non-profit and educational institutions like, State, Federal, and Regional Grants. With these, you’ll find at least 13 business grants for felons with high acceptance rates.

Begin by looking for grants relevant to your business on and GrantWatch. If eligible, put together a proposal including the plans for your business. Be persuasive and include your business goals and how the grant will benefit you.

Yes, felons can get company loans, although they might face some barriers because of their past. This is why they’ll need to find loans that cater to people with poor credit or unique circumstances, including ex-felons. Examples include Business Administration (SBA) Microloans.

This depends on the type of license, location, business type, and state laws. Industry-specific licensing requirements may pose challenges for felons, particularly in fields like law enforcement and contracting. Check the state laws in your area online. You might still be able to register your business and get a local business license.

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