If you have a criminal record, it can be difficult to find and keep employment. In 2019, there were an estimated 24 million people with felony convictions, according to a report by the American Enterprise Institute. 

In a study released by the U.S. Department of Justice in 2021, it was reported that a staggering 33% of people released from federal prison in 2010 were unable to find work over the following four years. 

While it may be incredibly challenging to find employment, there are some grants and other resources available to help you build a business despite your felony conviction. Here’s what you should know about your options.

Small Business Grants for Felons

Here are some ways to obtain funds that you can use to build your business that don’t require repayment.

FedEx^® Small Business Grant Contest

FedEx^® has shelled out more than $1.5 million in cash and prizes to over 100 small businesses since 2012. The grand prize in 2022 was $50,000 in cash plus $4,000 in FedEx^® Office print 

services. 

First-place winners received $20,000 and $1,500 in print services, and a handful of businesses earned the FedEx^® Distinction Award worth $10,000 in cash.

Here are the basic qualifications:

• You must have a for-profit small business.
• Your business must have a FedEx^® shipping account number.
• You need to have been in continuous operation selling a product for at least six months.
• You must have fewer than 99 employees.
• Your business must have a shipping need.

The winners of the 2022 contest were announced in May, so you’ll want to get a head start in early 2023. While next year’s contest’s dates haven’t been announced yet, you can follow the contest page for updates. 

Grants.gov

The U.S. Department of Health and Human Services provides a database of grants that are available for many people and organizations, which also includes small businesses. 

Currently, there are more than 1,000 opportunities for small businesses and another 1,000-plus opportunities for for-profit organizations that aren’t small businesses. 

You can use the database to search for grant opportunities based on the nature of your business and your eligibility. Be sure to note the close date for each program to ensure that you don’t miss it.

GrantWatch

GrantWatch is a private organization that provides its own database of grant opportunities for local, national, and international non-profit organizations, government agencies, small businesses, and individuals. 

You can register for free to get alerts and a newsletter, and you can also search for grants based on location, interests, recipient type, funding source, and deadline. 

However, if you want to search by keyword, and view full grant information and direct links to apply, you’ll need to sign up for a paid account, which starts at $18 per week. 

Federal Small Business Grants

The federal government doesn’t provide direct grants that you can use to start a business, but you may be able to take advantage of certain programs. 

For example, the Rural Innovation Stronger Economy program offers grant assistance to rural job accelerator partnerships to help create jobs and support new businesses in rural areas. 

Additionally, the Small Business Innovation Research (SBIR) program can provide seed funding to small businesses working in technological innovation. 

The Bureau of Justice Assistance’s Second Chance Act Community-based Reentry Program also offers funding to non-profit organizations and Native American tribal governments that help reintegrate formerly incarcerated people into society.

State and Regional Small Business Grants

Depending on where you live, you may be able to find grant opportunities from state and local governments as well as local and regional non-profit organizations. Research opportunities online in your area to learn more about what’s available.

NASE Growth Grants

The National Association for the Self-Employed (NASE) offers a business development grant worth up to $4,000. The NASE allows applications throughout the year, reviewing submissions once a quarter.

Note, however, that you need to be a member of the organization to be able to apply, and certain members have a 90-day waiting period after they join. Learn more about the grant, eligibility, and the application process on the NASE website.

Department of Labor Grants

The U.S. Department of Labor maintains its own database of grants for a long list of individuals, including formerly incarcerated youth and adults. You can find more than 1,700 grants based on location, grant amount, agency, keyword, and more.

Visit the Department of Labor grant page for more information.

Small Business Loans for Felons

If you’re having trouble finding grant money, or you simply need more than what a grant can provide, here are some loan options you may consider to help you get started.

Online Small Business Loans

You’ll typically need to have an established business credit history and a few years of operations before you can get a bank loan or line of credit, but many online lenders are willing to work with newer businesses, even if your credit isn’t in great shape.

Shop around and compare multiple lenders to determine which one can offer you the best deal based on your situation and needs. 

Keep in mind, though, that online business loans can come with higher interest rates and fees, so consider that as you determine the right way to find capital.

SBA Microloans

The U.S. Small Business Administration (SBA) offers microloans through various intermediary lenders across the country. You can borrow up to $50,000, but the average loan is about $13,000. 

These loans typically have interest rates ranging from 8% to 13%, which is high compared to bank loans but low relative to online loans, and you can take as long as six years to repay the debt, depending on the situation.

If you’re interested in a microloan, you can look up intermediary lenders in your state to get more information and submit an application.

Business Credit Cards

Business credit cards can be a great way to fund your business because they often don’t require that you even have the revenue to get approved. Instead, they’ll typically use your personal credit score and income to determine your ability to repay.

If you can qualify, you can use a business credit card for everyday expenses and pay off the balance in full every month to avoid interest charges. 

Some cards also offer cash back, points or miles on your purchases, and other benefits that can make it easier to manage your cash flow.

Business Resources for Felons

As you work to start and build your business, here are some different resources you can take advantage of.

Inmates to Entrepreneurs

Supported by the Brian Hamilton Foundation, Inmates to Entrepreneurs offers free online and in-person entrepreneurship courses, correctional facility boot camps, and other resources to help you along your path towards building your business.

The eight-week flagship course is available to anyone with a criminal background. It’s available year-round, but you have to sign up for a waitlist to get details and dates for the next time the class starts.

Help for Felons

The Help for Felons organization provides various resources to help you get reintegrated into society, including information about felon-friendly housing, food stamp information, insurance guides, job opportunities, and tips if you want to start your own business.

If you’re feeling lost in general after incarceration, the Help for Felons website can provide a lot of valuable information to help you find your footing.

Crowdfunding

If you have a product idea but don’t have access to grants or loans, crowdfunding can be a good way to get the investment you need to get started. 

Crowdfunding websites like Kickstarter and Indiegogo provide opportunities for small business owners to get pledges from consumers who are interested in buying their products. 

In exchange for upfront capital, you’ll provide funders with early access to your product. 

Review popular crowdfunding campaigns to get an idea of which products perform well and how to showcase yours.

Angel Investors

Angel investors can provide funding for startups in exchange for equity in the business. While you may need to give up total control over the direction of your company, you don’t have to repay the investment as you would a loan.

Additionally, angel investors are often willing to provide wisdom and guidance to help you succeed as a small business owner. Just be sure to avoid giving up too much control of your business. Otherwise, you may not be able to achieve your original vision.

The Bottom Line

As a convicted felon, it can be difficult to re-enter society and find a good job. While starting a business is a solid alternative, you may run into other obstacles along the way. 

These small business grants for felons and other resources can help you get started on your business and make it easier to achieve your goals. 

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