After release from incarceration, convicted felons have many challenges as they strive to get back on their feet again. Finding a means of earning a living will likely be one of the first hurdles. Many cities offer re-entry programs for former convicts to help them find jobs. But for those convicted felons that have loftier goals, business grants can be the solution.
Finding a job as soon as possible after release is often the immediate goal. For those who have a long-term goal of starting a business, looking for a job within the same industry you’re targeting is a good idea. This provides an on-the-job opportunity to learn about the industry while also earning a paycheck. When perusing industries in which you want to start a business, check into any potential limitations that might interfere with your goal. For instance, some states may deny occupational licenses to convicted felons for certain industries. However, anyone can register a business entity with a state, and this includes convicted felons.
Applying for a Loan
Those with a criminal record can still apply for loans. However, applying for a business loan usually entails a background check as a part of the application process. Applicants are required to authorize a personal criminal background check. This is a requirement to enable organizations to assess an applicant’s character.
Financial Resources for Felons
Many convicted felons lack a financial history, which is necessary to get business financing. Another potential issue is the presence of negative credit. Felons may also have difficulty getting financial support from friends and family. In this case, bootstrapping, or starting a company on your own from the ground up, may be the only option.
The federal government provides grants to eligible small businesses. Grants may take the form of awards, prizes, or internships. Grants are also available to assist formerly incarcerated people with rejoining their communities. Some re-entry programs receive federal funding, providing resources for small-business owners.
It’s possible to receive approval through the SBA microloan program, which is reserved for minorities, women, military veterans, and low-income entrepreneurs who need $50,000 or less. Convicted felons often fall into one or more of these categories.
Finding investors for a business is another viable option. Personal investors often live in the entrepreneur’s immediate community. Investors may only be willing to invest small amounts; in this case, it would be necessary to approach several investors.
Online platforms make it possible for entrepreneurs to approach potential investors outside of an immediate community. In this approach, known as crowdfunding, the entrepreneur pitches the proposal and others can opt to assist. Sometimes, investors receive products or services in return, and other times, there is nothing exchanged.
Programs are in place in many communities that teach former inmates skills they’ll need to succeed as entrepreneurs. Community colleges may also operate special programs for students with criminal backgrounds.
Increasing Chances of Loan Approval
Finding funding can be a challenge for anyone. Convicted felons may need to wait a couple of years after release to be approved for funding. During this time, the felon should work and maintain a clean record. Taking classes, working within the industry, meeting peers in the community, and shadowing a business owner in the industry are a few ways to work toward business goals. It’s also important to repair credit and strive to maintain good finances. Pay bills promptly, don’t accrue excessive debt, and try to save money.