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How to Get Small Business Grants for Felons

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Having a felony on your criminal record can make finding employment difficult. Employment background checks can reach back many years. Though many businesses do hire felons, it may be more appealing to be self-employed. Starting your own business, however, requires start-up funds which can be hard to come by after serving prison time.

The good news is both public and private entities offer grants and other funding for felons re-entering the workforce. Below are five helpful tips on how to get small business grants for felons.

1. Grants vs. Loans: Know the Difference

Both loans and grants are methods of lending money. Loans must be paid back, often with interest, and can generally be used for any reason. Grants are issued to carry out an idea and are usually competitive. They do not have to be paid back unless you violate the terms, which is why they are often described as “free grants.” For felons just re-entering the workforce, this can be a relief.

Grant programs still require a lot of work — for example, the federal grant life cycle includes an application process for each funding opportunity, the award, and a post-award reporting and closeout process.

2. Choose What You Want to Do

Do you have creative skills, like building furniture, drawing, or writing? What about landscaping, construction, or driving? Websites like provide ideas for felon-owned businesses if you need inspiration. These days, almost anything can be monetized, especially if you have an online presence.

Organizations like Inmates to Entrepreneurs offer courses on pursuing self-employment after incarceration and tips for accessing grants for felons, and success stories pertaining to all sorts of business ideas. You can even start taking courses before you’re released from prison.

While you may already have skills you can leverage into a small business, you may also want to learn new ones. The Pell Grant program offers educational assistance to ex-convicts and has expanded to include some currently incarcerated individuals.

3. Write Out Your Business Plan

Having a business plan is the first step in applying for a grant. Grant programs want assurance you are serious about your idea. It just takes planning and research at the outset.

What Should You Include in a Business Plan?

Small business plan templates and planning tools are available online. They may seem like a lot of work, but the more detail you put into your plan at first, the more prepared you will be in the grant application process. Most business plans include:

  • Executive summary. This is often written last because it summarizes the entire business plan
  • Description of your business. Include what product or service you provide, who your customers are, and what is unique about your business
  • Market analysis. Research and analysis that details what other businesses you may be competing with for customers
  • Business structure. Include a description or chart of your leadership and management teams
  • Marketing strategy. Your approach to attracting customers to your business
  • Startup capital. How much money you need to start your business,including how you will use it
  • Financial predictions. Any past financial documents and projections for the next three years

Search for state or local programs that help formerly incarcerated individuals create business plans, such as the Florida-based LEAP program, which helps female felons re-enter the workforce, or small business development centers located around the country.

4. Consider Your Funding Options

Many websites aggregate information on small business lending for felons, such as Help for Felons or Free Grants for Felons, where you can search by state. The most common business funding options for felons are federal grants, second chance grants, private grants, and angel investors.

Federal Grants for Felons

The U.S. government has recognized the value of helping felons get their businesses running after being released. Their main grants website is full of information on qualifications, funding opportunities, and the grants application process.

There are also microloans and other assistance measures available from the Small Business Administration, which must be repaid.

Second Chance Grants

The terms “second chance” and “fair chance” are synonymous with workplace re-entry assistance across the U.S., usually through state- and local-level or large firm initiatives. Searching online for second chance grants could yield helpful results, such as Virginia’s second chance assistance programs. Check out your state and local chambers of commerce to learn about funding sources in your area.

Private Grant Programs

Depending on the nature of your business, there may be a private grant available. Free Grants for Felons has a list of private grant opportunities such as the Doris Day Animal Foundation grant for felons who want to help animals. Large companies like FedEx offer competitive funding for small businesses. Search online for other private grant opportunities.

Angel Investors

Angel investors are former entrepreneurs who invest their own money in new business ventures in exchange for partial ownership. They often serve as mentors to the business founders given their successful backgrounds. The challenges to finding angel investors include sometimes needing a sophisticated business plan, existing customer base, and other aspects of a fully formed business, such as an exit strategy. One benefit to angel investing is that you don’t have to pay back their investment if your business fails.

5. Apply, Apply, Apply!

Remember that the grant application process is competitive. Don’t be discouraged if you don’t succeed in your first application. The good news is that you can use the same application materials more than once — so apply to as many grant programs as you can.

Need More Information on Grants for Felons?

If you’re seeking funding for a business idea, an experienced business attorney can guide you through the grant application process. Get your business idea off the ground today.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

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