Many ex-felons will have a difficult time finding employment. For them, the only way forward is to start their own business. However, without their own money or assistance from friends and family to get started, they will face an uphill battle. While some businesses require only a small investment, others will require quite a tidy sum to get off the ground. People with felony convictions can find it challenging to get business loans.
Types of Businesses
The first decision may be what type of business structure to pursue. For some, going it alone may be the best option. Businesses that readily lend themselves to sole proprietorship include web and graphic design, research, writing and landscaping. Of course, you may also consider a partnership arrangement. With a partnership, you may have an easier time getting business loans as your partners (if they do not have criminal records) can be the face of the business.
Before you even begin to consider seeking a business loan for ex-felon you need to make certain decisions. These include the services or products you plan on offering. You need to determine how much you will need to start the business, find out if there is a need for the product or service and how you will find your customers/clients. You should learn the requirements to operate successfully. To acquire all this information you need to develop a business plan. Now, don’t get worried, there is lots of help available to help you create a business plan for free. Some of these agencies are the U.S. Small business Association (https://www.sba.gov/) and Entrepreneur.com (http://www.entrepreneur.com/article/790880), and Score (https://www.score.org/). These organizations are also helpful in providing support to get your business started and functioning properly.
Sources of Business Loans for Ex-Felons
Now, while the cards may be stacked against you, if you know where to look, you can find available grants and business loans even if you are an ex-offender. Some good places to start searching for what is available are your local library, the small business association office in your area, government websites, and even your probation officer if you have one. If you are a church member, you may be able to get assistance from your church as well. To improve your odds of getting a loan to start a business as an ex-felon, you may need to apply as a member of a particular group. For example, African Americans, Native Americans and former members of the armed forces may find agencies lending just to that particular group of ex-felons.
Partnerships are a good source of funding as stated above. However, it is important to get solid legal advice to ensure that there are no issues later on. It is best to go into a partnership with people you trust and who you know have integrity. This will protect not only you, but your partner or partners as well.
Angel Investors (http://www.forbes.com/sites/georgedeeb/2014/09/19/how-to-find-angel-investors-for-your-startup/) is another option available for funding. Although this may be difficult seeing that angel investors tends to support people with good reputations, they may lend to ex-felons depending on the crime and how the person has lived since leaving prison.
The U.S. Department of Labor (http://www.doleta.gov/), also offers different types of grants to help ex-felons re-integrate into society. To find a grant that can be used to help you establish a small business, visit the website, Grants.Gov ( http://www.grants.gov/web/grants/home.html).
Micro-lenders are also worth exploring as a source of funding for starting a business for ex-felons. Many of these agencies will lend to people with bad credit. Some micro-lenders to consider include Accion USA (http://us.accion.org/), Kiva (Kiva.org) and Count-Me-In (http://www.count-me-in.org/) which is specific to women.
The website, Help for Felons (http://www.helpforfelons.org/loans-grants-for-felons-2/) also has lots of helpful information on loans and grants for felons wanting to start over their lives. While not specific to business loans for ex-felons, the information is valuable.
The Prison Entrepreneurship Program (http://www.pep.org/) was developed for Texan ex-prisoners. The program teams prison inmates with business people while offering an MBA-level program in collaboration with Baylor University to help them prepare for the outside world. The program offers top-class training and support to help ex-prisoners harness their intellectual and entrepreneurial skills to improve their lives when they return to society.
One popular source of funding for ex-felons is the Federal Pell Grant Program (http://www2.ed.gov/programs/fpg/index.html). One of the best things about this grant is that it does not need to be repaid. While this grant is not a business loan, but rather an education grant, it enables ex-felons to get the education and training they need to succeed if they set up their own business or decide to work for someone else.
The small business section of Chron website (http://smallbusiness.chron.com/start-new-business-loan-bad-credit-4192.html) offers lots of information on how people with bad credit, such as many ex-felons can get loans to start a small business. Since many prisoners were running successful businesses before going into prison, albeit some were illegal, they have the knowledge and skill to operate legal small enterprises. With the right support, many ex-felons are able to start and operate successful businesses and contribute to society.