Can You Start A Business With A Criminal Record?

If you have been convicted of a crime, whether a misdemeanor or a felony charge, it can be hard to find employment. Because of this, many convicts feel they will be better off trying to start up a business as a way to make an honest living.

These entrepreneurs usually worry about how their public record will negatively impact their ability to become a successful business owner. Thankfully, a criminal record will not have an overbearing negative impact on an entrepreneur’s chances to open up a business.

Start a business with criminal record

There is no state or federal law that prevents a person convicted of a crime from starting up a business.

The First Thing You Should Do

Smart entrepreneurs will seek legal guidance from an attorney to make sure they have a good understanding of the legal requirements that need to be satisfied in order to legally open up a business.

An attorney will help their client complete all federal and state filings that need to be completed. Counsel will also guide the entrepreneurs in getting a tax identification number.

Again, a criminal record does not impact these processes.

Problems Convicts Face getting Licenses and Bonds

There are certain businesses that require a license. The process to get these licenses requires a criminal background check.

Professions, where background checks are required, include:

  • Law
  • Medicine
  • A company that deals with handling dangerous chemicals
  • A company that deals with merchandise like firearms.

Having a felony conviction will make it hard for a person to practice medicine and law. A misdemeanor conviction will make the process longer, but most of the time these people will be allowed to enter the professional field of their choice.

If you are a person with a prior criminal conviction who wants to open up a new business in the industries listed above, there are additional requirements each profession has but a person with a criminal record can usually enter the field.

In most industries, there are absolutely no requirements for the license that would ban a person with a criminal record.

Surety Bonds

A felon will not be able to receive a surety bond. A surety bond is an insurance policy that is designed to protect customers. A surety bond is typically required for a contractor, mortgage provider, plumber and auto dealer in numerous states.

Convictions for Sexual Assault

If a person has a prior record for criminal sexual conduct, it is a lot harder to start your own business.

The first challenge is that the business must be at a location a certain distance away from a school. The vast majority of people convicted for this kind of charge must be registered as a sex offender. It is very unlikely they will be able to work in an industry that has regular contact with children.

People with these types of convictions will probably suffer from a poor reputation online if the community finds out about their conviction.

Business funding for convicts

Can An Entrepreneur Get Funding With a Criminal Conviction

State and federal governments believe it serves the public’s best interest to avoid recidivism from those who have a criminal background. Society believes people who have been convicted of a crime in their past can contribute to a growing economy and help create jobs.

Starting a new business can be extremely expensive!

Because of this, it is often essential to obtain finances to get a small business up and going. One good source of getting aid is the Small Business Administration (SBA).

The SBA regularly loans out money to people who have been trying to launch a new small business. The SBA will guarantee a loan from certified lenders.

Certain criminal convictions will keep an SBA from approving loans.

The type of crimes that the SBA will not tolerate are ones of moral turpitude.

A crime of moral turpitude is one that violates community standards. These crimes are major felony crimes and crimes that deal with serious issues of moral dishonesty.

These crimes include:

  • Aggravated assault
  • Statutory Rape
  • Embezzlement
  • Attempted murder
  • Perjury
  • Lying to a Police Officer
  • Larceny
  • Retail Fraud

On top of the requirements of the SBA, the lender of the loan will have its own requirements.

One of the loan programs that a person convicted for a felony might want to consider looking into for funding is the SBA Microloan Program. These loans are much easier to qualify for. The highest amount a person can request under a Microloan is $50,000.

These loans can be used for:

  • Supplies
  • Inventory
  • Capital
  • Fixture
  • Equipment
  • Machinery

Government grants

Grants for People Convicted of Felonies

An entrepreneur with a felony conviction will be able to apply grants to start their small business that is not required to be paid back! In order to gain access to these grants, start talking to local leaders who can be found at a correctional facility. Contact local community officials, religious leaders, and local politicians

Start by talking to leaders at your past correctional facility or your local community. A religious leader, community official, or another knowledgeable person may know of local programs to help you start a new business.

After a convicted felon trying to start up a small business has done a search of grants from all the local sources available, the next step for them to do is check out Inmates to Entrepreneurs and Small Business Development Centers by searching the internet.

Reputation Management

A successful business needs to be focused on having a good reputation in the local community.

Before the internet was created, a person had to spend a lot more time and effort in order to gather public records such as a check of a person’s criminal history. Public records are easy to gather now online. Any negative information is easy to find and post.

If a person with a criminal conviction on their record wants to open up a business, they need to more diligently on making sure they quickly get good reviews once they start up their business. Encourage your customers to leave reviews on your Google My Business Page and Yelp.

Final Thoughts

Do not try to achieve your dream of becoming a business owner if you have a criminal record!

You will be able to start up most companies despite having a criminal history. By creating a new business, you will give yourself the chance to improve your reputation online and in the community by being an entrepreneur.