The U.S. Small Business Administration has changed a microloan program to increase access and expand the pool of recipients as well as offer more flexibility to nonprofit intermediaries.
Among other things, the changes also will make small businesses that have an owner who is on probation or parole eligible for microloan programs, helping individuals with the highest barriers to traditional employment re-enter the work force.
“Small business ownership and self-employment are paths toward wealth creation and independence,” said SBA spokesman Miguel A. Ayala. “This option can be particularly useful for citizens who may have difficulty finding employment after returning to their community from prison. With millions of Americans looking to start over after incarceration or move past their criminal records, the SBA is removing barriers so that citizens can achieve economic security and be successful members of society.”
The microloan program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers open and expand. Microloans play an important role in distressed communities, where access to conventional lending remains a challenge. The average microloan is about $13,000.
Changes in the program support the goals of the Federal Reentry Council to reduce barriers to employment and reduce recidivism. It also implements key recommendations of the My Brother’s Keeper Initiative to increase access to jobs, reduce violence and offer a second chance.
Other changes to the program are intended to promote increased microloan activity and provide intermediaries with additional flexibility in how they manage program funds. For more information about the microloan program, visit the Web site at www.sba.gov/microloans.