Nearly 4% of small businesses in the United States have an owner with a criminal record, and many of them are automatically denied loans because of their record. The Small Business Administration addressed this barrier through a final federal rule, but its impact remains unclear, particularly among banks and other lending institutions, some of whom tend to associate a criminal record with credit worthiness. In this session, we will review the SBA’s changes to their loan programs, discuss additional areas of clarification, and how the CDFI community can relay best practices for lending to justice-impacted small business owners. The purpose of this session is to acknowledge the structural barriers that persist for formerly incarcerated entrepreneurs in accessing capital.
