The U.S. Small Business Administration this week published a final rule for the microloan program that provides more flexibility to SBA non-profit intermediaries, expands the pool of microloan recipients, and increases accessibility in SBA programs.
The change will make small businesses that have an owner who is currently on probation or parole eligible for microloan programs, aiding individuals with the highest barriers to traditional employment to reenter the workforce.
“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,” he said.
The program, which is focused on startups, minority and other underserved markets, provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand.
Microloans play an important role in distressed communities where access to conventional lending remains a challenge. The average microloan size is approximately $13,000. There are two SBA-authorized microloan intermediaries in Puerto Rico — Corporación para el Financiamiento Empresarial del Comercio y de las Comunidades (COFECC) and Pathstone.