Most content aimed at borrowers with a felony record is either vague encouragement or a flat “no.” Neither matches the actual rules. SBA’s regulations draw a precise line: they bar people based on present status — incarcerated, on probation or parole, under indictment — and treat a past conviction as a character question weighed on stated factors, not a lifetime disqualification. This page quotes the rules as written, then maps the channels beyond SBA, which write their own.
General information, not financial or legal advice. Character determinations and eligibility turn on the specific facts of a record; if your situation involves an open case, supervision, or a financial-misconduct conviction, an attorney familiar with SBA lending can advise before you apply.
A business is ineligible for an SBA loan if an owner (or a person the rule reaches) is:
Read the list carefully: every item is a current condition. The regulation does not say “has ever been convicted.” While any of these statuses applies, the SBA conversation is over before it starts — there is no character determination to request, because eligibility itself fails. When the status ends (probation completed, parole discharged), the bar lifts and the question becomes the character analysis below. This is also why timing advice dominates this topic: an application filed during supervision is a wasted inquiry.
Separate from eligibility, SBA imposes an ethical and character requirement. For a past felony, §120.140(g) directs that the history be weighed by factors including:
Those four factors are the actual grammar of a character decision. A fifteen-year-old single conviction with no repetition scores differently from a recent financial-fraud conviction — not because a blog says so, but because the regulation names magnitude, repetition, harm and remoteness as the tests. Where a determination is triggered, the lender documents the record and SBA evaluates character on those terms. A record is not a lifetime bar — but financial-misconduct history is weighed hardest, because the harm factor points directly at the lender’s own risk.
The practical consequence: because remoteness and repetition are regulatory factors, evidence moves the decision. Completion-of-sentence and supervision-discharge documents, a clean record since, steady employment or business history, and a factual written account of the offense all speak directly to the named factors. An applicant who hands the lender a documented file is arguing in the regulation’s own language; one who hopes the record goes unnoticed is leaving the four factors to be filled in by a stranger.
The SBA Borrower Information Form (Form 1919) contains the character questions every SBA applicant answers — including questions about arrests, convictions, probation and parole. Answering falsely is its own, separate disaster: it can convert a survivable character question into a misrepresentation problem across every federal program. The practical guidance is boring and absolute: disclose exactly what is asked, document completion of sentences and supervision, and let the lender run the determination. Expedited channels do not skip these questions; they are part of the form, not the lender’s curiosity.
For the broader SBA disqualification picture — federal debt, CAIVRS, prior losses to the government — the dedicated page is what disqualifies you from an SBA loan; this page owns only the character slice.
Non-SBA lenders are not bound by the CFR — each writes its own character policy, and they vary more than any other underwriting factor on this site:
Can a felon get a business loan? Yes, through several channels — the record is a factor, not a universal bar. Off SBA, CDFIs, reentry-oriented lenders and Kiva underwrite character case by case. On SBA loans, the bar applies only to present status (incarceration, probation, parole, indictment); a past conviction goes to a character determination weighed by magnitude, repetition, harm and remoteness under 13 CFR §120.140(g).
Can you get an SBA loan with a felony? Sometimes. A completed, older conviction can pass the character determination — particularly where it is single, non-financial and remote. A financial-misconduct conviction is weighed hardest because the regulation names harm as a factor. There is no score or waiting-period table; it is a documented, case-by-case determination.
Does SBA run a background check? Effectively, yes. Form 1919 asks character questions of every applicant, and lenders verify — including current incarceration, probation, parole and indictment status under 13 CFR §120.110(n). Answer the form exactly; a false answer creates a misrepresentation problem far worse than the record itself.
Can I get an SBA loan while on probation or parole? No. Probation and parole are present-status bars under 13 CFR §120.110(n) — the business is ineligible while any owner is under supervision, regardless of the underlying offense or the business’s strength. The eligibility returns when supervision ends; the character determination is the question that follows, not this one.
Are there grants for felon entrepreneurs? Very few, and almost none are national programs. What exists is mostly local: city and nonprofit reentry programs, some CDFI-adjacent technical-assistance and micro-grant schemes, and small-business training pipelines. Be skeptical of any site selling a list of “felon business grants” — the honest map is local reentry organizations and your nearest CDFI or Small Business Development Center.
General information, not financial or legal advice. Sources: 13 CFR §120.110(n) (present-status eligibility bars) and §120.140(g) (character factors: magnitude, repetition, harm, remoteness), via eCFR; SBA Form 1919 character questions; Kiva U.S. eligibility page (five-year violent/financial conviction bar). Currency verified 2026-10-23.