[A] new initiative through the Small Business Administration will encourage Vermont micro-lenders to reach out to entrepreneurs on parole and probation.
The program, announced Wednesday by the SBA, a federal agency that supplies loans to small businesses across the country, is part of a wider effort to provide more access to employment.
People with criminal records can run into barriers when applying for many federal benefits, including student loans, said Miguel Ayala, spokesperson for the SBA, on Thursday.
“This is a very small change to one of our small programs,” Ayala said.
But it’s a crucial shift in policy for consumers. The SBA expects that it will help entrepreneurs with a criminal record kickstart their business.
Martin Hahn, executive director of Community Capital of Vermont, said that the Barre-based micro-lender welcomed the new development.
“Some call us a lender of last resort,” Hahn said. “We consider ourselves a lender of first opportunity.”
Community Capital currently asks applicants whether they have a criminal background, and only a small number answer yes, Hahn said. However, he noted that the group has never rejected an application on the basis of a criminal background.
The micro-lender works with people all over Vermont. They’ve helped to provide the start-up funds for something as small as the purchase of a livestock truck, to more expansive efforts like launching a mushroom-growing operation. Loans range from $1,000 to $100,000.
Hahn said that he sees the SBA’s new program as an opportunity to work directly with the corrections system.
According to the Department of Corrections, there were almost 6,500 people on probation or parole on an average day in fiscal year 2014 in the state.
Working with people who have recently come out of prison does have its risks, Hahn said, noting that recidivism is a concern. However, according to Hahn, the micro-lender would weigh someone’s parole or probation status in a similar way that they would consider other parts of an application.
“It would certainly be a factor, but it’s a factor like many other things in people’s lives,” Hahn said.
