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Finance & Accounting, Small Business Loans

Overcoming Your Past So You Can Move Forward: Business Loans and Options for the Underserved

business loans for the least likely

You probably hear it all the time: “In America, hard work will help you get where you want to go,” or “In America, everyone is equal.” But how true are those statements? Can those who find themselves part of the “vulnerable adult population” truly get a fresh start, defy the odds, and become entrepreneurs?

Entrepreneurship offers a chance at more than just a new career and income for previously incarcerated individuals – it’s an opportunity to embrace a new way of life. In some cases, entrepreneurship arises less from choice and more from necessity. Employers tend to turn them away, so even those attempting to become law abiding, productive members of their community find it nearly impossible to do so.

However, across the United States it is possible to find success stories. The Huffington Post recently published a story about Marc Roth, a 16-year tech industry veteran entrepreneur who found himself homeless for six months.

The experience inspired him to start multiple businesses focused on helping the homeless get back on their feet. He founded the SF Laser, a laser cutting and etching service and The Learning Shelter, a three-month program that provides housing, food, and job training to homeless people.

Another example of a thriving business that depends on the “vulnerable adult population” is Wash Cycle Laundry a Philadelphia-based business that picks up and delivers laundry via bicycle. With additional locations in Austin, Texas and Washington, DC, the business has created nearly 50 jobs by hiring previous addicts, ex-felons, homeless, or those dependent on the welfare system.

Defy Ventures is yet another nonprofit organization whose focus is to provide second chances to previously incarcerated individuals through business start up and management training. The program consists of a mix of features including Harvard Business School professors and key influencers. The entrepreneurs-in-training are able to take their talents and new skills and become CEOs of their own ventures.

Getting Started

By starting a business, members of the “vulnerable population” avoid the negative stigmas and hassles of seeking employment. If you happen to fall into this group, you’re probably wondering how you can get started. Here are a few tips to help you out:

  1. Put your skills to work – Match your skillset with your desire to start a business. Think about the skills you can bring to the table and try to focus on areas that you particularly excel in.
  2. Create a business plan – Every business should have a business plan that serves as the blueprint of the business. Although your business plan will change over the life of your company, having one is a must.
  3. The Work Opportunity Tax Credit – The Work Opportunity Tax Credit is a federal tax credit available to employers who hire certain target groups who have consistently faced barriers to employment, such as those who have formerly been incarcerated.
  4. Seek additional training – Business owners should always attempt to stay relevant, informed, and educated. Check out your local Economic Development Corporation, Chamber of Commerce, and business workshops in your area.
  5. Apply for a business license – Every business should obtain a business license through the local government. Check with both your state and your city to determine what the business license requirements are. There are no restrictions on applying for a business license based on your past.
  6. Legal business structure – There are many reasons why a business owner should take steps to put their venture into a legal business entity through incorporation or by forming an LLC. This is an especially important step for those who are trying to show that their business is legitimate.

Funding Options

Once you start your business, you’ll need to figure out how to obtain funding. Here are several business loans that may be a good fit for you:

Private Loans

Private lending is a viable option for those who are less likely to receive funding through a traditional source such as a bank. This lending practice is also referred to as hard money because it usually has to be secured by an asset such as a property. This type of loan is easier to secure, but the risks are greater to the borrower.


Entrepreneur.com recently published an article about the joys and pitfalls of using crowdfunding to finance your business. Crowdfunding sites like gofundme, Kickstarter, and Indiegogo allow you to raise money for your venture. However, make sure that you read the terms and fine print before you decide to go this route. For example, Kickstarter doesn’t allow you to collect the funds until you have reached the fundraising goal.

Alternative Lenders

Traditional banks are less likely to lend to business owners who have less than stellar backgrounds. However, alternative lenders like Kabbage use innovative technology to approve entrepreneurs for loans. Because of their outside-the-box approach, those who fall into the “vulnerable adult population” fare a better chance of being approved by an alternative lender than a traditional bank.

If you need funds to start a business, don’t give up. There are many options out there, you just have to know where to look!

Are you an entrepreneur who has an inspirational story? Share it with us @KabbageInc.