New Start Act Launches $100K-$500K Grants to Fund Business Training for Formerly Incarcerated People

The New Start Act of 2025 is setting up a major new grant program under the Small Business Administration (SBA) designed to tackle the high rate of reoffending by turning justice-impacted individuals into entrepreneurs. The core idea, backed by the bill’s own findings, is that helping people start their own businesses dramatically lowers the chance they’ll end up back in prison.

This five-year initiative, officially called the New Start Program, requires the SBA to start handing out grants within 180 days of the bill becoming law. These grants, ranging from $100,000 to $500,000 annually, will go to organizations like Women’s Business Centers and Small Business Development Centers (SBDCs) that provide business training, coaching, and help securing startup capital for people who are currently or formerly incarcerated.

The Data Behind the Hustle

Why the focus on entrepreneurship? Section 2 of the bill lays out the case with some pretty compelling numbers. Currently, about 77% of people released from prison commit another crime within five years. A big reason is employment: nearly half of formerly incarcerated individuals are unemployed or severely underemployed a year after release. This bill argues that entrepreneurship is a powerful antidote, citing data that shows formerly incarcerated people who start businesses are 50% more likely to do so than the average person, and their rate of reoffending drops by 5.3%—a significant 32.5% decrease compared to those who just take regular jobs. Plus, the bill notes these entrepreneurs earn about $2,700 more per year.

Who Gets the Training and Who Pays?

This program is aimed at two groups: “currently incarcerated individuals” in federal minimum, low, or medium security facilities, or residential reentry centers, and “formerly incarcerated individuals” who have completed their time. Crucially, both groups must meet certain eligibility rules set by the SBA, which aren't specified in the bill text, meaning the SBA has some room to define who actually qualifies down the road.

Organizations applying for the grants must prove they have a solid plan, a strong curriculum, and, if they focus on those already released, a partnership with a Microloan Intermediary or Community Advantage lender to ensure participants can actually access capital later. This is a smart requirement—training without funding access is just homework.

The Grant Game: Priorities and Potential Pitfalls

The SBA Administrator has discretion when awarding these grants, and they can prioritize applicants based on a few factors. They’ll favor organizations that tailor training to the local economy, offer training alongside job placement services, and have a proven track record. They’ll also prioritize those who can bring in non-Federal funding, which, while encouraging local investment, might put smaller, grassroots organizations that rely purely on federal money at a disadvantage compared to larger non-profits with established donor bases.

For taxpayers, the bill authorizes “whatever funding is necessary” to run the program. While this is standard language for new federal programs, it means there is no hard cap on the cost. Accountability is built in, however: the SBA must report to Congress annually on the program’s performance, including participant demographics, retention rates, and how many loans were ultimately made. The Government Accountability Office (GAO) is also mandated to conduct a final, comprehensive evaluation after the five-year run is over.

In short, the New Start Act is a focused attempt to address a major social problem—recidivism—by leveraging the entrepreneurial spirit. It connects federal resources directly to local organizations, aiming to replace the cycle of incarceration with the stability of self-employment.