The Small Business Administration (SBA) has introduced a new law, known as “Ban the Box,” aimed at providing financial opportunities for individuals with criminal records. The law aims to help these individuals in establishing or expanding their own businesses. The proposition states that everyone deserves a fair chance to succeed, regardless of their past mistakes.
The new law abolishes regulations from the SBA’s loan programs that previously denied financial assistance to those on probation or parole. The revised policy champions inclusivity and creates more opportunities for those with a criminal record, marking a radical divergence from previous guidelines.
Furthermore, the SBA will be removing sections from their application forms that request potential borrowers to disclose their criminal histories.
Improving ex-convicts’ SBA financial opportunities
This change is part of a larger plan to make the application process smoother and to create equitable access to resources. The changes are expected to take effect on May 30, albeit with exceptions for imprisoned individuals and childcare businesses with key personnel under probation or parole.
The SBA was firm in its stance against a proposal suggesting that ex-convicts should wait a decade before having access to capital, deeming it unnecessary and restrictive. The SBA argued that such measures could prevent ex-convicts from successfully reintegrating into society through their businesses and perpetuate a cycle of criminality.
Although the fiscal impact of the rule change is anticipated to be less than $100 million per annum, it is expected to confer broad societal benefits, with the potential to assist around four million people on probation or parole. This could potentially lead to a decrease in recidivism rates and contribute more constructively to the economy.
High-profile figures, including Vice President Kamala Harris, have supported this initiative, signaling its potential benefits in reducing repeat criminal behavior. Harris and other advocates believe the law can significantly contribute to the reform and rehabilitation of convicted individuals, regarding it as a crucial step in the ongoing discussion around criminal justice reform.
