The New Start Act of 2025 would create a new program under the Small Business Act to award five-year grants to organizations—often partnerships that involve small business development centers (SBDCs), women's business centers (WBCs), and SCORE chapters—to run entrepreneurial development programming for justice-impacted individuals. These include both currently incarcerated individuals (in specified federal facilities or under BOP jurisdiction) and formerly incarcerated individuals who meet program eligibility. The program aims to reduce recidivism and improve economic outcomes by providing comprehensive entrepreneurship counseling, training, access to capital, and connections to existing federal resources. The act emphasizes coordination with the Bureau of Prisons, prioritizes equitable grant distribution between incarcerated and formerly incarcerated participants, and requires extensive reporting and evaluation of the program’s effects, without altering the ongoing SBA 7(m) microloan program. Key features include concrete grant parameters (amounts, duration, geographic dispersion), defined eligibility and program content, criteria to prioritize applications, required partnerships with lenders and capital providers, connection to broader federal resources, annual reporting to Congress, and a GAO evaluation after the program terminates. The act also clarifies that it does not change or supersede the existing 7(m) program.
Key Points
- 1Establishment of the New Start Program within the Small Business Administration to fund entrepreneurial development for currently incarcerated and formerly incarcerated individuals, with grants awarded for five years.
- 2Grant specifics: each grant to an organization or partnership must be between $100,000 and $500,000 per year, with a mandate to diversify grant recipients geographically across the United States; women’s business center grants do not count toward the program’s maximum grant cap.
- 3Definitions and scope: new program defines terms such as currently incarcerated individual, formerly incarcerated individual, entrepreneurial development program, microloan intermediary, and Community Advantage Small Business Lending Company; aligns with SBA’s existing lender and resource networks (SBA microloan programs, SCORE, SBDCs, WBCs).
- 4Application requirements: applicants must demonstrate access to capital (through microloan intermediaries or lenders or partnerships), show community ties, outline a full, ongoing entrepreneurial development plan, provide a curriculum, list partners, and include a detailed use-of-funds plan.
- 5Priorities in awarding grants: factors include secured non-federal funding, alignment with local economies, ability to provide services concurrent with employment/training, track record of serving justice-impacted individuals, and outreach to those about to be released from Federal custody (within 18 months of starting services).
- 6Program responsibilities: grant recipients should connect participants with a broad set of federal resources (including 7(m), Community Advantage lenders, SBDCs, WBCs, SCORE chapters, Veteran Business Outreach Centers, and Minority Business Development Agency centers).
- 7Accountability and reporting: annual reports to Congress with participant characteristics, program participation and retention, loan activity, and program outcomes; a GAO evaluation after program termination assessing services, oversight, and overall impact.
- 8Relationship to existing programs: rule of construction clarifies that nothing in the act alters the SBA 7(m) program or its administration.
- 9Funding authorization: authorization states that appropriations, as necessary, are available to carry out the New Start Program.