A new loan program for minority and women-owned businesses in three Connecticut cities that have been affected by COVID-19 was announced on Tuesday.

State and local leaders announced the launch of the loan program for eligible businesses in Ansonia, Derby and New Haven.

The program is a partnership with the Community Foundation for Greater New Haven, HEDCO, Inc., the Amour Propre Fund and the City of New Haven.

HEDCO is expected to administer the program and help companies through the application process, as well as provide financial planning services, officials said.

Eligible businesses are owned by minorities and women with 20 or fewer employees, according to state and local leaders.

Officials said they were offering 4% term loans of up to $ 25,000 with a pooled pool of $ 1.5 million. Eligible loans in good standing may be partially canceled after one year.

Program officials said the loan would only have 12 months of interest and on the 13th month it would be converted to interest and principal payment.

There is a one page app which can be found on the HEDCO website here. To be eligible, officials said the company must be in good standing with the Department of Tax Services.

Officials said the loans allow businesses to be used for working capital, inventory, equipment, or whatever else they need.

They said the hope was for businesses to emerge from the pandemic healthier than they entered.