No one ever said being an entrepreneur is easy. And being a minority entrepreneur? Even tougher.
But starting a small business as a woman or person of color just became a much more attainable goal in New York City, thanks to a new initiative by the mayor's office.
On Thursday, New York's Department of Small Business Services (SBS) announced the launch of the Contract Financing Loan Fund, which allows minority- and women-owned businesses (M/WBEs) to apply for low-interest contract financing loans of up to half a million dollars. The interest rate on the loan will be capped at 3%, SBS commissioner Gregg Bishop said during an event marking the fund's launch at the Brooklyn Historical Society Thursday afternoon.
For comparison, the federal Small Business Association's rates, which are considered among the most competitive, are typically between 6% and 9%, depending on the risk factors involved.
Subscribe to the Broadsheet, Fortune’s newsletter for powerful women.
The M/WBE loans will be made available through a city-financed, $10 million revolving loan fund, which uses interest and principal payments on old loans to issue new ones. Initial lenders include BOC Capital, Inc., TruFund Financial Services, and Excelsior Growth Fund.
The fund is part of a larger, city-wide initiative to promote women- and minority-owned businesses that is intended to increase the proportion of city contracts that go to M/WBEs to 30% by 2021, award $16 billion to M/WBEs by 2025, and certify 9,000 M/WBEs by 2019 (the certification helps minority and female business owners win government contracts).
In addition to the new fund, the city also unveiled a new, streamlined certification application process, which is particularly helpful for small businesses owned and operated by one person. This directly benefits women, who comprise 90% of sole proprietors in the U.S.