Mr. KERRY. Mr. President, today Senator Snowe and I are introducing a bill to improve the Small Business Administration's Microloan Program, a program which makes a very big difference through very small loans of up to $35,000. We are very pleased that Senators Bond, Wellstone, Cleland, Landrieu, Harkin, Levin, Lieberman, Bingaman, Enzi, and Kohl are joining us and cosponsoring this bill.

Senator Snowe and I have worked together many times on this program, pushing to make sure our country's smallest businesses have access to capital and business assistance. The changes we are introducing today are not controversial, and they are not new. In fact, they should sound familiar to all but our newest colleagues. First, they were part of the microloan provisions in the Senate version of last year's SBA Reauthorization bill. Second, our Committee and the full Senate voted unanimously to pass them. Further, they were drafted in cooperation with the Administration and with the folks who make the loans and provide the business training. The National Association of SBA Microloan Intermediaries (NASMI) and its members were full partners in shaping this legislation in the 106th Congress.

These provisions were not included in the conference agreement on SBA's Reauthorization bill because the House Committee on Small Business wanted to postpone consideration of these changes until they could hold a hearing and their members could have a chance to weigh in on the program. I thank former House Small Business Committee Chairman Talent, and returning Ranking Member Nydia Velázquez, for working with us on the microloan changes.

These changes we are re-introducing today will make the SBA Microloan Program more flexible to meet credit needs, more accessible to microentrepreneurs across the nation, and more streamlined for lenders to make loans and provide management assistance. They complement the program and technical changes we made last year.

The Microloan Program Improvement Act of 2001 does the following:

It allows microintermediaries to offer revolving lines of credit. Currently, microloans are short-term loans. Eliminating this requirement will allow intermediaries greater latitude in developing microloan products that best meet their community's needs by offering borrowers revolving lines of credit, such as for seasonal contract needs. Congress does not intend for this flexibility to be used to make loans with long terms, such as 15 and 30 years.

It broadens the eligibility criteria for potential microintermediaries. Instead of requiring intermediaries to have one year of experience in making microloans to startup, newly established, or growing small businesses and providing technical assistance to its borrowers, this legislation would deem a prospective intermediary eligible if it has equivalent experience.

It expands flexibility to intermediaries to subcontract out technical assistance. Currently, intermediaries are limited to using 25 percent of their funds to assist prospective borrowers. This change allows an intermediary to allocate as much technical assistance as appropriate. This subsection also increases the percentage of technical assistance grant funds that an intermediary can use to subcontract out technical assistance. Currently, intermediaries can only subcontract 25 percent, and this legislation would raise it to 35 percent.

It establishes a peer-to-peer mentoring program to help new intermediaries provide the best possible service to microentrepreneurs. Specifically, SBA would be allowed to use up to $1 million of annual appropriations for technical assistance grants to provide peer-to-peer mentoring by subcontracting with one or more national trade associations of SBA microlending intermediaries, or subcontracting with entities knowledgeable of and experienced in microlending and related technical assistance. As Congress increases the number of lending intermediaries around the country to reach more people, we want to make sure that new intermediaries have the benefits of lessons learned by other more xperienced lending intermediaries. Because the microlending industry is still very young, there are few sources of conventional training available to prospective and new intermediaries. According to the National Association of SBA Microloan Intermediaries, experienced SBA microlenders are called upon frequently to assist new intermediaries in addressing issues with their loan fund, from financial management and marketing to targeting loan funds effectively to a population or business sector. While these experienced intermediaries do their best to respond to the needs of their colleagues, they currently lack the resources to respond effectively and efficiently to the growing needs of the field.

Before I wrap up my statement, I would like to quickly run through the changes we made and that President Clinton signed into law on December 21.

Increases the maximum loan amount from $25,000 to $35,000;

Increases the average loan size for each intermediary's portfolio from $10,000 to $15,000 and increases the average loan size for specialty lenders from $7,500 to $10,000;

Raises the threshold for the comparable credit test from $15,000 to $20,000;

Increases the number of non-lending technical assistance (TA) providers from 25 to 55 and raises the maximum grant amount to each TA provider from $125,000 to $200,000; and,

Increases the number of intermediaries SBA is authorized to fund from 200 to 300.

Mr. President, I ask for unanimous consent that the bill be printed in the Record.