Tom Harkin: “I thank Senator Wellstone for his leadership in this area. The SBA Microloan Program really works. It's the most…”

“I thank Senator Wellstone for his leadership in this area. The SBA Microloan Program really works. It's the most effective welfare to work program we've got. It turns welfare dependents into taxpaying small business people. The Institute for Social and Economic Development in my State of Iowa has been a pioneer in promoting microloans. This organization headed by John Else works with individuals, helping them establish their own businesses. The institute works with them to determine if a concept to establish a business is sound. If so, they help the client establish a sound business plan, teaching them the many skills that are necessary to be successful in a small business. And, they work with the person to secure a loan through a bank or other financial institution. This is time intensive work. But, without this technical assistance, there is no way microloans will produce significant success. Most microloan intermediaries use SBA financing to provide direct loans. In either case, the program really works. I have personally met with a number of people who have used the program. In many cases, they were on AFDC, food stamps, and other Federal assistance when they started. Now, they are operating successful businesses, making a decent living and paying taxes rather than receiving welfare benefits. Through this program, they have been able to turn their lives around. When we talk about helping people get off welfare, this is a mechanism that really works.”