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Web-based loan applications are coming to the Farm Service Agency

Even to a computer geek, it might be an intimidating sight -- banks of more than 100 laptop computers, all hooked up to the same Web site, on the eighth floor of a downtown Omaha office building.

This is the room were the USDA Farm Service Agency will make the biggest leap in modernizing its loan application process since the agency's predecessor began using a paper "Farm and Home Plan" for loan applications in the 1940s. FSA makes operating and land ownership loans, including loans for beginning farmers and ranchers. It also guarantees commercial bank loans.

Monday, FSA's state heads of lending programs and other top USDA officials visited the site where USDA plans to train 2,200 lending coordinators between now and next September.

After state lending officials get a week of training, the new Web-based loan processing system will go live when they return to their states the following Monday, said Steven Rubin, a senior loan officer with FSA in Washington, D.C. The first states to use the system will be Minnesota, Vermont and New Hampshire.

"We're not just replacing a farm and home plan. We're re-engineering the way we do business," Rubin told Agriculture Online.

FSA officials conceded that there's some trepidation in the ranks over switching to more high-tech software that uses the Internet to process loan applications. But Rubin says many are also pleased that the agency is catching up with commercial lenders who already use the same software.

"I've been getting phone calls and e-mails from across the country that, finally, they'll be equal to a bank," Rubin said.

The software allows FSA loan officers to work with customers to do cash flow projections and calculate the "sweet sixteen" financial ratios used by commercial lenders to evaluate credit worthiness. The ratios include such financial indicators as return on equity and return on assets. The new application process is now called the Farm Business Plan.

Its software and Web system, Web Equity Manager, was developed by ECI of Glenwood, Iowa, which already has 6,500 commercial clients in the U.S. and Canada.

The business was started by a former hog farmer, Gary Kruse, who dreams that someday the FSA data base might be used by its borrowers to compare their financial performance with the average performance of similar borrowers -- anonymously, since each individual's financial data will remain private.

"It's all private. This is not available to the public on the Internet," Kruse said.

The system should speed up the process for banks that want to make loans to farmers with FSA loan guarantees, since loan applications and finanical information can be sent from banks to the agency more quickly through the Internet.

By the summer of 2005, FSA hopes to open up the system to farmers, so that they can make loan applications via the Internet without leaving their home of office, said Michael Yost, a Minnesota farmer and former American Soybean Association president who is now FSA's associate administrator.

"Not only is this going to expedite loans, but it will give them assistance in business planning," Yost said.

The Web-based system should be appreciated by young farmers who apply for beginning farmer loans from FSA, said Brian Wolford, the FSA state executive director for Nebraska.

"I think it gives them an opportunity to use the computers they've grown up with," he said.

For more information on Web Equity Manager and the new FSA program, visit the website below.

This is the biggest leap in modernizing the FSA's loan application process since the 1940s.

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Even to a computer geek, it might be an intimidating sight -- banks of more than 100 laptop computers, all hooked up to the same Web site, on the eighth floor of a downtown Omaha office building.

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