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February 2, 2001

FSA speeds up
small loan processing

USDA Farm Service Agency Acting Administrator James Little has announced that FSA has reduced the paperwork required for farmers to receive farm operating loans from USDA. Producers who need to borrow $50,000 or less and those who have a record of borrowing from and repaying FSA on annual operating loans will benefit from the new procedures.

The changes in documentation requirements will reduce the time for loan officials to review application information and make the necessary determinations. Requirements that are repetitive or are not essential for a sound credit decision in light of the financial risk involved are being dropped.

To qualify, a producer must fit one of two categories:

•Small loans (Operating credit needs of $50,000 or less): Producer must meet FSA loan eligibility requirements, be current on all debt payments and have no FSA debt restructuring in the past five years.

Loans under this provision may be used to pay annual production expenses, to purchase or repair equipment and similar needs. Producers seeking loans for refinancing existing farm debts will be required to submit additional information for a more intensive credit analysis and will not qualify for a "lo-doc" operating loan.

•Recurring FSA borrowers must: meet FSA loan eligibility requirements; have repaid at least two FSA production loans on time; have no past due payments to any creditor; and have no FSA debt restructuring in the past five years.

Loans under this provision may be used to pay annual production expenses and limited farm and family subsistence needs only.