The Small Business Administration wants to harvest new customers in farm states, seeking a "small business" that has rarely used its products in the past.

"What we're trying to do is make bankers aware that the program is there," said Michael Niehaus, assistant district director for economic development at SBA's Nebraska district office in Omaha.

Nationwide, just over 3% of SBA loans were agriculture related, according to the agency.

In Nebraska, where farms and ranches make up 96% of the state's land area, the SBA has done little business with producers, Mr. Niehaus said.

"Bankers don't usually associate SBA with farm lending, even though farmers have always been eligible for loan programs."

The SBA wants agriculture lenders to add its loan products to the repertoire of loans offered by other government-guarantee programs. In some cases it's simply a matter of letting the agricultural lender know the SBA makes loans to farms.

"I never thought of it (SBA) as an ag lender," Clyde Haskins, executive vice president of the $70 million-asset Geneva State Bank, where farm- related loans make up more than 50% of the total loan portfolio.

In Iowa about 12.5% of SBA's $114 million in loans are agriculture related, said Dave Lentell, a spokesman for the Des Moines office. "It's slowly gone up over the years," he said. "It's just really hard to get the word out. We just have to use word of mouth."

The SBA isn't trying to steal business or carve a niche in agricultural loans, Mr. Niehaus said, but wants banks to know there's an alternative, for instance when a loan is not eligible for Farmers Home Administration loans or when they want less paperwork.

SBA guarantees can apply to all types of farm loans, either through its standard program for loans up to $500,000 or especially through the one- year-old low-documentation program.

LoDoc, as the program is known, uses a one-page application with one side filled out by the applicant and the other by the bank. Responses to loan guarantee requests average three days, he said.

LoDoc is limited to term lending and loans under $100,000 and SBA guarantees up to 90% of the loan.

For LoDoc or usual SBA guarantees, producers in most cases must generate less than $500,000 in gross annual revenues. However, a chicken or egg operation can make $9 million in gross revenues and a feedlot can have $1.5 million, and both can still qualify. Revenue size standards are based on the average for the past three fiscal years, according to SBA.

Mr. Lentell in Iowa also believes that the simplified LoDoc program will draw more agriculture loans to SBA.

"We're seeing a lot more use of LoDoc by all small business," he said. "Being a rural state, small businesses in Iowa aren't looking for the large dollar amount. We have seen a lot of farmers using LoDoc."

Jerry Liebold, vice president of $31 million-asset Iowa State Bank, Clarksville, also expects to do more agriculture loans through the simplified documentation process. "That's probably an area that we haven't pursued to the fullest extent," he said.

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