Soon, you may choose more than crop chemicals, fertilizer and seed at your local crop supply store. You may also choose a financing package that will be offered and settled on the Internet, while you shop in the store. John Deere Credit and CoBank have developed an online system called Isis for providing loans for farmers buying crop inputs.
Isis will be located in a supplier's or distributor's store. When a farmer buys an input such as fertilizer and needs a loan to finance the purchase, the vendor accesses Isis for the loan. The customer supplies financial information electronically on the system, which goes out to participating lenders. Within minutes, bids for the loan come in. The rest of the loan process also is handled immediately and electronically. Large, more complex loans will require up to 24 hours.
Direct payment to supplier. The process should be a fast, efficient method of procuring and completing a loan process, with payment made directly to the supplier. Everything from application, credit scoring and approval to bill presentment and settlement clearing are handled online through Isis. The advantage to farmers is access to more lending facilities with possibly better terms.
Currently, online loans for consumer goods usually only involve loan application and approval. The rest of the process moves offline in traditional methods.
John Deere Credit (JDC) and CoBank formed a separate company called iVesta Financial Solutions to develop and manage Isis. JDC, Johnston, IA, owns 75% of iVesta, and CoBank, a wholesale bank for cooperatives located in Denver, CO, owns 25% of the company.
Banks bid for loans. IVesta is seeking banks, Farm Credit and other financial institutions to participate as lenders on Isis. “This network will give banks an opportunity to participate in loans they might not have had access to otherwise,” reports Larry Sidwell, iVesta CEO and JDC senior vice president. “While JDC is a lender on the back end [of Isis], there is nothing preferential about it. It is simply a participant along with other banks that take a look at these loans as they come on the network.”
IVesta also is targeting suppliers, vendors and distributors of agricultural products and services to participate in the selling end of Isis. The retail outlets will be online with Isis.
The system was successfully tested in pilot demonstrations at an ag cooperative, Sidwell says. He hopes to open Isis for full operation within six months.