Rural Broadband Access Loans

This program furnishes loans and loan guarantees to provide funds for the costs of construction, improvement, or acquisition of facilities and equipment needed to provide service at the broadband lending speed in eligible rural areas. In facilitatin

(a) To be eligible for a broadband loan, an applicant may be either a nonprofit or for-profit organization, and must take one of the following forms: (1) Corporation; (2) Limited liability company (LLC); (3) Cooperative or mutual organization; (4) Indian tribe or tribal organization as defined in 25 U.S.C. 5304; or (5) State or local government, including any agency, subdivision, or instrumentality thereof. (b) To be eligible for a broadband loan, the applicant must: (1) Submit a loan application which meets the requirements set forth the regulation; (2) Agree to complete the build-out of the broadband system described in the loan application within three years from the day the applicant is notified that loan funds are available. The loan application must demonstrate that all proposed construction be completed within this three year period with the exception of CPE. CPE can be funded throughout the forecast period; (3) Demonstrate an ability to furnish, improve, or extend broadband facilities to provide service at the broadband lending speed in rural areas; (4) Demonstrate an equity position equal to at least 10 percent of the amount of the loan requested in the application; and (5) Provide additional security if it is necessary to ensure financial feasibility as determined by the Administrator. An eligible entity that provides telecommunications or broadband service to at least 20 percent of the households in the United States may not receive a total amount of loans or guarantees for a fiscal year in excess of 15 percent of the funds authorized and appropriated for that fiscal year.

Residents and businesses of eligible rural areas.

Funds can be used for the costs of the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in rural areas. Additional restrictions may apply to projects depending on the availability of existing broadband service. A direct loan shall bear interest at an annual rate either (1) equivalent to the cost of borrowing to the Department of the Treasury for obligations of comparable maturity or (2) 4 percent. A guaranteed loan shall bear interest at an annual rate equivalent to the current applicable market rate for a loan of comparable maturity.

Unless requested to be shorter by the applicant, broadband loans must be repaid with interest within a period that, rounded to the nearest whole year, is equal to the expected composite economic life of the assets to be financed, as determined by the Agency based upon acceptable depreciation rates. The borrower must begin construction within six months from the date the Agency notifies the applicant that loan funds are available. The build-out must be complete within three years from the day the Agency notifies the applicant that loan funds are available. Build-out is considered complete when the network design has been fully implemented, the service operations and management systems infrastructure is operational, and the borrower is ready to support the activation and commissioning of individual customers to the new system.

Applicants must supply environmental impact information to determine whether an environmental assessment or an environmental impact statement will be required. Additional information regarding environmental requirements can be found in 7 CFR Part 1790.

Detailed information on applying for a loan may be found in 7 CFR part 1738. For further information on submitting an application, please contact RUS and visit our website: http://www.rd.usda.gov/programs-services/farm-bill-broadband-loans-loan-guarantees

The RUS Administrator makes the final decision on approval of the loan or loan guarantee. There must be a finding that the project is economically feasible, capable of delivering service at the Broadband Lending Speed, and serves the purposes of the program. Borrowers and member of Congress are notified directly of the approval of a loan or loan guarantee.

Normal processing time is four to five months.