(a) Loan and loan/grant combination applications must be submitted through the Agency's online application system.

(b) The Agency may publish additional application submission requirements in the Federal Register.

(a) Online application system. Loan and loan/grant combination applications must be submitted through RUS' online application system and include all information as required by that system and detailed in the Rural Broadband Program Application Guide (the Application Guide), available on the Agency's website, so that applications can be uniformly evaluated and compared.

(b) SAM registration. Prior to submitting an application, all Applicants requesting loan/grant combination funds must register in the System for Award Management (SAM) at https://sam.gov/ and provide a Unique Entity Identifier as part of the application. SAM registration must be active with current data at all times, from the application review throughout the active Federal Award. To maintain the required registration in the SAM database, annual renewal is required with a review and update of all information. The Applicant must ensure that the information in the database is current, accurate, and complete.

(c) Contents of the application. A complete application will include the following information as requested in the RUS online application system and Application Guide:

(1) General information on the Applicant and the project including:

(i) A description of the project that will be made public consistent with the requirements in this part; and

(ii) The estimated dollar amount of the funding request.

(2) An executive summary of the proposed project. The summary shall include, but not be limited to, a detailed description of the existing operations, discussion of key management, description of the workforce and a detailed description of the proposed project.

(3) A description of the proposed funded service area including the number of premises passed.

(4) Subscriber projections including the number of subscribers for broadband, video and voice services and any other service that may be offered. A description of the proposed service offerings and the associated pricing plan that the Applicant proposes to offer, and an explanation showing that the proposed service offerings are affordable.

(5) A map, utilizing the RUS mapping tool, of the proposed funded service areas identifying the areas lacking access to broadband service and the areas lacking access to service of speeds of at least 10 Mbps downstream and 1 Mbps upstream and any non-funded service areas of the Applicant

(6) A competitive analysis of the entire proposed service territory(ies) as required by § 1738.205.

(7) A network design which includes a description of the proposed technology used to deliver service at the required broadband lending speed (see § 1738.55) to all premises in the proposed funded service area, a network diagram, a build-out timeline and milestones for implementation of the project, and a capital investment schedule showing that the system can be built within 5 years from the date funds are made available to the Awardee. All of which must be certified by a professional engineer who is certified in at least one of the states where the project is to be constructed. The certification from the professional engineer must clearly state that the proposed network can deliver service at the required broadband lending speed (see § 1738.55) to all premises in the proposed funded service area.

(8) All environmental information as required by § 1738.108.

(9) Resumes of key management personnel, a description of the organization's readiness to manage a broadband services network, and an organizational chart showing all parent organizations and/or holding companies (including parents of parents, etc.) and all subsidiaries and affiliates.

(10) A legal opinion that addresses the Applicant's ability to enter into loan or loan/grant combination as requested in the application for financial assistance, to pledge security as required by the Agency, to describe all pending litigation matters, and such other requirements as are detailed in the Application Guide.

(11) A summary and itemized budgets of the infrastructure costs of the proposed project, including if applicable, the ratio of loans to grants, and any other sources of outside funding.

(12) A detailed description of working capital requirements and the sources of those funds.

(13) Complete copies of audited financial statements for the two years preceding the application submission as detailed in § 1738.206.

(14) The historical and projected financial information required in § 1738.206.

(15) Documentation proving that all required licenses and regulatory approvals for the proposed operation have been obtained, or the status of obtaining such licenses or approvals.

(16) If service is being proposed on tribal land, a certification from the proper tribal official that they are in support of the project and will allow construction to take place on tribal land. The certification must:

(i) Include a description of the land proposed for use as part of the proposed project;

(ii) Identify whether the land is owned, held in Trust, land held in fee simple by the Tribe, or land under a long-term lease by the Tribe;

(iii) If owned, identify the land owner; and

(iv) Provide a commitment in writing from the land owner authorizing the Applicant's use of that land for the proposed project.

(17) Scoring sheet, analyzing the scoring criteria set forth in this part and most recent funding opportunity announcement.

(18) Additional items that may be required by the Administrator through a notice in the Federal Register.

(d) Material representations. The application, including certifications and all forms submitted as part of the application, will be treated as material representations upon which RUS will rely in awarding loans and loan/grant combinations.

If all proposed funded service areas in a loan or loan/grant combination application are eligible, the Agency will review the application for completeness. The completeness review will include an assessment of whether all required documents and information have been submitted and whether the information provided is of adequate quality to allow further analysis.

(a) If the application contains all documents and information required by this part and is sufficient, in form and substance acceptable to the Agency, the Agency will notify the Applicant, in writing, that the application is complete. A notification of completeness is not a commitment that assistance will be approved. By submitting an application, the Applicant acknowledges that no obligation to enter into an agreement exists until the actual Award documents have been executed.

(b) If the application is considered to be incomplete or inadequate, the Agency will notify the Applicant, in writing, with detailed information regarding the reasons the applications was found to be incomplete or inadequate.

After a loan or loan/grant combination Applicant is notified that the application is complete, the Agency will evaluate the application's financial and technical feasibility. Only applications that, as determined by the Agency, are technically and financially feasible will be considered for funding.

(a) The Agency will determine financial feasibility by evaluating the impact of the facilities financed with the proceeds of the loan and the associated debt, the Applicant's equity, competitive analysis, financial information—including the Applicant's ability to meet the Agency's Net worth and TIER, DSCR, or CR requirements in § 1738.206(b)(2)(i)—and other relevant information in the application.

(b) The Agency will determine technical feasibility by evaluating the Applicant's network design and other relevant information in the application.

The Applicant must submit a competitive market analysis for each service area regardless of projected penetration rates. Each analysis must identify all existing service providers and all resellers in each service area regardless of the provider's market share, for each type of service the Applicant proposes to provide. The analysis must compare the rates, services, and the quality of that service being offered by competitors against those that will be offered by the Applicant. The analysis must also discuss strategies the Applicant will use to compete, as well as the impacts of the competitors on the projected penetration rates for the project.

(a) The Applicant must submit financial information acceptable to the Agency that demonstrates that the Applicant has the financial capacity to fulfill the loan or loan/grant combination requirements in this part and to successfully complete the proposed project.

(1) Applicants must provide complete copies of audited financial statements (opinion letter, balance sheet, income statement, statement of changes in financial position, and notes to the financial statement) for the two years preceding the application submission. For governmental entities financial statements must be accompanied with certifications identifying unrestricted cash that will be available on a yearly basis to the Applicant. Subsidiary operations formed from existing utility providers may provide audited financial statements for the two previous years from the parent company, as long as the parent will be a cosigner of the loan or loan/grant documents, pledging its assets in accordance with § 1738.154(a), or will guarantee the debt.

(2) If the Applicant relies on services provided by a parent or affiliated operation, it must also provide complete copies of audited financial statements for those entities for the fiscal year preceding the application submission. If audited statements are not available, unaudited statements and tax returns for the previous year must be submitted.

(3) Applicants must provide detailed information for all outstanding obligations. Copies of existing notes, loan agreements, security agreement, or other legal documents covering loans, grants, leases, or other loan guarantees must be included in the application.

(4) Applicants must provide a detailed description of working capital requirements and the source of these funds, if internally generated funds are insufficient.

(b) Applicants must submit the following documents that demonstrate the proposed project's financial viability and ability to repay the requested loan.

(1) Customer projections for the 5-year forecast period that substantiate the projected revenues for each service that is to be provided. The projections must be provided on at least an annual basis and must be developed separately for each service area and must be clearly supported by evidence such as market surveys or current company take rates.

(2) Pro forma financial forecast, including a balance sheet, income statement, and statement of cash flows. For non-regulated entities, the pro forma should be prepared in conformity with U.S. GAAP and the Agency's guidance on grant accounting found at https://www.rd.usda.gov/files/AccountingGuidance10.pdf. Regulated telecommunications providers may follow the USOA and RUS accounting standards for their pro forma, including accounting for grant-funded assets as a contribution, in accordance with 47 CFR 32.2, if the project assets will be treated as regulated plant. The pro forma should validate the sustainability of the project by including subscriber estimates related to all proposed service offerings; annual financial projections with balance sheets, income statements, and cash flow statements; supporting assumptions for a 5-year forecast period and a depreciation schedule for existing facilities and those funded with Federal assistance, and other funds. This pro forma should indicate the committed sources of capital funding and include a bridge year prior to the start of the forecast period. This bridge year is the year in which the application is submitted and serves as a buffer between the historical financial information and the forecast period. Including the bridge year, the pro forma statements span a 6-year period.

(i) The financial projections submitted by Applicants must demonstrate that their entire operation will be able to meet two of the following three ratio requirements: A minimum TIER, CR, or DSCR equal to 1.25 by the end of the 5-year forecast period. Additionally, the projections must demonstrate the Applicant's ability to maintain a Net worth of at least 20 percent throughout the forecast period. Demonstrating that the operation can achieve a projected Net worth of 20 percent and TIER, CR, or DSCR of 1.25 does not ensure that the Agency will approve the loan or loan/grant combination.

(ii) If the financial analysis suggests that the operation will not be able to achieve the Net worth requirement or two of the required TIER, CR, or DSCR in paragraph (b)(2)(i) of this section, the Agency will not approve the loan or loan/grant combination Award without additional capital, additional cash, additional security, and/or a change in the Award terms.

(c) Based on the financial evaluation, the Award documents will specify the Net worth and TIER, CR, or DSCR requirements in paragraph (b)(2)(i) of this section that must be met throughout the amortization period.

(a) Applications for loan or loan/grant combinations must include a network design that demonstrates the project's technical feasibility. The network design must fully support the delivery of service to meet the broadband build-out requirements specified in § 1738.55, together with any other services to be provided. In measuring speed, the Agency will take into account industry and regulatory standards. The design must demonstrate that the project will be complete within the 5-year forecast period and must include the following items:

(1) A detailed description of the proposed technology that will be used to provide service at the broadband lending speed. This description must clearly demonstrate that all premises in the proposed funded service area will be able to receive service at the broadband lending speed;

(2) A detailed description of the existing network. This description should provide a synopsis of the current network infrastructure;

(3) A detailed description of the proposed network. This description should provide a synopsis of the proposed network infrastructure;

(4) A description of the approach and methodology for monitoring ongoing service delivery and service quality for the services being deployed;

(5) Estimated project costs detailing all facilities that are required to complete the project. These estimated costs must be broken down to indicate costs associated with each proposed service area and must specify how Agency and non-Agency funds will be used to complete the project;

(6) A construction build-out schedule of the proposed facilities by service area on an annual basis. The build-out schedule must include:

(i) A description of the workforce that will be required to complete the proposed construction;

(ii) A timeline demonstrating project completion within the forecast period; and

(iii) Detailed information showing that all premises within the proposed funded service area will be offered service at the broadband lending speed when the system is complete;

(7) A depreciation schedule for all facilities financed with loan and loan/grant combination funds;

(8) An environmental report prepared in accordance with 7 CFR part 1970; and

(9) Any other system requirements required by the Administrator through a notice published in the Federal Register.

(b) The network design must be prepared by a registered Professional Engineer with telecommunications experience who is certified in at least one of the states where a project is to be constructed or by qualified personnel on the Applicant's staff. If the network design is prepared by the Applicant's staff, the application must clearly demonstrate the staff's qualifications, experience, and ability to complete the network design. To be considered qualified, staff must have at least 3 years of experience in designing the type of broadband system proposed in the application.

(a) If the loan or loan/grant combination application meets all statutory and regulatory requirements and the feasibility study demonstrates that the Net worth and TIER, CR, or DSCR requirements in § 1738.206(b)(2)(i) can be satisfied and the business plan is sustainable, the application will be submitted to the Agency's credit committees for consideration according to the priorities in § 1738.105. Such submission of an application to the Agency's credit committees does not guarantee that a loan or loan/grant combination will be approved. In making a loan and/or loan/grant combination Award determination, the Administrator shall consider the recommendations of the credit committees.

(b) The Applicant will be notified of the Agency's decision in writing. If the Agency does not approve the loan or loan/grant combination, a rejection letter will be sent to the Applicant, and the application will be returned with an explanation of the reasons for the rejection.