Money Is There to Aid Rural Internet, but Loans Are Hard to Get

[SOURCE: New York Times, AUTHOR: Vikas Bajaj]
Across rural America, entrepreneurs, lawmakers and Internet company executives say they are frustrated with a loan program created by Congress in 2002 to help extend high-speed Internet service to rural areas. Run by the Rural Utilities Service, an arm of the Department of Agriculture, the program has been allocated nearly $3 billion but the agency has lent less than half that. As of Sept. 30, the end of the 2005 fiscal year, the utilities service had rejected 87 loan applications totaling $1.1 billion and approved 48 loans totaling $770 million. The agency had nearly $2 billion in unused money, and $556 million of that must be committed to new loans before the end of the fiscal year next September or its authorization will expire. Most of the loans carry the same interest rates as United States Treasury bonds, about 4.5 percent. Critics say the agency's standards are so tough that applicants that have not been profitable for at least two years are rejected if they do not have enough cash on hand to cover a full year's operating expenses.
http://www.nytimes.com/2005/11/29/technology/29broad.html
(requires registration)