§ 1735.51 Required findings.

(a) Feasibility of and security for the Loan. The borrower shall provide RUS with satisfactory evidence to enable the Administrator to determine that the security for the loan is reasonably adequate and the loan will be repaid on time. This finding is based on the following factors: (1) Self-liquidation of the loan within the loan amortization period; this requires that there be sufficient revenues from the borrower's system, in excess of operating expenditures (including maintenance and replacement), to repay the loan with interest. (2) Reasonable assurance of achieving the telephone market projections upon which the loan is based. (3) Economic feasibility (based on projected revenues, expenses, net income, maximum debt service, and rate of return on investment) for the proposed system using local service rate schedules appropriate for the area served. (4) Impact of the proposed loan and construction on the ratio of the borrower's secured debt to assets. (5) Projected growth in the borrower's equity. (6) Satisfactory experience and reputation of the system's principal owners and manager. (7) A first lien on the borrower's total system or other adequate security. (8) Fair market value of the borrower's assets as represented in its financial reports to RUS. (9) Appropriate financial and managerial controls included in the loan documents. (10) Other factors determined to be relevant by RUS. (b) Area coverage. The borrower shall provide RUS with satisfactory evidence to enable the Administrator to determine that adequate telephone service will be made available to the widest practical number of rural users during the life of the loan. (c) Nonduplication or certificate requirement. The borrower shall provide RUS with satisfactory evidence to enable the Administrator to determine that no duplication of telephone service shall result from a particular loan.