Flexible Loan Program
Request for Information (RFI)

Evaluating the feasibility of a Flexible Loan Program to support communications union districts in the expansion of fiber-optic broadband to unserved and underserved communities in Vermont

RFI Responses Due April 30, 2025

RFI Overview

The Vermont Communications Union Districts Association (“VCUDA”) is the association of the mission-driven municipal entities that are actively bringing fiber-optic broadband to all unserved and underserved homes and businesses in their District. Members are communications union districts (CUDs) formed under 30 VSA Chapter 82.

Through this Request for Information (RFI), VCUDA intends to explore and evaluate the feasibility of establishing a Flexible Loan Program.

The objective is to understand the potential commercial terms of a program which would have a key objective to provide below-market rate loans to CUDs, supporting the expansion of fiber-optic broadband to unserved and underserved communities in Vermont.

CUDs are primarily building networks in rural, unserved areas that have been historically neglected by commercial providers due to poor (or even negative) business cases for providing broadband in these areas. The economics are no less challenging for CUDs than for the private sector, and therefore the interest rate associated with debt service is crucial both to the sustainability of the CUDs and to the rates offered to residents of the rural areas served by CUDs. Therefore, achieving as low an effective interest rate as possible for any debt incurred by the districts is crucial.

Based on responses to this RFI, VCUDA will decide whether or not to move forward with the development of a Flexible Loan Program.

Eligible Entities

The beneficiaries of the Flexible Loan Program will be Vermont’s CUDs with the possibility of extension to CUDs’ broadband partners, including nonprofit and mission-driven broadband providers engaged in deploying and maintaining fiber-optic networks. Loan applicants must demonstrate alignment with the state’s broadband goals, including universal service commitments and affordability measures.

Initial Loan Types & Terms

While specific terms will be refined through this process, one objective of the program is to enable CUDs to strengthen their business cases, and so flexibility is key.

VCUDA is interested in a wide range of loan structures including:

• Construction Loans: Short-term, low-interest loans for fiber network buildout, repayable upon securing long-term financing or operational revenue and/or longer term loans required to achieve universal service

• Bridge Loans: Financing for providers awaiting state or federal grant disbursements.

• Working Capital Loans: Assistance with operational or capital expenses to ensure sustainability of broadband services and/or capital availability to support rapid network deployment

• Equipment & Infrastructure Loans: Support for critical network components, ensuring long-term service viability.

Loan terms will be designed to be flexible yet sustainable, balancing the need for affordable capital with the program's long-term ability to cover overheads. Repayment structures may include revenue-based and/or deferred-payment options to accommodate varying business models. Loan terms will need to be flexible with when collateral is required and when required accepting pari passu status, or in some cases second position.

Role of the Program Partner

If VCUDA launches this program, it will go through a procurement process to select a Program Partner. The selected partner will play a crucial role in:

• Structuring and launching the loan program within maximum 90 days of funding receipt.

• Identifying and securing additional funding sources to expand the program’s reach.

• Managing fund allocation and financial tracking.

• Developing application, underwriting, and reporting processes.

• Engaging with CUDs and broadband providers to ensure alignment with program goals.

Requested Information

VCUDA invites respondents to submit responses to the following:

1. How would you approach developing a fundraising strategy?

2. What would be your process for conducting outreach to potential fund contributors?

3. What is your experience raising philanthropic funds?

4. How would you leverage additional fund capital to advance the program’s goals? What additional funding sources, inclusive of philanthropic, low-interest commercial options, and any other vehicles that leverage tax advantages related to CUDs’ status as municipal entities or the respondents own tax status, could reasonably be expected to be brought to bear?

5. Provide an estimate, or a range, of how much capital the respondent believes could be put into such a fund, over what time period this could reasonably be expected to be achieved. Provide as much detail as possible about what resources the respondent knows or believes to be available to contribute to the fund. In the case of commercial options, provide details about prospective commercial funder(s) and the expected rate, term, and any known conditions or caveats. Answer this question for the following scenarios:

   • If $8M (or an amount close to $8M) were put into the fund as seed capital

   • If $8M (or an amount close to $8M) were available as a loan loss reserve

   • If no seed money was available for the fund

6. Please provide details of the fees you would anticipate charging to administer this program. Response should be of a sufficient level of detail that VCUDA can understand the overhead costs associated with running this program.

7. Please estimate the overall effective interest rate that you think could be achieved if this program were put into place, inclusive of the fees listed in question 6, and also provide your assessment of what a current “market rate” would be for early stage CUDs, none of which have yet achieved operational break-even.How would you approach developing a fundraising strategy?

Responses are not binding but should represent respondents’ current best response.

Proposals must be received by 8pm EDT on April 30, 2025, via either of these methods:

• the online form below (or at this link)

• via email at vcuda@quantifiedventures.com

Frequently Asked Questions (FAQs) + Proposal Information