The Best Way To Streamline RUS: Fast-Track Partial Loan Guarantees

[Commentary] In the second round of broadband stimulus, we need to find solutions for streamlining the approval process, getting money out the door more quickly, and maximizing the impact of taxpayer dollars. Daily's suggestion: a fast-track partial loan guarantee program. Compared to grants, guarantees have the advantage of leverage. You only have to budget for a fraction of whatever guarantees you hand out. Whereas a dollar of budget authority can only deliver a dollar of grants, that same dollar of budget authority can be turned into ten to twenty dollars of guarantees. Government loans offer the same opportunities for leverage, but with guarantees government doesn't have to write a check and it's able to share the risk with private capital. Put simply: loan guarantees are one of the best options to stimulate broadband deployment, and yet to date we've been ignoring them. So how can loan guarantees be used to streamline the second round of RUS's BIP program? 1) Change the guarantees to cover 100% of losses up to 50% of the value of the loan. 2) Institute a fast-track approval process. The basis for implementing a new fast-track approval process is the fact that if you have a private capital source writing a check for the full amount of a loan and taking on half the risk then you can assume that that lender has done a thorough job vetting the financial viability of a project.