Worried about paying for auction-related equipment costs, ATSC 3.0 upgrades or general equipment needs?
Public Media Company has secured $20 million from a non-profit lender to assist public television stations with equipment financing needs through an affordable loan program (the “Loan Program”). Additionally, there might be other lenders interested in providing financing solutions to public TV stations on a case-by-case basis.
To apply, please download our application form here.
Repack and transmission system costs not covered by the FCC
Although the intention of Congress is to fund 100% of the costs of repacking stations after the spectrum auction, there are cases where costs will not be reimbursed:
- If you received funds by agreeing to channel share or move from UHF to VHF, none of the costs you incur related to these changes will be reimbursed by the FCC.
- If you would like to ‘upgrade’ your transmission facility while in the process of the repack, you may be responsible for costs that the FCC will not reimburse. Examples may include:
- Enhanced equipment. For example, replacing a tube transmitter with a solid-state transmitter when the tube transmitter could theoretically be re-tuned.
- Installing a top-mount antenna when you currently have a side-mount antenna and there is no technical reason why a top-mounted antenna is required.
- Upgrading unrelated equipment on the tower while it is rigged for the repack.
- Improving encoders, STLs, or other equipment that are not directly impacted because of the channel change.
- If there is a shortfall in the FCC $1.75 billion repacking fund before your costs are reimbursed. Costs that are not reimbursed by the FCC would be eligible for financing under this Loan Program.
ATSC 3.0 Conversion
- Higher power equipment you may need because of the additional power requirements of ATSC3.0.
- Higher power transmitters and vertical antennas to add vertical polarization to improve indoor antenna reception as part of your preparation for ATSC 3.0.
- The replacement mask filter you will need for ATSC 3.0.
- Expansion of STL capacity, control room capacity, and other increases in equipment capability to take advantage of the increased service potential of ATSC 3.0.
Other Equipment Needs
This may include:
- Transmission equipment replacement that you have to replace yourself because you haven’t been repacked.
- State-of-the-art encoders so that you can offer the most streams at the best resolution.
- Equipment you may require to complete capital improvement projects such as affiliating with a joint master control.
- Upgrades to studio equipment such as migrating to 4K production or IP infrastructure.
WHO IS ELIGIBLE TO APPLY?
Licensees and prospective licensees of noncommercial, educational television stations operating under a renewable television license granted by the Federal Communications Commission, whereby a majority of the station’s daily broadcast schedule within its primary signal area must be intended for a general audience and of an educational, informational and cultural nature.
Priority is given to organizations that demonstrate the financial capacity to repay the loan in a timely manner. In determining the eligibility of an organization wishing to borrow funds, the lender(s) will consider relevant organizational and financial criteria, such as the following:
- The financial condition of the borrower as evidenced in a detailed analysis of the borrower’s financial history, including at least three years of Audited Financials; revenue and expense trends and debt management experience; the borrower’s current financial position, including cash reserves; and any financial projections that may be relevant for the project.
- The value of the assets being acquired, evidenced by invoices from vendors and, if applicable, third party installation costs.
- The quality and experience of the borrower’s management team, staff, and governing board of directors.
- Whether a guaranty source exists to support all or a portion of the debt service, and whether the borrower is willing or able to designate a specific financial asset or revenue stream to guarantee the debt service, either on-hand or projected in the future. This may include additional revenue projected from activities made possible by the funded equipment or general revenue or fundraising activities of the borrower.
Amount: A minimum loan amount of $50,000
Length of Loan: Terms are set during application process, and may be up to 60 months.
Interest Rate: Interest rate is Prime plus 3 percent (6.75% as of March 15).
Terms of Repayment: Terms of repayment are set during the application process, but generally will be interest-only payments. Reimbursements received from the FCC, related to equipment financed by the lender, will be used to reduce the outstanding principal.
Loan Origination Fees: An origination fee of 1% paid at closing and an administrative fee equal to the greater of $2,000 or 1% (50% paid at the signing of a commitment letter or term sheet and the balance paid at closing).
Legal Fees: All legal costs will be borne by the borrower.
Security: All loans will be secured by the underlying equipment/capital asset. Further security may be required.
- In order to initiate the process, an application is required (see the application form).
- If, after performing the preliminary review, there is an interest in proceeding with a formal loan proposal, the due diligence process will proceed to completion with the issuance of a Term Sheet or a Commitment Letter.
- If the borrower agrees with the terms and conditions, and returns the executed Term Sheet or Commitment Letter within the designated time frame, the loan moves into the closing stage.
- The lender’s counsel will prepare the loan/investment closing documents which could include the following:
a. Promissory note
b. Loan & Security agreement
c. UCC Financing Statements
d. Personal Guaranties (if applicable)
- The legal counsel will arrange for the signing of the loan documents. Any outstanding applicable fees will be collected at closing.