Terence Flanagan (Dublin North East, Fine Gael)
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Question 194: To ask the Minister for Jobs, Enterprise and Innovation his views on a matter (details supplied) regarding the Government loan guarantee scheme; and if he will make a statement on the matter. [39945/11]

Richard Bruton (Dublin North Central, Fine Gael)
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The Deputy is referring to the Temporary, Partial Credit Guarantee Scheme which should be in operation by the end of March 2012. An Invitation to Tender was published on Monday 5th December to select on Operator for the Scheme. In parallel with this selection process, I will be introducing appropriate legislation in the Oireachtas to underpin the introduction of the Scheme.

The Scheme is intended to address two specific market failures which act as barriers to lending to viable enterprises which otherwise would have received bank credit. These market failures are inadequacy of collateral and inadequacy of understanding of the novelty of a business model, market, sector or technology. Eligible companies will be commercially viable, well performing companies that have a solid business plan and a defined market for their products or services, thereby demonstrating their ability to repay the loan. Refinancing of existing debts will be excluded as the purpose of this Scheme is to facilitate additional lending into the economy.

Decision making on facilitating individual loans including assessment of eligibility and the viability of the borrower will be fully devolved to the participating lenders. The baseline for determining commercial viability within the Scheme should be no different from the standard viability test applied by each Lender within their normal commercial SME lending procedures.

It is not clear from the details supplied whether the person concerned would meet the eligibility criteria for the Scheme when introduced. The individual may wish to discuss with banks the extent to which his credit requirements may be facilitated under current lending arrangements.