Michael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Jobs, Enterprise and Innovation when he expects to have the temporary partial loan guarantee scheme up and running; and if he will advise of the terms and conditions that will apply for applicant businesses. [43343/12]

Richard Bruton (Dublin North Central, Fine Gael)
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Officials in my Department are working on the final arrangements in conjunction with the participating banks and the Operator of the Scheme, Capita Assets Services, and the scheme launch is imminent. I have made, with the consent of my colleagues the Minister for Finance and the Minister for Public Expenditure and Reform, a necessary scheme under section 5 of the Act. The Scheme, which is Statutory Instrument number 343 of 2012, sets out the terms and conditions, and was laid before the Oireachtas on 13th September.

The Scheme is intended to address two distinct barriers to lending: inadequacy of collateral (Pillar 1) and inadequacy of understanding of the novelty of a business model, market, sector or technology (Pillar 2). It will be exclusively targeted to address these particular market inefficiencies. Commercially viable, well performing micro, small and medium enterprises that have a solid business plan and a defined market for their products or services, thereby demonstrating their ability to repay the loan is the target of the scheme.

Decision making on commercial viability of the SME and all credit assessments will be fully devolved to the accredited lenders. The individual loan transaction between Lender and Borrower is delivered in an almost identical fashion to any other comparable commercial lending transaction between the parties, with the only difference being the supplementary arrangements necessary for payment of the 2% premium charge by the borrower to the State. Term loans, other instruments with term loan-like structures, and performance bonds will be covered by the Scheme. The minimum permissible loan value will be €10,000 and the maximum will be €1,000,000. Use of the Scheme is focussed on facilitating additional new lending, with refinancing of existing debt explicitly excluded.