Credit Guarantee Scheme

rodento

Is the credit guarantee scheme a complete shame

http://www.businesspost.ie/#!story/Home/News/Credit+Guarantee+Scheme%3A+key+details/id/19410615-5218-507e-7257-ed4839519925

One of the conditions of the loan is that banks have no familiarity with the sector that the company does business in and if the loan is granted the government will provide 75% guarantee that the loan will be repaid.

Don't like the idea of banks lending out tax payers money in such risky circumstances

Death and Taxes

rodento wrote: »

Is the credit guarantee scheme a complete shame

http://www.businesspost.ie/#!story/Home/News/Credit+Guarantee+Scheme%3A+key+details/id/19410615-5218-507e-7257-ed4839519925

One of the conditions of the loan is that banks have no familiarity with the sector that the company does business in and if the loan is granted the government will provide 75% guarantee that the loan will be repaid.

Don't like the idea of banks lending out tax payers money in such risky circumstances
.

Link to that please, it is NOT in the article you linked and I would say it is a highly dubious claim

rodento

WileyCoyote wrote: »

Link to that please, it is NOT in the article you linked and I would say it is a highly dubious claim

Try rereading it, this may help:rolleyes::rolleyes::rolleyes:

Who is eligible?

The scheme is intended to address market failure affecting commercially viable businesses in two specific situations – namely, where businesses have insufficient collateral, and where businesses operate in sectors with which the banks are not familiar.




How will the scheme work?

The scheme provides a 75% State guarantee to banks against losses on qualifying loans to firms with growth and job creation potential. 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

Death and Taxes

rodento wrote: »

Try rereading it, this may help:rolleyes::rolleyes::rolleyes:

Who is eligible?

The scheme is intended to address market failure affecting commercially viable businesses in two specific situations – namely, where businesses have insufficient collateral, and where businesses operate in sectors with which the banks are not familiar.




How will the scheme work?

The scheme provides a 75% State guarantee to banks against losses on qualifying loans to firms with growth and job creation potential. 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

Apologies!
However I see nothing wrong with the scheme where their are areas like digital Marketing, or microsciences, sectors where Irish banks might not have the familiarity to be prepared to lend into them!

thebman

WileyCoyote wrote: »

Apologies!
However I see nothing wrong with the scheme where their are areas like digital Marketing, or microsciences, sectors where Irish banks might not have the familiarity to be prepared to lend into them!

There is a fairly big problem with giving out loans having no idea if they will be repaid safe in the knowledge if they can't, taxpayers will repay instead of you.

Why can't the banks hire in the expertise to actually make an informed decision?

rodento

Thats what I was getting at, if the banks don't understand the market, were is the due deligence and who monitors the scheme

MadsL

Nice to see the Govt admitting that banks are clueless when it comes to responsible lending practices. Not so nice to see them underwriting their incompetence once more.