The term can be used to refer to a government to assume a private [[debt]] obligation if the borrower [[default (finance)|defaults]]. Most [[loan]] [[guarantee]] programs are established to correct perceived [[market failure]]s by which small borrowers, regardless of [[creditworthiness]], lack access to the credit resources available to large borrowers.<ref>Riding, Alan L. "On the Care and Nurture of Loan Guarantee Programs." ''Financing Growth in Canada''. Paul J. N. Halpern, ed. University of Calgary Press, 1997.</ref>
Loan guarantees can also be extended to large borrowers for politicalnational security reasons. help companies in essential industries, or in situations where the failure of a large company will harm the larger economy, For example, [[Chrysler Corporation]], one of the "big three" US automobile manufacturers, obtained a loan guarantee in 1979 amid its near-collapse, and [[lobbying]] by labor interests. SomewhatThe differently,loans despiteare intensive lobbyingmade by private lenders with the [[Israelcaveat lobbythat inthe government will pay off the Unitedloans States|Israelif lobby]],the [[Georgecompany defaults on H.Wthem. Bush|PresidentChrysler Georgedid H.not Wgo into default. Bush]]Another example was the creation of the Emergency Loan Guarantee Board to refusedadminister $10250 billionmillion dollars in US government loan guarantees made to theprivate [[Israel]]ilenders governmenton behalf of [[YitzhakLockheed Shamir]]in because1971. ofThe hisprogram pro-settlementended policyin and1977 becausewhen PalestiniansLockheed andrestructured its debt to its many24 Arablending governmentsbanks viewedending the priorprogram acceptanceended. ofOver loan$30 guaranteesmillion asin anGuarantee indicatorcommitment offees Americapaid by Lockheed and it's lacklenders to the board created over $29 million transferred to the US treasury. <ref>{{cite web |title=Implementation of credibilitythe asEmergency aLoan mediatorGuarantee Act |url=https://www.gao.gov/products/PSAD-78-66 |website=Government Accountability Office |publisher=US government |accessdate=26 October 2018}}</ref>
Bush requested and received a Congressional delay in discussion of the guarantees, and the [[Madrid Conference of 1991]] was later convened. These loan guarantees were issued later, following the election of [[Yitzhak Rabin]] and his pledge to end Shamir's settlement policy and reformulate national priorities.<ref>Scott Lasensky, [http://meria.idc.ac.il/journal/2002/issue1/jv6n1a7.html Underwriting Peace in the Middle East: U.S. Foreign Policy and the Limits of Economic Inducements] {{webarchive|url=https://web.archive.org/web/20020422101455/http://meria.idc.ac.il/journal/2002/issue1/jv6n1a7.html |date=2002-04-22 }}, [[Middle East Review of International Affairs]]: Volume 6, No. 1 - March 2002</ref>
