Garcia was close to a move to Bournemouth, with reports in Spain suggesting that the loan deal was close to being completed and that he was keen to reunite with former boss Iraola.
The 26-year-old played under Iraola at Rayo Vallecano, but Real Madrid decided not to progress the loan move and Garcia was left at the Spanish giants, asking to train alone after the move collapsed.
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Iraola said the move was one the club explored after Julio Soler was ruled out for much of the remainder of the season through injury.
Asked about the move, Iraola told the Daily Echo: “It was not a situation that appeared during the market.
“I think we've had a lot of talks during the January transfer window, a lot of players that we've tried to sign that we haven't signed, like always happens.
“But Fran was a situation that appeared in the last days because we received the news about Julio that they were a lot more pessimistic than we expected.
“And probably it would be a situation that it could fit from both sides. A loan for 4 months, I think, would be fine for us.
“I think he also was keen to come here, but it didn't happen because a lot of things have to happen for a transfer.
“But like other situations that don't go public, at the end it didn't finish.”