Credit Guarantee Scheme for Startups

Summary of the Scheme
Name of Scheme	Credit Guarantee Scheme for Startups (CGSS)
Launch Year	2022
Benefits	Maximum guarantee cover of ₹20 crore per borrower.
Beneficiary	DPIIT-recognised eligible startups.
Nodal Agency	Department for Promotion of Industry and Internal Trade (DPIIT)
Subscription	Subscribe here to get Update Regarding Scheme
Mode of Apply	Apply through eligible banks, NBFCs or other participating financial institutions.

Credit Guarantee Scheme for Startups (CGSS)

Good ideas alone don’t fund a startup, and many founders struggle to get loans because they have little collateral. The Credit Guarantee Scheme for Startups (CGSS), introduced in 2022, gives participating lenders a government-backed guarantee so they can lend to eligible startups more easily. The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, is the nodal department, and the National Credit Guarantee Trustee Company Limited (NCGTC) administers the guarantee. Under the revised guidelines notified on 8 May 2025, the maximum guarantee cover is ₹20 crore per borrower.

CGSS is not free money or a subsidy. The guarantee goes to the lender, and the startup must repay the loan in full.

Key Benefits

• Guarantee cover of up to ₹20 crore per borrower
• 85% of the amount in default for eligible loans up to ₹10 crore, and 75% for loans above ₹10 crore
• Support for working capital, product development, expansion, and other eligible business needs
• Easier access to loans for startups without much collateral
• Concessional Annual Guarantee Fee rates for women-led startups, North-Eastern startups, and startups in specified Champion Sectors
• Guarantee support for eligible Venture Debt Funds managed by SEBI-registered Alternative Investment Funds (AIFs) under the umbrella model

The guarantee is calculated on the amount in default, not automatically on the whole sanctioned loan. For example, if an eligible ₹8 crore loan defaults, the cover is 85% of the amount in default, subject to scheme conditions and the maximum limit.

Loan Types Covered

• Venture debt
• Working capital
• Subordinated debt: repaid after certain other debts if the borrower faces difficulty
• Mezzanine debt: combines debt and equity features and may include an option to convert into equity
• Debentures
• Optionally convertible debt
• Other eligible fund-based and non-fund-based facilities that have crystallised into debt

Falling in one of these categories does not automatically make a facility eligible.

Who Can Apply?

• A DPIIT-recognised startup
• Not in default to any bank, financial institution, or investing institution
• Not classified as an NPA under RBI guidelines
• Meets the other scheme conditions, as verified and certified by the lender before seeking the guarantee
• Meets the lender’s assessment of business, finances, and repayment capacity

Recognition alone does not guarantee a loan.

How the Scheme Works

1. A DPIIT-recognised startup approaches a participating bank, NBFC, or other eligible institution for a loan.
2. The lender assesses the startup’s business, finances, loan need, and ability to repay.
3. If the startup meets the lender’s requirements and the scheme’s conditions, the lender approves the loan.
4. The lender applies to NCGTC for guarantee coverage.
5. NCGTC provides the cover once the conditions and fee requirements are met.
6. If the startup later fails to repay, the lender can claim the eligible guarantee amount after following the recovery and claim process.

Two guarantee models

• Transaction-based: the guarantee covers an eligible loan to an individual startup
• Umbrella-based: the guarantee covers eligible Venture Debt Funds managed by SEBI-registered AIFs, across a pool of startup investments within prescribed limits

Guarantee Coverage and Fees

Annual Guarantee Fee (transaction-based)

The fee is payable by the participating Member Institution to the Trust. It is not a cash subsidy paid to the startup.

Umbrella model: the Member Institution pays an Annual Commitment Charge of 0.15% per annum on the pooled investment amount declared for cover. Extra charges may apply when a guarantee claim is made.

Documents You May Need

The list varies by lender and loan type.

• DPIIT Startup Recognition Certificate
• Certificate of Incorporation or business registration
• PAN of the startup or business entity
• KYC of promoters, directors, or authorised signatories
• Address proof of the registered office and business premises
• Business plan or project report with funding needs and growth plans
• Audited financial statements or provisional accounts
• Bank statements and details of existing loans or liabilities
• Projected income, expenses, and cash-flow statements, if requested
• GST registration and returns, income tax returns, or other tax documents, where applicable

How to Apply

You cannot apply directly to NCGTC. You apply for a loan, and your lender seeks the guarantee.

Online (JanSamarth Portal)

1. Open the JanSamarth Startup Loan Application page and choose to apply for a startup loan.
2. Register with your mobile number and OTP, or sign in.
3. Enter your startup details, DPIIT recognition, business activities, and loan requirement.
4. Provide financial and business details and upload the supporting documents.
5. Review and submit. The selected lender assesses the application and may ask for more information.
6. If the loan meets CGSS conditions, the lender applies to NCGTC for cover.

Offline

1. Identify a bank or financial institution participating in CGSS.
2. Ask its nearest branch about a CGSS startup loan.
3. Collect the form and document checklist, fill it in, and submit it.
4. The lender assesses your eligibility, proposal, and repayment capacity, and seeks the guarantee if the loan is approved.

You can also check the Startup India CGSS page for scheme details and links to participating institutions.

Important Conditions

• A facility already covered by another guarantee scheme cannot also get CGSS cover.
• If a loan is partly secured by collateral, the eligible unsecured portion may be covered.
• Cover begins only after the guarantee fee or commitment charge is paid and other conditions are met.
• For transaction-based cover, a 12-month lock-in period applies from the date cover starts. The lender cannot invoke the guarantee during this period.
• If the account becomes an NPA, the lender must follow the prescribed recovery process and meet the claim requirements before seeking payment.
• Even after a claim payment, the lender must keep working to recover the outstanding amount from you.

Related Schemes

The Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE), the Pradhan Mantri Mudra Yojana (PMMY), and the Prime Minister’s Employment Generation Programme (PMEGP).

Contact

Startup India support
Helpline: 1800 115 565
Hours: 10:00 AM to 5:30 PM
Address: Invest India, 110, Vigyan Bhavan Annexe, 001, Maulana Azad Road, New Delhi 110001

No dedicated CGSS email is listed on the Startup India scheme page. Queries can go through the Startup India Contact Us page. For loan status, eligibility, and guarantee questions, contact the bank or institution handling your application.

Guidelines, fees, and limits can change, so check the Startup India portal and the latest CGSS guidelines before applying.