Credit Guarantee Scheme for Startups
Credit Guarantee Scheme for Startups (CGSS)
The Government of India has introduced the Credit Guarantee Scheme for Startups to enhance the availability of credit for startups recognized by the DPIIT. This initiative aims to provide guarantees for loans obtained from Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs), and Venture Debt Funds (VDFs) that are registered with SEBI under Alternative Investment Funds (AIFs). The scheme was officially launched on October 6, 2022, with updates issued on May 8, 2025, establishing its provisions for loans sanctioned post-notification.
Overview of the Scheme
The Credit Guarantee Scheme for Startups (CGSS), managed by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, is designed to provide credit guarantees across various debt instruments. This includes venture debt, working capital, subordinated and mezzanine debt, debentures, and other financial products that result in debt. The primary aim is to offer collateral-free financing to eligible startups, thus improving their access to institutional funds.
Key Features
- Guarantee coverage of up to ₹20 crore per borrower.
- Transaction-based and umbrella-based guarantee structures.
- Annual Guarantee Fee and Commitment Charge slabs with concessional rates for startups in the North-East, women entrepreneurs, and 27 identified Champion Sectors.
- 85% guarantee coverage for credit facilities up to ₹10 crore.
- 75% guarantee coverage for loans exceeding ₹10 crore, capped at ₹20 crore.
- Supports eligible startups that are not classified as Non-Performing Assets (NPAs) and are recognized by Member Institutions.
Benefits of the CGSS
- The scheme enables collateral-free debt funding for recognized DPIIT startups by providing a government-backed guarantee on loans.
- It facilitates access to diverse financial instruments such as venture debt, working capital loans, subordinated debt, and debentures.
- High guarantee coverage minimizes loss risks for lenders on smaller loan amounts, significantly enhancing lending capabilities.
- Encourages financial institutions to lend more actively to startups by mitigating risks associated with lending.
- Offers both transaction-based and umbrella guarantees, covering individual loans as well as pooled financing arrangements.
- Provides lower guarantee fees for startups led by women and those located in the North-East region.
- Increases lender confidence by providing unconditional, irrevocable guarantees, thus stabilizing credit flows to startups.
- Allows for the restructuring of existing loans covered by the scheme without losing the guarantee cover, within specified limits.
- Strengthens the startup ecosystem by improving access to formal credit, allowing startups to scale, invest in technology, and create employment opportunities.
Eligibility Criteria
- The applicant must be a startup recognized by DPIIT as per applicable Gazette Notifications.
- The applicant should not have any defaults with lending or investing institutions and must not be classified as an NPA according to RBI guidelines.
- Eligibility must be certified by the relevant Member Institution for guarantee cover.
- The applicant must engage in eligible business activities as per DPIIT recognition and continue operations for which the credit is sought.
- Compliance with all other criteria and conditions set forth in the CGSS is mandatory.
Application Process
To apply for the CGSS, follow these steps through the JanSamarth Portal:
- Visit the JanSamarth Portal: Access the portal at https://www.jansamarth.in.
- Create an Account or Log In: First-time users must register using their mobile number and OTP, providing necessary basic details.
- Check Your Eligibility: Click on “Check Eligibility” and enter your startup details (PAN, Udyam, etc.) along with the DPIIT recognition number.
- Start the Loan Application: Choose “Loan for Startups” and follow the guided online form to verify PAN and Udyam details, enter the DPIIT recognition number, and fill in business details.
- Provide Loan Details: Specify the required loan amount, purpose, and desired repayment tenure. Some data may be auto-filled from existing databases.
- Submit and Match with Banks: After submission, your profile will be matched with loan offerings from participating public sector banks.
Conclusion
The Credit Guarantee Scheme for Startups plays a crucial role in enhancing the financial landscape for innovative and entrepreneurial ventures across India. By providing a robust safety net for lenders, the scheme not only facilitates access to essential funding for startups but also contributes positively to the overall growth of the Indian startup ecosystem.
Eligibility Criteria
1. The Legal Status of the applicant should be: an entity recognised as a Startup by DPIIT as per the applicable Gazette Notifications.
2. The Credit History of the applicant should be: not in default to any lending or investing institution and not classified as a Non Performing Asset as per RBI guidelines.
3. The Certification requirement of the applicant should be: its eligibility must be certified by the concerned Member Institution for the purpose of obtaining guarantee cover.
4. The Nature of activity of the applicant should be: engaged in eligible startup business activities as per DPIIT recognition, and continuing the activity for which the credit facility is being sought.
5. Any other: The applicant must comply with all other eligibility criteria and scheme conditions prescribed under the Credit Guarantee Scheme for Startups (CGSS) from time to time.
Benefits
1. Provides collateral free debt funding to eligible DPIIT recognised startups by backing their loans with a government guarantee.
2. Improves access to a wide range of instruments such as venture debt, working capital limits, subordinated/mezzanine debt, debentures and other fund and non fund based facilities.
3. Offers high guarantee coverage of up to 85% of the amount in default for loans up to Rs. 10 crore, significantly reducing loss risk for lenders on smaller exposures.
4. Provides 75% guarantee coverage of the amount in default for loan amounts above Rs. 10 crore, up to an overall cap of Rs. 20 crore per borrower.
5. Lowers risk for Member Institutions (banks, NBFCs, FIs, AIF based venture debt funds), encouraging them to lend more actively to startups.
6. Supports both transaction based and umbrella based guarantees, enabling individual startup loans as well as pooled venture debt portfolios to be covered.
7. Offers concessional guarantee fee/commitment charge for North East units, women led startups and entities in the 27 Champion Sectors, reducing their effective cost of borrowing.
8. Provides unconditional and irrevocable guarantee cover, increasing lender confidence and stability in credit flows to startups.
9. Permits restructuring and enhancement of existing CGSS covered credit facilities while retaining guarantee cover, subject to the overall limit.
10. Strengthens the startup ecosystem by improving formal credit availability, enabling innovative startups to scale, invest in technology and create employment.
Application Process
Apply OnlineStep-by-Step: Apply for CGSS via JanSamarth Portal (Online)
1. Open the JanSamarth Portal
Visit: https://www.jansamarth.in n
This is the Government of India’s unified credit-linked schemes platform.
2. Create an Account or Login: If you are a first-time user, register using a mobile number and OTP. Provide basic details and complete the login/verification process.
3. Check Your Eligibility: Click “Check Eligibility” and enter: Startup entity details (PAN, Udyam, etc.) DPIIT recognition number, Basic business information The portal will show whether you qualify for the Startup loan under CGSS.
4. Start the Loan Application
Select “Loan for Startups” / “Startup Common Application”.
Follow the guided online form:
Verify PAN of the startup
Verify Udyam details
Enter DPIIT recognition number
Select the GSTIN (auto-populated where applicable)
Fill in business operational and financial details
Upload required documents (e.g., incorporation certificate, financials).
5. Provide Loan Details
Enter:
Loan amount needed
Purpose (working capital, term loan, etc.)
Desired repayment tenure
The portal may pre-fill some data via integration with PAN, GST, and other databases.
6. Submit and Match with Banks
After submitting the application:
The portal will match your profile with loan products from participating public sector banks.
You will see available bank options, interest rates, and product terms.
7. Choose Bank & Branch
Select a bank and branch (filtered by state/city) where you want to process your loan application.
Confirm your choice and forward the application to that bank.
8. In-Principle Sanction / Digital Approval
If the bank finds the application acceptable:
You may receive an in-principal sanction digitally.
Download the digital approval letter for your records.
9. Follow Up & Status Tracking
You can track your application status via login.
Status updates may also be sent via SMS and email.
10. Bank Final Processing & Disbursement
After approval from the bank, the standard due diligence (KYC, documents, board resolutions, etc.) will proceed.
Once final sanction and documentation are completed at the bank branch:
The loan is disbursed.
The bank will then apply for CGSS guarantee coverage (handled by the bank via NCGTC).
Step-by-Step: Apply for CGSS (Offline)
1. Reach out to nearby branch of Member Lending Institutions. List of Member Lending Institutions(MLIs) is available on the NCGTC Website. https://www.ncgtc.in/en/product-details/CGSS/Credit-Guarantee-Scheme-for-Start-ups-(CGSS)
2. Get more information from MLIs and submit documents as required by MLIs.
References & Official Links
Scheme Details
| Full Name | Credit Guarantee Scheme for Startups |
| Short Title | CGSS |
| Level | Central |
| Scheme For | Infra |
| Ministry | Ministry Of Commerce And Industry |
| Categories | Business & Entrepreneurship |
| States | All India |
| Gender | All |
| Age Range | Any — 85 years |
| Area | Urban |
| Source | www.myscheme.gov.in ↗ |
Deepika Raikwar · 📅 04 May 2026
Deepika Raikwar is an Education Analyst and scholarship researcher who focuses on public welfare and merit-based scholarships. She simplifies complex eligibility rules, deadlines, and application processes to help common people access reliable funding opportunities worldwide.
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