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    Department for Promotion of Industry and Internal Trade

    CGSS

    Credit Guarantee Scheme for Startups

    Non-dilutive

    Credit guarantee of 85% of the amount in default for loans up to Rs.10 crore and 75% above Rs.10 crore, capped at Rs.20 crore per borrower, unlocking collateral-free debt.

    The schemeNon-dilutive

    Credit Guarantee Scheme for Startups

    Credit guarantee of 85% of the amount in default for loans up to Rs.10 crore and 75% above Rs.10 crore, capped at Rs.20 crore per borrower, unlocking collateral-free debt.

    Who qualifies

    DPIIT-recognised startups that are not in default to any lender/investor and not classified as an NPA, whose eligibility is certified by a Member Institution, borrowing collateral-free debt from a registered MI (bank / NBFC / SEBI-registered AIF).

    Instrument
    Credit guarantee
    Issued by
    Department for Promotion of Industry and Internal Trade
    Coverage
    All India
    Launched
    2022

    What it is worth

    • Up to ₹20 croreINR (max debt per borrower eligible for guarantee cover)

      Ceiling is the maximum amount of debt (fund-based or non-fund-based) per borrower eligible for guarantee cover — NOT a project-cost ceiling. Revised from Rs.10cr to Rs.20cr per borrower via the 2025 DPIIT expansion notification.

    • In certain cases

      85%% of the amount in default

      Capped at Max Rs.20 crore per borrower

      Transaction-based cover: 85% of the amount in default for a credit facility up to Rs.10 crore. Cover accrues to the Member Institution (lender) on the borrower's default.

    • In certain cases

      75%% of the amount in default

      Capped at Max Rs.20 crore per borrower

      Transaction-based cover: 75% of the amount in default for a credit facility exceeding Rs.10 crore (up to the Rs.20 crore per-borrower guarantee ceiling).

    How applying runs

    1. recognitionObtain DPIIT (Startup India) recognition — the gating requirement for the scheme.
    2. applicationApply via the Jan Samarth Portal or approach a registered Member Institution (Scheduled Commercial Bank, eligible NBFC, or SEBI-registered AIF) directly.
    3. appraisalThe MI examines project feasibility and viability and confirms eligibility parameters, then sanctions need-based collateral-free credit.
    4. guarantee coverThe MI applies on the NCGTC portal for guarantee cover; issue of cover is automatic on meeting eligibility parameters (ensured by the MI).

    Worth knowing

    • DPIIT recognition encapsulates the underlying startup definition (Private Limited Company / Registered Partnership Firm / LLP; incorporated under 10 years; annual turnover not exceeding Rs.100 crore in any year since incorporation; not formed by splitting up or reconstruction of an existing business; working towards innovation, development or improvement of products/processes/services or a scalable, employment/wealth-generating model). Gating on dpiit_recognised avoids re-encoding a definition that DPIIT amends 'from time to time'.
    • A credit guarantee pays the Member Institution (lender) on the borrower's default — it does not disburse cash to the startup — but it UNLOCKS collateral-free debt the startup could not otherwise raise, so it is in scope per the 'unlocks money' half of the scope test.
    • Annual Guarantee Fee (AGF): 2% p.a. of the guaranteed amount, reduced to 1% p.a. for startups in the 27 notified 'Champion Sectors'. This is a fee/cost term, not a guarantee benefit; the Champion-Sectors list is a notified closed list (see gap_analysis).
    • Two guarantee-cover models run under ONE scheme: transaction-based (per-borrower; the 85%/75% bands modelled here) and umbrella-based (for Venture Debt Funds — actual losses or up to 5% of Pooled Investment, whichever is lower, subject to max Rs.20 crore per borrower, running through the life of the fund). The startup applies once via its MI and does not separately apply to a model — hence one node, not a family.
    • Eligible instruments: venture debt, working capital, term loans, subordinated/mezzanine debt, debentures, optionally convertible debt, and other fund-based & non-fund-based facilities that have crystallised as debt obligations.
    • Real estate projects and HUFs are reported as not permitted by Member-Institution implementations (citing the Gazette of India dated 08.05.2025). Sourced from a bank (secondary) page — Needs verification against the master operational guidelines; not gated here (see gap_analysis).
    • Notified 6 October 2022; expanded in 2025 (per-borrower ceiling raised Rs.10cr -> Rs.20cr; cover bands 85%/75%; Champion-Sector AGF cut). Implemented and monitored by NCGTC (National Credit Guarantee Trustee Company), a GoI trustee company, under DPIIT.

    Sources

    Every figure and condition above is traceable to a government document. Scheme terms change — if this page and the source disagree, the source is right, and we want to know.

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