Up to ₹20Cr
A government credit guarantee, not a grant, that lets banks, NBFCs and AIFs lend to DPIIT-recognised startups without collateral. Cover up to Rs 20 crore per borrower.
The Credit Guarantee Scheme for Startups (CGSS) provides credit guarantee cover against loans extended by Member Institutions to DPIIT-recognised startups. The startup receives a loan and repays it. The guarantee protects the lender against default, which is what makes collateral-free lending possible.
The Credit Guarantee Scheme for Startups (CGSS) is a central government scheme that makes it possible for a DPIIT-recognised startup to borrow without pledging collateral or a third-party guarantee.
CGSS does not give you money. This is the single most common misreading of the scheme, and it is worth being blunt about. The scheme gives a guarantee to your lender. If you default, a government-backed trustee company reimburses the lender for a large share of its loss. That protection is what allows a bank to approve credit for a business with no land, no plant and no promoter property to mortgage, which is the position nearly every software or R&D-led startup is in.
What you receive is debt. A working capital facility, a term loan, venture debt, or in some structures a debenture. You repay it with interest, on schedule, exactly as you would repay any other loan. The scheme changes whether the loan is available. It does not make the loan free, and it does not make it cheaper.
The numbers most articles still get wrong. CGSS was notified by DPIIT in 2022 with a ceiling of Rs 10 crore per borrower. A gazette notification dated 8 May 2025 raised that ceiling to Rs 20 crore and increased the extent of cover to 85 percent of the amount in default on loans up to Rs 10 crore, and 75 percent above that. Many of the pages currently ranking for this scheme, including at least one major bank landing page, still quote the old Rs 10 crore figure. If you are comparing sources, check which ceiling they print before you trust the rest of the page.
Indian startups that have crossed the grant and seed stage run into a structural wall. They have revenue and a working product, but the balance sheet is made of people, code and intellectual property, none of which a lender can foreclose on. Conventional credit assessment asks for collateral the company does not own, and the founder is pushed toward equity dilution to solve what is really a working capital problem.
CGSS is the government's answer to that gap, and it deliberately copies a mechanism that already worked. CGTMSE has underwritten collateral-free lending to micro and small enterprises since 2000. CGSS applies the same risk-sharing logic to the startup balance sheet, with a far higher ceiling and an additional route built for venture debt funds.
The scheme is administered by the National Credit Guarantee Trustee Company (NCGTC), a company wholly owned by the Ministry of Finance that also operates CGTMSE and the Credit Guarantee Scheme for Subordinate Debt. NCGTC issues the operating circulars, collects the guarantee fee, and settles claims. DPIIT owns the scheme and notifies its terms.
To be an eligible borrower under CGSS, a startup must meet all of the following:
The DPIIT recognition criteria underneath all of this. Because DPIIT recognition is the gate, its own conditions apply in full. The entity must be within 10 years of incorporation, must have had turnover below Rs 100 crore in every previous financial year, and must be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership. An entity formed by splitting up or reconstructing an existing business does not qualify.
Who is not eligible. Sole proprietorships and unregistered entities, because they cannot hold DPIIT recognition. Companies past the 10-year mark. Anything currently in default or classified as NPA. Pre-revenue startups with no twelve-month audited record. And startups whose lender declines to certify them, which is a commercial decision the scheme does not override.
Who can lend under the scheme. Member Institutions fall into three categories: scheduled commercial banks and financial institutions; RBI-registered NBFCs holding a minimum BBB+ rating and a net worth of at least Rs 100 crore; and SEBI-registered Alternative Investment Funds, which is the route venture debt funds use.
CGSS offers two structures.
Transaction-based cover applies to a single loan to a single borrower. The guarantee ceiling is Rs 20 crore per borrower, raised from Rs 10 crore by the May 2025 expansion. The extent of cover is:
Umbrella-based cover is built for SEBI-registered Alternative Investment Funds providing venture debt. Cover is the actual losses, or up to 5 percent of the pooled investment in eligible startups from that fund, whichever is lower, subject to the same Rs 20 crore ceiling per borrower.
What is actually covered. The guarantee attaches to the credit facility your lender extends, which in practice means working capital facilities, term loans, and venture debt. The scheme covers the lender against default on that facility. It is not restricted by sector.
What it costs you, stated plainly. The guarantee is not free. An Annual Guarantee Fee is payable on the guaranteed amount, and in practice lenders pass this cost to the borrower. It recurs every year the guarantee stays live, not once at sanction.
The consequence is one that almost no other page on this scheme will tell you: a CGSS-backed loan is more expensive than an equivalent secured loan, not cheaper. The scheme buys you access to credit you could not otherwise obtain. It does not buy you a better rate. If you hold collateral you are genuinely willing to pledge, price both routes before assuming CGSS is the better deal. Fee rates are set by NCGTC circular and were revised in 2025, so confirm the current rate and its pass-through with your lender before you sign.
How CGSS compares to the other startup funding routes. CGSS is debt against a guarantee, so it is the right instrument only at a specific stage:
What the guarantee fee actually costs. The scheme itself does not publish a headline rate, but Member Institutions do. HDFC Bank states a fee of 2 percent or 1.5 percent, and Axis Bank states 1 to 2 percent as per scheme norms. Treat 1 to 2 percent per annum on the guaranteed amount as the working range and confirm the exact figure and its pass-through with your lender, because it recurs annually and NCGTC revised the fee structure in 2025.
When cover starts and ends. For transaction-based cover, the guarantee runs from the date the guarantee fee is paid, through the tenure of the loan. For umbrella-based cover, it runs from the date the commitment charges are paid, through the life cycle of the venture debt fund. An existing loan already covered under CGSS can be enhanced.
How many lenders actually participate. The Member Institution panel is smaller than the eligibility rules suggest. As listed by HDFC Bank, it comprises 11 public sector banks, seven private banks, three NBFCs, and one each of a foreign bank, a small finance bank, an AIF and a financial institution. That is roughly two dozen institutions in total, so if your existing banker is not on the panel you will need to open a relationship with one that is.
There are two ways in, and the important thing to understand about both is that you never apply to the scheme itself. You apply for a loan, and the lender applies for the guarantee. Every step that involves NCGTC happens on the lender's side, without you.
Route 1: online, through Jan Samarth. The Department of Financial Services has launched a Startup Common Application on the Jan Samarth portal (jansamarth.in), built with the Indian Banks Association and the PSB Alliance. It is a single form that checks your eligibility, routes you to participating lenders and lets you track the application, with PAN, GST and ITR integration doing much of the verification that a branch would otherwise ask you to evidence on paper. DPIIT states that the platform carries startup credit across all public sector banks, that facilities up to Rs 20 crore are eligible under CGSS through it, and that there are special concessions for women entrepreneurs.
The scope limit worth knowing. The common application is a public sector bank rail. The two Member Institutions whose own CGSS material is in the best shape, Axis Bank and HDFC Bank, are private sector banks, and the NBFCs, small finance banks and venture debt funds on the panel are not public sector banks either. If you want one of those specifically, approach it directly rather than expecting Jan Samarth to reach it. This is the newer route and most pages about CGSS have not caught up with it at all.
Route 2: offline, through a branch. Approach the nearest branch of any Member Institution directly. This remains the standard path, and for a larger or more complex facility it is often the faster one, because you are talking to the credit team that will actually underwrite you.
Either way the sequence below is what happens.
Documents you should expect to be asked for. The list is set by your lender, not by the scheme, but in practice it covers: the DPIIT recognition certificate; certificate of incorporation and the constitutional documents (MoA and AoA, or the LLP or partnership deed); PAN and GST registration; audited financial statements and twelve months of monthly statements; bank statements, commonly six to twelve months; income tax returns; a business plan or projections explaining the use of funds; KYC for all directors or partners; and existing loan sanction letters if you carry other debt. Getting the audited monthly statements in order early is what shortens the process.
CGSS has no competitive selection, no jury and no cohort. There is no shortlist to be placed on and no announcement date to wait for. This distinguishes it from almost every other scheme on this site.
The decision that matters is your lender's ordinary credit appraisal: revenue quality and consistency, unit economics, existing debt and repayment record, promoter background, and a credible use of funds. The scheme's own criteria, meaning DPIIT recognition, stable revenue, no default and no NPA classification, are threshold conditions the Member Institution certifies. They are not scoring criteria you compete on.
The practical implication is worth stating directly, because it is where most founder time is wasted: being eligible for CGSS tells you nothing about whether you will get the loan. Founders routinely confirm eligibility, approach a bank, and are declined on credit grounds. Preparing for the bank's appraisal is the actual work. The scheme is only the mechanism that removes the collateral objection once that appraisal is favourable.
Why applications get declined. Weak or lumpy revenue that fails the stability test. Incomplete or unaudited financials. Existing debt the lender considers already stretched. A use of funds the lender cannot underwrite. Or simply a branch with no appetite for startup credit, which is a reason to approach more than one institution rather than to conclude you are ineligible.
CGSS is a standing, always-open facility. There is no cohort, no application window and no deadline. A Member Institution can lodge a guarantee at any time of year.
The scheme runs through three parties, and knowing which one to talk to saves a great deal of time:
Because loan terms are set by the lender and not by the scheme, the interest rate, tenure, moratorium and repayment schedule vary between institutions for an identical borrower. The scheme fixes the guarantee, not the loan. This is the strongest practical argument for approaching several Member Institutions rather than accepting the first sanction.
The full list of registered Member Institutions. These are the institutions that can actually lodge a CGSS guarantee, as registered with NCGTC. If your bank is not on this list it cannot put your loan under the scheme, however willing it is to lend to you.
Public sector banks (12). Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Indian Bank, Indian Overseas Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of India, UCO Bank, Union Bank of India.
Private sector banks (11). Axis Bank Ltd., HDFC Bank Ltd, ICICI Bank, IDBI Bank Ltd, IDFC First Bank, IndusInd Bank Limited, Karnataka Bank Ltd., RBL Bank Limited, Tamilnad Mercantile Bank Ltd., The Karur Vysya Bank Limited, Yes Bank.
Small finance banks (2). AU Small FInance Bank Limited, Slice Small Finance Bank Limited.
Regional rural banks (2). Karnataka Grameena Bank, Kerala Gramin Bank.
Foreign banks (1). Standard Chartered Bank.
NBFCs (8). Caspian Impact Investments Private Limited, Equentia Financial Service Private Limited, InCred Financial Services Limited, Kerala Financial Corporation, Nabkisan Finance Limited, RAR Fincare Limited, Samunnati Finance Private Limited (SFPL), UGRO Capital Limited.
All-India financial institutions (2). Export-Import Bank of India, Small Industries Development Bank of India (SIDBI).
Funds and other institutions (2). Nilacap Venture Trust, RevX Capital.
That is 40 institutions. Note how short the list is against the eligibility rules: any scheduled commercial bank, any NBFC rated BBB+ with Rs 100 crore net worth and any SEBI-registered AIF may join, but only 40 have. The list changes as institutions register and withdraw, so confirm with the branch before building a plan around one name.
Once the loan is sanctioned and the guarantee is lodged, your obligations are those of any borrower. Service the loan on schedule and keep the covenants in your sanction letter.
Three things specific to CGSS are worth tracking.
The Annual Guarantee Fee recurs. It is charged each year the guarantee remains live, not once at sanction. It belongs in your annual cash-flow model, not in your one-time setup costs. Over a five-year facility this compounds into a real number.
The guarantee protects your lender, not you. This is the most misunderstood part of the scheme after the belief that it disburses money. A default is still a default on your books. It damages your credit standing, it can be reported to credit bureaus, and it makes you ineligible for future cover under a scheme that requires you not be in default to any lending institution. When NCGTC settles a claim, the lender is made whole for its covered share and retains the right to recover from you. The guarantee changes who absorbs the loss in the first instance. It does not cancel the debt and it does not soften the consequence to the company.
Personal and director guarantees are a separate question. CGSS removes the requirement for collateral security. Whether your lender additionally asks for a personal guarantee from promoters is its own commercial decision, and it is not prohibited by the scheme. Read the sanction letter for this specifically. Founders often assume collateral-free means personal-liability-free, and the two are not the same thing.
Do not approach a bank before DPIIT recognition is in hand. It is the one non-negotiable condition and the most common reason a promising conversation stops at the first meeting.
Name the scheme explicitly, and ask the right desk. Ask for the MSME or startup lending desk, and ask whether that branch has lodged a CGSS guarantee before. A branch that has done one will move considerably faster than one learning the process on your file.
Shop the loan, not the scheme. The guarantee terms are identical everywhere. The Rs 20 crore ceiling and the 85 and 75 percent cover levels are set by DPIIT and no bank can improve on them. What varies between lenders is the interest rate, tenure, moratorium, and how the guarantee fee is passed through. Those differences are worth far more to you than anything about the scheme itself, and they are the only thing genuinely worth negotiating.
Model the guarantee fee before you accept. A CGSS-backed loan costs more than a secured loan at the same headline rate. If you hold collateral you are comfortable pledging, price both routes honestly rather than assuming the scheme is automatically better.
Be realistic about stage. The twelve-month audited stable-revenue test is a real filter, not a formality. If you are pre-revenue, or your revenue is lumpy, your route is a grant or equity rather than CGSS. Establishing that early saves months of meetings.
Check the date on every other page you read about this scheme. The ceiling changed in May 2025. A page still printing Rs 10 crore was written before that and has not been maintained, which tells you what to assume about the rest of its detail.
Neither, strictly. CGSS is a credit guarantee, meaning a risk cover given to your lender. What you receive is a loan from a bank, NBFC or AIF, which you repay with interest. No money is disbursed to the startup by the scheme itself, and there is no grant or subsidy component.
No. Rs 20 crore is the maximum guarantee cover per borrower, not a loan you receive. Your loan amount is whatever your lender sanctions after its own credit appraisal, and the guarantee covers a share of the lender's loss if you default.
For transaction-based cover, 85 percent of the amount in default on loans up to Rs 10 crore, and 75 percent of the amount in default on loans above Rs 10 crore. Cover is capped at Rs 20 crore per borrower.
The gazette notification dated 8 May 2025 raised the guarantee ceiling per borrower from Rs 10 crore to Rs 20 crore and increased the extent of cover to 85 percent of the amount in default on loans up to Rs 10 crore and 75 percent above that. Many pages about this scheme still quote the old Rs 10 crore ceiling.
No. Removing the collateral requirement is the entire purpose of the scheme. The guarantee stands in place of security, which is what lets a lender approve credit for a startup with no assets to pledge. Note that this is separate from a personal guarantee, which your lender may still ask promoters to provide.
No. An Annual Guarantee Fee is charged on the guaranteed amount every year the guarantee is live, and lenders generally pass it to the borrower. A CGSS-backed loan is more expensive than an equivalent secured loan. It buys access to credit, not a cheaper rate.
The scheme does not set the interest rate. Your Member Institution prices the loan on its own credit policy, so the rate, tenure and moratorium vary between lenders for an identical borrower. This is why it is worth approaching more than one institution.
Generally no. The scheme requires a stable revenue stream assessed from audited monthly statements over twelve months, and that the startup be amenable to debt financing. Pre-revenue companies should look at the Startup India Seed Fund Scheme or equity instead.
Two routes. Online, through the Startup Common Application on the Jan Samarth portal (jansamarth.in), which checks eligibility and routes you to participating Member Institutions. Or offline, by approaching the nearest branch of a Member Institution directly. Either way you are applying for a loan, not to the scheme: the lender underwrites you on its own credit policy and lodges the guarantee with NCGTC. You never contact NCGTC yourself.
Three categories of Member Institution qualify: scheduled commercial banks and financial institutions; RBI-registered NBFCs with a minimum BBB+ rating and net worth of at least Rs 100 crore; and SEBI-registered Alternative Investment Funds, which is the route venture debt funds use. Participation varies by institution, so confirm with the specific bank.
Yes, without exception. The scheme covers loans to startups recognised by DPIIT under the Startup India gazette notifications. No recognition means no cover. DPIIT recognition itself requires the entity to be within 10 years of incorporation, to have had turnover below Rs 100 crore in every previous financial year, and to be a private limited company, registered partnership firm or LLP.
The scheme sets no timeline, because the loan is your lender's decision. Founders commonly report two to four weeks from complete application to disbursal, though this depends heavily on how clean your audited financials are and whether the branch has processed CGSS cases before.
Your lender sets the list, but expect the DPIIT recognition certificate, certificate of incorporation and constitutional documents, PAN and GST registration, audited financials with twelve months of monthly statements, six to twelve months of bank statements, income tax returns, a business plan explaining use of funds, KYC for all directors or partners, and existing sanction letters if you carry other debt.
A route for SEBI-registered Alternative Investment Funds providing venture debt. Cover is the actual losses or up to 5 percent of the pooled investment in eligible startups, whichever is lower, subject to the Rs 20 crore per-borrower ceiling.
The guarantee protects your lender, not you. NCGTC reimburses the lender for its covered share and the lender retains the right to recover from you. The default is still recorded against your company, can be reported to credit bureaus, and makes you ineligible for future cover under a scheme that requires you not be in default to any lending institution.
CGTMSE covers collateral-free credit for micro and small enterprises generally, requires no DPIIT recognition, and carries a lower ceiling. CGSS is startup-specific, requires DPIIT recognition and a twelve-month stable revenue record, and covers up to Rs 20 crore per borrower. Both are operated by NCGTC.
No. The scheme does not oblige any institution to lend and does not override a credit decision. Your lender appraises you on its normal credit policy first and applies the guarantee second. Confirming you are eligible for CGSS says nothing about whether your loan will be sanctioned.
Yes. The Department of Financial Services has launched a Startup Common Application for CGSS on the Jan Samarth portal (jansamarth.in), developed with the Indian Banks Association and the PSB Alliance. It lets you check eligibility, apply and track status in one place. The offline route, approaching a Member Institution branch directly, remains available and is often faster for a larger facility.
It depends which lender you want. Jan Samarth carries startup credit across public sector banks, so it is the efficient route if a PSB suits you: one form, PAN/GST/ITR-based verification, and several lenders reached at once. It does not reach the private banks, NBFCs, small finance banks or venture debt funds on the panel, so if you want Axis, HDFC, UGRO or a venture debt fund you approach them directly. Neither route changes the guarantee terms, which are fixed by DPIIT.
DPIIT states that the Startup Common Application for CGSS on the Jan Samarth portal carries special concessions for women entrepreneurs. The specific terms are applied by the lender, so confirm exactly what applies to your facility with the Member Institution rather than assuming a fixed benefit.