Credit Guarantee Scheme for Startups

Credit Guarantee Scheme for Startups helps DPIIT-recognised startups get collateral-free institutional finance by giving government-backed credit guarantees to banks, NBFCs and venture debt funds. Under the revised framework that came into force on 8 May 2025, guarantee cover now goes up to ₹20 crore per borrower, which makes it easier for new and growing startups to raise debt without pledging assets.

Launched on 6 October 2022 by the Department for Promotion of Industry and Internal Trade (DPIIT), the scheme is still open for applications in 2026-27. Eligible startups can apply online through the JanSamarth portal or by approaching a member bank directly. The scheme is implemented by the National Credit Guarantee Trustee Company (NCGTC) under the Ministry of Commerce and Industry.

Credit Guarantee Scheme for Startups - Introduction

Credit Guarantee Scheme for Startups serves as a catalyst for innovation by providing a secure credit guarantee mechanism for loans extended to DPIIT-recognised startups. It encourages scheduled commercial banks, non-banking financial companies (NBFCs) and venture debt funds to lend without demanding traditional collateral.

The scheme covers a wide range of debt facilities, including venture debt, working capital, subordinated or mezzanine debt, debentures and other fund-based and non-fund-based facilities that turn into debt obligations. By offering unconditional and irrevocable guarantees, it lowers lender risk and supports different kinds of business models across India. If you manage a startup, this assurance helps you secure funds to grow your business.

Benefits

This scheme offers clear advantages for startups that find it hard to get loans without collateral. The main benefits are listed below.

• Collateral-free funding: You get loans without pledging personal or business assets, which is a big help for early-stage companies.
• Wide range of instruments: Access venture debt, working capital, subordinated debt, debentures and other debt tools through member institutions.
• High guarantee cover: The scheme covers 85% of the default amount for loans up to ₹10 crore and 75% for loans above ₹10 crore, up to ₹20 crore per borrower.
• Concessional fees: Women-led startups, North-East India units and companies in the 27 Champion Sectors pay lower guarantee fees.
• Lender confidence: Because the government shares the risk, banks feel more comfortable lending to newer and innovative startups.

Eligibility

To get benefit under this scheme, you must meet the following conditions.

• You should be a startup recognised by DPIIT as per the applicable Gazette Notifications.
• You should not be in default to any lending or investing institution and should not be classified as a Non-Performing Asset (NPA) as per RBI rules.
• Your member lending institution must certify your eligibility for the guarantee cover.
• You should be actively engaged in the business activities identified during your DPIIT recognition process.

Application Process

Applying Online via JanSamarth Portal

STEP 1 - Visit the JanSamarth Portal and register or log in using your mobile number and OTP.

STEP 2 - Click on the eligibility check and enter your startup details, PAN, Udyam information and DPIIT recognition number to see if you qualify.

STEP 3 - Select the loan category for startups and fill in your business, financial and operational details as prompted by the guided form.

STEP 4 - Enter the loan amount, purpose and repayment tenure, then upload the required documents such as the incorporation certificate and financial statements.

STEP 5 - Choose your preferred bank and branch from the list shown, and submit your application digitally for an in-principle sanction.

STEP 6 - Once the bank verifies your documents and KYC, it will process the loan and apply for the guarantee cover under this scheme through NCGTC.

Applying Offline

STEP 1 - Visit the nearest branch of a Member Lending Institution (MLI). You can find the full list of MLIs on the NCGTC website.

STEP 2 - Ask about the documentation requirements for this scheme and submit your loan proposal directly to the branch manager.

References

Official Startup India CGSS Page

CGSS Operational Guidelines PDF

NCGTC CGSS Product Page

FAQ's

What is the maximum guarantee cover under Credit Guarantee Scheme for Startups?

The maximum guarantee cover is ₹20 crore per borrower. The scheme covers 85% of the default amount for loans up to ₹10 crore and 75% for loans above ₹10 crore up to ₹20 crore.

Who can apply for Credit Guarantee Scheme for Startups?

Any startup recognised by DPIIT that is not in default and not classified as an NPA can apply. The member bank or NBFC must certify the eligibility of the startup for the guarantee cover.

How can I apply for Credit Guarantee Scheme for Startups?

You can apply online through the JanSamarth portal at jansamarth.in or offline by approaching the nearest branch of a member lending institution listed on the NCGTC website.

Is Credit Guarantee Scheme for Startups still running in 2026?

Yes, the scheme is still running. The revised framework came into force on 8 May 2025 and continues to provide collateral-free guarantee cover to eligible DPIIT-recognised startups in 2026-27.