DPIIT • NCGTC
Credit Guarantee Scheme for Startups (CGSS)
Guarantee cover that lets a bank, NBFC or venture debt fund lend to a DPIIT-recognised startup with no collateral to pledge
₹10Cr
Max Cover
DPIIT
Recognition Required
80%
Cover up to ₹3Cr
NCGTC
Trustee
- Administered by
- DPIIT
- Operated by
- NCGTC
- Cover per borrower
- Up to ₹10 Crore
- Cover extent
- 80% up to ₹3Cr, 75% above
- Collateral
- Not required
- Instruments
- Term loan, WC, venture debt
01Overview
About Credit Guarantee Scheme for Startups (CGSS)
CGSS does not lend you money. It stands behind the lender — so a bank, NBFC or SEBI-registered venture debt fund can extend credit to a DPIIT-recognised startup that has no land, building or third-party security to offer. The guarantee is what makes an unsecured sanction possible.
Notified by DPIIT and operated through the National Credit Guarantee Trustee Company (NCGTC), the scheme covers up to ₹10 crore per borrower. Where a loan goes bad, the trust pays the lender 80% of the amount in default on facilities up to ₹3 crore, and 75% above that.
Two structures exist. Transaction-based cover is taken by a single lender for a single startup. Umbrella-based cover sits over a venture debt fund's portfolio. Which one applies depends on who is lending to you, and we work that out before an application is made.
The scheme is a credit enhancement, not an entitlement. The lender still appraises your business, still takes the assets financed as primary security, and still has to want the exposure. What CGSS removes is the collateral conversation that ends most startup borrowing before it starts.
- 01
Collateral-Free Credit
The guarantee replaces third-party security, so borrowing does not depend on a promoter having property to pledge.
- 02
DPIIT Recognition First
Only DPIIT-recognised startups qualify. Recognition is free, and it has to be in place before a lender can seek cover.
- 03
Two Cover Structures
Transaction-based cover per borrower through banks and NBFCs, or umbrella cover across a venture debt fund's portfolio.
- 04
Revenue, Not Projections
Member institutions assess a stable revenue stream from audited financials. This is a scheme for startups that already sell.
02Who can apply
Eligibility Criteria
Who Can Apply
5 points- DPIIT-recognised startup — recognition must be valid at the time of application.
- Private Limited Company, LLP or registered partnership; a proprietorship cannot be recognised by DPIIT.
- A stable revenue stream, evidenced in audited financial statements.
- Not in default to any bank, NBFC or other lending institution.
- Not classified as a non-performing asset by any lender.
Cover & Limits
4 points- Guarantee cover up to ₹10 crore per borrower.
- 80% of the amount in default on facilities up to ₹3 crore.
- 75% of the amount in default on facilities above ₹3 crore.
- Eligibility for cover is certified by the Member Institution extending the credit.
Who Can Lend
4 points- Scheduled commercial banks and financial institutions.
- RBI-registered NBFCs meeting the scheme's rating criteria.
- SEBI-registered Alternative Investment Funds extending venture debt.
- The lender must be enrolled with NCGTC as a Member Institution.
03Paperwork
Required Documents
0 / 12 ready
Tick the documents you already have
Recognition & Constitution
Financials & Business Case
Credit & Compliance
04Step by step
Application Process
- 01
Recognition Check
1–15 DaysWe confirm your DPIIT recognition is valid, or obtain it first. Without it no lender can seek cover, so this gates everything else.
Recognition is free; only the paperwork takes time.
- 02
Lender Matching
3–7 DaysWe identify Member Institutions actually active in CGSS for your sector and ticket size, rather than filing blind at your existing bank.
Not every enrolled lender writes CGSS-backed credit.
- 03
File Preparation & Appraisal
3–6 WeeksProject report, projections and audited financials assembled to the lender's format, then taken through credit appraisal.
This is where most files stall on unanswered queries.
- 04
Cover & Disbursement
2–4 WeeksThe lender applies to NCGTC for guarantee cover, executes documentation, and disburses against the sanctioned terms.
Annual guarantee fee is payable on the covered amount.
05Why it's worth it
Key Benefits
No Collateral Conversation
The guarantee stands in for third-party security, which is what usually ends a startup's borrowing discussion.
- No property to pledge
- Assets financed as primary security
- Promoter guarantee may still apply
Debt Instead of Dilution
Funding the next stage on credit rather than equity means you keep the ownership you would otherwise sell.
- No equity given up
- Cover up to ₹10 crore
- Repay and re-borrow
Works Across Instruments
Term loans, working capital and venture debt all fall within the scheme rather than only one product.
- Term loan
- Working capital
- Venture debt
Stacks With Other Support
Sits alongside DPIIT benefits you should already be claiming — the 80-IAC tax holiday and IPR rebates.
- 80-IAC exemption
- IPR fee rebate
- Seed fund eligibility
06Questions
Frequently Asked Questions
- No. It guarantees a lender against default, which is what allows that lender to sanction credit without collateral. You still borrow from a bank, NBFC or venture debt fund, and they still appraise your business.
- Yes. CGSS is only available to DPIIT-recognised startups, and recognition must be valid when the lender seeks cover. Recognition is free and we obtain it for you, but it has to come before the credit application.
- Up to ₹10 crore per borrower. The trust pays 80% of the amount in default on facilities up to ₹3 crore, and 75% on facilities above that.
- Realistically no. Member institutions look for a stable revenue stream in audited financials, because a guarantee does not create the cash flow a loan is repaid from. At pre-revenue stage the Startup India Seed Fund Scheme is the right route, and it costs you no equity.
- An annual guarantee fee is payable on the covered amount. Lenders normally pass it through to the borrower, so treat it as part of your cost of funds when comparing offers.
- No. DPIIT recognises only Private Limited Companies, LLPs and registered partnerships, so a proprietorship cannot be recognised and therefore cannot access CGSS. Converting is the first step, and takes about two weeks.
Plan your EMI before you apply
See the monthly instalment, the real cost of interest and how the balance falls, year by year.
EMI Planner
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Monthly EMI
₹32,241
Total interest
₹4.34 L
Total payable
₹19.34 L
Principal 78%
Interest 22%
Every ₹1 borrowed costs ₹1.29 in total.
What you pay each year
Illustrative only. Your actual rate depends on the lender, scheme and your credit profile.
Real outcomes
Success Stories
“Eighteen months of audited revenue and CGSS cover got us venture debt without touching the cap table before our Series A.”
OrdrlyB2B SaaSFunded: ₹3.5 Crore“No property to pledge and a bank that kept asking for it. The guarantee is what finally moved the file.”
Vanam NaturalsD2C Personal CareFunded: ₹1.2 Crore“Working capital against receivables from two PSU contracts, sanctioned collateral-free under CGSS.”
GridsenseIndustrial IoTFunded: ₹2 Crore
CGSS
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