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Founder guide · India

How CGSS backs loans up to ₹20 crore for DPIIT startups

The Credit Guarantee Scheme for Startups (CGSS) provides loan guarantees up to ₹20 crore per borrower for DPIIT-recognised startups. It covers loans from banks, NBFCs, and SEBI-registered Alternative Investment Funds without requiring collateral.

Last checked 21 October 2026 against 4 official pages · 3 min read

₹20 crore
Maximum guarantee per borrower
85%
Guarantee cover for loans up to ₹10 crore
BBB
Minimum NBFC credit rating
₹100 crore
Minimum NBFC networth

What CGSS covers

CGSS guarantees loans extended by Member Institutions (MIs) to eligible startups. The loans can be in the form of venture debt, working capital, subordinated debt, debentures, optionally convertible debt, and other fund-based or non-fund-based facilities that crystallise as debt obligations.

The scheme offers two types of guarantee cover: transaction-based and umbrella-based. Transaction-based cover applies to individual loans, while umbrella-based cover applies to pooled investments by Venture Debt Funds (VDFs) under SEBI-registered Alternative Investment Funds.

Who can borrow

To borrow under CGSS, a startup must:

Be recognised by DPIIT as per Gazette Notifications issued from time to time.

Not be in default to any lending or investing institution and not be classified as a Non-Performing Asset as per RBI guidelines.

Have its eligibility certified by the Member Institution for guarantee cover.

The startup must also demonstrate a stable revenue stream, assessed from audited monthly statements over a 12-month period.

Who can lend

Eligible lending institutions under CGSS include:

Scheduled Commercial Banks and Financial Institutions.

RBI-registered Non-Banking Financial Companies (NBFCs) with a credit rating of BBB and above and a minimum networth of ₹100 crore. If an NBFC’s rating falls below BBB, it loses eligibility until upgraded again.

SEBI-registered Alternative Investment Funds (AIFs).

All eligible institutions must register under the scheme by submitting a signed undertaking and Board Resolution on the NCGTC portal.

Guarantee limits and coverage

The maximum debt eligible for guarantee cover is ₹20 crore per borrower. The extent of guarantee cover varies:

For transaction-based guarantee cover:

85% of the amount in default for loans up to ₹10 crore.

75% of the amount in default for loans exceeding ₹10 crore.

For umbrella-based guarantee cover:

The guarantee covers actual losses or up to 5% of the pooled investment, whichever is lower, subject to a maximum of ₹20 crore per borrower.

Losses are defined as the aggregate of principal investments of written-off assets plus three months of accrued interest from the date of default.

How to apply

Startups can apply for CGSS through two methods:

Visit the Jan Samarth Portal and complete the online application. The list of Member Institutions is available on the portal.

Refer to the instructional video on the Jan Samarth Portal for step-by-step guidance.

Approach the nearest branch of any Member Institution directly to enquire about the process.

The list of eligible Member Lending Institutions (MLIs) is available on the official page.

DPIIT recognition requirement

A startup must be recognised by DPIIT to avail benefits under CGSS. DPIIT recognition is granted to entities that:

Are incorporated as a Private Limited Company, Registered Partnership Firm, Limited Liability Partnership, or Cooperative Society.

Have been in existence and operations for not more than 10 years (20 years for deeptech startups) from the date of incorporation.

Have an annual turnover not exceeding ₹200 crore (₹300 crore for deeptech startups) in any financial year since incorporation.

Are working towards innovation, development, or improvement of products, processes, or services, or have a scalable business model with high potential for employment or wealth generation.

Have not been formed by splitting up or reconstructing an existing business.

Rules may change

Startups and lenders should confirm the latest details on the official CGSS page before applying.

Step by step

  1. 1

    Register as a member institution

    Eligible banks, NBFCs, or AIFs must register on the NCGTC portal by submitting a signed undertaking and Board Resolution. After registration, login credentials will be provided to apply for guarantee cover.

  2. 2

    Apply for guarantee cover

    After sanctioning a loan to an eligible startup, the Member Institution must apply on the NCGTC portal for guarantee cover. The cover is issued automatically if eligibility parameters are met.

Frequently asked questions

How is the guarantee issued under CGSS?
An eligible startup approaches a Member Institution for credit. The institution evaluates the startup’s feasibility and viability, sanctions the loan, and applies for guarantee cover on the NCGTC portal. The cover is issued automatically if eligibility criteria are met.
Can a startup apply directly for CGSS?
No. Startups must apply through a Member Institution (bank, NBFC, or AIF). The institution certifies the startup’s eligibility and applies for the guarantee cover.
What happens if an NBFC’s credit rating falls below BBB?
The NBFC loses eligibility for further guarantee cover until its rating is upgraded to BBB or above.

Official sources

Rules and amounts change. Check these before you apply.

How this guide was made: StartupReader wrote it with AI from the official pages above, read on 21 October 2026. Every figure and name in it was checked automatically against those pages, and anything they don't support was left out. It's re-checked every month. It isn't affiliated with the program. Spotted something out of date? Tell us.

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