Credit Guarantee Scheme for Startups (CGSS)

Objectives

Key Features

• To provide guarantee upto a specified limit against credit instruments extended by Member Institutions (MI) to finance eligible Startups
• Facilitate much needed collateral free debt funding to Startups
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• Nodal Ministry: Ministry of Commerce & Industry.
• Purpose: Providing credit guarantees to loans extended to eligible startups. 
• Process for credit guarantees to loans: CGSS does not directly guarantee loans to startups.
  • Instead, National Credit Guarantee Trustee Company (NCGTC) provides guarantee cover to MIs that lend to startups.
• Ceiling on guarantee cover
  • Maximum guarantee cover per borrower shall not exceed Rs. 20 crores.
  • The credit facility being covered here should not have been covered under any other guarantee scheme
  • In respect of credit facilities where a portion of the same has been secured by way of partial collateral security, the remaining part comprising of the unsecured facility will be covered under the guarantee scheme
• Instruments of Assistance: Venture debt, working capital, subordinated debt/mezzanine debt, debentures, optionally convertible debt and other fund-based as well as non-fund-based facilities, which have crystallised as debt obligations.