CGSS Scheme 2025: Everything Indian Startups Should Know

Introduction

In Budget 2025, the Indian government expanded the Credit Guarantee Scheme for Startups (CGSS) to support more startups and MSMEs with collateral-free loans. This scheme is a big opportunity for early-stage businesses who often face funding barriers due to lack of assets or financial history. Here’s everything you need to know about the CGSS Scheme, how it works, and how StartupFlora can help you access it easily.

What Is CGSS Scheme?

The CGSS Scheme (Credit Guarantee Scheme For Startups) is a government-backed program that offers loan guarantees to eligible startups and MSMEs through approved financial institutions. It allows DPIIT-recognised startups to get loans without offering collateral.

The scheme is operated by the National Credit Guarantee Trustee Company (NCGTC) and covers a wide range of loan instruments.

Under the revised 2025 guidelines:

• Startups can get a loan guarantee up to ₹20 crore.
• The government offers 85% guarantee for loans up to ₹10 crore, and 75% for loans above ₹10 crore.

This makes the CGSS Scheme for startups one of the most founder-friendly initiatives launched under the Startup India Action Plan.

Eligibility Criteria For CGSS Scheme

To be eligible for the CGSS Scheme for MSMEs and startups, you must:

• Be DPIIT-recognised as a startup
• Be less than 10 years old from the date of incorporation
• Have an annual turnover not exceeding ₹100 crore in any previous financial year
• Not be a defaulter to any lending institution

Eligible financial partners (Member Institutions) include:

• Scheduled commercial banks
• Select NBFCs with a BBB+ rating or higher
• SEBI-registered AIFs

Budget of CGSS Scheme Loan

CGSS Scheme Loan Budget Highlights

• Maximum loan amount covered: ₹20 crore per eligible startup/MSME
• Guarantee coverage:

85% for loans up to ₹10 crore

75% for loans above ₹10 crore

• Annual Guarantee Fee (AGF): 1% for startups in Champion Sectors
• The fund is managed by NCGTC under the Ministry of Finance and DPIIT support.

How to Apply for the CGSS Scheme

Here’s a simple way to apply:

1. Get your startup registered with DPII via the Startup India portal.
2. Approach any Member Institution (bank, NBFC, or AIF) that participates in the CGSS Scheme.
3. Submit your business plan, financials, and loan requirement.
4. If approved, your lender applies for guarantee coverage from NCGTC.

Once approved, your loan gets disbursed under the CGSS umbrella without needing collateral.

Types of Loans Covered Under CGSS

The CGSS Scheme for startups and MSMEs supports various funding types:

• Working capital loans
• Term loans
• Venture debt
• Mezzanine and subordinated debt
• Optionally convertible debt
• Debentures

This flexibility helps startups choose funding that fits their growth needs.

CGSS vs Other Startup Loan Schemes in India

Unlike traditional MSME loan schemes (like MUDRA or SIDBI), the CGSS Scheme:

• Offers larger ticket size (up to ₹20 crore)
• Targets DPIIT-recognised startups, not just micro-businesses
• Supports innovative instruments like venture and mezzanine debt
• Is backed by NCGTC, ensuring lenders are willing to fund riskier profiles

This makes CGSS ideal for scaling startups and MSMEs aiming for aggressive growth.

How StartupFlora Helps Startups Access the CGSS Scheme

Understanding the scheme is one thing. Accessing it successfully is another.

That’s where StartupFlora comes in.

StartupFlora is a trusted funding consultancy for Indian startups and MSMEs. We’ve helped hundreds of founders successfully apply for government funding, including the Credit Guarantee Scheme for MSME Budget 2025.

• We offer end-to-end guidance on loan applications, documentation, and matching you with the right financial partners.
• Our team has a 92% success rate in helping startups and MSMEs get approvals for government schemes.
• Most importantly, we help you access collateral-free loans under CGSS, even if traditional lenders have turned you down.

Whether you’re struggling to get funding or just want expert support to speed up your journey StartupFlora is here to make government funding work for you.

FAQ

1. What is the budget limit under CGSS Scheme?
Startups or MSMEs can get loans up to ₹20 crore.

2. How much guarantee coverage is offered?

85% for loans up to ₹10 crore, and 75% for loans above ₹10 crore.

3. Who operates the CGSS Scheme?
The scheme is managed by the National Credit Guarantee Trustee Company (NCGTC).

4. What is the eligibility for CGSS?
The startup must be DPIIT-recognised, less than 10 years old, and have an annual turnover below ₹100 crore.

5. Is collateral required for CGSS loans?
No, the scheme offers 100% collateral-free funding support.