Credit Guarantee Scheme: ₹10 Crore Loans For Startups Without Guarantee
The Indian government has launched a Credit Guarantee Scheme for Indian Startups so that they can get a loan of upto ₹10 crore, without any guarantee.
To encourage the startup culture, the government has started a new program. Startup businesses are eligible for a maximum loan of Rs. 10 crore, with no guarantee.
The loan will be supported by the government. The Credit Guarantee Scheme for Startups (CGSS) has been approved by the Central Government as a solution for this.
They will receive mortgage-free loans under this, but only up to a specific amount.
In this regard, a notification was released by the Department for Promotion of Commerce, Industry, and Internal Trade (DPIIT).
As a result, qualified borrowers will be qualified for loans approved under this scheme on or after October 6.
Credit Guarantee Scheme For Startups (CGSS)
A loan guarantee cover of up to 80% of the transaction value will be offered. This assurance will be based on a transaction. The bank startups will provide loan guarantees in this.
Startups would receive transaction-based protection on 80% of the loan amount up to a maximum of Rs 3 crore. Those with loans between Rs 3 and 5 crore will receive 75% guarantee coverage.
Startups would also receive a credit guarantee on 65% of their loans up to a total of Rs. 10 crore. Loan guarantee from the Venture Debt Fund.
Umbrella-based guarantee on the loan will also be possible under CGSS. Under this, Venture Debt Funds (VDFs) registered under SEBI’s AIF guidelines will receive a guarantee cover.
Which Startups Are Eligible For CGSS?
Department for Promotion of Industry and Internal Trade accreditation (DPIIT). Those who have a steady income, as shown by the audited monthly statement for the last 12 months.
Should not be in default with any bank or investment company, and the loan should not have been designated as NPA.