|CGSS| Credit Guarantee Scheme for Startups 2024: Amount

Credit Guarantee Scheme for Startups Apply Online & Application Form | CGSS Check Loan Amount & Guarantee Fees | Credit Guarantee Scheme for Startups Check Features & Benefits | CGSS Check Eligible Lending Institutions & Delegated Bodies | Credit Guarantee Scheme for Startups Check Eligibility & All Details |

The Credit Guarantee Scheme for Startups was introduced by the Department for Promotion of Industry and Internal Trade to enable applicants to launch their new ventures or businesses following the issuance of a loan. Member Institutions (MIs) including Scheduled Commercial Banks, Non-Banking Financial Companies, and Alternative Investment Funds (AIFs) registered with the Securities and Exchange Board of India (SEBI) will provide this loan.

Today through this article we will provide you with all types of information about the Credit Guarantee Scheme for Startups 2024 like purpose, Eligibility Criteria, Benefits, Features, and important documents, etc. Apart from this, we will share with you the process to apply online for this scheme. To get complete information about this scheme, read this article till the end.

Credit Guarantee Scheme for Startups 

With the online registration provided by the Credit Guarantee Scheme for Startups, applicants or qualified borrowers can now launch or begin the process of launching their own business endeavors. A single borrower or individual may apply for up to Rs. 10 crores to establish their business. It will be recommended to the applicants to apply online prior to the deadline.

The Ministry of Commerce and Industry, Credit Guarantee Scheme for Startups was established with the active participation or association of the Department for Promotion of Industry and Internal Trade (DPIIT). This will enable lending institutions like SEBI, AIFs, and Scheduled Commercial Banks to provide loans to qualified borrowers.

Highlights Of Credit Guarantee Scheme for Startups 2024

The highlights of this scheme are as follows:- 

Objectives Of Credit Guarantee Scheme for Startups 

The major objective of launching the Credit Guarantee Scheme for Startups is to provide or lend loans to eligible borrowers so that they will be able to initiate the movement of starting their own businesses with the help of loans provided to them. The applicants will be able to start up their own businesses without facing any financial issues. 

Another objective of launching the Credit Guarantee Scheme for Startups is to grant loan amounts ranging from Rs. 5 Crores to Rs. 10 Crores to applicants so that they will be enabled the establishment of their start-ups. This will bring growth of new enterprises being formed and will also increase the growth of our nation. 

Delegated Bodies 

The list of delegated bodies are as follows:- 

• Scheduled Commercial Banks
• Non-Banking Financial Companies and the Securities and Exchange Board of India (SEBI) 
• Member Institutions 
• Management Committee (MC) 
• Risk Evaluation Committee (REC)
• National Credit Guarantee Trustee Company Limited (NCGTC) 

Eligible Lending Institutions 

The list of eligible lending institutions are as follows:- 

• Small Industries Development Bank of India (SIDBI)
• Delhi Financial Corporation
• North Eastern Development Finance Corporation (NEDFI)
• Kerala Financial Corporation
• National Small Industries Corporation (NSIC)
• Jammu & Kashmir Development Finance Corporation Ltd
• Tamil Nadu Industrial Investment Corporation Ltd.
• Export Import Bank of India
• Andhra Pradesh State Financial Corporation

CGSS Loan Amount Limit 

The limit of loan amount under this scheme are as follows:- 

CGSS Guarantee Fee

The guarantee fee charged are as follows:- 

Credit Guarantee Scheme for Startups Duration 

The applicants or eligible borrowers who are going to get loans provided by the lending institutions will provide them loans on the basis of the duration that has been fixed by the selection body or the government. The applicants will be able to carry out loan amounts for a maximum duration of 5 years. 

Credit Guarantee Scheme for Startups:- Selection Procedure

Startups often face challenges in securing credit from financial institutions due to their limited track record and high-risk nature. To address this issue, governments and financial institutions have introduced Credit Guarantee Schemes specifically designed for startups. These schemes provide a safety net for lenders, encouraging them to extend credit to startups by guaranteeing a portion of the loan amount. In this article, we will explore the selection procedure of a Credit Guarantee Scheme for startups.

Credit Guarantee Scheme for Startups:- Implementation Procedure

Implementing a Credit Guarantee Scheme involves several steps to ensure its smooth functioning. The process typically begins with the identification of eligible startups and continues with the application and evaluation phases. Let’s delve into the implementation procedure of a Credit Guarantee Scheme for startups.

Credit Guarantee Scheme for Startups:- Supervision Body

Supervision and oversight are crucial for the successful implementation of a Credit Guarantee Scheme. A dedicated body or organization is responsible for monitoring the scheme’s operations, ensuring transparency, and resolving any disputes that may arise. Let’s take a closer look at the role of the supervision body in a Credit Guarantee Scheme for startups.

Key Guidelines for Credit Guarantee Scheme for Startups

• Eligibility Criteria:- Clearly define the eligibility criteria for startups to participate in the scheme. This may include factors such as the age of the startup, sector, and financial viability.
• Loan Coverage:- Determine the maximum loan amount that can be guaranteed under the scheme. This will help manage the risk exposure for the guaranteeing body.
• Guarantee Fee:- Establish a reasonable guarantee fee that startups need to pay to avail the benefits of the scheme. This fee should be affordable and commensurate with the loan amount.
• Documentation Requirements:- Specify the documents that startups need to submit along with their loan application. This may include business plans, financial statements, and other relevant information.
• Collateral Requirements:- Define the collateral requirements, if any, for startups seeking credit under the scheme. This will help mitigate the risk for lenders.
• Loan Repayment Terms:- Set clear guidelines regarding the repayment terms for startups. This may include the repayment period, interest rates, and any grace periods.
• Disbursement Process:- Outline the process for disbursing the guaranteed funds to the startups. This should be streamlined and efficient to ensure timely access to credit.
• Monitoring and Evaluation:- Establish mechanisms to monitor the performance of startups availing credit under the scheme. Regular evaluation will help identify any issues and take corrective measures.
• Default Management:- Define the procedures for managing defaults by startups. This may involve recovery mechanisms, legal actions, or restructuring options.
• Review and Improvement:- Periodically review the Credit Guarantee Scheme to identify areas for improvement and make necessary modifications to enhance its effectiveness.

Important Instructions for Credit Guarantee Scheme for Startups

• Thoroughly understand the eligibility criteria and ensure that your startup meets all the requirements before applying for the scheme.
• Prepare a comprehensive business plan and financial projections to demonstrate the viability of your startup to the guaranteeing body.
• Gather all the necessary documents and ensure their accuracy and completeness before submitting your loan application.
• Be aware of the collateral requirements, if any, and explore options to provide suitable collateral to secure the loan.
• Understand the repayment terms and ensure that your startup has a feasible plan to repay the loan within the specified timeframe.
• Follow the disbursement process diligently and provide any additional information or documentation as requested by the guaranteeing body.
• Maintain regular communication with the supervision body and promptly address any queries or concerns they may have.
• Monitor your startup’s financial performance closely and take proactive measures to avoid defaulting on the loan.
• Seek professional advice if you encounter any difficulties or need assistance in managing your startup’s finances.
• Keep yourself updated with any changes or updates to the Credit Guarantee Scheme and adapt accordingly to maximize its benefits.

Tips and Tricks for Credit Guarantee Scheme for Startups

• Network with other startups who have availed the Credit Guarantee Scheme to gain insights and learn from their experiences.
• Engage with financial advisors or consultants who specialize in startup financing to navigate the complexities of the scheme.
• Build a strong credit history by maintaining a good relationship with lenders and repaying any existing loans on time.
• Explore alternative financing options such as venture capital or angel investors alongside the Credit Guarantee Scheme to diversify your funding sources.
• Continuously improve your startup’s financial management practices to demonstrate your ability to handle credit responsibly.
• Stay informed about government initiatives and policies that support startups and leverage them to your advantage.
• Maintain accurate and up-to-date financial records to facilitate the application and evaluation process.
• Seek feedback from the supervision body to identify areas for improvement and implement necessary changes.
• Attend workshops, seminars, and training programs related to startup financing to enhance your knowledge and skills.
• Stay persistent and resilient throughout the process, as securing credit for startups can be challenging but not impossible.

General Points to Remember for Credit Guarantee Scheme for Startups

• Each Credit Guarantee Scheme may have specific guidelines and procedures, so it is essential to familiarize yourself with the scheme applicable to your region or country.
• The success of a Credit Guarantee Scheme depends on the collaboration between startups, financial institutions, and the supervision body.
• Credit Guarantee Schemes can provide a significant boost to startups by enabling them to access the necessary credit for growth and expansion.
• It is crucial to maintain transparency and integrity throughout the application and evaluation process to build trust with the guaranteeing body.
• Regularly review and evaluate your startup’s financial performance to ensure timely repayment and avoid defaulting on the loan.
• Seek professional advice from legal and financial experts to fully understand the implications and obligations of participating in a Credit Guarantee Scheme.
• Remember that a Credit Guarantee Scheme is not a substitute for sound financial management practices and a viable business model.
• Maximize the benefits of the Credit Guarantee Scheme by utilizing the guaranteed credit effectively to achieve your startup’s growth objectives.
• Maintain open communication channels with the guaranteeing body and promptly address any concerns or issues that may arise during the loan tenure.
• Continuously update your knowledge about the startup ecosystem, financial markets, and regulatory changes to make informed decisions regarding credit utilization.

Some Other Related Programmes 

Some other related programmes are as follows:- 

• National Initiative for Developing and Harnessing Innovations (NIDHI)
• Startup India Action Plan (SIAP)
• Ranking of States on Support to Startup Ecosystems (RSSSE)
• Fund of Funds for Startups (FFS)

Benefits Of Credit Guarantee Scheme for Startups 

The benefits of this scheme are as follows:- 

• The applicants will be able to start their own business ventures.
• This will increase the employment rate in India country.
• India will be able to increase its production and growth in terms of enterprises. 
• The maximum duration on the basis of which the applicants can borrow the loan amount will be 5 years. 
• One can apply online before the last date for getting timely registration. 
• There will be a generation of employment opportunities. 

Features Of Credit Guarantee Scheme for Startups 

The features of this scheme are as follows:- 

• With the active participation or association of the Department for Promotion of Industry and Internal Trade (DPIIT), the Ministry of Commerce and Industry Credit Guarantee Scheme for Startups has been launched.
• This will provide loans to the borrowers to build their own new business ventures or enterprises.
• The maximum loan amount can be Rs. 10 Crores which can be undertaken by the borrower. 
• Guarantee Fee will also be charged on the basis of the loan amount borrowed by the applicant. 
• The duration of this loan period will be 5 years. 
• For getting more information, one can visit the official website.

Credit Guarantee Scheme for Startups Eligibility Criteria 

The applicants will need to follow the below-mentioned points to apply online for CGSS:- 

• He or she must be a citizen of India.
• The applicant must be wanting to undertake loans for their business start-up. 

Important Documents 

Some of the important documents to apply online under this scheme:-

• Identity Proof 
• Address Proof (Passport/Voter ID Card/Driving License/Aadhaar Card)
• Bank statement of previous 3 months 
• Two latest salary slips/current dated salary certificate with the latest Form 16

Process To Apply Online Under Credit Guarantee Scheme for Startups 

As this scheme has been recently launched no such information has been released with the help of various social networking sites regarding the application procedure to apply online for the Credit Guarantee Scheme for Startups. Whenever the application procedure will be launched, we will update you through this article otherwise the applicant can visit the Official Website.

To Do Login 

The applicants will need to follow the below-mentioned points to do login:- 

• Visit the official website first.
• There are various links to log in will get appeared such as:-
  • ECLGS Login 
  • MLI Login 
  • NCGTC Staff Login
• Click on anyone’s link as per your choice.
• The relevant page will get displayed on your screen.
• Fill it in with the required details. 

Getting Contact Details 

The applicants will need to follow the below-mentioned points to get contact details:- 

• Visit the official website first.
• On the homepage, click on the drop-down menu placed above.
• Now click on the Contact Us option.

• The contact details will get displayed on your screen. 

Contact Information 

In case any queries and questions come to your mind regarding the Credit Guarantee Scheme for Startups, then you may contact this mentioned office address, phone no, and email ID:- 

• Office Address:- 
  • Central Public Information Officer (CPIO) under RTI
  • Swavalamban Bhavan,C-11, G-Block,
  • Bandra Kurla Complex, Bandra (East), Mumbai 400051 
• Phone No:- 022-67221413
• Email ID:- smrutih@ncgtc.in