Collateral-free credit for startups, through CGSS
Helping more than five DPIIT-recognised startups raise collateral-free debt for growth under the Credit Guarantee Scheme for Startups.
- Sector
- Startups and lending
- Scope
- 5+ DPIIT-recognised startups
- My role
- Advisor
The problem
Startups with revenue and a clear growth plan often struggle to borrow. Lenders ask for collateral the founders lack, and equity is an expensive way to fund working capital.
The Credit Guarantee Scheme for Startups, run by the National Credit Guarantee Trustee Company, exists for this gap: a government-backed guarantee covers part of the loan, so the lender can lend without collateral. The scheme is in place. Using it well is the hard part.
The approach
Check eligibility early
Confirm DPIIT recognition and that the business fits what participating lenders look for, before anyone spends time on paperwork.Shape the ask
Tie the loan to a clear use, such as working capital or a specific expansion, with numbers a credit team can test.Match with the right lender
Approach lending institutions that participate in the scheme and suit the startup's stage and sector.Prepare the credit case
Build the papers and projections the lender needs to decide quickly.Stay through to sanction
Answer lender questions and keep the process moving until the loan and the guarantee are in place.
Who it serves
Founders
Growth capital without pledging assets or diluting equity.Lenders
Better prepared applications from eligible startups, with the guarantee lowering their risk.
The outcome
More than five DPIIT-recognised startups raised collateral-free debt for growth under the scheme.