The Department for Promotion of Industry and Internal Trade (DPIIT) on Friday notified the credit guarantee scheme for start-ups to provide them collateral-free loans up to a specified limit.
“Maximum guarantee cover per borrower shall not exceed Rs 10 crore. The credit facility being covered here should not have been covered under any other guarantee scheme,” the department said in the notification.
“The government has approved the ‘Credit Guarantee Scheme for Start-ups (CGSS) to provide credit guarantees to loans extended by member institutions (MIs),” it said.
MIs include financial intermediaries (banks, financial institutions, NBFCs, AIFs) engaged in lending/investing and conforming to the eligibility criteria approved under the scheme.
Recognised start-ups with a stable revenue stream, as assessed from audited monthly statements over a 12-month period, amenable to debt financing; and start-ups that are not in default to any lending/ investing institution and not classified as a non-performing asset under RBI guidelines, are eligible for this scheme.
