Credit guarantee scheme for startups notified; loans up to Rs. 10 crore collateral-fee

The government has notified a credit guarantee scheme for start-ups (CGSS) under which lenders will extend collateral-free loans up to Rs 10 crore to each eligible borrower.

Loans or debt facilities sanctioned to an eligible startup on or after October 6 can be covered under the scheme, the Department for Promotion of Industry and Internal Trade (DPIIT) said in a notification. The loans will be backed by sovereign guarantee. The move is aimed at supporting startups that are hit hard by the pandemic and are now going to be impacted further by the rising interest rate scenario when liquidity is unlikely to be easily available to new entrepreneurs.