Overview
Guarantee cover to banks so micro and small enterprises can get term loans and working capital without collateral or third-party guarantee.
Why it matters for founders
Use this scheme together with other Startup India and MSME benefits. Our community experts can help you prepare documents and a strong application.
Key benefits
Collateral-free term loans and working capital for MSEs
Guarantee cover of 75%–85% of the amount in default, higher for micro units, women-owned units and the North-East
Reduced annual guarantee fees for smaller loans
Credit limits are revised by the government from time to time — check the official site for the current ceiling
Eligibility
- New and existing micro and small enterprises in manufacturing or services (including retail trade)
- Loan from a member lending institution (most scheduled banks, NBFCs and SFBs)
- No collateral security or third-party guarantee taken for the loan
Who should apply
- Early-stage founders who meet the eligibility above and have their documents ready
- Businesses that need this type of support (grant, loan or subsidy) in the next 6–12 months
- Applicants who can show a clear plan for how the money or benefit will be used
How to apply
- 1
Approach a member bank or NBFC for a loan
- 2
The lender assesses the proposal on merit
- 3
The lender applies to CGTMSE for guarantee cover and pays the guarantee fee
Documents checklist
0 of 4 readyTick each document as you collect it — your ticks are saved on this device.
Common mistakes to avoid
- Applying before checking every eligibility condition
- Uploading unclear, unsigned or expired documents
- Using different business names or addresses across documents
- Paying agents who promise guaranteed approval — government applications are free
- Missing the deadline or not tracking the application status
Frequently asked questions
Who can apply for Credit Guarantee Fund Trust for Micro and Small Enterprises?
Where do I apply?
Is the information on this page official?
Similar schemes
Credit Guarantee Scheme for Startups
Guarantee cover on loans given by banks, NBFCs and venture debt funds to DPIIT-recognised startups, so founders can borrow without collateral.
Pradhan Mantri Mudra Yojana
Collateral-free loans for non-farm micro and small enterprises through banks, NBFCs and MFIs under the Shishu, Kishore, Tarun and Tarun Plus categories.
Prime Minister's Employment Generation Programme
Credit-linked subsidy for setting up new micro-enterprises in manufacturing and service sectors, with higher subsidy for special categories and rural areas.
Tax Exemption for Startups (Section 80-IAC)
Eligible DPIIT-recognised startups can claim a deduction of 100% of profits for any 3 consecutive years out of their first 10 years.
