• Increased guarantee limit per borrower to Rs 20 crore from  Rs10 crore
• Higher guarantee coverage: 85% for loans up to Rs10 crore; 75% for loans over  Rs10 crore
• Annual Guarantee Fee brought down from 2% to 1% for 27 'Champion Sectors' startups
• The coverage is for term loans, working capital, and venture debt

In a significant step to fortify India's startup ecosystem, the Government of India has enlarged the Credit Guarantee Scheme for Startups (CGSS), with improved financial assistance and operational reforms to facilitate access to debt financing. The updated scheme, notified by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, will enhance credit accessibility to startups through the provision of higher guarantee coverage and lower yearly guarantee fees. Based on the new guidelines, the guarantee limit per borrower has been increased from Rs10 crore to Rs20 crore. For loans of Rs10 crore or less, the guarantee cover has been raised to 85%, and loans of more than Rs10 crore will be covered to the tune of 75%. Moreover, the Annual Guarantee Fee (AGF) for start-ups in 27 selected 'Champion Sectors' under the Make in India programme has been reduced from 2% to 1% annually, reducing the cost of borrowing for sectors that are pivotal to the growth of the nation.

Introduced in October 2022 as part of the larger Startup India program initiated in 2016, the CGSS extends collateral-free credit assistance to qualifying startups by way of Scheduled Commercial Banks, NBFCs, AIFIs, and SEBI-registered Alternative Investment Funds. The widening is likely to induce financial institutions to lend more confidently to innovation-led startups, particularly those engaged in cutting-edge technologies and R&D. By lowering risk perception and enhancing the ease of availing credit, the new scheme will enable startups to grow faster without over-drawing on equity-based capital.

In addition to financial improvements, the government has launched ecosystem-based reforms to enhance the accessibility of the scheme, especially for innovation-led startups based in Tier 2 and Tier 3 cities. These steps intend to reduce procedural delays and facilitate wider participation by innovation-led firms. The scheme is consistent with the government's vision for long-term creation of a Viksit Bharat (Developed India), where startups are enabled to spur economic development, employment opportunities, and technology acceleration. With greater institutional confidence and higher credit availability, the scheme will unleash the next generation of India's innovation and entrepreneurship-led growth.