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
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 required
- Udyam registration certificate
- KYC of the promoters
- Project report / business financials
- Bank statements
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.
Startup India Seed Fund Scheme
Early-stage funding for proof of concept, prototype development, product trials, market entry and commercialisation — routed through selected incubators.
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.