Govt rolls out bigger, better CGSS to boost Startup loan access to Rs.20 Cr

The government has expanded the Credit Guarantee Scheme for Startups (CGSS) in 2025, increasing the cover to 85% for loans up to INR 5 crore and reducing processing fees by 40%. The revamped scheme introduces faster 72-hour approvals through an AI-powered platform and extends eligibility to startups registered in the last 7 years (previously 5). These changes aim to address the credit gap for early-stage startups facing funding winter conditions. The scheme has guaranteed INR 3,200 crore to 1,850 startups since inception, with default rates below 2.5%. The 2025 update also allows alternative collateral options like IP and future cash flows, particularly benefiting asset-light tech startups. SIDBI will administer the enhanced scheme in partnership with 12 scheduled banks and 5 NBFCs.