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Startups To Get Collateral Free Loans Under Credit Guarantee Scheme

Government notifies Credit Guarantee Scheme to provide collateral-free loans up to a specific limit for startups. The eligible startups would be covered on or after 6 October under the scheme

The government has notified the credit guarantee scheme for startups to provide them with collateral-free loans up to a specified limit. In a notification, the Department for Promotion of Industry and Internal Trade (DPIIT) said that loan/debt facilities sanctioned to an eligible borrower on or after October 6, would be eligible for coverage under the scheme.
 
In the notification by the Department for Promotion of Industry and Internal Trade(DPIIT), it was mentioned that loan/debt facilities sanctioned to an eligible borrower on or after October 6, would be eligible for coverage under the scheme.

"The Central Government has approved the 'Credit Guarantee Scheme for Startups (CGSS) for the purpose of providing credit guarantees to loans extended by member institutions (MIs) to finance eligible borrowers being startups," it said.
 
MIs include financial intermediaries (banks, financial institutions, NBFCs, AIFs) engaged in lending/investing and conforming to the eligibility criteria approved under the Scheme. 

The startups that have a stable revenue stream, according to audited monthly statements over a 12-month period, startups that do not default to any lending/investing institution and are not classified as non-performing assets according to the RBI are eligible for the scheme.




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