Government has started a Credit Guarantee Scheme for Startups to provide Collateral Free Loans upto Rs. 10 crores to Startups. You may submit your details in the below form to get the assistance of MSME Helpline:
[ Ссылка ]
Key features of the scheme are as under:
1. Date of commencement
i. It shall come into force from the date of notification by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India, which is October 6, 2022.
iii. Loan/Debt facilities sanctioned to an eligible borrower on or after the date of notification of the scheme shall be eligible for coverage under the scheme.
2. Objective of the scheme
The broad objective of CGSS is to provide guarantee upto a specified limit against credit instruments extended by Member Institutions (MIs) to finance eligible Startups. This scheme would help provide the much needed collateral free debt funding to Startups.
3. Eligible borrower
The eligibility criteria for an entity to borrow under the Credit Guarantee Scheme for Startups shall be as follows, wherein an entity should be:
i. Startup as recognized by DPIIT as per Gazette Notifications issued from time to time, and
ii. Startups that have reached stage of stable revenue stream, as assessed from audited monthly statements over a 12 month period, amenable to debt financing, and
iii. Startup not in default to any lending/investing institution and not classified as Non-Performing Asset as per RBI guidelines, and
iv. Startup whose eligibility is certified by the member institution for the purpose of guarantee cover.
4. Eligible lending/investing institutions
The eligibility criteria for the lending/investing institutions under the Credit Guarantee Scheme for Startups shall be as follows:
i. Scheduled Commercial Banks and Financial Institutions,
ii. RBI registered Non-Banking Financial Companies (NBFCs) having a rating of BBB and above as rated by external credit rating agencies accredited by RBI and having minimum net worth of Rs. 100 crore. However, it may be noted that in case an NBFC subsequently becomes ineligible, due to a downgrade in the credit rating below BBB, the NBFC shall not be eligible for further guarantee cover till upgradation again to eligible category.
iii. SEBI registered Alternative Investment Funds (AIFs).
5. Instruments of assistance
i. The instruments of assistance would be in the form of Venture debt, working capital, subordinated debt/mezzanine debt, debentures, Optionally Convertible debt and other fund based as well as non-fund- based facility which has crystallised as a debt obligation.
ii. In the event of converting optionally convertible debt, partially or fully, to equity, the debt obligation of the borrower and the guarantee will stand reduced to the extent of equity conversion. [However, the MI need to take prior permission from Fund/Trustee which could be given conditionally or at a pre-closure premium or it will be treated as cash inflow while final settlement of claims.]
6. Ceiling on guarantee cover
i. Maximum guarantee cover per borrower shall not exceed Rs.10 crore.
ii. The credit facility being covered here should not have been covered under any other guarantee scheme.
iii. In respect of credit facilities where a portion of the same has been secured by way of partial collateral security, the remaining part comprising of the unsecured facility will be covered under the guarantee scheme. The guarantee will be limited to the outstanding limit less the value of collateral security accepted
by the MI at the time of sanction of facilities in terms of its valuation policy guidelines, subject to compliance of other conditions of the scheme.
#creditgauranteeschemeforstartups #creditguaranteescheme #creditguaranteefundformicrounits #creditguaranteeschemeforstartups2022 #creditgauranteeschemeforstartupsand #creditguaranteeschemeforstartupsandtechcompanies
#startupfunding #startupfundingexplained #startupfundingrounds #startupfunding2022 #startupfundingfromgovernment #startupfundingindia #startupfunding101 #startupfundingseriesexplained #startupfundingprocess #startupfundingpitch #startupfundingstories #startupfundingoptions #startupfundingseries #startupfundinginpakistan #startupfundingshow #startupfundingand #startupfundingandstrategyforfuture #startupfundingandvaluation #startupfundingankurwarikoo #startupfundinglive #startupfundinguk #startupfundingnews
