"How exactly do we access this ₹20 crore with no collateral?"
I promised to share the exact process, so here it is.
CGSS now offers guarantees up to ₹20 crore. debt funding that doesn't dilute your equity. The government covers 65-80% of the default risk, making banks more willing to lend to startups.
But good schemes often fail at implementation. Let me show you how to navigate this one successfully.
Here's the 5-step process many founders use to secure CGSS funding
1. Register on Startup India & get DPIIT recognition first
⤷ This is non-negotiable and takes 2-3 weeks
⤷ Create a comprehensive profile on [startupindia.gov.in]
⤷ Ensure your incorporation documents, address proofs, and director IDs are ready
⤷ Follow up with the DPIIT team if there are delays beyond 3 weeks
2. Select the right bank/NBFC
⤷ Research which ones have active CGSS disbursals (SBI, Bank of Baroda, and Punjab National Bank are currently most active)
⤷ Target institutions with dedicated startup teams (many now have specialized branches)
⤷ Public sector banks often more receptive than private banks for this scheme
⤷ Pro tip: Find out which relationship manager has processed CGSS applications before
3. Prepare bank-specific documentation
⤷ 3-year financial projections with clear debt servicing ability (focus on DSCR ratios)
⤷ Business plan focused on risk mitigation (unlike VC pitch)
⤷ Market validation evidence (contracts, LOIs, customer testimonials)
⤷ Detailed use of funds with timeline and measurable outcomes
⤷ Management team credentials emphasizing operational expertise
4. Apply and address feedback quickly
⤷ Typical processing: 4-6 weeks
⤷ Be responsive to queries within 24-48 hours (delays kill applications)
⤷ Have supporting data ready for common questions on market size, competition, and financial assumptions
⤷ Be prepared for multiple meetings and clarifications (persistence matters)
⤷ Consider getting advisory support if needed (many banks have empaneled consultants)
5. Post-approval compliance
⤷ Meet all conditions precedent (these can be numerous but are critical)
⤷ Set up proper financial reporting systems for ongoing bank requirements
⤷ Maintain open communication with bank relationship manager
⤷ Document milestone achievements to build credibility for future funding
What most founders miss is that bank financing requires a completely different mindset than equity funding.
Banks are looking for:
→ Steady, predictable growth rather than hypergrowth
→ Conservative projections that you can beat, not moonshots
→ Clear evidence of repayment capability
→ Risk mitigation strategies for various scenarios
The founders who win in the long run often aren't the ones who raised the most but those who raised most efficiently.
StartupFunding CGSS DebtFinancing EntrepreneurshipIndia
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