CGTMSE Collateral-Free Loans up to ₹10 Crore — Eligibility, Guarantee Fee Slabs and the Udyam Assist Route (2025-26)
Quick answer: Since 1 April 2025 the Credit Guarantee Fund Trust for Micro and Small Enterprises covers loans up to ₹10 crore per borrower — doubled from ₹5 crore by Circular 250/2024-25 (Ref. CGTMSE/273, 18 March 2025) for guarantees approved on or after that date, including working-capital enhancements. The lender pays an annual guarantee fee (usually passed on) of 0.37% up to ₹10 lakh, 0.55% for ₹10–50 lakh, 0.60% to ₹1 crore, 0.85% to ₹2 crore, 1.00% to ₹5 crore, 1.10% to ₹8 crore and 1.20% to ₹10 crore (Circular 251/2024-25), with concessions for women, SC/ST, aspirational districts and the North-East. Udyam or an Udyam Assist certificate is the eligibility gate; DPIIT startups use the separate CGSS, now capped at ₹20 crore. We package the proposal so the bank actually invokes the guarantee instead of asking for property.
Last verified 5 October 2026 — rules on this page checked against the current notifications. We update it the day a rule changes.
The 2025-26 numbers (CGTMSE circulars)
| Item | Position | Source |
|---|---|---|
| Guarantee ceiling per borrower (CGS-I: PSBs, private, foreign banks, select FIs) | ₹10 crore for guarantees approved on or after 1 April 2025 (was ₹5 crore); applies to enhancements too | Circular 250/2024-25, Ref. CGTMSE/273, 18 Mar 2025 |
| Annual guarantee fee (AGF) on outstanding | ≤ ₹10 lakh 0.37% · ₹10–50 lakh 0.55% · ₹50 lakh–1 cr 0.60% · ₹1–2 cr 0.85% · ₹2–5 cr 1.00% · ₹5–8 cr 1.10% · ₹8–10 cr 1.20% | Circular 251/2024-25, Ref. CGTMSE/274, 18 Mar 2025; cgtmse.in fee structure |
| AGF concessions | Women-owned, SC/ST, ZED-certified, aspirational districts and North-East units get a reduced rate (10% rebate on the slab in most cases) | Fee structure page — confirmed per case |
| Coverage | 85% for micro loans up to ₹5 lakh; 75% standard; higher bands for women/SC/ST/NE/aspirational districts | CGS-I guidelines |
| Eligibility gate | Udyam-registered micro or small enterprise; informal micro units via the Udyam Assist certificate (treated at par with Udyam — S.O. 1296(E) 20 Mar 2023, RBI circular 9 May 2023) | PIB / SIDBI |
| Startups | Separate CGSS through DPIIT — ceiling revised to ₹20 crore per borrower from 8 May 2025 | startupindia.gov.in |
| Not covered | Retail trade beyond the permitted window, educational institutions, SHGs, and loans with collateral already taken (hybrid security allowed on the uncovered part) | Scheme guidelines |
How the bank actually decides
- The guarantee is the lender's to invoke — a branch that asks for property on a ₹2 crore term loan to an eligible unit is choosing not to use CGTMSE; the fix is a proposal the credit officer can approve under the scheme (CMA data, DSCR above the bank's floor, clean CIBIL, Udyam category right)
- Hybrid security: the bank can take partial collateral and cover only the unsecured portion under CGTMSE — often the route for ₹5–10 crore exposures
- AGF is charged on the outstanding each year; on a ₹1.5 crore limit at 0.85% that is about ₹1.3 lakh a year, usually debited to the borrower — budget for it in the CMA/DPR
- Pairs with PMEGP (margin-money subsidy) and state incentives; the 2025 MSME limits brought many "medium" units back into eligibility
What we do
- Udyam / Udyam Assist and category check; bank selection by CGTMSE uptake; CMA data, projections and DPR; guarantee-fee planning
- Representation when a branch insists on collateral; Mudra/Stand-Up India and CGSS routing where they fit
- Patna and NCR: PSB and SIDBI branch follow-up through sanction
Client: A Ghaziabad components manufacturer, small enterprise under the 2025 limits, seeking a ₹3.2 crore term loan.
Situation: Branch asked for the promoter's house as collateral despite scheme eligibility.
Approach: Rebuilt the CMA data to the bank's DSCR floor, documented Udyam category and CGTMSE coverage, and proposed hybrid security on a smaller uncovered slice.
Outcome: Sanctioned under CGTMSE with no residential property charged; AGF at 1.00%.
Client identity and certain details have been changed or withheld to protect confidentiality. Outcomes depend on individual facts and are not a guarantee of results.
Which loan fits? Mudra tiers, term loan, working capital, CC and OD.
Talk to us before you file anything
Frequently asked questions
What is the CGTMSE loan limit in 2025-26?
₹10 crore per borrower for guarantees approved on or after 1 April 2025 under Circular 250/2024-25 — doubled from ₹5 crore.
What is the CGTMSE guarantee fee?
An annual fee on the outstanding: 0.37% up to ₹10 lakh, 0.55% for ₹10–50 lakh, 0.60% to ₹1 crore, 0.85% to ₹2 crore, 1.00% to ₹5 crore, 1.10% to ₹8 crore and 1.20% to ₹10 crore (Circular 251/2024-25), with concessions for women, SC/ST, NE and aspirational districts.
Is Udyam registration mandatory for CGTMSE?
Yes — or an Udyam Assist certificate for an informal micro enterprise, which is treated at par with Udyam.
Can a bank still ask for collateral?
CGTMSE is the lender's choice; banks can take hybrid security and cover only the unsecured portion. A well-prepared proposal is what moves a branch to use the scheme.
Does CGTMSE cover startups?
DPIIT-recognised startups use the separate Credit Guarantee Scheme for Startups, with the cap revised to ₹20 crore per borrower from 8 May 2025.
Does CGTMSE cover working capital?
Yes — term loans, working capital and enhancements, within the ₹10 crore ceiling.
Who pays the guarantee fee?
The lender is charged and almost always recovers it from the borrower.
Are traders eligible?
Retail trade is covered only within the scheme's specific window and limits; manufacturing and service MSEs are the core.