Union Budget 2026-27 brings significant relief to MSMEs with doubled credit guarantee limits and expanded collateral-free lending.
Key Takeaways
- Credit guarantee limit doubled from Rs 5 crore to Rs 10 crore
- Collateral-free loans now available up to Rs 5 crore
- Interest subvention for priority sectors
- Simplified application process through UDYAM portal
Credit Guarantee Changes
- Previous Limit: Rs 5 crore
- New Limit: Rs 10 crore
- Coverage Ratio: Up to 85% for micro enterprises
Collateral-Free Lending
- Micro Enterprises: Up to Rs 2 crore collateral-free
- Small Enterprises: Up to Rs 5 crore collateral-free
- Processing Time: Maximum 15 days mandated
Combined with SME Growth Fund
When combined with the Rs 20,000 crore SME Growth Fund, MSMEs now have multiple avenues for growth capital.
Related: Union Budget 2026: Complete Guide to Startup Initiatives