LfA Förderbank Bayern looks back on a successful fiscal year 2025 Back in 2025, total output amounted to €2.67 billion, a substantial increase of 45 percent. The breadth of this growth is particularly noteworthy: LfA not only expanded its traditional lending business but also simultaneously strengthened its role as a financier for SMEs, transformation projects, and startups. This is significant for the Bavarian ecosystem because it demonstrates that public funding instruments are once again being used more effectively as levers for investment, innovation, and succession solutions in a challenging economic environment.
The state-owned specialist bank committed more than €2.16 billion in its core business of program loans for small and medium-sized enterprises (SMEs) and municipalities in 2025. Together with syndicated and global loans of over €370 million, this brought the total lending to more than €2.53 billion. Including risk assumptions of €138 million, the total funding provided to Bavaria amounted to approximately €2.67 billion.
1.32 billion euros for start-up, growth and working capital
A key focus in 2025 was on the Funding area: Start-up, growth & Working capital. Loan commitments here rose to around €1.32 billion. In the previous year, they stood at €1.02 billion. This corresponds to an increase of just over 29 percent.
In this area, the LfA finances not only traditional growth investments, but also new business start-ups and company successions. This is a particularly important finding for start-ups and smaller medium-sized enterprises. The LfA addresses not only later growth phases, but also early entrepreneurial steps and transitional situations within the SME sector.
Transformation is becoming the second major growth driver.
The funding areas of Innovation & Digitalization and Energy & Climate Protection developed even more dynamically. Commitments here rose to around 720 million euros, compared to around 235 million euros in 2024. This means that the volume in the area of economic transformation has more than tripled.
This suggests that the LfA's expanded programs, launched in 2025, have had a direct impact on businesses. Particularly relevant is the opening of loan programs to finance digital and ecological transformation, even for larger medium-sized enterprises. According to the LfA, demand for larger-volume loans was especially high, indicating a significant need for investment in this segment.
Higher loan amounts and more liability waivers are having an effect
A key reason for the strong funding year was the strategic expansion of the program starting in spring 2025. The LfA had significantly increased maximum loan amounts, expanded risk relief through liability waivers, and broadened its programs to include transformation projects.
These instruments are particularly crucial during periods of economic strain because they provide banks and businesses with greater financial flexibility. The significant increase in demand in 2025 can therefore also be interpreted as a signal that standardized public funding principles and a higher willingness to take risks in investments are once again finding a better balance.
€124 million in equity commitments for startups and scaleups
Of particular relevance to the startup scene is the development in the area of equity investments. Around €124 million in new commitments were made in 2025 via equity instruments of LfA and its venture capital subsidiary Bayern Kapital. The previous year saw €85 million in commitments.
This is further enhanced by the VC4Start-ups initiative of the Free State of Bavaria, which has been running since 2025. This initiative is creating new venture capital funds with a total additional volume of €750 million. In addition, the Bayern-Kapital Growth and ScaleUp Fund has been relaunched with a fund volume of €500 million. This will enable future investments of up to €50 million per startup.
This is an important point for the Bavarian startup ecosystem. While public funding is often associated with early-stage support, the expansion now visibly also aims at larger growth and scaling rounds.
Municipalities also benefit
Not only businesses, but also municipalities benefited from the increased funding activity. Around 85 Bavarian municipalities were able to realize investments in municipal infrastructure totaling almost €190 million in 2025 with LfA promotional loans.
This shows that the LfA continues to understand its role broadly, namely as a financing institution for economic development throughout the Free State. This is not insignificant for regional innovation hubs, as infrastructure investments often create the foundation for business relocations, commercial space, energy projects, or digital site development.
LfA's total assets and core capital ratio have increased
LfA also reported a stable year in terms of its business performance. Total assets in 2025 amounted to €25.2 billion, slightly above the previous year's level of 2.7 percent. The Common Equity Tier 1 (CET1) ratio rose from 20.3 to 23.9 percent.
The operating result after risk provisions amounted to slightly more than €40 million. At the same time, the bank allocated €25 million to the fund for general banking risks in accordance with Section 340g of the German Commercial Code (HGB). In 2024, this figure was €20 million. The net profit remained unchanged at €20 million.
These key figures are important for classification because they show that the LfA is not expanding its funding activities from a period of weakness in its balance sheet, but rather on a stable capital base.
Aiwanger and Schwab see the expansion of the LfA confirmed
Bavaria's Minister of Economic Affairs and Chairman of the LfA Administrative Board Hubert Aiwanger explains:
“The significant increase in demand in the 2025 funding year confirms that we have taken the right course with the expansion of the LfA's funding program. Especially in these challenging times, our Bavarian businesses need strong and reliable partners like the LfA by their side. The approximately 4,000 companies and municipalities that received funding from the LfA last year demonstrate the importance of targeted government support. In the future, we will continue to focus on a smart combination of public funding and private investment so that startups and established companies can actively invest, grow, and drive innovation from within Bavaria.”
LfA CEO Bernhard Schwab sees the bank's further development into a "strong SME and transformation bank" as the key lever for its increased effectiveness. According to him, further product innovations are expected to follow as early as 2026.
