LfA Förderbank Bayern looks back on a successful business year 2025. Total support performance in 2025 amounted to €2.67 billion. That’s a solid increase of 45 percent. What is particularly noteworthy is the breadth of growth: LfA not only increased its traditional lending business but simultaneously expanded its role as a financier for mid-market companies, transformation, and startups. For the Bavarian ecosystem, this is relevant because it shows that public funding instruments are again being used more strongly as a lever for investments, innovations, and succession solutions in a difficult economic environment.
In its core business with program loans for mid-market companies and municipalities, the state-owned specialist bank approved more than €2.16 billion in 2025. Together with consortium and global loans of over €370 million, total credit provision reached more than €2.53 billion. Including risk assumptions of €138 million, total support performance for the location of Bavaria thus amounted to approximately €2.67 billion.
€1.32 billion for founding, growth and working capital
A major focus in 2025 was on the funding area founding and growth & working capital. Here, loan approvals rose to approximately €1.32 billion. In the previous year, these were still at €1.02 billion. This corresponds to an increase of just under 29 percent.
In this area, LfA finances not only classic growth investments but also new startups and business successions. This is an important finding especially for startups and smaller mid-market companies. LfA addresses not only later growth phases but also early entrepreneurial steps and transition situations in mid-market companies.
Transformation becomes the second major growth driver
The funding area innovation & digitalization as well as energy & climate protection developed even more dynamically. Commitments here rose to approximately €720 million, compared to approximately €235 million in 2024. This means the volume in the area of economic transformation has more than tripled.
This suggests that the expanded LfA programs in 2025 have directly reached companies. Particularly relevant here is the opening of loan programs for financing digital and ecological transformation also in the larger mid-market. According to LfA, especially the higher-volume lending business was in strong demand, which indicates high investment needs in this segment.
Higher loan amounts and more liability exemptions show impact
A key reason for the strong funding year was the strategic expansion of offerings from spring 2025. LfA significantly raised maximum loan amounts, expanded risk relief through liability exemptions, and opened its programs more broadly for transformation projects.
These instruments are particularly crucial in economically strained phases because they give house banks and companies more financing flexibility. The fact that demand increased so significantly in 2025 can also be read as a signal that standardized public funding logic and higher risk appetite for investments are coming together better again.
€124 million in equity commitments for startups and scaleups
Particularly relevant for the startup scene is the development in the equity investment area. Through LfA’s equity instruments and its venture capital subsidiary Bayern Kapital, approximately €124 million was newly committed in 2025. In the previous year, this was €85 million.
Additional significance comes from the VC4Start-ups initiative launched by the Free State of Bavaria in 2025. This creates new venture capital funds with a total additional volume of €750 million. In addition, there is the new edition of the Bayern Kapital Growth and ScaleUp Fund with a fund volume of €500 million. This makes it possible for future investments of up to €50 million per startup.
For the Bavarian startup ecosystem, this is an important point. Because while public funding is often associated with early-stage support, the expansion now visibly also targets larger growth and scaling rounds.
Municipalities also benefit
Not only companies but also municipalities benefited from increased funding activity. Approximately 85 Bavarian municipalities were able to realize investments in municipal infrastructure totaling almost €190 million in 2025 with LfA funding loans.
This shows that LfA continues to understand its role broadly, as a financing institution for economic development in the Free State as a whole. For regional innovation hubs, this is not insignificant, because infrastructure investments often create the foundation for business settlements, commercial areas, energy projects, or digital site development.
LfA’s balance sheet total and core capital ratio increased
From an operational perspective, LfA also reports a stable year. The balance sheet total was €25.2 billion in 2025, slightly above the previous year’s level of plus 2.7 percent. The hard core capital ratio increased from 20.3 to 23.9 percent.
Operating result after risk provisions was just over €40 million. At the same time, the bank allocated €25 million to the fund for general banking risks according to § 340g HGB. In 2024, this was still €20 million. The annual profit remained at a high €20 million unchanged.
These figures are important for classification because they show that LfA is expanding its funding impact not from a phase of balance sheet weakness but from a stable capital base.
Aiwanger and Schwab see LfA expansion confirmed
Bavaria’s Minister of Economics and LfA Administrative Board Chairman 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 funding offering. Especially in continued difficult times, our Bavarian companies need strong and reliable partners like LfA by their side. Approximately 4,000 companies and municipalities supported by LfA in the past year show how important targeted government support is. In the future, we will continue to focus on intelligent coordination of public funding and private investments so that entrepreneurs and companies can actively invest, grow, and advance innovations from Bavaria.”
LfA CEO Bernhard Schwab sees the development into a “strong mid-market and transformation bank” as the central lever for the increased impact. According to his information, further product innovations are already planned for 2026.
