State Guarantees for the Commercial Sector

The funding program targets commercial enterprises and liberal professionals with a registered office in Bavaria who cannot provide sufficient bankable collateral for their projects. The aim is to support projects of economic, social, agricultural, or cultural-political interest for the Free State of Bavaria, even if they exceptionally take place outside Bavaria but benefit Bavaria's economic and financial strength.

The state guarantee supports the financing of various projects in the commercial sector. Funding primarily covers investments, in exceptional cases also working capital, and guarantee facilities for securing contracts. The guarantee covers up to 80 percent of the loan amount and extends over a maximum term of 15 years.

The Free State of Bavaria provides default guarantees for loans to compensate for missing standard banking collateral. The guarantee covers up to 80 percent of the loan amount and is limited to a maximum term of 15 years. Applications are processed and guarantees monitored by LfA Förderbank Bayern.

Several conditions must be met to apply for a state guarantee, including proof of insufficient collateral, the overall financing of the project, and compliance with EU state aid regulations. Specific rules apply regarding equity, project start, and aid cumulation.

Applications for a state guarantee are submitted through the house bank, which forwards them to LfA Förderbank Bayern after its own review. LfA reviews the application and obtains a professional opinion before the State Ministry of Finance makes the final decision. For larger guarantee amounts, additional approvals are required.

State guarantees in the commercial sector are based on the Directive of the Bavarian State Ministry of Finance, for State Development and Homeland, dated December 22, 2014. This directive sets out the application of EU state aid regulations and specifies the budgetary framework for assuming guarantees.