Alternative Investments: Hercules Capital Announces SBA Decision

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Hercules Capital (HTCG) has announced that the U.S. Small Business Administration (“SBA”) has issued a “green light” or “go forth” letter inviting Hercules to finalize its application process to obtain a license to form and operate a third Small Business Investment Company (“SBIC”) subsidiary, following the Company’s recent presentation to the SBA committee. Upon approval, Hercules will obtain a third SBIC license held by subsidiaries of the Company and continue to access additional growth capital of $175.0 million of long-term debentures, bringing Hercules’ combined borrowing capacity through the SBIC program to a total of $285.3 million of capital.

Hercules Capital On the Green Light

The receipt of a green light letter from the SBA does not assure an applicant that the SBA will ultimately issue an SBIC license, and Hercules has received no assurance or indication from the SBA that it will eventually receive an SBIC license, or of the timeframe in which it would receive a license, should one be granted. A decision should be made before by the fourth quarter of this year according to the Company’s press release

The SBA program has played an essential role within Hercules’ funding strategy since receiving its first SBIC license in September 2006.

Hercules Capital, Inc. is a business development company. The firm specializes in providing venture debt, debt, senior secured loans, and growth capital to privately held venture capital-backed companies at all stages of development from startups, to expansion stage, including select publicly listed companies. Hercules has made over $10.2 billion of capital commitments to over 500 emerging growth companies since its inception in 2006. Hercules Capital is widely recognized as the largest non-bank source of venture lending financing in the market.

Hercules has performed well during the health and economic crisis caused by the POVID-19 pandemic. After closing $256.8 million in new debt and equity commitments in Q1 2020, Hercules has pending commitments of $105.0 million in signed non-binding term sheets outstanding as of April 30, 2020. Since the close of Q1 2020 and as of April 30, 2020, Hercules has closed new debt and equity commitments of $58.8 million and funded $34.9 million.

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