Hercules Technology Growth Capital Receives SBA Approval to Complete its Second SBIC License
A second license would increase the Company's borrowing capacity up to a cumulative $225 million
PALO ALTO, Calif.--(BUSINESS WIRE)-- Hercules Technology Growth Capital, Inc. (NASDAQ: HTGC), the leading specialty finance company providing venture debt and equity to venture capital and private equity-backed technology and life science companies at all stages of development, today announced that after its presentation to the Small Business Administration (SBA) committee on September 3, 2009, the Company has received a notice of approval by the SBA to pursue a second license as a Small Business Investment Company (SBIC). The second SBIC license will allow Hercules to access an additional $75 million of long-term non-callable capital, bringing Hercules's combined borrowing capacity through the SBIC program to a total of $225 million of capital.
In order to fully access the new $75 million, Hercules will, upon the receipt of the second license, be required to invest an additional $37.5 million into its newly formed wholly owned SBIC subsidiary, Hercules Technology III, L.P.
"Our partnership with the SBIC program is a strategic and long-term component to maintaining a highly liquid balance sheet in order to fund the needs of many technology and life sciences companies seeking growth capital. We are extremely pleased to receive the approval by the SBA to move forward with our second license. We anticipate final approval for the additional $75 million to occur in the first quarter of 2010," said Manuel A. Henriquez, co-founder, chairman and chief executive officer of Hercules.
As an existing member of the SBIC, Hercules was invited to present the Company's qualifications to the SBA for a second SBIC license on September 3, 2009. Select qualified SBICs have been given the opportunity to gain access to an additional $75 million, and higher under certain conditions, as the result of the American Recovery and Reinvestment Act of 2009 (Stimulus Bill) which contained a provision to increase the borrowing capacity of participants in the SBIC program. These provisions also increased the maximum amount of SBIC leverage capacity under its first license to $150 million from the prior maximum amount of approximately $137 million, of which Hercules has only drawn down $130.6 million.
"Over the course of the past few weeks, we are seeing some encouraging signs of economic recovery and we continue to believe that Hercules is well positioned to take advantage of the improving markets by maintaining a high level of liquidity. The additional capital from a second SBIC license will bolster our current liquidity position of approximately $125 million and play a beneficial part as we look to originate in an improved investment environment," Henriquez said.
The SBA program has played an important role within Hercules' funding strategy since first borrowing under the program in April 2007. As a reminder, Hercules has received an exemption from the SEC which allows for the exclusion of SBIC leverage from BDC debt to equity limitations.
About Hercules Technology Growth Capital, Inc.:
Hercules Technology Growth Capital, Inc. is a NASDAQ traded specialty finance company providing debt and equity growth capital to technology and life science companies at all stages of development. Founded in December 2003, the company primarily finances privately held companies backed by leading venture capital and private equity firms. Hercules invests in a broad range of ventures active in technology and life science industries and offers a full suite of growth capital products at all levels of the capital structure. The company is headquartered in Palo Alto, Calif. and has additional offices in the Boston, Boulder and Chicago areas. Providing capital to publicly-traded or privately-held companies backed by leading venture capital and private equity firms involves a high degree of credit risk and may result in potential losses of capital. For more information, please visit www.htgc.com.
Companies interested in learning more about financing opportunities should contact info@htgc.com, or call 650.289.3060.
Forward-Looking Statements:
The statements contained in this release that are not purely historical are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market turbulence, and other factors we identify from time to time in our filings with the Securities and Exchange Commission. Although we believe that the assumptions on which these forward-looking statements are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events.
Source: Hercules Technology Growth Capital, Inc.
Released September 8, 2009