Hibernia Plans $30M in Venture Capital to Aid Small Louisiana Companies

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Hibernia Corp. plans to provide $30 million in venture capital to small companies that do not yet qualify for bank credit.

Hibernia, based in New Orleans, said it would dedicate $20 million for direct investments and make $10 million available to its subsidiary, Hibernia Capital Corp., which is seeking approval from the Small Business Administration to operate as a small business investment company, or SBIC.

"We expect to be a major player in the Louisiana venture capital market," said Hibernia Corp. president and CEO Stephen A. Hansel.

The bank estimates that Louisiana firms now have access to less than $100 million in venture capital.

While Hibernia and other banks have traditionally made loans to small businesses, few Louisiana banks have offered venture capital to small firms. In venture-capital agreements, banks gain part ownership of the firm, usually in the form of stock or subordinated debt.

A small-business investment company may purchase as much as 49.9% of a small firm's equity.

Hibernia Capital expects to be approved as an SBIC by yearend. About 300 SBICs now operate around the country. …