Insights Archive

Small life science companies are the driving force behind groundbreaking medical innovations that have the potential to transform lives.

Introduction The SWK underwriting process generally consists of an approximate four-week diligence period followed by an approximate four-week legal documentation process. Key steps in SWK’s process include data review, key opinion leader (“KOL”) calls, customer...

The Federal Reserve’s move to raise interest rates to battle inflation – now running at approximately 8% annually – has altered the risk and return for investors, resulting in substantial market volatility. While life sciences companies are in a period of great innovation, they have not been immune to the upheaval in the financial markets and need creative funding alternatives when it comes to raising capital.

The primary motivation for growth stage companies to explore venture debt as a source of funding is to avoid the dilution that results from a round of equity financing. While venture debt will certainly be much less dilutive than an equity raise, prospective...

At SWK, we believe that financial covenants and the process of setting mutually agreeable covenant levels play an important role in the lender/borrower relationship. A lender's willingness to engage in the discussions and accommodate the requests outlined herein...

Factors to Consider When Choosing a Lender The four corners of the credit agreement will contain all of the important contractual terms and conditions to which a lender and borrower have agreed to be bound. The language will dictate what is required of each party...

Capacity is one of the five C’s of credit which refers to a borrower’s ability to repay a loan’s principal and interest. For early-stage companies, the capacity to repay is markedly more uncertain than for larger, more established businesses. The presence of...

As underwriting standards loosen during periods when capital markets become increasingly favorable to borrowers, an easing, or outright elimination of financial covenants invariably follows. Regardless of the lending environment, credit agreements will contain...