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Business Development Companies

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What they areEdit

Business Development Companies (BDC) were first authorized as a corporate entity in the United States by Congress in 1980. They were intended to aid in providing capital to small and medium sized companies that lacked adequate access to financing through banks or the public market

StructureEdit

As a rule, BDC's are set up as closed-end funds, and are regulated. Additionally, they must meet the following requirements:

  1. Invest at least 70% of assets in specific types of investments.
  2. Provide managerial assistance to the companies within their portfolio.
  3. Meet asset diversification tests.
  4. Distribute almost all net investment income to shareholders on an basis.

Some CompaniesEdit

CompanyTickerTypeDividend
Allied Capital 1ALDDiversified2.6
American Capital Strat.ACASDiversified4.12
Ameritrans Capital2AMTCSBIC Loans3.04
Apollo Investment1AINVDiversified2.08
Ares CapitalARCCDiversified1.68
Capital Southwest2CSWCVenture Cap.80
Equus Total ReturnEQSDiversified.63
Gladstone CapitalGLADDiversified1.68
Harris & HarrisTINYNanotechNone
Hercules TechHTGCTechnology1.36
Kohlberg CapKCAPDiversified1.64

Notes:Edit

1. recently profiled in Kiplingers.

2. AAII seems to like this one.

3. Small Business Investment Company Loans

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