Series 26: Business Development Companies

Business Development Companies

A business development company (BDC) is a type of closed-end investment company that invests in the securities of small, developing companies. The purpose of BDCs is to provide capital to small, struggling companies that cannot easily find capital elsewhere. Business development companies also may offer these companies their managerial assistance.

Registered business development companies must distribute at least 90% of their taxable income to shareholders every year.

BDCs are subject to the same diversification rules as other investment companies. They cannot put more than 5% of their assets in any single security or buy more than 1