A Business Development Company (BDC for short), is a type of corporate structure made possible by regulation
introduced by Congress in 1980. Under the structure, a BDC typically also elects to be treated as a Regulated
Investment Company, or RIC for short. Often, these companies are referred to as "BDC/RICs" or most often just "BDCs"
because in almost all cases within our coverage universe a BDC will also be a RIC.
The reason Congress created the BDC structure was to encourage the flow of public equity capital to private businesses
in the United States. BDCs have a requirement to invest at least 70% of their assets in private U.S. companies (or
very small public U.S. companies), and a requirement to make available significant managerial assistance to their
portfolio companies. Much like a Real Estate Investment Trust (REIT), BDCs must distribute 90% of their
taxable income to shareholders as dividends, and in doing so avoid double-taxation.
Learn more about BDCs at our Introduction to BDCs page.