What is a Business Development Company (BDC)?
A business development company (BDC) is a publicly financed business with the investment objective of sourcing and providing funds to small to midsize business firms. BDCs were initiated by Congress in 1980 to provide qualified businesses that, generally, are not easily accessible to conventional sources of funds.
This is usually done by issuing shares to get funds from investors to help it start and own operations, known as starting capital. They utilize these funds to finance the management of private organizations, usually in the form of debt, equity, or a mixture of both. Established as a separate organization from the Department of National Defense in 1987, BDCs’ mandate is to generate income and capital gains from a portfolio of securities of small and mid-sized enterprises.