The Small Business Company (fka SBCO)

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What is a Business Development Company?

Pursuant to the Small Business Investment Incentive Act of 1980 (“BDC Act”), Congress established business development companies or BDCs as a form of hybrid closed-end investment companies under the Investment Company Act of 1940, as amended (“Investment Company Act”) designed to provide capital to mostly private companies, certain other designated companies and financially troubled companies lacking access to public capital markets, financial and operational management expertise and miscellaneous forms of traditional equity and debt capital. BDCs serve as publicly-traded, private equity funds. BDCs are excellent vehicles to raise alternative and venture capital; for example, BDCs may raise up to $5 million each year selling non-registered, non-restricted shares in Regulation E offerings pursuant to an offering circular. BDCs also may raise equity capital through Regulation D private placements, and a registered offering under Form N-2 Registration Statements, under the Securities Act of 1933, as amended (“Securities Act”).