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Full-Text Articles in Securities Law
Business Development Companies – The Basics, Christine Lazaro
Business Development Companies – The Basics, Christine Lazaro
Faculty Publications
(Excerpt)
Business Development Companies (“BDCs”) are a type of closed end fund. They were created by Congress in 1980, through amendments to the Investment Company Act of 1940 (the “1940 Act”).
BDCs were first created when a venture capital pool manager lobbied Congress to make it easier to invest in venture capital pools and private equity investments. While there was early interest in BDCs, their popularity waned through the 1990s. Since 2000, they have once again regained their popularity.
BDCs provide funding to small and mid-sized businesses. Following the financial crisis, BDCs were able to provide loans to businesses that …