DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
What Is a Business Development Company (BDC)?
As we plan out how to invest our money to get our maximum returns, we need to make use of a special group of stocks making up the REITs category. If you do not have some money invested in Real Estate, this is a very effective method to make money. We did an article explaining REITS a while back.
Read about Reits here.
Today we are going to talk briefly about Business Development Companies. Many of these are tied to Reits, but they also provide capital for other business uses besides Real Estate.
A business development company (BDC) is an organization that invests in small and medium-sized companies as well as distressed companies. A BDC helps these firms grow in the initial stages of their development. With distressed businesses, the BDC helps the companies regain sound financial footing.Similar to closed-end investment funds, many BDCs are public companies whose shares trade on major stock exchanges, such as the American Stock Exchange (AMEX), Nasdaq, and others. As investments, they are high-risk but offer higher rewards.
I try to find solid companies that provide financing that is being sold at a discount and also show dividends of 8% or more.
BDCs are much like private equity funds for small businesses. While private equity funds tend to be restricted to high-net-worth and institutional investors, Block Development Companies are publicly traded on the stock market and available to anyone with a brokerage account. What is even greater, is they are transparent and easy to research. Like all stocks, these may or may not go up in price. However BDCs do normally pay dividends, and those are the ones I try to buy.
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