What is a business development company?
A concise guide for management teams assessing BDC financing or investment relevance.
A business development company, or BDC, is a US closed-end investment company that invests primarily in eligible portfolio companies and makes managerial assistance available subject to US statutory requirements. BDCs often participate in private credit and other mid-market financing. Availability, instrument, jurisdiction and company eligibility require transaction-specific review.
Where BDCs can fit
A BDC may provide senior debt, unitranche, subordinated debt or equity-linked capital depending on its mandate. A borrower should compare total cost, leverage, covenants, amortisation, security, equity participation, reporting and intercreditor terms against bank and other private-credit routes.
Borrower diligence questions
| Dimension | Question |
|---|---|
| Mandate | Does the company, sector, geography and ticket size fit? |
| Instrument | What debt, equity or hybrid structure is proposed? |
| Economics | What is the all-in cost including fees and equity participation? |
| Control | Which covenants, consents and information rights apply? |
| Execution | Who approves the investment and what diligence is required? |
Official sources reviewed
| Official source | Why it matters |
|---|---|
| US SEC; Investment Company Registration and Regulation | Official overview of business development company status and regulation. |
| US SEC; BDC Data Sets | Official structured BDC filing data. |
Sources reviewed September 2026. Rules, standards and market practice can change; verify the current position with qualified advisers.
Related Matchpoint resources
Last updated: September 2026.
BDC means business development company, a US regulated closed-end investment company focused principally on eligible portfolio companies.
Eligibility and mandate fit vary. Confirm the BDC's governing documents, regulatory constraints, jurisdiction policy and current investment criteria.
Compare all-in cost, leverage, maturity, amortisation, covenants, security, equity participation, information rights and execution certainty.
Discuss a mandate
Speak to a partner about the structure, evidence and execution plan for your transaction.
