BDC Directory

A Business Development Company (BDC) is a type of investment fund that pays qualified dividends. Many BDCs have dividend yields of 10% or even higher.

Congress created BDCs in 1980 to help fund small business growth in the U.S. The government set up BDCs to be structured as pass-through entities, similar to Real Estate Investment Trusts (REITs).

In lieu of paying corporate taxes, BDCs distribute 90% (or higher) of taxable income to dividend holders on record.

Many investors buy BDCs in tax-advantaged accounts such as IRAs and 401(k)s. When held in taxable accounts, the first 20% of BDC dividend payouts become taxable (through the year 2025, unless changed by Congress).

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