Business development companies (BDCs) are big dividend paying companies that tend to thrive as rates rise. Today, we’ll discuss three inflation-powered payouts up to 10.7%.
BDCs extend loans to small businesses and often their loans have a “floating rate” component included. So, the BDC tends to make more money as long-term rates rise.
A quick background on BDCs. Since traditional banks have backed off on lending over the years, BDCs have stepped in. They provided much-needed debt, equity and other financial solutions to small businesses.
Congress whipped up business development companies with a few pen strokes in 1980, creating a structure that’s incentivized to provide smaller companies with financing.… Read more