•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Thomas Friedmann Bailey McCann, Opalesque, New York:

Business Development Companies (BDCs) are an increasingly important source of funding for small and mid-sized U.S. companies with limited access to traditional capital markets. However, they have also faced a complex set of regulatory requirements which have kept them from gaining a foothold as a financial tool. Now, a new bill proposed in the US house may change all that by making BDCs easier to set up.

Representative Michael M. Grimm (R-N.Y.) joined Representative Nydia Velazquez (D-NY) in introducing the Next Steps for Credit Availability Act (H.R. 5929), earlier this month. The bipartisan bill aims to increase the availability of funding to small to mid-level companies and startups by increasing the capital available to BDCs and reducing certain regulatory burdens on BDCs. The bill is set to go before the House Banking Committee in the coming weeks and according to congressional sources is likely to make its way through the body.

BDCs are closed-end investment companies designed to facilitate capital raising by small and mid-sized U.S. businesses. However, they are required to comply with both the Investment Company Act of 1940 and the Securities Act of 1933. "BDCs are really caught between two worlds having to comply with both the 1933 Act and the 1940 Act, this may clear up some of that burden," explains Thomas Friedmann, Partner at New York-based law firm Dechert LLP, in an interview with Opalesque.

Accordin......................

To view our full article Click here