A business development company is a public company that that invest its money and resources in small upcoming business firms. The major objective of the business development companies is to put their stake in upcoming and growing businesses with a point of view that their stakes will grow in value with the increased growth and success of the business. The major services provided by the business development companies are the loan offering and consulting services that they offer for a fee.
The working of Business Development Company
The investors can also buy the shares of the business development company to enter into the world of the venture capitalism. While investing and granting loan to small companies the business development companies don’t select companies that are small or will remain at the small scale forever instead they invest in smaller companies that have a potential to grow and to turn into a bigger company some day. In addition to investment business development companies also look for a position in the business by which they can steer the direction of the growing business such as acting as one of the member of board of directors of the company.
Most of the business development companies posses a status of Regulated Investment Company. By this status we mean that they have a permission to distribute about 90 percent of their taxable income to their shareholders.
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