Traditional banks can't lend to small businesses, so they have to go somewhere else. That's where BDCs come in.
As an incentive to serve this sector, government regulations allow BDCs to avoid paying corporate taxes if they disburse 90% of their earnings in dividends.
That means we can make big bucks from holding BDCs as investors. We're also helping support small businesses, which is a win-win.
But not all BDCs are created equal. Many high yielding BDCs are risky, so you have to dig into the fundamentals of a company before investing.
Drop your comments or questions for this episode on one of our posts.
We discussed 6 BDCs in this episode.
- HRZN invests in technology 11% yield
- HTGC 9.8% yield
- ARCC 10% yield
- MAIN 6.9% yield
- FSK 12.8% yield but recommend preferred shares instead
- PSEC 11.5% yield but recommend preferred shares instead
If you're looking for a more detailed summary of this episode, click here.
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**DISCLAIMER**
Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.
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