Bipartisan BDC Modernization Legislation Signed Into Law

By: SBIA | March 23, 2018


Tonnie Wybensinger
Executive Director, BDC Council
Small Business Investor Alliance
(202) 628-5057


Bipartisan BDC Modernization Legislation Signed Into Law

Law Streamlines Regulations and Increases Capital Access for U.S. Small and Mid-Sized Businesses


March 23, 2018, Washington, D.C. – The Small Business Investor Alliance (SBIA), the leading association of lower middle market private equity funds and investors — including the vast majority of Business Development Companies (BDCs) — applauded the inclusion of BDC modernization language in the $1.3 trillion must-pass spending bill to fund the government. The language mirrors S. 2324, the Small Business Credit Availability Act, which earned overwhelming bipartisan support in the Senate (6 Republican/12 Democrat cosponsors) as well as the House companion bill which passed Committee 58-2.

The BDC language makes modest, long overdue updates to the Investment Company Act of 1940 to streamline the regulations governing Business Development Companies (BDCs). It creates a modern regulatory framework for BDCs that is consistent with other operating companies, and allows the BDC industry to provide billions of dollars in additional growth capital to small and mid-sized American companies. Streamlining the regulatory process through a simplified offering process, updated proxy rules, and modest optional increase in the leverage ratio–all while maintaining the utmost transparency–will liberate the SEC’s resources to focus on meaningful investor protections while increasing the capital available for domestic investment.

SBIA’s members provide critical investment to domestic low-middle and middle market firms that may be otherwise unable to access growth capital.  SBIA is pleased that the bipartisan approach to regulatory reform remains a priority in this spending deal.

To learn more about BDCs and SBIA’s BDC Council please visit:


About Business Development Companies

Created in 1980 with overwhelming bipartisan Congressional support, Business Development Companies (BDCs) are a job-creating engine that provides access to capital for American small- and medium-sized businesses. BDCs invest in and provide management expertise to these companies to help them grow. BDCs invest at least 70% of their total assets in “eligible portfolio companies,” which are generally defined as small to mid-sized American companies.

In addition to providing access to capital for small and middle market companies, BDCs also allow individual investors access to highly-regulated investment opportunities that were once available to only wealthy individuals and institutional investors.

The number of BDCs operating in the lower and middle markets today has more than doubled since 2005. From this time, BDCs have invested billions of dollars into growing small and medium-sized businesses, demonstrating the significant demand for capital filled by BDCs and their contribution to the growth of the U.S. Economy. For more information, visit

About the Small Business Investor Alliance (SBIA)

The Small Business Investor Alliance (SBIA) is the premier organization of lower middle market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for over 60 years. For more information, visit or call (202) 628-5055.

2018-06-26T15:40:25+00:00 March 23rd, 2018|Featured, Press Releases|