January 2, 2018

When the GOP tax plan was signed into law, a number of positive tax code changes for BDCs were enacted. These include:

• Amending the bill from removing all deductibility of interest expense to
  • Unlimited interest expensing for businesses with $25MM or less in gross receipts
    • This was beneficial to small BDCs, but unlikely to be as useful to mid- to large-size BDCS
• Unlimited carry forward of capital losses
• Use of EBITDA (instead of EBIT) for the 30% limitation on interest expensing
  • Limited to the next four years, after which the EBIT standard will be used

SBIA’s BDC Council is still analyzing the bill and its impact on BDCs and their portfolios.

Our partner Compass Capital has provided an overview of the bill’s key provisions, which can be accessed here.

For questions or thoughts on how tax reform will affect BDCs, please email info@bdccouncil.org

Tonnie Wybensinger
Executive Director
SBIA BDC Council