Business Development Companies

On this page:

• Purpose & Portfolio Rules
• How BDCs Differ From Operating Companies & Mutual Funds
• SEC Filings Filed by BDCs
• How to Find Business Development Companies
• How to Access the Schedule of Investments
  • Where It Is Published
  • Accessing the Schedule of Investments via API
    • Example API Requests
    • Example Response
• Risks
• Tax Treatment
• Resources

A Business Development Company (BDC) is an investment company that raises capital from investors to finance small and mid-sized, often privately held, U.S. businesses. In addition to providing capital, BDCs are required to offer managerial assistance to their portfolio companies, typically through strategic guidance, operational support, or financial advice.

Created by Congress in 1980 under the Small Business Investment Incentive Act, BDCs operate under Sections 55–65 of the Investment Company Act of 1940 ("'40 Act") to promote the flow of private capital to developing American enterprises. A company becomes a BDC by filing Form N-54A with the SEC and may later withdraw that election through Form N-54C.

Legally, a BDC is a closed-end management investment company regulated by the SEC. It functions much like an investment fund, raising capital to invest in a portfolio of private loans and equity, but operates under a distinct framework with additional regulatory constraints.

• A BDC's objective is to provide debt and equity financing to small/mid-size U.S. companies (often private).
• At time of any new investment,
  • ≥70% of assets under management must be in "eligible portfolio companies",
  • ≤30% of AUM can make up publicly traded debt/equity, asset-backed products (e.g. auto-loans, CLO tranches), foreign companies, other BDCs, and more.
• BDCs are expected to offer "significant managerial assistance" to portfolio companies.

Versus operating companies:

Operating companies make and sell products/services; BDCs are investment vehicles holding portfolios (largely private credit/equity). They still file 10-K/10-Q/8-K filings like other public companies, but their substance is asset management, not operations.

Versus mutual funds (open-end) and traditional closed-end funds:

• BDCs are a special type of closed-end management investment company that typically invest in private loans/equity rather than liquid public securities.
• Leverage rules differ: BDCs can operate with 150% asset-coverage (ie, 2:1 debt-to-equity) if approved and disclosed, reduced from the historical 200% by the Small Business Credit Availability Act (2018).
• Liquidity for investors: many BDCs are exchange-listed; others are non-traded (illiquid, interval-style liquidity, and often higher fees).

A typical filing pattern for a publicly listed BDC includes:

• Initial election: N-54A
• Public registration: N-2 (and 497 supplements)
• Ongoing disclosures: 10-K, 10-Q, 8-K, proxy materials
• Ownership and insider activity: Forms 3, 4, 5, 13D/G
• If deregistering as BDC: N-54C

The following presents an overview of the main EDGAR form types a BDC files, along with the primary content and purpose of each form.

Form Type	Primary Content / Purpose	Filing Frequency / Trigger
Form N-6F	Notice of intent to file Form N-54A. Filed by an investment company that plans to elect BDC status to claim limited exemptions from registration while preparing for the election.	One-time, optional precursor filed before electing BDC status.
Form N-54A	Election to be regulated as a Business Development Company under the Investment Company Act.	One-time filing when electing BDC status.
Form N-54C	Withdrawal of BDC election; used when ceasing to be a BDC.	One-time, upon exiting BDC status.
Form N-2	Registration statement for BDC public offerings (initial or follow-on). Includes investment objective, strategies, fees, risk factors, adviser arrangements, and financials.	Initial public offering or subsequent capital raises.
Form N-2/A	Amendment to N-2, typically for updates or new share classes.	As needed.
Form 10-K	Annual report: full financial statements, portfolio schedule, MD&A, investment adviser fees, leverage, risk disclosures, internal controls.	Annually (within 60–90 days of fiscal year-end, depending on filer status).
Form 10-Q	Quarterly report: condensed financials, NAV changes, portfolio overview, leverage metrics, and interim MD&A.	Quarterly (three times per year).
Form 8-K	Current report on material events — e.g., new debt issuance, portfolio valuation change, adviser termination, dividend declaration, management change, etc.	Within 4 business days of triggering event.
Proxy (DEF 14A / PRE 14A)	Shareholder meeting materials, including director elections, advisory agreements, fee approvals, charter amendments.	Annually or as required for shareholder votes.
Form 3 / 4 / 5	Insider beneficial ownership reports for officers, directors, and large shareholders.	Form 3: initial; Form 4: within 2 days of change; Form 5: annual catch-up.
Form 13D / 13G	Significant shareholder ownership disclosures (>5%). Filed by external owners, not the BDC itself, but appear in its EDGAR index.	Upon crossing 5% ownership thresholds.
Form 497	Prospectus supplements or updates tied to a Form N-2 offering (e.g., pricing, dividend reinvestment plan, rights offering).	As needed after N-2 effectiveness.
Form 24F-2NT	Notice filing reporting shares sold under a registration statement and applicable registration fees.	Annually, if continuous offering is in effect.
Form 13F	Quarterly holdings report (for BDCs that also register as investment advisers). Lists publicly traded positions above $100M AUM.	Quarterly, within 45 days of quarter-end.
Form N-CSR	Certified shareholder report including audited financials and shareholder letters (some internally managed BDCs use this if structured as fund).	Semiannually (less common for listed BDCs filing 10-K/10-Q instead).
Form 11-K	Employee benefit plan annual report, if the BDC sponsors a plan offering its securities.	Annually, if applicable.

Business Development Companies (BDCs) can be identified by their one-time filing of Form N-54A with the SEC, which signals the company's election to be regulated as a BDC under the Investment Company Act. All Form N-54A filings can be retrieved via the Query API using the following search:

{
  "query": "formType:"N-54A"",
  "from": 0,
  "size": 20
}

The Schedule of Investments provides a detailed listing of a BDC's (or fund's) portfolio holdings, including each investment's type, cost, fair value, acquisition date, interest rate, maturity, and percentage of net assets. It allows investors and analysts to understand the composition, diversification, and valuation of the BDC's portfolio.

The Schedule of Investments is included as part of the annual report (Form 10-K), and in some cases the quarterly reports (Form 10-Q). Publicly listed BDCs typically publish it once per year in their Form 10-K filing, while semiannual reports (for certain non-traded BDCs) may include it more frequently.

The Schedule of Investments can be extracted from an SEC filing using the XBRL-to-JSON Converter API. Provide either the filing URL or the accession number of the filing.

Using filing URL:

api.sec-api.io/xbrl-to-json?token=YOUR_API_TOKEN&htm-url=https://www.sec.gov/Archives/edgar/data/1916608/000095017025045562/ck0001916608-20241231.htm

Using accession number:

api.sec-api.io/xbrl-to-json?token=YOUR_API_TOKEN&accession-no=0000950170-25-045562

The API response includes a key calledStatementConsolidatedScheduleOfInvestments, which represents the Schedule of Investments in structured form. This object typically contains fields such as:

• AssetsNet
• InvestmentOwnedAtCost
• InvestmentOwnedAtFairValue
• InvestmentAcquisitionDate
• InvestmentInterestRate

{
  "StatementConsolidatedScheduleOfInvestments": {
    "AssetsNet": {
      "period": { "instant": "2024-12-31" },
      "value": "149237926"
    },
    "InvestmentAcquisitionDate": [
      {
        "period": {
          "startDate": "2024-01-01",
          "endDate": "2024-12-31"
        },
        "segment": {
          "typedMember": {
            "dimension": "us-gaap:InvestmentIdentifierAxis",
            "us-gaap:InvestmentIdentifierAxis.domain": "DEBT Investment, Automobile Components, Fenix Intermediate LLC, Acquisition Date - 03/28/24, Investment - Term Loan B - 10.83% (SOFR + 6.50%, 1.75% Floor), Net Assets - 4.0%, Maturity Date - 03/28/29"
          }
        },
        "value": "2024-03-28"
      }
    ],
    "InvestmentInterestRate": [
      {
        "period": { "instant": "2024-12-31" },
        "segment": {
          "typedMember": {
            "dimension": "us-gaap:InvestmentIdentifierAxis",
            "us-gaap:InvestmentIdentifierAxis.domain": "DEBT Investment, Automobile Components, Fenix Intermediate LLC, Acquisition Date - 03/28/24, Investment - Term Loan B - 10.83% (SOFR + 6.50%, 1.75% Floor), Net Assets - 4.0%, Maturity Date - 03/28/29"
          }
        },
        "value": "0.1083"
      }
    ],
    "InvestmentOwnedAtCost": [
      {
        "period": { "instant": "2024-12-31" },
        "segment": {
          "typedMember": {
            "dimension": "us-gaap:InvestmentIdentifierAxis",
            "us-gaap:InvestmentIdentifierAxis.domain": "DEBT Investment, Automobile Components, Fenix Intermediate LLC, Acquisition Date - 03/28/24, Investment - Term Loan B - 10.83% (SOFR + 6.50%, 1.75% Floor), Net Assets - 4.0%, Maturity Date - 03/28/29"
          }
        },
        "value": "5983372"
      }
    ]
  }
}

Each entry in the StatementConsolidatedScheduleOfInvestments corresponds to an individual portfolio holding identified under us-gaap:InvestmentIdentifierAxis. Within each investment record, the key data fields can be interpreted as follows:

Field	Meaning / Use
InvestmentOwnedAtCost	Historical purchase price or principal amount of the investment. Used to calculate unrealized gains or losses when compared to fair value.
InvestmentOwnedAtFairValue	Current fair value of the investment as reported by the BDC, typically determined through valuation models or market quotes.
InvestmentAcquisitionDate	The date the position was acquired, useful for analyzing portfolio turnover and holding periods.
InvestmentInterestRate	The coupon or effective yield of the loan or debt investment. For floating-rate debt, it may reference a benchmark (e.g., SOFR + spread).
AssetsNet	Represents the BDC’s total net assets; each investment’s value can be expressed as a percentage of net assets to assess portfolio concentration.

Various metrics can be derived from these data points, such as:

• Unrealized gain/loss: FairValue – Cost
• Portfolio weight: InvestmentFairValue ÷ AssetsNet
• Yield estimate: Using InterestRate × (InvestmentFairValue or Cost) depending on context

• Portfolio mix: predominantly senior secured loans, unitranche/mezzanine debt, and minority equity/co-investments to U.S. middle-market issuers.
• Key risks: credit/default risk in private loans, illiquidity, interest-rate exposure, and regulatory constraints (qualifying-assets, transactions with affiliates, etc.).

Many BDCs elect to be Registered Investment Companies under Subchapter M for pass-through tax treatment, which typically requires distributing ≥90% of taxable income annually to avoid entity-level tax. The BDC's tax footnotes provide more details.

• https://www.sec.gov/files/rules/final/2008/ic-28266.pdf - Final Rule
• https://www.sec.gov/files/formn-54a.pdf - Form N-54A
• https://www.sec.gov/files/rules/final/2006/ic-27538.pdf - Final Rule: Definition of Eligible Portfolio Company under ...
• https://www.sec.gov/files/formn-2.pdf - Form N-2
• https://www.congress.gov/bill/115th-congress/house-bill/4267 - H.R.4267 - 115th Congress (2017-2018): Small Business ...
• https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/investor-bulletin-non-publicly-traded-business-development-companies-bdcs - Non-Publicly Traded Business Development Companies ...