Business Development Companies: A Re-Emerging Alternative Capital Source

Leveraging BDCs to Finance Business Ventures

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, July 18, 2013

Recorded event now available

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Course Materials

This CLE course will provide commercial finance counsel with a review of business development companies (BDCs), which are emerging as a capital-raising alternative. The panel will offer strategies for taking advantage of opportunities while minimizing legal risks for finance counsel to investors and issuers of private equity and venture funds.

Description

Businesses seeking capital are exploring BDCs as a source of alternative funding because traditional bank and private equity financing remains limited. 2012 was a record year for BDCs, with 2013 following suit, due to a rise in private equity activity and the implementation of the JOBs Act.

BDCs offer a number of potential benefits. Investors can reap high potential yields and immediate liquidity through listed securities, while sponsors benefit from permanent capital and an established regulatory framework.

BDCs can be an appealing option in the current environment, but they are complex entities subject to SEC regulation and fraught with legal risk. Counsel advising investors must consider whether BDCs are suitable, and counsel for issuers must structure BDC offerings with great care.

Listen as our panel of experienced securities and tax attorneys explains how to take advantage of BDCs to raise capital for businesses and offers strategies for structuring financing deals while minimizing legal risks.

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Outline

  1. Overview—what is a BDC?
    1. Becoming a BDC
    2. Types of investments
    3. Tax treatment of BDCs
    4. Traded and non-traded structures
  2. Affiliate transactions
  3. Regulatory environment
  4. Restrictions on investment practices
  5. Fees
  6. Disclosure requirements

Benefits

The panel will review these and other key questions:

  • What benefits and risks do BDCs offer as an alternative source of financing for businesses seeking capital?
  • What are the unique SEC requirements applicable to BDCs?
  • What best practices should counsel apply in representing BDCs and investors in BDC share offerings and debt financings?
  • What are the key structural and tax issues to understand and consider when using BDCs?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Friedmann, Thomas
Thomas J. Friedmann
Partner
Dechert

Mr. Friedmann is a Partner in the firm's Corporate and Securities Group and focuses his practice on the...  |  Read More

Krus, Cynthia
Cynthia M. Krus
Partner
Eversheds Sutherland (US)

Ms. Krus advises clients on a variety of corporate transactions including mergers and acquisitions, proxy contests,...  |  Read More

James G. Silk
James G. Silk
Partner
Willkie Farr & Gallagher

Mr. Silk has a broad corporate practice with particular focus in the investment management area. He counsels investment...  |  Read More

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