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SBIA Makes the Case for BDC Modernization

June 17, 2015, 07:31 AM

The Small Business Investor Alliance (SBIA), the leading association of lower middle market private equity funds and investors, commends the House Financial Services Committee for carving a path forward in an effort to pass major regulatory modernization for the Business Development Company (BDC) industry. The SBIA membership’s response to the draft legislation was presented by Vincent Foster, Chairman, Chief Executive Officer, and President of Houston-based Main Street Capital Corporation.

In his testimony this afternoon, Foster points to the number of improvements proposed in the discussion draft developed by Congressman Mick Mulvaney (R-SC). “The legislation makes a number of significant and necessary changes to modernize the regulation of BDCs and increase access to capital while continuing to preserve investor protections.” Most notably, the legislation streamlines the BDC offering process, updates proxy rules, and expands access to capital by changing the “asset coverage ratio.”

Foster has been with Main Street Capital since its founding in 1997. Main Street Capital is publicly traded investment firm that primarily provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. Mr. Foster will present testimony on the SBIA’s Capital Formation Agenda for BDCs detailed in the SBIA BDC Modernization Agenda.

BDCs are government-regulated investment companies created by Congress in 1980 to provide new and increased sources of capital for small and mid-sized American companies. There are over 80 active BDCs in the U.S. and this rapidly growing industry has already surpassed $70 billion.

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.

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