Ares Capital: A Blue Chip To Bank On The U.S. Economy With An 11% Yield (NASDAQ:ARCC)

Seeking Alpha | Oct 24, 2020 at 4:05 PM
  • Business Development Companies were created in 1980 through amendments to the Investment Company Act of 1940.
  • BDCs will not only lend to these private companies, they also have a stake in the company having a good future, and in the event of a default on a loan, are often more willing to work out a deal with the company rather than just cut their losses like a traditional bank might.
  • We need to be careful in this sector because even as small- to medium-sized businesses support the economy, they do fail and we want to make sure we are invested in a BDC that has a high-quality team capable of determining what businesses are worth investing in.