Henri Steenkamp

Research Studies and Opinions


A Q&A with Henri J. Steenkamp: Chief Financial Officer of Saratoga Investment Corp

Question: What kind of CFO should know about a Business Development Company?

HS: The CFO looking for financing that is either greater than a bank would allow under asset-based lending rules, or to whom a bank is unwilling to loan because it is a smaller middle market company. Either way, the CFO is in the market for alternative funding sources to meet his company’s growth needs. Business Development Companies serve smaller middle-market companies with revenues of $8 million to $150 million and EBITDA of $2 million or greater.

Question: What is a BDC?

HS: Congress enacted legislation creating Business Development Companies in 1980 as an amendment to the Investment Company Act of 1940. The idea was to create a regulated entity to focus on the capital needs of
smaller middle-market companies. Since January 2007, BDCs have grown from 16 to more than 50 companies. They serve an estimated 65,000 businesses in the US with revenues in the range of $8 million to $150 million, the overwhelming majority of them privately held and family owned. These companies have significant capital needs, but because they work in a highly fragmented marketplace, they are underserved by banks, and often not served at all.

Read the full article at Saratoga Investment Corp.