011 - How To Invest In BDCs To Earn High Yields & Avoid The Risks

Traditional banks can't lend to small businesses, so they have to go somewhere else. That's where BDCs come in. As an incentive to serve this sector, government regulations allow BDCs to avoid paying corporate taxes if they disburse 90% of their earnings in dividends.  That means we can make big bucks from holding BDCs as investors. We're also helping support small businesses, which is a win-win.  But not all BDCs are created equal. Many high yielding BDCs are risky, so you have to dig into the fundamentals of a company before investing.Drop your comments or questions for this episode on one of our posts.   FacebookYouTubeBlog We discussed 6 BDCs in this episode.HRZN invests in technology 11% yieldHTGC 9.8% yieldARCC 10% yieldMAIN 6.9% yieldFSK 12.8% yield but recommend preferred shares insteadPSEC 11.5% yield but recommend preferred shares instead If you're looking for a more detailed summary of this episode, click here.We're trying to grow. Help us reach others who want to learn to invest with confidence. Spread the word and leave a review to help us rank in search. We appreciate your support!     Questions? Email Tim at [email protected] Want FREE weekly market updates, Tim's top 10 dividend picks, and our portfolio updates delivered right to your inbox? Subscribe to our email list. Stay connected. Follow us on social! **DISCLAIMER**Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here. Episode music was created using Loudly.