Highlights

- On March 23, 2018, President Trump signed the Small Business Credit Availability Act (the Act), which aims to increase the availability of funding to small to mid-sized private U.S. companies and startups by increasing the capital available to business development companies (BDCs) and reducing certain regulatory burdens on BDCs.

- The Act loosens the leverage limits under the Investment Company Act of 1940, as amended (the 1940 Act), applicable to BDCs by reducing the asset coverage requirements for senior securities from 200% asset coverage to 150% asset coverage, subject to certain conditions described herein.

- The Act also reduces disparities in treatment for BDCs as compared to other SEC registrants under the Securities Act of 1933, as amended (the 1933 Act), related to offering and reporting requirements, streamlining securities registration and reporting for BDCs.