Loans to Small Businesses Make a Comeback

Investment firms form business development corporations to lend to smaller companies.

Lending to small U.S. businesses is making a comeback on Wall Street, with 12 investment firms arranging $1.38 billion of initial stock offerings to funnel cash to the nation’s biggest job creators.

Oaktree Capital Management LP, Crescent Capital Group LP and Churchill Financial Holdings LLC are forming so-called business development corporations, which typically lend to businesses with annual revenue of less than $500 million, according to filings with the U.S. Securities & Exchange Commission. The wave of BDCs is the largest in at least seven years, based on data from Ipreo Holdings LLC in New York.

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