--- title: "Business Development Companies Industry" description: "62 SEC filers are classified under the Standard Industrial Classification code that describes the business development companies industry." canonical: https://www.getswoopr.com/stocks/industries/financials/business-development-companies/ source: "Swoopr Investment: https://www.getswoopr.com" --- # Business Development Companies Industry ## Direct Answer 62 SEC filers are classified under the Standard Industrial Classification code that describes the business development companies industry, and their latest annual reports show $68.8 billion of combined revenue and a median operating margin of -118.2%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics. ## Industry Overview Business development companies lend to and invest in mid-sized private companies and distribute most income to shareholders, similar to REITs. Net investment income, credit quality and leverage determine dividends and book value. The first numbers to compare across companies here are net investment income per share, net asset value per share and non-accrual rate. ## Key Industry Metrics - **Net investment income per share**: Interest and fee income less expenses, divided by shares. It is the main earnings measure and drives the dividend, so compare it with the payout. - **Net asset value per share**: Value of investments less debt, divided by shares. It is marked by the manager each quarter, so look at the trend and the discount to market price. - **Non-accrual rate**: Share of loans that have stopped paying interest, at cost or fair value. Rising readings signal credit problems that reduce income and net asset value. - **Dividend coverage**: Compares dividends paid with net investment income. Coverage below one means the payout is funded from other sources, and cuts become likelier. - **Leverage**: Borrowing relative to equity, limited by regulation. More leverage lifts income, and magnifies losses when credit quality turns. ## Primary Macro Drivers - **Short-term interest rates on floating loans**: Most loans float with base rates, so higher short-term rates lift investment income per share and lower rates reduce it. - **Credit quality of borrowers**: Borrowers' earnings and leverage decide how many loans go bad, affecting non-accrual rate and net asset value per share. - **Deal flow and spreads**: More deals and wider spreads lift new investment yield and portfolio growth, while heavy competition squeezes spreads. - **Cost of funding**: Borrowing cost on credit lines and notes sets the margin on leveraged investments, so funding cost affects net investment income. ## Major Risks - **Credit losses**: Defaults and non-accruals cut income and lower net asset value, which can pressure the dividend. Watch non-accrual rate and net asset value per share. - **Falling base rates reducing income**: When base rates fall, income on floating loans drops faster than borrowing costs adjust. Watch net investment income against the dividend. - **Leverage and covenant limits**: Rules cap borrowing relative to assets, and breaching covenants can limit growth or force asset sales. Watch the leverage ratio and covenant headroom. - **Valuation markdowns**: Loans are valued by models, so markdowns lower net asset value and can show stress before defaults. Watch valuation changes and the non-accrual rate. ## Industry Characteristics | Characteristic | Profile | | --- | --- | | Cyclicality | Cyclical | | Capital Intensity | Medium | | Regulatory Intensity | Medium | | Industry Maturity | Mature | | Geographic Importance | U.S. | ## Business Development Companies Filers in the SEC Record 62 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 6199. Their latest fiscal years end between 2022 and 2026, and together they reported $68.8 billion of revenue. Median revenue growth over the prior year was 10.0%. Median operating margin was -118.2% and median net margin -191.0%. Median total liabilities were 44% of total assets, and 13 of 62 reported a profit in their latest year. | Company | Revenue | Growth | Operating margin | Net margin | Year | | --- | --- | --- | --- | --- | --- | | [American Express Co](https://www.getswoopr.com/stocks/companies/american-express/) | $41.3 billion | 6.4% | n/a | 26.2% | FY 2025 | | [Coinbase Global, Inc.](https://www.getswoopr.com/stocks/companies/coinbase/) | $7.2 billion | 9.4% | 20.0% | 18.1% | FY 2025 | | [Circle Internet Group, Inc.](https://www.getswoopr.com/stocks/companies/circle-internet-group-inc/) | $2.7 billion | 63.9% | -3.5% | -2.5% | FY 2025 | | [Bakkt, Inc.](https://www.getswoopr.com/stocks/companies/bakkt-inc/) | $2.3 billion | -32.1% | -6.3% | -4.6% | FY 2025 | | [Chime Financial, Inc.](https://www.getswoopr.com/stocks/companies/chime-financial-inc/) | $2.2 billion | 30.7% | -47.6% | -46.2% | FY 2025 | | [Green Dot Corp](https://www.getswoopr.com/stocks/companies/green-dot-corporation/) | $2.1 billion | 20.7% | 0.7% | -4.8% | FY 2025 | | [Pagaya Technologies Ltd.](https://www.getswoopr.com/stocks/companies/pagaya-technologies-ltd/) | $1.3 billion | 26.1% | 20.3% | 6.3% | FY 2025 | | [Loandepot, Inc.](https://www.getswoopr.com/stocks/companies/loandepot-inc/) | $1.2 billion | 12.2% | n/a | -9.0% | FY 2025 | The 8 largest of 62 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code. ## Where to Go Next The Business Development Companies guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company. ### More in Financials - [Financials sector overview](https://www.getswoopr.com/stocks/industries/financials/) - [Buy Now Pay Later](https://www.getswoopr.com/stocks/industries/financials/buy-now-pay-later/) - [Blockchain Financial Infrastructure](https://www.getswoopr.com/stocks/industries/financials/blockchain-financial-infrastructure/) - [Canadian Banks](https://www.getswoopr.com/stocks/industries/financials/canadian-banks/) - [Banks](https://www.getswoopr.com/stocks/industries/financials/banks/) - [Capital Markets](https://www.getswoopr.com/stocks/industries/financials/capital-markets/) - [Banking-as-a-Service](https://www.getswoopr.com/stocks/industries/financials/banking-as-a-service/) - [Card Networks](https://www.getswoopr.com/stocks/industries/financials/card-networks/) - [B2B Payments](https://www.getswoopr.com/stocks/industries/financials/b2b-payments/) ### Put it to work - [How to analyze a stock](https://www.getswoopr.com/stocks/how-to-analyze-a-stock/) - [Fundamental analysis guides](https://www.getswoopr.com/learn/fundamental-analysis/) - [Company research](https://www.getswoopr.com/stocks/companies/) - [All industries](https://www.getswoopr.com/stocks/industries/) ## Frequently Asked Questions What are the main KPIs for the Business Development Companies industry? Key performance indicators for the Business Development Companies industry include: Net investment income per share, Net asset value per share, Non-accrual rate, Dividend coverage, Leverage. Which matter most depends on the company's model, so compare them across several companies rather than relying on one. How cyclical is the Business Development Companies industry? The Business Development Companies industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing. What are the biggest risks in the Business Development Companies industry? The primary risks for Business Development Companies companies include: Credit losses, Falling base rates reducing income, Leverage and covenant limits, Valuation markdowns. Investors should assess each company's exposure to these factors and its track record of navigating them. **[Swoopr Editorial Team](https://www.getswoopr.com/authors/swoopr-editorial-team/)** Swoopr's editorial team produces independent investment education content reviewed for accuracy and clarity. We do not provide personalized financial advice. See our [editorial policy](https://www.getswoopr.com/legal/editorial-policy/) and [corrections policy](https://www.getswoopr.com/legal/corrections-policy/).