Industrial Development Companies)
Business and Industrial Development Companies (BIDCOs) are licensed and
regulated by the Louisiana Office of Financial Institutions for the purpose of
making loans to small businesses located and/or operating in the state. BIDCOs
are not authorized to take deposits and make only business loans. Typically, a
BIDCO would provide loans and growth capital to small business ventures
considered too risky for traditional lenders. BIDCOs may also specialize by
investing more than 25% of their financial assistance portfolio in businesses
owned by minorities, women or disabled individuals or in businesses that operate
in economically depressed areas.
Loans made by BIDCOs can fill the gap
between venture capital sources (equity investments), and traditional debt
financing through commercial banks, industrial bonds or government programs.
They have flexibility in the financing tools available to them, blending debt
financing with equity and near equity investments, and utilizing government
guaranties to improve a company's credit worthiness for traditional lenders.
BIDCOs are designed to address
moderate risk capital needs of smaller, growth-oriented companies. BIDCOs help
finance companies that require additional capital but are not expected to
generate the high returns required by most venture capital companies.
Many companies operate as both a CAPCO and a BIDCO. If you would like further
information on these programs, please contact Review Examiner Doug Buras at
(225) 922-2595 or
October 23, 2013