Forbes·2025-07-03 17:20Core Viewpoint - Small business sentiment is improving, driven by the adoption of AI tools like ChatGPT, which are enabling entrepreneurs to compete effectively against larger brands [3][5]. Small Business Sentiment - The NFIB Small Business Optimism Index saw a significant decline in April but has since rebounded, with positive sentiment reported for two consecutive months [3]. - Entrepreneurs are increasingly utilizing AI for various business functions, leading to enhanced productivity and optimism [4][5]. Investment Opportunities - Ares Capital (ARCC) and Main Street Capital (MAIN) are highlighted as two attractive dividend stocks benefiting from the growth in small business lending [7][16]. - ARCC is the largest BDC with over $22 billion in assets, allowing it to secure favorable loan terms and maintain a low percentage of non-performing loans at 1.5% [8][9]. - MAIN focuses on lending to smaller, growing companies with annual revenues between $25 million and $500 million, maintaining a diverse portfolio across 190 companies [11][14]. Dividend Performance - ARCC offers a dividend yield of 8.8%, supported by its net investment income, while MAIN provides a yield of 7.2% with a history of increasing dividends [10][16]. - MAIN has increased its total dividends from $1.50 per share in 2009 to $4.11 per share in the previous year, reflecting a 174% increase over 15 years [15]. Market Outlook - The blended yield of ARCC and MAIN is currently 8.1%, with expectations for dividend growth as small business sentiment remains positive [17].