Business Development Company (BDC) Funds Overview

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What is a BDC?

A business development company, or BDC, is a closed-end investment company that was created by Congress in 1980 in order to assist middle market companies to meet their capital needs and grow. Most BDCs are publicly traded, but some BDCs are often private vehicles.  BDCs can help investors generate current income, offering access to institutional loan investments. Some BDCs are offered privately, which makes them similar to private institutional funds in the sense that they do not have a daily fluctuating market price. At the same time, they have investor-friendly features that can make them more appealing than an institutional fund, such as smaller minimum investment amounts, shorter hold periods, and 1099 reporting. Other BDCs are publicly traded companies, which can be helpful from the standpoint of accessibility.

Monroe Capital Private BDC: Monroe Capital Income Plus Corporation Overview and Objective

Monroe Capital Income Plus Corporation is a continuously offered private vehicle, or a private BDC, with a 5-year track record specifically designed for registered investment advisors and high net worth investors. Income Plus is a senior secured direct lending strategy with a focus on current income generation by investing in lower-middle-market loans across multiple industries. Aligned with the overall Monroe strategy, the focus is on sponsored and non-sponsored borrowers with EBITDA between $3-$35 million and located in the U.S. and Canada.

Visit Monroe Capital Income Plus Publicly Filed Materials

EDGAR Entity Landing Page (sec.gov)

Monroe Capital Public BDC: Monroe Capital Corporation (NASDAQ: MRCC)

Monroe Capital Corporation is publicly traded on the NASDAQ under the ticker symbol “MRCC.” We are a specialty finance company focused on providing financing primarily to lower middle market companies with EBITDA between $3-35 million, in the U.S. and Canada. We provide customized financing solutions focused primarily on senior, unitranche and junior secured debt and, to a lesser extent, unsecured subordinated debt and equity, including equity co-investments in preferred and common stock and warrants.

MRCC is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the 1940 Act and as a regulated investment company (RIC) for tax purposes.

Our investment activities are managed by our investment advisor, Monroe Capital BDC Advisors, LLC (“MC Advisors”). MC Advisors is affiliated with Monroe Capital.

Monroe Capital Corporation Investment Objective

Our investment objective is to maximize the total return to our shareholders in the form of current income and capital appreciation through investment in senior, unitranche and junior secured debt and, to a lesser extent, unsecured debt and equity investments. Unitranche debt is an instrument that combines both senior and junior secured debt into one facility. We believe that our primary focus on lending to lower middle-market companies offers several advantages as compared to lending to larger sized companies, including more attractive economics, lower leverage, meaningful loan covenants, custom tailored loan documentation, direct access to borrower management and improved information flow.

Why Invest in Monroe Capital?
  • Monroe’s senior management has successfully invested through multiple credit cycles
  • Attractive current distributions
    • BDCs have paid quarterly dividends every quarter since respective inceptions.
  • Focused on safety and security
    • Approximately 83% of the investment portfolio is comprised of first lien loans
  • Proven track record
    • Monroe has a 20 year track record of successfully delivering attractive returns to its limited partners and shareholders. Monroe has funded approximately 2,075 investments involving $40 billion of investment loans since its inception in 2004

Data as of October 1, 2023

 

BDC Structure
  • Permanent capital base / long term investment horizon
  • Efficient tax structure (RIC election)
    • No entity-level income tax
    • Pass through capital gains to investors
  • Statutory asset diversification requirement and leverage limitation reduces risk, while allowing for enhanced returns
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Monroe Capital Platform
  • Award-winning lower middle market franchise
  • Nationwide origination focus (plus Canada)
  • Proven management / track record
  • Senior secured approach
  • Focus on direct originations
  • Strategic partnerships with banks
  • Credit first underwriting
  • Strong investment pipeline
Attractive Investment Opportunity
  • High targeted portfolio return
  • Lower risk profile – 82.9% secured loans
  • Attractive risk-adjusted returns
  • Proven track record in multiple credit cycles
  • Trading at a discount to NAV
  • Experienced management team
Visit Monroe Capital Corporation Website

www.monroebdc.com

Public BDC: Horizon Technology Finance Corporation (NASDAQ: HRZN)

Horizon Technology Finance Corporation (NASDAQ: HRZN) is a leading specialty finance company that provides capital in the form of secured loans to venture capital backed companies in the technology, life science, healthcare information and services, and sustainability industries. The investment objective of Horizon is to maximize its investment portfolio’s return by generating current income from the debt investments it makes and capital appreciation from the warrants it receives when making such debt investments.

Visit Horizon Technology Finance Corporation Website

www.horizontechfinance.com

Contact:

Dayna Kleinman
Managing Director, Head of Business Development – Wealth Management Solutions
(312) 568-7883
dkleinman@monroecap.com