Prospect Capital is a Business Development Company (BDC) that lends to and invests in U.S. middle-market private companies. Its core business is directly originating first lien senior secured loans to private companies with revenues below $750M and enterprise values below $1B, funding refinancings, acquisitions, capital expenditures, and recapitalizations. Prospect Capital targets the lower and core middle market, where it argues it earns wider spreads and higher SOFR floors (250–400 bps) than comparable loans to larger companies. First lien loans represent about 65% of the portfolio, and Prospect Capital is actively rotating into more first lien exposure by winding down two secondary strategies: a private REIT (National Property REIT Corp) that owns multifamily real estate, and a CLO equity portfolio that has declined to roughly 4% of assets. Prospect Capital sources deals directly through relationships with private equity sponsors, independent sponsors, and management teams rather than buying syndicated loans in the secondary market. The business model is straightforward: deploy capital into floating-rate loans, earn interest income (roughly 90–94% of total investment income), and generate net investment income (NII) as the spread between asset yields (around 11–12% in recent quarters) and funding costs. Prospect Capital funds itself through a revolving credit facility and a mix of unsecured fixed-rate debt and preferred stock. The company is externally managed by Prospect Capital Management, led by John Barry and Grier Eliasek, and pays its manager a 2% base management fee on gross assets plus incentive fees.