Saratoga Investment is a Business Development Company (BDC) that provides debt financing to U.S. lower middle-market companies, which Saratoga defines as businesses with $2M–$50M in EBITDA. As of February 2026, Saratoga's portfolio was roughly $1B in fair value across 49 companies. The core product is first lien senior secured term loans, which make up about 82% of the portfolio, with the remainder in second lien loans, unsecured loans, CLO debt tranches, and equity interests. Loans are predominantly floating rate, tied to SOFR, so earnings are sensitive to interest rate moves. Saratoga also takes minority equity co-investments alongside most loans, which generate realized gains over time. Saratoga has no employees and is externally managed by Saratoga Investment Advisors, which handles origination, underwriting, and portfolio management. Saratoga earns income primarily through net interest income — the spread between portfolio yield and its cost of debt — and secondarily through realized equity gains. A key funding advantage is Saratoga's SBIC license, which provides access to SBA-guaranteed, fixed-rate debentures at below-market rates, lowering its cost of capital relative to peers. The external manager earns a base management fee of 1.75% on gross assets and a 20% income incentive fee above a 7.5% annualized hurdle rate, which creates an incentive to maximize leverage. Saratoga's stated differentiators include a focus on the lower middle market, systematic equity co-investments, strong credit quality, and long-standing sponsor relationships.