Stellus Capital Investment Corporation is a Business Development Company (BDC) that provides loans to U.S. lower middle-market companies, typically businesses with $5M–$50M of EBITDA that lack access to public debt markets. Stellus fills a gap left by large banks, which tend to focus on larger corporate clients. Nearly all of Stellus's borrowers are backed by private equity sponsors, and Stellus has cultivated relationships with over 195 sponsors since inception. The portfolio totaled roughly $1B at fair value across 115 companies as of year-end 2025, with an average loan size of about $9M. About 90% of the portfolio is first lien secured debt, giving Stellus a senior claim on assets in a default scenario. Stellus also takes small equity co-investment stakes alongside most loans, which can generate realized gains when portfolio companies are sold. Stellus is externally managed by Stellus Capital Management, which handles all deal sourcing, underwriting, and portfolio monitoring in exchange for management and incentive fees. Stellus earns interest income on its loan portfolio, funded by a mix of equity, bank borrowings, unsecured notes, and SBA-guaranteed debentures issued through its SBIC subsidiaries — a low-cost funding source with up to $350M of capacity. About 92% of the debt portfolio is floating-rate, tied to SOFR, making NII sensitive to interest rate movements. As a regulated investment company, Stellus distributes at least 90% of taxable income to shareholders as dividends, requiring ongoing access to external capital to fund growth.