OFS Capital Corp (NASDAQ: OFS) is a business development company (BDC) that provides debt and equity financing to U.S. middle-market companies. It makes money primarily through net investment income, the spread between interest earned on loans and equity investments and the cost of borrowed funds, plus origination and amendment fees recognized over the life of each loan. OFS Capital Management, LLC (OFS Advisor), a wholly owned subsidiary of Orchard First Source Asset Management, serves as external investment adviser in exchange for a base management fee and an incentive fee. The portfolio includes senior secured loans, mezzanine debt, subordinated notes in CLO structures, and equity positions. Total outstanding debt stood at $220.5 million as of December 31, 2025, down from $248.4 million at December 31, 2024. The company has no direct employees; day-to-day operations are managed entirely by OFS Advisor. During FY2025, the portfolio experienced net losses of $45.0 million, comprised of net unrealized depreciation of $32.8 million and net realized losses of $12.2 million.

Revenue model

Net investment income from interest on middle-market loans and CLO debt/equity positions, plus deferred origination fees, discounts, premiums, and amendment fees amortized over loan life. OFS Advisor earns a base management fee calculated on total assets including leveraged assets, and an incentive fee tied to net investment income and realized gains.

Products and services

Senior secured loans, mezzanine debt, subordinated CLO notes, and equity investments targeting U.S. middle-market companies. CLO positions include subordinated notes and mezzanine debt tranches in vehicles such as Apex Credit CLO 2021, Apex Credit CLO 2022-1, Battalion CLO XI, BlueMountain CLO XXXV, Brightwood Capital MM CLO 2023-1, and Canyon CLO 2019-1, among others (as of filings through 2026-03-03).

Customers and end markets

U.S. middle-market companies and private equity sponsor groups seeking customized debt and equity financing solutions.

Value-chain role

Direct lender and equity co-investor in the middle-market capital formation chain. OFS Advisor handles deal origination, credit underwriting, due diligence, structuring, execution, portfolio management, and ongoing monitoring.

Geographic exposure

United States, with portfolio companies operating domestically. No specific geographic revenue breakdown disclosed in the filing excerpts.

Source: SEC 10-K, filed 2026-03-03

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