MONROE CAPITAL Corp - Quarter Report: 2021 September (Form 10-Q)

MONROE CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 814-00866

MONROE CAPITAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Maryland		27-4895840
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

311 South Wacker Drive, Suite 6400 Chicago, Illinois		60606
(Address of Principal Executive Office)		(Zip Code)

(312) 258-8300

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share		MRCC		The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	x	Smaller reporting company	¨

Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 1, 2021, the registrant had 21,543,540 shares of common stock, $0.001 par value, outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		3

Item 1.	Consolidated Financial Statements	3

	Consolidated Statements of Assets and Liabilities as of September 30, 2021 (unaudited) and December 31, 2020	3

	Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (unaudited)	4

	Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2021 and 2020 (unaudited)	5

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited)	6

	Consolidated Schedules of Investments as of September 30, 2021 (unaudited) and December 31, 2020	7

	Notes to Consolidated Financial Statements (unaudited)	20

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	77

Item 4.	Controls and Procedures	78

PART II. OTHER INFORMATION		79

Item 1.	Legal Proceedings	79

Item 1A.	Risk Factors	79

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	82

Item 3.	Defaults Upon Senior Securities	82

Item 4.	Mine Safety Disclosures	82

Item 5.	Other Information	82

Item 6.	Exhibits	83

Signatures		84

Part I. Financial Information

Item 1. Consolidated Financial Statements

MONROE CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except per share data)

	September 30, 2021			December 31, 2020
	(unaudited)
ASSETS
Investments, at fair value:
Non-controlled/non-affiliate company investments	$	416,667		$	398,040
Non-controlled affiliate company investments		95,746			109,715
Controlled affiliate company investments		41,331			39,284
Total investments, at fair value (amortized cost of: $582,828 and $596,103, respectively)		553,744			547,039
Cash		7,031			6,769
Restricted cash		8,045			25,657
Unrealized gain on foreign currency forward contracts		863			—
Interest receivable		9,389			4,606
Other assets		379			1,052
Total assets		579,451			585,123

LIABILITIES
Debt:
Revolving credit facility		144,425			126,559
2023 Notes		—			109,000
2026 Notes		130,000			—
SBA debentures payable		56,900			115,000
Total debt		331,325			350,559
Less: Unamortized deferred financing costs		(6,318	)		(7,052	)
Total debt, less unamortized deferred financing costs		325,007			343,507
Interest payable		1,334			2,764
Unrealized loss on foreign currency forward contracts		—			113
Management fees payable		2,399			1,978
Incentive fees payable		1,578			—
Accounts payable and accrued expenses		2,448			2,327
Directors' fees payable		35			—
Total liabilities		332,801			350,689
Net assets	$	246,650		$	234,434

Commitments and contingencies (See Note 11)

ANALYSIS OF NET ASSETS
Common stock, $0.001 par value, 100,000 shares authorized, 21,544 and 21,304 shares issued and outstanding, respectively	$	22		$	21
Capital in excess of par value		297,586			294,897
Accumulated undistributed (overdistributed) earnings		(50,958	)		(60,484	)
Total net assets	$	246,650		$	234,434

Net asset value per share	$	11.45		$	11.00

See Notes to Consolidated Financial Statements.

MONROE CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Investment income:
Non-controlled/non-affiliate company investments:
Interest income	$	8,495		$	9,992		$	24,807		$	36,800
Payment-in-kind interest income		405			553			1,286			1,479
Dividend income		234			5			284			(71	)
Fee income		288			26			1,065			3,047
Total investment income from non-controlled/non-affiliate company investments		9,422			10,576			27,442			41,255
Non-controlled affiliate company investments:
Interest income		1,561			659			4,225			894
Payment-in-kind interest income		2,508			1,010			5,040			3,624
Dividend income		698			40			784			106
Total investment income from non-controlled affiliate company investments		4,767			1,709			10,049			4,624
Controlled affiliate company investments:
Dividend income		1,025			1,100			3,300			3,150
Total investment income from controlled affiliate company investments		1,025			1,100			3,300			3,150
Total investment income		15,214			13,385			40,791			49,029

Operating expenses:
Interest and other debt financing expenses		3,924			4,358			12,219			13,743
Base management fees		2,399			2,414			7,060			7,399
Incentive fees		1,578			—			2,828			—
Professional fees		264			201			730			738
Administrative service fees		327			321			1,020			973
General and administrative expenses		304			284			833			729
Directors' fees		35			38			109			113
Expenses before incentive fee waivers		8,831			7,616			24,799			23,695
Incentive fee waivers		—			—			(1,057	)		—
Total expenses, net of incentive fee waivers		8,831			7,616			23,742			23,695
Net investment income before income taxes		6,383			5,769			17,049			25,334
Income taxes, including excise taxes		71			125			254			272
Net investment income		6,312			5,644			16,795			25,062

Net gain (loss):
Net realized gain (loss):
Non-controlled/non-affiliate company investments		(9,435	)		(10	)		(8,468	)		2,545
Non-controlled affiliate company investments		—			—			(250	)		—
Extinguishment of debt		(336	)		—			(3,110	)		—
Foreign currency forward contracts		20			(15	)		(55	)		3
Foreign currency and other transactions		(880	)		3			(894	)		(13	)
Net realized gain (loss)		(10,631	)		(22	)		(12,777	)		2,535

Net change in unrealized gain (loss):
Non-controlled/non-affiliate company investments		11,222			3,048			20,106			(22,527	)
Non-controlled affiliate company investments		(1,076	)		5,456			(2,173	)		(8,153	)
Controlled affiliate company investments		(54	)		1,969			2,047			(4,888	)
Foreign currency forward contracts		530			(55	)		976			19
Foreign currency and other transactions		936			(855	)		650			521
Net change in unrealized gain (loss)		11,558			9,563			21,606			(35,028	)

Net gain (loss)		927			9,541			8,829			(32,493	)

Net increase (decrease) in net assets resulting from operations	$	7,239		$	15,185		$	25,624		$	(7,431	)

Per common share data:
Net investment income per share - basic and diluted	$	0.29		$	0.26		$	0.78		$	1.21
Net increase (decrease) in net assets resulting from operations per share - basic and diluted	$	0.34		$	0.71		$	1.20		$	(0.36	)
Weighted average common shares outstanding - basic and diluted		21,544			21,303			21,404			20,797

See Notes to Consolidated Financial Statements.

MONROE CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(unaudited)

(in thousands)

	Common Stock						Accumulated undistributed
	Number of shares		Par value		Capital in excess of par value		(overdistributed) earnings			Total net assets
Balances at June 30, 2020	21,270	$	21	$	295,116	$	(74,541	)	$	220,596
Net investment income	—		—		—		5,644			5,644
Net realized gain (loss)	—		—		—		(22	)		(22	)
Net change in unrealized gain (loss)	—		—		—		9,563			9,563
Issuance of common stock, net of offering and underwriting costs	34		—		228		—			228
Distributions to stockholders	—		—		—		(5,326	)		(5,326	)
Balances at September 30, 2020	21,304	$	21	$	295,344	$	(64,682	)	$	230,683

Balances at June 30, 2021	21,544	$	22	$	297,586	$	(52,811	)	$	244,797
Net investment income	—		—		—		6,312			6,312
Net realized gain (loss)	—		—		—		(10,631	)		(10,631	)
Net change in unrealized gain (loss)	—		—		—		11,558			11,558
Issuance of common stock, net of offering and underwriting costs	—		—		—		—			—
Distributions to stockholders	—		—		—		(5,386	)		(5,386	)
Balances at September 30, 2021	21,544	$	22	$	297,586	$	(50,958	)	$	246,650

	Common Stock						Accumulated undistributed
	Number of shares		Par value		Capital in excess of par value		(overdistributed) earnings			Total net assets
Balances at December 31, 2019	20,445	$	20	$	288,850	$	(39,513	)	$	249,357
Net investment income	—		—		—		25,062			25,062
Net realized gain (loss)	—		—		—		2,535			2,535
Net change in unrealized gain (loss)	—		—		—		(35,028	)		(35,028	)
Issuance of common stock, net of offering and underwriting costs	859		1		6,494		—			6,495
Distributions to stockholders	—		—		—		(17,738	)		(17,738	)
Balances at September 30, 2020	21,304	$	21	$	295,344	$	(64,682	)	$	230,683

Balances at December 31, 2020	21,304	$	21	$	294,897	$	(60,484	)	$	234,434
Net investment income	—		—		—		16,795			16,795
Net realized gain (loss)	—		—		—		(12,777	)		(12,777	)
Net change in unrealized gain (loss)	—		—		—		21,606			21,606
Issuance of common stock, net of offering and underwriting costs	240		1		2,689		—			2,690
Distributions to stockholders	—		—		—		(16,098	)		(16,098	)
Balances at September 30, 2021	21,544	$	22	$	297,586	$	(50,958	)	$	246,650

See Notes to Consolidated Financial Statements.

	Nine months ended September 30,
	2021			2020
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	25,624		$	(7,431	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized (gain) loss on investments		8,718			(2,545	)
Net realized (gain) loss on extinguishment of debt		3,110			—
Net realized (gain) loss on foreign currency forward contracts		55			(3	)
Net realized (gain) loss on foreign currency and other transactions		894			13
Net change in unrealized (gain) loss on investments		(19,980	)		35,568
Net change in unrealized (gain) loss on foreign currency forward contracts		(976	)		(19	)
Net change in unrealized (gain) loss on foreign currency and other transactions		(650	)		(521	)
Payment-in-kind interest income		(6,326	)		(5,103	)
Net accretion of discounts and amortization of premiums		(857	)		(960	)
Purchases of investments		(181,821	)		(96,451	)
Proceeds from principal payments, sales of investments and settlement of forward contracts		193,506			163,458
Amortization of deferred financing costs		1,677			1,586
Changes in operating assets and liabilities:
Interest receivable		(4,783	)		2,867
Other assets		673			(664	)
Interest payable		(1,430	)		(1,072	)
Management fees payable		421			(337	)
Incentive fees payable		1,578			(1,374	)
Accounts payable and accrued expenses		121			(438	)
Directors' fees payable		35			38
Net cash provided by (used in) operating activities		19,589			86,612

Cash flows from financing activities:
Borrowings on revolving credit facility		272,400			56,700
Repayments of revolving credit facility		(253,854	)		(137,100	)
Repayment of 2023 Notes		(109,000	)		—
Proceeds from 2026 Notes		130,000			—
Repayment of SBA debentures		(58,100	)		—
Payments of deferred financing costs		(4,053	)		(1,099	)
Proceeds from shares sold, net of offering and underwriting costs		2,690			6,495
Stockholder distributions paid, net of stock issued under the dividend reinvestment plan of $0 and $0, respectively		(16,098	)		(17,738	)
Net cash provided by (used in) financing activities		(36,015	)		(92,742	)

Net increase (decrease) in Cash and Restricted cash		(16,426	)		(6,130	)
Effect of foreign currency exchange rates		(924	)		(35	)
Cash and Restricted cash, beginning of period		32,426			29,643
Cash and Restricted cash, end of period	$	15,076		$	23,478

Supplemental disclosure of cash flow information:
Cash interest paid during the period	$	11,889		$	13,171
Cash paid (refund received) for income taxes, including excise taxes during the period	$	400		$	85

The following tables provide a reconciliation of cash and restricted cash reported on the Consolidated Statements of Assets and Liabilities that sum to the total of the same such amounts on the Consolidated Statements of Cash Flows:

	September 30, 2021		December 31, 2020
Cash	$	7,031	$	6,769
Restricted cash		8,045		25,657
Total cash and restricted cash shown on the Consolidated Statements of Cash Flows	$	15,076	$	32,426

	September 30, 2020		December 31, 2019
Cash	$	4,405	$	2,234
Restricted cash		19,073		27,409
Total cash and restricted cash shown on the Consolidated Statements of Cash Flows	$	23,478	$	29,643

See Notes to Consolidated Financial Statements.

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

(unaudited)

September 30, 2021

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate			Acquisition Date ^(c)	Maturity			Principal		Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Non-Controlled/Non-Affiliate Company Investments
Senior Secured Loans
Aerospace & Defense
Cassavant Holdings, LLC	L+6.50%		7.50	%	9/8/2021		9/8/2026			8,000	$	7,842	$	7,840		3.2	%
										8,000		7,842		7,840		3.2	%
Automotive
Born To Run, LLC	L+6.00%		7.00	%	4/1/2021		4/1/2027			3,492		3,426		3,553		1.4	%
Born To Run, LLC (Delayed Draw) ^{(f) (g)}	L+6.00%		7.00	%	4/1/2021		4/1/2027			569		—		—		0.0	%
Hastings Manufacturing Company	L+7.25%		8.25	%	4/24/2018		4/24/2023			2,581		2,561		2,581		1.1	%
Lifted Trucks Holdings, LLC	L+5.75%		6.75	%	8/2/2021		8/2/2027			7,000		6,862		6,979		2.8	%
Lifted Trucks Holdings, LLC (Delayed Draw) ^{(f) (g)}	L+5.75%		6.75	%	8/2/2021		8/2/2027			1,400		—		—		0.0	%
Lifted Trucks Holdings, LLC (Revolver) ^(f)	L+5.75%		6.75	%	8/2/2021		8/2/2027			1,667		444		443		0.2	%
Magneto & Diesel Acquisition, Inc.	L+6.05%		7.10	%	12/18/2018		12/18/2023			4,863		4,820		4,863		2.0	%
Magneto & Diesel Acquisition, Inc.	L+6.05%		7.10	%	7/6/2020		12/18/2023			1,913		1,887		1,952		0.8	%
Magneto & Diesel Acquisition, Inc.	L+6.05%		7.10	%	8/4/2021		12/18/2023			831		816		848		0.3	%
Magneto & Diesel Acquisition, Inc. (Revolver) ^(f)	L+5.50%		6.55	%	12/18/2018		12/18/2023			500		—		—		0.0	%
										24,816		20,816		21,219		8.6	%
Banking, Finance, Insurance & Real Estate
Florida East Coast Industries, LLC ^(h)	n/a		10.50	%	8/9/2021		6/28/2024			3,572		3,469		3,576		1.5	%
J2 BWA Funding LLC (Delayed Draw) ^{(f) (g) (h)}	n/a		9.00	%	12/24/2020		12/24/2026			2,722		482		481		0.2	%
Liftforward SPV II, LLC ^(h)	L+10.75%		11.25	%	11/10/2016		12/31/2021			1,006		1,006		957		0.4	%
MV Realty Holdings, LLC (Delayed Draw) ^{(f) (g) (h)}	L+9.75%		11.25	%	7/29/2021		7/29/2026			8,000		441		745		0.3	%
NCBP Property, LLC ^(h)	L+9.50%		10.50	%	12/18/2020		12/16/2022			1,950		1,938		1,955		0.8	%
Oceana Australian Fixed Income Trust ^{(h) (i) (j)}	n/a		10.75	%	6/29/2021		6/29/2026			3,271		3,400		3,268		1.3	%
Oceana Australian Fixed Income Trust ^{(h) (i) (j)}	n/a		11.50	%	2/25/2021		2/25/2026			7,766		8,460		7,766		3.2	%
StarCompliance MidCo, LLC	L+6.75%		7.75	%	1/12/2021		1/11/2027			2,000		1,964		2,000		0.8	%
StarCompliance MidCo, LLC (Revolver) ^(f)	L+6.75%		7.75	%	1/12/2021		1/11/2027			322		—		—		0.0	%
US Claims Litigation Funding, LLC (Revolver) ^{(f) (h)}	L+8.75%		9.75	%	11/30/2020		11/29/2024			1,500		1,495		1,520		0.6	%
W3 Monroe RE Debt LLC ^(h)	n/a		10.00% PIK		2/5/2021		2/4/2028			2,835		2,835		2,835		1.1	%
										34,944		25,490		25,103		10.2	%
Beverage, Food & Tobacco
LVF Holdings, Inc.	L+6.25%		7.25	%	6/10/2021		6/10/2027			1,500		1,471		1,500		0.6	%
LVF Holdings, Inc.	L+6.25%		7.25	%	6/10/2021		6/10/2027			1,436		1,436		1,436		0.6	%
LVF Holdings, Inc. (Delayed Draw) ^{(f) (g)}	L+6.25%		7.25	%	6/10/2021		6/10/2027			344		—		—		0.0	%
LVF Holdings, Inc. (Revolver) ^(f)	L+6.25%		7.25	%	6/10/2021		6/10/2027			238		28		28		0.0	%
LX/JT Intermediate Holdings, Inc. ^(k)	L+6.00%		7.50	%	3/11/2020		3/11/2025			9,464		9,326		9,431		3.8	%
LX/JT Intermediate Holdings, Inc. (Revolver) ^(f)	L+6.00%		7.50	%	3/11/2020		3/11/2025			833		—		—		0.0	%
Toojay's Management LLC ^(l)	n/a		n/a	^(m)	10/26/2018		10/26/2022			1,448		1,407		—		0.0	%
Toojay's Management LLC ^(l)	n/a		n/a	^(m)	10/26/2018		10/26/2022			199		199		—		0.0	%
Toojay's Management LLC (Revolver) ^(l)	n/a		n/a	^(m)	10/26/2018		10/26/2022			66		66		—		0.0	%
										15,528		13,933		12,395		5.0	%
Capital Equipment
MCP Shaw Acquisitionco, LLC ^(k)	L+6.50%		7.50	%	2/28/2020		11/28/2025			9,733		9,588		9,699		3.9	%
MCP Shaw Acquisitionco, LLC (Revolver) ^(f)	L+6.50%		7.50	%	2/28/2020		11/28/2025			1,784		—		—		0.0	%
										11,517		9,588		9,699		3.9	%
Chemicals, Plastics & Rubber
Valudor Products LLC	L+7.50%		7.00% Cash/ 1.50% PIK		6/18/2018		6/19/2023			1,579		1,566		1,842		0.8	%
Valudor Products LLC ⁽ⁿ⁾	L+7.50%		8.50% PIK		6/18/2018		6/19/2023			232		229		223		0.1	%
Valudor Products LLC (Revolver) ^(f)	L+9.50%		10.50	%	6/18/2018		6/19/2023			1,095		1,055		1,049		0.4	%
										2,906		2,850		3,114		1.3	%
Construction & Building
Dude Solutions Holdings, Inc.	L+7.25%		8.25	%	6/14/2019		6/13/2025			9,925		9,770		9,910		4.0	%
Dude Solutions Holdings, Inc. (Revolver) ^(f)	L+7.25%		8.25	%	6/14/2019		6/13/2025			1,304		—		—		0.0	%
TCFIII OWL Buyer LLC	L+6.00%		7.00	%	4/19/2021		4/17/2026			2,045		2,012		2,045		0.8	%
TCFIII OWL Buyer LLC (Delayed Draw) ^{(f) (g)}	L+6.00%		7.00	%	4/19/2021		4/17/2026			2,495		1,876		1,876		0.8	%
										15,769		13,658		13,831		5.6	%
Consumer Goods: Durable
Independence Buyer, Inc.	L+5.75%		6.75	%	8/3/2021		8/3/2026			6,000		5,883		6,000		2.4	%
Independence Buyer, Inc. (Revolver) ^(f)	L+5.75%		6.75	%	8/3/2021		8/3/2026			1,423		—		—		0.0	%
Parterre Flooring & Surface Systems LLC ^(k)	L+9.00%		10.00	%^(m)	8/22/2017		8/22/2022			6,936		5,881		151		0.1	%
Recycled Plastics Industries, LLC	L+6.75%		7.75	%	8/4/2021		8/4/2026			3,500		3,431		3,500		1.4	%
Recycled Plastics Industries, LLC (Revolver) ^(f)	L+6.75%		7.75	%	8/4/2021		8/4/2026			473		—		—		0.0	%
										18,332		15,195		9,651		3.9	%
Consumer Goods: Non-Durable
The Kyjen Company, LLC	L+6.50%		7.50	%	5/14/2021		4/3/2026			995		986		1,000		0.4	%
The Kyjen Company, LLC (Revolver) ^(f)	L+6.50%		7.50	%	5/14/2021		4/3/2026			105		43		43		0.0	%
Thrasio, LLC	L+7.00%		8.00	%	12/18/2020		12/18/2026			1,489		1,456		1,489		0.6	%
Thrasio, LLC	L+7.00%		8.00	%	12/18/2020		12/18/2026			988		988		988		0.4	%
										3,577		3,473		3,520		1.4	%
Environmental Industries
Quest Resource Management Group, LLC	L+7.50%		8.75	%	10/19/2020		10/20/2025			993		926		1,017		0.4	%
Quest Resource Management Group, LLC (Delayed Draw) ^{(f) (g)}	L+7.50%		8.75	%	10/19/2020		10/20/2025			1,087		—		—		0.0	%
StormTrap, LLC	L+5.50%		6.50	%	12/10/2018		12/8/2023			7,170		7,108		7,170		2.9	%
StormTrap, LLC (Revolver) ^(f)	L+5.50%		6.50	%	12/10/2018		12/8/2023			432		—		—		0.0	%
Synergy Environmental Corporation ^(k)	L+6.00%		7.00	%	4/29/2016		9/29/2023			2,861		2,853		2,861		1.2	%
Synergy Environmental Corporation ^(k)	L+6.00%		7.00	%	4/29/2016		9/29/2023			478		477		478		0.2	%
Synergy Environmental Corporation	L+6.00%		7.00	%	4/29/2016		9/29/2023			813		813		813		0.3	%
Synergy Environmental Corporation (Revolver) ^(f)	L+6.00%		7.00	%	4/29/2016		9/29/2023			671		—		—		0.0	%
										14,505		12,177		12,339		5.0	%
Healthcare & Pharmaceuticals
Apotheco, LLC	L+8.50%		6.50% Cash/ 3.00% PIK		4/8/2019		4/8/2024			3,614		3,575		3,432		1.4	%
Apotheco, LLC (Revolver)	L+8.50%		6.50% Cash/ 3.00% PIK		4/8/2019		4/8/2024			948		948		900		0.4	%
Brickell Bay Acquisition Corp.	L+6.50%		7.50	%	2/12/2021		2/12/2026			1,904		1,869		1,904		0.8	%
Brickell Bay Acquisition Corp. (Delayed Draw) ^{(f) (g)}	L+6.50%		7.50	%	2/12/2021		2/12/2026			382		—		—		0.0	%
Caravel Autism Health, LLC	L+5.75%		6.75	%	6/30/2021		6/30/2027			5,000		4,903		5,000		2.0	%
Caravel Autism Health, LLC (Delayed Draw) ^{(f) (g)}	L+5.75%		6.75	%	6/30/2021		6/30/2027			3,750		188		188		0.1	%
Caravel Autism Health, LLC (Revolver) ^(f)	L+5.75%		6.75	%	6/30/2021		6/30/2027			1,250		125		125		0.1	%
Dorado Acquisition, Inc.	L+6.75%		7.75	%	6/30/2021		6/30/2026			5,000		4,903		4,992		2.0	%
Dorado Acquisition, Inc. (Delayed Draw) ^{(f) (g)}	L+6.75%		7.75	%	6/30/2021		6/30/2026			216		—		—		0.0	%
Dorado Acquisition, Inc. (Revolver) ^(f)	L+6.75%		7.75	%	6/30/2021		6/30/2026			596		—		—		0.0	%
INH Buyer, Inc.	L+6.00%		7.00	%	6/30/2021		6/28/2028			2,946		2,918		2,945		1.2	%
NationsBenefits, LLC	L+7.00%		8.00	%	8/20/2021		8/20/2026			4,000		3,921		4,002		1.6	%
NationsBenefits, LLC (Revolver) ^(f)	L+7.00%		8.00	%	8/20/2021		8/20/2026			445		—		—		0.0	%
Rockdale Blackhawk, LLC	n/a		n/a	^(o)	3/31/2015		n/a	^(p)		—		—		1,592		0.6	%
Seran BioScience, LLC	L+6.25%		7.25	%	12/31/2020		12/31/2025			2,488		2,445		2,497		1.0	%
Seran BioScience, LLC (Revolver) ^(f)	L+6.25%		7.25	%	12/31/2020		12/31/2025			444		—		—		0.0	%
										32,983		25,795		27,577		11.2	%
High Tech Industries
Arcstor Midco, LLC	L+7.00%		8.00	%	3/16/2021		3/16/2027			4,478		4,393		4,469		1.8	%
MarkLogic Corporation	L+6.00%		7.00	%	10/20/2020		10/20/2025			3,474		3,401		3,526		1.4	%
MarkLogic Corporation (Revolver) ^(f)	L+6.00%		7.00	%	10/20/2020		10/20/2025			269		—		—		0.0	%
Mindbody, Inc.	L+8.50%		8.00% Cash/ 1.50% PIK		2/15/2019		2/14/2025			6,462		6,386		6,427		2.6	%
Mindbody, Inc. (Delayed Draw) ^{(f) (g)}	L+8.50%		8.00% Cash/ 1.50% PIK		9/22/2021		2/14/2025			667		—		—		0.0	%
Mindbody, Inc. (Revolver) ^(f)	L+8.00%		9.00	%	2/15/2019		2/14/2025			667		—		—		0.0	%
Newforma, Inc. ^(k)	L+5.50%		6.50	%	6/30/2017		6/30/2022			4,077		4,067		4,077		1.7	%
Newforma, Inc. (Revolver) ^(f)	L+5.50%		6.50	%	6/30/2017		6/30/2022			1,250		—		—		0.0	%
Planful, Inc.	L+6.50%		7.50	%	12/28/2018		12/30/2024			9,500		9,404		9,462		3.8	%
Planful, Inc.	L+6.50%		7.50	%	1/11/2021		12/30/2024			1,325		1,325		1,320		0.6	%
Planful, Inc. (Revolver) ^(f)	L+6.50%		7.50	%	12/28/2018		12/30/2024			442		88		88		0.0	%
										32,611		29,064		29,369		11.9	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

(unaudited)

September 30, 2021

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate			Acquisition Date ^(c)	Maturity		Principal		Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Hotels, Gaming & Leisure
Equine Network, LLC	L+8.00%		9.00	%	12/31/2020		12/31/2025		1,741	$	1,707	$	1,743		0.7	%
Equine Network, LLC	L+8.00%		9.00	%	1/29/2021		12/31/2025		790		776		790		0.3	%
Equine Network, LLC (Delayed Draw) ^{(f) (g)}	L+8.00%		9.00	%	12/31/2020		12/31/2025		427		—		—		0.0	%
Equine Network, LLC (Revolver) ^(f)	L+8.00%		9.00	%	12/31/2020		12/31/2025		171		—		—		0.0	%
									3,129		2,483		2,533		1.0	%
Media: Advertising, Printing & Publishing
AdTheorent, Inc.	L+8.50%		9.00	%	12/22/2016		12/22/2021		2,512		2,509		2,512		1.0	%
Destination Media, Inc. ^(k)	L+5.50%		6.50	%	4/7/2017		4/7/2022		2,593		2,587		2,593		1.1	%
Destination Media, Inc. (Revolver) ^(f)	L+5.50%		6.50	%	4/7/2017		4/7/2022		542		—		—		0.0	%
North Haven USHC Acquisition, Inc.	L+6.00%		7.00	%	10/30/2020		10/30/2025		2,481		2,439		2,481		1.0	%
North Haven USHC Acquisition, Inc.	L+6.00%		7.00	%	3/12/2021		10/30/2025		719		719		726		0.3	%
North Haven USHC Acquisition, Inc. (Delayed Draw) ^{(f) (g)}	L+6.00%		7.00	%	9/3/2021		10/30/2025		1,442		483		488		0.2	%
North Haven USHC Acquisition, Inc. (Revolver) ^(f)	L+6.00%		7.00	%	10/30/2020		10/30/2025		240		—		—		0.0	%
Relevate Health Group, LLC	L+6.00%		7.00	%	11/20/2020		11/20/2025		1,493		1,467		1,507		0.6	%
Relevate Health Group, LLC (Delayed Draw) ^{(f) (g)}	L+6.00%		7.00	%	11/20/2020		11/20/2025		786		668		674		0.3	%
Relevate Health Group, LLC (Revolver) ^(f)	L+6.00%		7.00	%	11/20/2020		11/20/2025		316		—		—		0.0	%
XanEdu Publishing, Inc.	L+6.00%		7.00	%	1/28/2020		1/28/2025		4,642		4,561		4,654		1.9	%
XanEdu Publishing, Inc. (Revolver) ^(f)	L+6.00%		7.00	%	1/28/2020		1/28/2025		742		99		99		0.0	%
									18,508		15,532		15,734		6.4	%
Media: Broadcasting & Subscription
Vice Group Holding Inc.	L+12.00%		5.50% Cash/ 8.00% PIK		5/2/2019		11/2/2022		1,496		1,491		1,496		0.6	%
Vice Group Holding Inc.	L+12.00%		5.50% Cash/ 8.00% PIK		11/4/2019		11/2/2022		287		285		287		0.1	%
Vice Group Holding Inc.	L+12.00%		5.50% Cash/ 8.00% PIK		5/2/2019		11/2/2022		469		469		469		0.2	%
Vice Group Holding Inc.	L+12.00%		5.50% Cash/ 8.00% PIK		5/2/2019		11/2/2022		177		177		177		0.1	%
									2,429		2,422		2,429		1.0	%
Media: Diversified & Production
Attom Intermediate Holdco, LLC	L+6.15%		7.15	%	1/4/2019		1/4/2024		1,945		1,926		1,945		0.8	%
Attom Intermediate Holdco, LLC	L+6.15%		7.15	%	6/25/2020		1/4/2024		474		468		474		0.2	%
Attom Intermediate Holdco, LLC	L+6.15%		7.15	%	7/1/2021		1/4/2024		279		274		279		0.1	%
Attom Intermediate Holdco, LLC (Revolver) ^(f)	L+5.75%		6.75	%	1/4/2019		1/4/2024		320		—		—		0.0	%
Crownpeak Technology, Inc.	L+5.75%		6.75	%	2/28/2019		2/28/2024		4,000		3,958		4,000		1.6	%
Crownpeak Technology, Inc.	L+5.75%		6.75	%	2/28/2019		2/28/2024		60		60		60		0.0	%
Crownpeak Technology, Inc. (Revolver) ^(f)	L+5.75%		6.75	%	2/28/2019		2/28/2024		167		—		—		0.0	%
CyberGrants Holdings, LLC	L+6.50%		7.25	%	9/8/2021		9/8/2027		10,900		10,738		10,737		4.4	%
CyberGrants Holdings, LLC (Delayed Draw) ^{(f) (g)}	L+6.50%		7.25	%	9/8/2021		9/8/2027		1,069		—		—		0.0	%
CyberGrants Holdings, LLC (Revolver) ^(f)	L+6.50%		7.25	%	9/8/2021		9/8/2027		1,069		—		—		0.0	%
									20,283		17,424		17,495		7.1	%
Retail
BLST Operating Company, LLC	L+8.50%		1.00% Cash/ 9.00% PIK	^(m)	8/28/2020		8/28/2025		1,147		1,054		1,142		0.5	%
Forman Mills, Inc. ^(k)	L+9.50%		8.50% Cash/ 2.00% PIK		1/14/2020		12/30/2022		1,336		1,336		1,329		0.5	%
Forman Mills, Inc. ^(k)	L+9.50%		8.50% Cash/ 2.00% PIK		10/4/2016		12/30/2022		441		441		439		0.2	%
Forman Mills, Inc. ^(k)	L+9.50%		8.50% Cash/ 2.00% PIK		10/4/2016		12/30/2022		7,623		7,623		7,497		3.0	%
LuLu's Fashion Lounge, LLC	L+9.50%		8.00% Cash/ 2.50% PIK		8/21/2017		8/29/2022		3,919		3,893		3,351		1.4	%
									14,466		14,347		13,758		5.6	%
Services: Business
Aras Corporation	L+7.00%		4.25% Cash/ 3.75% PIK		4/13/2021		4/13/2027		1,514		1,486		1,544		0.6	%
Aras Corporation (Delayed Draw) ^{(f) (g)}	L+7.00%		4.25% Cash/ 3.75% PIK		4/13/2021		4/13/2027		200		—		—		0.0	%
Aras Corporation (Revolver) ^(f)	L+7.00%		4.25% Cash/ 3.75% PIK		4/13/2021		4/13/2027		150		—		—		0.0	%
Atlas Sign Industries of FLA, LLC ^(k)	L+11.50%		11.50% Cash/ 1.00% PIK		5/14/2018		5/15/2023		3,590		3,395		3,590		1.5	%
Burroughs, Inc. ^(k)	L+6.50%		7.50	%	12/22/2017		12/22/2022		5,576		5,550		5,576		2.3	%
Burroughs, Inc. (Revolver) ^(f)	L+6.50%		7.50	%	12/22/2017		12/22/2022		1,220		—		—		0.0	%
Certify, Inc.	L+5.50%		6.50	%	2/28/2019		2/28/2024		9,000		8,928		9,000		3.6	%
Certify, Inc.	L+5.50%		6.50	%	2/28/2019		2/28/2024		1,227		1,227		1,227		0.5	%
Certify, Inc. (Revolver) ^(f)	L+5.50%		6.50	%	2/28/2019		2/28/2024		409		102		102		0.0	%
HS4 Acquisitionco, Inc.	L+6.75%		7.75	%	7/9/2019		7/9/2025		10,025		9,887		9,919		4.0	%
HS4 Acquisitionco, Inc. (Revolver) ^(f)	L+6.75%		7.75	%	7/9/2019		7/9/2025		817		—		—		0.0	%
IT Global Holding LLC^(h)	L+9.00%		10.00	%	11/15/2018		11/10/2023		7,101		7,030		7,677		3.1	%
IT Global Holding LLC ^(h)	L+9.00%		10.00	%	7/19/2019		11/10/2023		2,648		2,614		2,863		1.2	%
IT Global Holding LLC (Revolver)^(h)	L+9.00%		10.00	%	11/15/2018		11/10/2023		875		875		946		0.4	%
RedZone Robotics, Inc.	L+6.75%		7.75	%	6/1/2018		6/5/2023		215		213		215		0.1	%
RedZone Robotics, Inc. (Revolver) ^(f)	L+6.75%		7.75	%	6/1/2018		6/5/2023		158		—		—		0.0	%
Relativity ODA LLC	L+7.50%		8.50% PIK		5/12/2021		5/12/2027		1,855		1,811		1,854		0.8	%
Relativity ODA LLC (Revolver) ^(f)	L+7.50%		8.50% PIK		5/12/2021		5/12/2027		180		—		—		0.0	%
Security Services Acquisition Sub Corp.	L+6.00%		7.00	%	9/30/2021		2/15/2024		8,000		7,880		8,000		3.2	%
Security Services Acquisition Sub Corp. ^(k)	L+6.00%		7.00	%	2/15/2019		2/15/2024		3,421		3,387		3,421		1.4	%
Security Services Acquisition Sub Corp. ^(k)	L+6.00%		7.00	%	2/15/2019		2/15/2024		2,461		2,461		2,461		1.0	%
Security Services Acquisition Sub Corp. ^(k)	L+6.00%		7.00	%	2/15/2019		2/15/2024		2,162		2,162		2,162		0.9	%
Security Services Acquisition Sub Corp.	L+6.00%		7.00	%	2/15/2019		2/15/2024		1,555		1,555		1,555		0.6	%
VPS Holdings, LLC	L+9.00%		8.00% Cash/ 2.00% PIK		10/5/2018		10/4/2024		3,492		3,452		3,201		1.3	%
VPS Holdings, LLC	L+9.00%		8.00% Cash/ 2.00% PIK		10/5/2018		10/4/2024		2,852		2,852		2,614		1.1	%
VPS Holdings, LLC (Revolver) ^(f)	L+9.00%		8.00% Cash/ 2.00% PIK		10/5/2018		10/4/2024		1,000		100		92		0.0	%
									71,703		66,967		68,019		27.6	%
Services: Consumer
Express Wash Acquisition Company, LLC	L+6.50%		7.50	%	12/28/2020		12/26/2025		3,211		3,161		3,211		1.3	%
Express Wash Acquisition Company, LLC	L+6.50%		7.50	%	9/3/2021		12/26/2025		7,275		7,149		7,275		2.9	%
Express Wash Acquisition Company, LLC (Delayed Draw) ^{(f) (g)}	L+6.50%		7.50	%	9/3/2021		12/26/2025		3,500		—		—		0.0	%
Express Wash Acquisition Company, LLC (Delayed Draw) ^{(f) (g)}	L+6.50%		7.50	%	9/3/2021		12/26/2025		2,500		450		450		0.2	%
Express Wash Acquisition Company, LLC (Revolver) ^(f)	L+6.50%		7.50	%	12/28/2020		12/26/2025		750		400		400		0.2	%
IDIG Parent, LLC	L+6.00%		7.00	%	12/15/2020		12/15/2026		5,530		5,432		5,537		2.2	%
IDIG Parent, LLC	L+6.00%		7.00	%	12/15/2020		12/15/2026		918		918		919		0.4	%
IDIG Parent, LLC (Revolver) ^(f)	L+6.00%		7.00	%	12/15/2020		12/15/2026		429		—		—		0.0	%
Mammoth Holdings, LLC	L+6.00%		7.00	%	10/16/2018		10/16/2023		1,945		1,927		1,947		0.8	%
Mammoth Holdings, LLC	L+6.00%		7.00	%	10/16/2018		10/16/2023		4,083		4,083		4,087		1.7	%
Mammoth Holdings, LLC (Delayed Draw) ^{(f) (g)}	L+6.00%		7.00	%	3/12/2021		10/16/2023		6,371		6,060		6,066		2.4	%
Mammoth Holdings, LLC (Delayed Draw) ^{(f) (g)}	L+6.00%		7.00	%	6/15/2021		10/16/2023		1,646		—		—		0.0	%
Mammoth Holdings, LLC (Revolver) ^(f)	L+6.00%		7.00	%	10/16/2018		10/16/2023		657		—		—		0.0	%
									38,815		29,580		29,892		12.1	%
Telecommunications
Calabrio, Inc.	L+7.00%		8.00	%	4/16/2021		4/16/2027		3,400		3,320		3,400		1.4	%
Calabrio, Inc. (Revolver) ^(f)	L+7.00%		8.00	%	4/16/2021		4/16/2027		409		—		—		0.0	%
									3,809		3,320		3,400		1.4	%
Wholesale
Nearly Natural, Inc. ^(k)	L+11.50%		8.50% Cash/ 4.00% PIK		12/15/2017		12/15/2022		6,535		6,498		6,535		2.6	%
Nearly Natural, Inc.	L+11.50%		8.50% Cash/ 4.00% PIK		2/16/2021		12/15/2022		3,068		3,027		3,068		1.2	%
Nearly Natural, Inc. ^(k)	L+11.50%		8.50% Cash/ 4.00% PIK		9/22/2020		12/15/2022		1,689		1,670		1,689		0.7	%
Nearly Natural, Inc. ^(k)	L+11.50%		8.50% Cash/ 4.00% PIK		8/28/2019		12/15/2022		1,840		1,840		1,840		0.8	%
Nearly Natural, Inc. (Revolver)	L+11.50%		8.50% Cash/ 4.00% PIK		12/15/2017		12/15/2022		2,406		2,406		2,406		1.0	%
									15,538		15,441		15,538		6.3	%
Total Non-Controlled/Non-Affiliate Senior Secured Loans									404,168		347,397		344,455		139.7	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

(unaudited)

September 30, 2021

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate			Acquisition Date ^(c)	Maturity			Principal		Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Unitranche Secured Loans ^(q)
Chemicals, Plastics & Rubber
MFG Chemical, LLC ^(k)	L+8.00%		9.00	%	6/23/2017		6/23/2022			6,441	$	6,424	$	6,441		2.6	%
MFG Chemical, LLC	L+8.00%		9.00	%	3/15/2018		6/23/2022			630		630		630		0.3	%
										7,071		7,054		7,071		2.9	%
Consumer Goods: Non-Durable
Vinci Brands LLC (fka Incipio, LLC)	n/a		2.00% PIK	^(m)	7/6/2018		2/6/2024			7,026		7,026		6,141		2.5	%
Vinci Brands LLC (fka Incipio, LLC) ^(ac)	n/a		2.00% PIK	^(m)	3/9/2018		2/6/2024			3,065		3,065		—		0.0	%
Vinci Brands LLC (fka Incipio, LLC) ^(ad)	n/a		2.00% PIK	^(m)	12/26/2014		2/6/2024			13,552		13,528		—		0.0	%
Vinci Brands LLC (fka Incipio, LLC) ^(ae)	n/a		2.00% PIK	^(m)	12/26/2014		2/6/2024			1,149		1,149		—		0.0	%
										24,792		24,768		6,141		2.5	%
Healthcare & Pharmaceuticals
Priority Ambulance, LLC ^(r)	L+6.50%		7.50	%	7/18/2018		4/12/2022			10,015		10,015		10,010		4.0	%
Priority Ambulance, LLC ^(s)	L+6.50%		7.50	%	4/12/2017		4/12/2022			1,253		1,248		1,253		0.5	%
Priority Ambulance, LLC	L+6.50%		7.50	%	12/13/2018		4/12/2022			659		659		659		0.3	%
Priority Ambulance, LLC	L+6.50%		7.50	%	10/22/2020		4/12/2022			996		996		995		0.4	%
										12,923		12,918		12,917		5.2	%
High Tech Industries
Energy Services Group, LLC	L+8.42%		9.42	%	5/4/2017		5/4/2022			3,781		3,773		3,781		1.5	%
Energy Services Group, LLC ^{(h) (t)}	L+8.42%		9.42	%	5/4/2017		5/4/2022			4,588		4,517		4,588		1.9	%
Energy Services Group, LLC	L+8.42%		9.42	%	5/4/2017		5/4/2022			1,076		1,063		1,076		0.4	%
WillowTree, LLC	L+5.00%		6.00	%	10/9/2018		10/9/2023			7,689		7,627		7,732		3.1	%
										17,134		16,980		17,177		6.9	%
Telecommunications
VB E1, LLC (Delayed Draw) ^{(f) (g)}	L+8.50%		9.00	%	11/18/2020		11/18/2026			2,250		1,100		1,114		0.5	%
										2,250		1,100		1,114		0.5	%
Total Non-Controlled/Non-Affiliate Unitranche Secured Loans										64,170		62,820		44,420		18.0	%

Junior Secured Loans
Banking, Finance, Insurance & Real Estate
Florida East Coast Industries, LLC ^(h)	n/a		16.00% PIK		8/9/2021		6/28/2024			1,461		1,420		1,470		0.6	%
MoneyLion, Inc. ^(h)	n/a		12.00	%	8/27/2021		5/1/2023			1,500		1,486		1,500		0.6	%
Witkoff/Monroe 700 JV LLC (Delayed Draw) ^{(f) (g) (h)}	n/a		8.00% Cash/ 4.00% PIK		7/2/2021		7/2/2026			5,500		4,472		4,534		1.8	%
										8,461		7,378		7,504		3.0	%
Services: Consumer
Education Corporation of America	L+11.00%		5.63% Cash/ 5.50% PIK	^(m)	9/3/2015		n/a	^(p)		833		831		576		0.2	%
										833		831		576		0.2	%
Total Non-Controlled/Non-Affiliate Junior Secured Loans										9,294		8,209		8,080		3.2	%

Equity Securities ^{(u) (v)}
Automotive
Born To Run, LLC (269,438 Class A units)	—		—	^(w)	4/1/2021		—			—		269		283		0.1	%
Lifted Trucks Holdings, LLC (111,111 Class A units) ^(x)	—		—	^(w)	8/2/2021		—			—		111		110		0.1	%
												380		393		0.2	%
Banking, Finance, Insurance & Real Estate
J2 BWA Funding LLC (0.7% profit sharing) ^{(h) (x)}	—		—	^(w)	12/24/2020		—			—		—		—		0.0	%
MV Realty Holdings, LLC (729 common units) ^{(h) (x)}	—		—	^(w)	7/29/2021		—			—		300		295		0.2	%
MV Realty Holdings, LLC (warrant to purchase up to 0.8% of the equity) ^{(h) (x)}	—		—	^(w)	7/28/2021		7/28/2031			—		363		532		0.2	%
PKS Holdings, LLC (5,680 preferred units) ^(h)	n/a		12.00% PIK		11/30/2017		—			—		58		229		0.1	%
PKS Holdings, LLC (5,714 preferred units) ^(h)	n/a		12.00% PIK		11/30/2017		—			—		9		35		0.0	%
PKS Holdings, LLC (132 preferred units) ^(h)	n/a		12.00% PIK		11/30/2017		—			—		1		5		0.0	%
PKS Holdings, LLC (916 preferred units) ^(h)	n/a		12.00% PIK		11/30/2017		—			—		9		35		0.0	%
Witkoff/Monroe 700 JV LLC (2,141 preferred units) ^{(h) (x)}	n/a		8.00% Cash/ 4.00% PIK		7/2/2021		—			—		2		2		0.0	%
												742		1,133		0.5	%
Beverage, Food & Tobacco
California Pizza Kitchen, Inc. (78,699 common units)	—		—	^(w)	8/19/2016		—			—		5,468		4,643		1.9	%
												5,468		4,643		1.9	%
Capital Equipment
MCP Shaw Acquisitionco, LLC (118,906 Class A-2 units) ^(x)	—		—	^(w)	2/28/2020		—			—		119		168		0.1	%
												119		168		0.1	%
Chemicals, Plastics & Rubber
Valudor Products LLC (501,014 Class A-1 units) ^(x)	n/a		10.00% PIK		6/18/2018		—			—		501		169		0.1	%
												501		169		0.1	%
Consumer Goods: Durable
Independence Buyer, Inc. (81 Class A units)	—		—	^(w)	8/3/2021		—			—		81		92		0.0	%
												81		92		0.0	%
Environmental Industries
Quest Resource Management Group, LLC (warrant to purchase up to 0.2% of the equity)	—		—	^(w)	10/19/2020		3/19/2028			—		67		204		0.1	%
												67		204		0.1	%
Healthcare & Pharmaceuticals
Dorado Acquisition, Inc. (178,891 Class A-1 units)	—		—	^(w)	6/30/2021		—			—		179		179		0.1	%
Dorado Acquisition, Inc. (178,891 Class A-2 units)	—		—	^(w)	6/30/2021		—			—		—		14		0.0	%
NationsBenefits, LLC (888,889 Series A units) ^(x)	n/a		9.00% PIK		8/20/2021		—			—		736		729		0.3	%
NationsBenefits, LLC (106,667 common units) ^(x)	—		—	^(w)	8/20/2021		—			—		153		151		0.1	%
Seran BioScience, LLC (33,333 common units) ^(x)	—		—	^(w)	12/31/2020		—			—		334		665		0.2	%
												1,402		1,738		0.7	%
High Tech Industries
Answers Finance, LLC (76,539 shares of common stock)	—		—	^(w)	4/14/2017		—			—		2,284		11		0.0	%
MarkLogic Corporation (290,239 Class A units)	—		—	^(w)	10/20/2020		—			—		290		408		0.2	%
Planful, Inc. (473,082 Class A units)	n/a		8.00% PIK		12/28/2018		—			—		473		565		0.2	%
Recorded Future, Inc. (80,486 Class A units) ^(y)	—		—	^(w)	7/3/2019		—			—		81		192		0.1	%
												3,128		1,176		0.5	%
Hotels, Gaming & Leisure
Equine Network, LLC (99 Class A units) ^(x)	—		—	^(w)	12/31/2020		—			—		99		96		0.0	%
												99		96		0.0	%
Media: Advertising, Printing & Publishing
AdTheorent, Inc. (128,866 Class A voting units)	—		—	^(w)	12/22/2016		—			—		129		1,763		0.7	%
InMobi Pte, Ltd. (warrant to purchase up to 2.8% of the equity) ^{(h) (j)}	—		—	^(w)	9/18/2015		9/18/2025			—		—		1,963		0.8	%
Relevate Health Group, LLC (40 preferred units)	n/a		12.00% PIK		11/20/2020		—			—		40		40		0.0	%
Relevate Health Group, LLC (40 Class B common units)	—		—	^(w)	11/20/2020		—			—		—		1		0.0	%
XanEdu Publishing, Inc. (49,479 Class A units)	n/a		8.00% PIK		1/28/2020		—			—		49		102		0.0	%
												218		3,869		1.5	%
Media: Diversified & Production
Attom Intermediate Holdco, LLC (297,197 Class A units) ^(x)	—		—	^(w)	1/4/2019		—			—		297		490		0.2	%
												297		490		0.2	%
Retail
BLST Operating Company, LLC (139,883 Class A units) ^(x)	—		—	^(w)	8/28/2020		—			—		712		350		0.1	%
Forman Mills, Inc. (warrant to purchase up to 2.6% of the equity) ^(k)	—		—	^(w)	1/14/2020		1/14/2029			—		—		518		0.2	%
												712		868		0.3	%
Services: Business
APCO Worldwide, Inc. (100 Class A voting common stock)	—		—	^(w)	11/1/2017		—			—		395		433		0.2	%
Atlas Sign Industries of FLA, LLC (warrant to purchase up to 3.0% of the equity) ^(k)	—		—	^(w)	5/14/2018		5/14/2026			—		125		239		0.1	%
												520		672		0.3	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

(unaudited)

September 30, 2021

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate			Acquisition Date ^(c)	Maturity			Principal		Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Services: Consumer
Education Corporation of America - Series G Preferred Stock (8,333 shares)	n/a		12.00% PIK	^(m)	9/3/2015		—			—	$	7,492	$	3,272		1.3	%
Express Wash Acquisition Company, LLC (120,492 Class A units) ^(x)	n/a		8.00% PIK		12/28/2020		—			—		120		208		0.1	%
IDIG Parent, LLC (245,958 shares of common stock)^{(x) (z)}	—		—	^(w)	1/4/2021		—			—		248		399		0.2	%
												7,860		3,879		1.6	%
Wholesale
Nearly Natural, Inc. (152,174 Class A units)	—		—	^(w)	12/15/2017		—			—		153		109		0.0	%
Nearly Natural, Inc. (17,585 Class AA units)	—		—	^(w)	8/27/2021		—			—		18		13		0.0	%
												171		122		0.0	%
Total Non-Controlled/Non-Affiliate Equity Securities												21,765		19,712		8.0	%
Total Non-Controlled/Non-Affiliate Company Investments											$	440,191	$	416,667		168.9	%

Non-Controlled Affiliate Company Investments ^(aa)
Senior Secured Loans
Banking, Finance, Insurance & Real Estate
American Community Homes, Inc.	L+10.00%		11.50% PIK		7/22/2014		12/31/2021			10,159	$	10,159	$	10,159		4.1	%
American Community Homes, Inc.	L+14.50%		16.00% PIK		7/22/2014		12/31/2021			4,566		4,566		4,566		1.9	%
American Community Homes, Inc.	L+10.00%		11.50% PIK		5/24/2017		12/31/2021			616		616		616		0.2	%
American Community Homes, Inc.	L+10.00%		11.50% PIK		8/10/2018		12/31/2021			2,264		2,264		3,098		1.3	%
American Community Homes, Inc.	L+10.00%		11.50% PIK		3/29/2019		12/31/2021			4,192		4,192		4,234		1.7	%
American Community Homes, Inc.	L+10.00%		11.50% PIK		9/30/2019		12/31/2021			20		20		20		0.0	%
American Community Homes, Inc.	L+10.00%		11.50% PIK		12/30/2019		12/31/2021			96		96		96		0.0	%
HFZ Capital Group LLC ^{(h) (ab)}	L+12.50%		14.00% PIK		10/20/2017		n/a	^(p)		13,242		13,242		14,814		6.0	%
HFZ Capital Group LLC ^{(h) (ab)}	L+12.50%		14.00% PIK		10/20/2017		n/a	^(p)		4,758		4,758		5,322		2.2	%
MC Asset Management (Corporate), LLC ^(h)	L+15.00%		16.00% PIK		1/26/2021		1/26/2024			6,873		6,873		6,873		2.8	%
MC Asset Management (Corporate), LLC (Delayed Draw) ^{(f) (g) (h)}	L+15.00%		16.00% PIK		4/26/2021		1/26/2024			1,586		816		816		0.3	%
MC Asset Management (Industrial), LLC ^{(h) (ab)}	L+17.00%		18.00% PIK		6/11/2019		10/30/2024			501		501		501		0.2	%
Second Avenue SFR Holdings II LLC (Revolver) ^{(f) (h)}	L+7.00%		7.50	%	8/11/2021		8/9/2024			4,875		642		642		0.3	%
										53,748		48,745		51,757		21.0	%
Beverage, Food & Tobacco
TJ Management HoldCo LLC (Revolver) ^{(f) (l)}	L+5.50%		6.50	%	9/9/2020		6/28/2024			477		—		—		0.0	%
										477		—		—		0.0	%
Healthcare & Pharmaceuticals
Ascent Midco, LLC ^(k)	L+5.50%		6.50	%	2/5/2020		2/5/2025			6,409		6,320		6,473		2.6	%
Ascent Midco, LLC (Revolver) ^(f)	L+5.50%		6.50	%	2/5/2020		2/5/2025			1,129		—		—		0.0	%
SHI Holdings, Inc. ^(k)	L+10.75%		10.84% PIK	^(m)	7/10/2014		n/a	^(p)		2,899		2,897		131		0.1	%
SHI Holdings, Inc. (Revolver) ^(f)	L+10.75%		10.84% PIK	^(m)	7/10/2014		n/a	^(p)		4,667		4,585		208		0.1	%
										15,104		13,802		6,812		2.8	%
High Tech Industries
Mnine Holdings, Inc.	L+8.00%		4.00% Cash/ 5.00% PIK		11/2/2018		12/30/2022			12,026		11,950		12,595		5.1	%
										12,026		11,950		12,595		5.1	%
Retail
Luxury Optical Holdings Co.	L+8.00%		9.00% PIK		9/12/2014		12/15/2021			1,615		1,615		1,602		0.6	%
Luxury Optical Holdings Co. (Delayed Draw) ^{(f) (g)}	L+11.50%		12.50	%	9/29/2017		12/15/2021			3,565		2,260		2,353		1.0	%
Luxury Optical Holdings Co. (Revolver)	L+8.00%		9.00% PIK		9/12/2014		12/15/2021			74		74		74		0.0	%
										5,254		3,949		4,029		1.6	%
Services: Business
Curion Holdings, LLC ^(k)	n/a		14.00% PIK	^(m)	5/2/2017		5/2/2022			4,226		4,189		3,890		1.6	%
Curion Holdings, LLC (Revolver) ^(f)	n/a		14.00% PIK	^(m)	5/2/2017		5/2/2022			871		836		830		0.3	%
										5,097		5,025		4,720		1.9	%
Services: Consumer
NECB Collections, LLC (Revolver) ^(f)	L+11.00%		12.00% PIK	^(m)	6/25/2019		n/a	^(p)		1,356		1,312		687		0.3	%
										1,356		1,312		687		0.3	%
Total Non-Controlled Affiliate Senior Secured Loans										93,062		84,783		80,600		32.7	%

Junior Secured Loans
Banking, Finance, Insurance & Real Estate
Second Avenue SFR Holdings II LLC (Delayed Draw) ^{(f) (g) (h)}	n/a		8.00	%	8/6/2021		7/28/2028			5,850		1,101		1,101		0.5	%
										5,850		1,101		1,101		0.5	%
Services: Business
Curion Holdings, LLC ^(k)	n/a		15.00% PIK	^(m)	8/17/2018		1/2/2023			1,720		1		—		0.0	%
Curion Holdings, LLC ^(k)	n/a		15.00% PIK	^(m)	8/17/2018		1/2/2023			44		—		—		0.0	%
										1,764		1		—		0.0	%
Total Non-Controlled Affiliate Company Junior Secured Loans										7,614		1,102		1,101		0.5	%

Equity Securities ^{(v) (aa)}
Banking, Finance, Insurance & Real Estate
American Community Homes, Inc. (warrant to purchase up to 22.3% of the equity)	—		—	^(w)	10/9/2014		12/18/2024			—		—		350		0.1	%
MC Asset Management (Corporate), LLC (15.9% of interests) ^{(h) (x) (ab)}	—		—	^(w)	6/11/2019		—			—		793		720		0.3	%
Second Avenue SFR Holdings II LLC (24.4% of interests) ^{(h) (af)}	—		—	^(w)	8/6/2021		—			—		734		734		0.3	%
												1,527		1,804		0.7	%
Beverage, Food & Tobacco
TJ Management HoldCo LLC (16 shares of common stock) ^{(l) (x)}	—		—	^(w)	9/9/2020		—			—		1,631		3,085		1.2	%
												1,631		3,085		1.2	%
Healthcare & Pharmaceuticals
Ascent Midco, LLC (2,032,258 Class A units) ^(x)	n/a		8.00% PIK		2/5/2020		—			—		2,032		3,111		1.2	%
Familia Dental Group Holdings, LLC (1,052 Class A units) ^{(x) (ag)}	—		—	^(w)	4/8/2016		—			—		3,602		2,441		1.0	%
SHI Holdings, Inc. (24 shares of common stock)	—		—	^(w)	12/14/2016		—			—		27		—		0.0	%
												5,661		5,552		2.2	%
High Tech Industries
Mnine Holdings, Inc. (6,400 Class B units)	—		—	^(w)	6/30/2020		—			—		—		—		0.0	%
												—		—		0.0	%
Retail
Luxury Optical Holdings Co. (91 preferred units)	n/a		15.00% PIK		9/12/2014		—			—		4,325		3,604		1.5	%
Luxury Optical Holdings Co. (86 shares of common stock)	—		—	^(w)	9/29/2017		—			—		—		—		0.0	%
												4,325		3,604		1.5	%
Services: Business
Curion Holdings, LLC (58,779 shares of common stock) ^(k)	—		—	^(w)	8/17/2018		—			—		—		—		0.0	%
												—		—		0.0	%
Services: Consumer
NECB Collections, LLC (20.8% of units) ^(x)	—		—	^(w)	6/21/2019		—			—		1,458		—		0.0	%
												1,458		—		0.0	%
Total Non-Controlled Affiliate Equity Securities												14,602		14,045		5.6	%
Total Non-Controlled Affiliate Company Investments											$	100,487	$	95,746		38.8	%

Controlled Affiliate Company Investments ^(ah)
Equity Securities
Investment Funds & Vehicles
MRCC Senior Loan Fund I, LLC (50.0% of the equity interests) ^(h)	—		—		10/31/2017		—			—	$	42,150	$	41,331		16.8	%
Total Controlled Affiliate Equity Securities												42,150		41,331		16.8	%
Total Controlled Affiliate Company Investments											$	42,150	$	41,331		16.8	%

TOTAL INVESTMENTS											$	582,828	$	553,744		224.5	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

(unaudited)

September 30, 2021

(in thousands, except for shares and units)

Derivative Instruments

Foreign currency forward contracts

Description	Notional Amount to be Purchased		Notional Amount to be Sold		Counterparty	Settlement Date	Unrealized Gain (Loss)
Foreign currency forward contract		102	£	83	Bannockburn Global Forex, LLC	10/4/2021	$	(10	)
Foreign currency forward contract		101	£	82	Bannockburn Global Forex, LLC	1/3/2022		(10	)
Foreign currency forward contract		97	£	79	Bannockburn Global Forex, LLC	4/4/2022		(9	)
Foreign currency forward contract		36	£	29	Bannockburn Global Forex, LLC	5/6/2022		(3	)
Foreign currency forward contract		113	AUD	145	Bannockburn Global Forex, LLC	10/19/2021		8
Foreign currency forward contract		105	AUD	136	Bannockburn Global Forex, LLC	11/16/2021		7
Foreign currency forward contract		115	AUD	148	Bannockburn Global Forex, LLC	12/16/2021		8
Foreign currency forward contract		121	AUD	156	Bannockburn Global Forex, LLC	1/19/2022		8
Foreign currency forward contract		105	AUD	136	Bannockburn Global Forex, LLC	2/16/2022		7
Foreign currency forward contract		102	AUD	132	Bannockburn Global Forex, LLC	3/16/2022		7
Foreign currency forward contract		113	AUD	146	Bannockburn Global Forex, LLC	4/19/2022		7
Foreign currency forward contract		107	AUD	138	Bannockburn Global Forex, LLC	5/17/2022		7
Foreign currency forward contract		119	AUD	153	Bannockburn Global Forex, LLC	6/17/2022		8
Foreign currency forward contract		107	AUD	138	Bannockburn Global Forex, LLC	7/18/2022		7
Foreign currency forward contract		108	AUD	140	Bannockburn Global Forex, LLC	8/16/2022		7
Foreign currency forward contract		118	AUD	153	Bannockburn Global Forex, LLC	9/16/2022		8
Foreign currency forward contract		117	AUD	152	Bannockburn Global Forex, LLC	10/19/2022		8
Foreign currency forward contract		105	AUD	136	Bannockburn Global Forex, LLC	11/16/2022		7
Foreign currency forward contract		109	AUD	142	Bannockburn Global Forex, LLC	12/16/2022		7
Foreign currency forward contract		118	AUD	153	Bannockburn Global Forex, LLC	1/18/2023		7
Foreign currency forward contract		108	AUD	140	Bannockburn Global Forex, LLC	2/16/2023		7
Foreign currency forward contract		102	AUD	132	Bannockburn Global Forex, LLC	3/16/2023		6
Foreign currency forward contract		123	AUD	160	Bannockburn Global Forex, LLC	4/20/2023		8
Foreign currency forward contract		93	AUD	121	Bannockburn Global Forex, LLC	5/16/2023		6
Foreign currency forward contract		121	AUD	157	Bannockburn Global Forex, LLC	6/19/2023		7
Foreign currency forward contract		107	AUD	138	Bannockburn Global Forex, LLC	7/18/2023		6
Foreign currency forward contract		113	AUD	146	Bannockburn Global Forex, LLC	8/16/2023		7
Foreign currency forward contract		113	AUD	146	Bannockburn Global Forex, LLC	9/18/2023		7
Foreign currency forward contract		114	AUD	148	Bannockburn Global Forex, LLC	10/18/2023		7
Foreign currency forward contract		107	AUD	140	Bannockburn Global Forex, LLC	11/16/2023		6
Foreign currency forward contract		109	AUD	142	Bannockburn Global Forex, LLC	12/18/2023		6
Foreign currency forward contract		115	AUD	150	Bannockburn Global Forex, LLC	1/17/2024		7
Foreign currency forward contract		110	AUD	143	Bannockburn Global Forex, LLC	2/16/2024		6
Foreign currency forward contract		11,827	AUD	15,410	Bannockburn Global Forex, LLC	3/18/2024		691
							$	863

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

(unaudited)

September 30, 2021

(in thousands, except for shares and units)

(a)	All of the Company's investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All of the Company's investments are issued by U.S. portfolio companies unless otherwise noted.
(b)	The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“Prime” or “P”) which reset daily, monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at September 30, 2021. Certain investments are subject to a LIBOR or Prime interest rate floor, or rate cap. Certain investments contain a Payment-in-Kind (“PIK”) provision.
(c)	Except as otherwise noted, all of the Company’s portfolio company investments, which as of September 30, 2021 represented 224.5% of the Company’s net assets or 95.6% of the Company’s total assets, are subject to legal restrictions on sales.
(d)	Because there is no readily available market value for these investments, the fair value of these investments is determined in good faith using significant unobservable inputs by the Company's board of directors as required by the 1940 Act. (See Note 4 in the accompanying notes to the consolidated financial statements.)
(e)	Percentages are based on net assets of $246,650 as of September 30, 2021.
(f)	All or a portion of this commitment was unfunded at September 30, 2021. As such, interest is earned only on the funded portion of this commitment.
(g)	This delayed draw loan requires that certain financial covenants be met by the portfolio company prior to any fundings.
(h)	This investment is treated as a non-qualifying investment under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of September 30, 2021, non-qualifying assets totaled 21.2% of the Company’s total assets.
(i)	This loan is denominated in Australian dollars and is translated into U.S. dollars as of the valuation date.
(j)	This is an international company.
(k)	All of this loan is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(l)	During the three months ended September 30, 2020, the senior secured lender group of Toojay’s Management, LLC (“Toojay’s OldCo”) established TJ Management HoldCo, LLC (“Toojay’s NewCo”) in order to acquire certain of the assets of Toojay’s OldCo as part of a bankruptcy restructuring. The Company owns 15.9% of the equity in Toojay’s NewCo. Toojay’s NewCo credit bid a portion of the senior secured debt in Toojay’s OldCo to acquire certain assets of Toojay’s OldCo which constitute the ongoing operations of the portfolio company. The Company’s portion of this credit bid was $2,386, and as such the Company's outstanding senior secured debt investment in Toojay’s OldCo was reduced by the amount of the credit bid and the Company’s cost basis of its new equity investment in Toojay’s NewCo was increased by the amount of the credit bid. While the Company still has loans outstanding at Toojay’s OldCo, the Company has valued these positions at zero as of September 30, 2021.
(m)	This position was on non-accrual status as of September 30, 2021, meaning that the Company has ceased accruing interest income on the position. See Note 2 in the accompanying notes to the consolidated financial statements for additional information on the Company’s accounting policies.
(n)	This investment represents a note convertible to preferred shares of the borrower.
(o)	In May 2020, an arbitrator issued a final award in favor of the estate of Rockdale Blackhawk, LLC (the “Estate”) in the legal proceeding between the Estate and a national insurance carrier. The Company's share of the net proceeds from the award exceeded the contractual obligations due to the Company as a result of the Company’s right to receive excess proceeds pursuant to the terms of a sharing agreement between the lenders and the Estate investment is a non-income producing security.
(p)	This is a demand note with no stated maturity.
(q)	The Company structures its unitranche secured loans as senior secured loans. The Company obtains security interests in the assets of these portfolio companies that serve as collateral in support of the repayment of these loans. This collateral may take the form of first-priority liens on the assets of a portfolio company. Generally, the Company syndicates a “first out” portion of the loan to an investor and retains a "last out” portion of the loan, in which case the “first out” portion of the loan will generally receive priority with respect to payments of principal, interest and any other amounts due thereunder. Unitranche structures combine characteristics of traditional first lien senior secured as well as second lien and subordinated loans and the Company’s unitranche secured loans will expose the Company to the risks associated with second lien and subordinated loans and may limit the Company’s recourse or ability to recover collateral upon a portfolio company’s bankruptcy. Unitranche secured loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity. Unitranche secured loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. In many cases the Company, together with its affiliates, are the sole or majority lender of these unitranche secured loans, which can afford the Company additional influence with a borrower in terms of monitoring and, if necessary, remediation in the event of underperformance.
(r)	A portion of this loan (principal of $9,258) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(s)	A portion of this loan (principal of $525) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(t)	This loan is denominated in Great Britain pounds and is translated into U.S. dollars as of the valuation date.
(u)	Represents less than 5% ownership of the portfolio company’s voting securities.
(v)	Ownership of certain equity investments may occur through a holding company or partnership.
(w)	Represents a non-income producing security.
(x)	Investment is held by a taxable subsidiary of the Company. See Note 2 in the accompanying notes to the consolidated financial statements for additional information on the Company’s wholly-owned taxable subsidiaries.
(y)	As of September 30, 2021, the Company was party to a subscription agreement with a commitment to fund an additional equity investment of $16.
(z)	As of September 30, 2021, the Company was party to a subscription agreement with a commitment to fund an equity investment of $43.
(aa)	As defined in the 1940 Act, the Company is deemed to be an “Affiliated Person” of the portfolio company as it owns 5% or more of the portfolio company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was an Affiliated Person (but not a portfolio company that the Company is deemed to control).
(ab)	The Company restructured its investments in HFZ Capital Group LLC (“HFZ”) and HFZ Member RB portfolio, LLC (“Member RB”) during the three months ended December 31, 2020. As part of the restructuring of HFZ, the Company obtained a 15.9% equity interest in MC Asset Management (Corporate), LLC (“Corporate”). As part of the Member RB restructuring, the Company exchanged its loan in Member RB for a promissory note in MC Asset Management (Industrial), LLC (“Industrial”). Corporate owns 100% of the equity of Industrial. In conjunction with these restructurings, the Company participated $4,758 of principal of its loan to HFZ as an equity contribution to Industrial. This participation did not qualify for sale accounting under ASC Topic 860–Transfers and Servicing because the sale did not meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. As a result, the Company continues to reflect its full investment in HFZ but has split the loan into two investments.
(ac)	A portion of this loan (principal of $54) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(ad)	A portion of this loan (principal of $4,969) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(ae)	A portion of this loan (principal of $421) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(af)	As of September 30, 2021, the Company was party to a subscription agreement with a commitment to fund an additional equity investment of $3,166.
(ag)	As of September 30, 2021, the Company was party to a subscription agreement with a commitment to fund an additional equity investment of $611.
(ah)	As defined in the 1940 Act, the Company is deemed to be both an “Affiliated Person” of and to “Control” this portfolio company as it owns more than 25% of the portfolio company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.

n/a - not applicable

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2020

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate		Acquisition Date ^(c)	Maturity	Principal	Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Non-Controlled/Non-Affiliate Company Investments
Senior Secured Loans
Automotive
Hastings Manufacturing Company	L+8.25%	9.25	%	4/24/2018	4/24/2023	2,820	$	2,790	$	2,829	1.2	%
Magneto & Diesel Acquisition, Inc.	L+6.05%	7.10	%	12/18/2018	12/18/2023	4,876		4,820		4,876	2.1	%
Magneto & Diesel Acquisition, Inc.	L+6.05%	7.10	%	7/6/2020	12/18/2023	1,918		1,885		1,932	0.8	%
Magneto & Diesel Acquisition, Inc. (Revolver) ^(f)	L+6.05%	7.10	%	12/18/2018	12/18/2023	500		—		—	0.0	%
						10,114		9,495		9,637	4.1	%
Banking, Finance, Insurance & Real Estate
777 SPV I, LLC ^(g)	L+8.50%	10.25	%	4/15/2019	4/14/2023	4,665		4,628		4,760	2.0	%
J2 BWA Funding, LLC (Delayed Draw) ^{(f) (g) (h)}	n/a	10.00	%	12/24/2020	12/24/2026	2,750		—		—	0.0	%
Liftforward SPV II, LLC ^(g)	L+10.75%	11.25	%	11/10/2016	6/30/2021	2,057		2,057		1,929	0.8	%
NCBP Property, LLC ^(g)	L+9.50%	10.50	%	12/18/2020	12/16/2022	1,950		1,931		1,931	0.8	%
US Claims Litigation Funding, LLC (Revolver) ^{(f) (g)}	L+8.75%	9.75	%	11/30/2020	11/29/2024	1,500		850		850	0.4	%
						12,922		9,466		9,470	4.0	%
Beverage, Food & Tobacco
LX/JT Intermediate Holdings, Inc. ^(j)	L+6.00%	7.50	%	3/11/2020	3/11/2025	9,732		9,564		9,567	4.1	%
LX/JT Intermediate Holdings, Inc. (Revolver) ^(f)	L+6.00%	7.50	%	3/11/2020	3/11/2025	833		—		—	0.0	%
Toojay’s Management, LLC ^(k)	n/a	n/a	^(l)	10/26/2018	10/26/2022	1,448		1,407		—	0.0	%
Toojay’s Management, LLC ^(k)	n/a	n/a	^(l)	10/26/2018	10/26/2022	199		199		—	0.0	%
Toojay’s Management, LLC (Revolver) ^(k)	n/a	n/a	^(l)	10/26/2018	10/26/2022	66		66		—	0.0	%
						12,278		11,236		9,567	4.1	%
Capital Equipment
MCP Shaw Acquisitionco, LLC ^(j)	L+6.50%	7.50	%	2/28/2020	11/28/2025	9,924		9,752		9,721	4.2	%
MCP Shaw Acquisitionco, LLC (Revolver) ^(f)	L+6.50%	7.50	%	2/28/2020	11/28/2025	1,784		—		—	0.0	%
						11,708		9,752		9,721	4.2	%
Chemicals, Plastics & Rubber
Midwest Composite Technologies, LLC ^(j)	L+6.75%	7.75	%	12/2/2019	8/31/2023	14,925		14,701		14,926	6.4	%
Midwest Composite Technologies, LLC	L+6.75%	7.75	%	8/31/2018	8/31/2023	887		876		887	0.4	%
Midwest Composite Technologies, LLC (Delayed Draw) ^{(f) (h)}	L+6.75%	7.75	%	8/31/2018	8/31/2023	509		179		179	0.1	%
Midwest Composite Technologies, LLC (Revolver) ^(f)	L+6.75%	7.75	%	8/31/2018	8/31/2023	90		—		—	0.0	%
Valudor Products, LLC	L+7.50%	7.00% Cash/ 1.50% PIK		6/18/2018	6/19/2023	1,561		1,543		1,702	0.7	%
Valudor Products, LLC ^(m)	L+7.50%	8.50% PIK		6/18/2018	6/19/2023	217		214		—	0.0	%
Valudor Products, LLC (Revolver) ^(f)	L+9.50%	10.50	%	6/18/2018	6/19/2023	818		549		521	0.2	%
						19,007		18,062		18,215	7.8	%
Construction & Building
Cali Bamboo, LLC	L+9.50%	8.00% Cash/ 2.50% PIK		7/10/2015	3/31/2022	6,859		6,857		6,859	2.9	%
Cali Bamboo, LLC (Revolver) ^(f)	L+9.50%	8.00% Cash/ 2.50% PIK		7/10/2015	3/31/2022	2,165		—		—	0.0	%
Dude Solutions Holdings, Inc.	L+7.50%	8.50	%	6/14/2019	6/13/2025	9,975		9,794		9,950	4.3	%
Dude Solutions Holdings, Inc. (Revolver) ^(f)	L+7.50%	8.50	%	6/14/2019	6/13/2025	1,304		—		—	0.0	%
						20,303		16,651		16,809	7.2	%
Consumer Goods: Durable
Franchise Group Intermediate Holdco, LLC	L+8.00%	9.50	%	2/24/2020	2/14/2025	3,425		3,366		3,382	1.4	%
Nova Wildcat Amerock, LLC	L+5.25%	6.25	%	10/12/2018	10/12/2023	9,009		8,897		9,009	3.9	%
Nova Wildcat Amerock, LLC (Revolver) ^(f)	L+5.25%	6.25	%	10/12/2018	10/12/2023	931		—		—	0.0	%
Parterre Flooring & Surface Systems, LLC ^(j)	L+9.00%	10.00	%^(l)	8/22/2017	8/22/2022	7,613		7,533		2,351	1.0	%
Parterre Flooring & Surface Systems, LLC (Revolver)	L+9.00%	10.00	%^(l)	8/22/2017	8/22/2022	696		696		215	0.1	%
						21,674		20,492		14,957	6.4	%
Consumer Goods: Non-Durable
Thrasio, LLC	L+7.00%	8.00	%	12/18/2020	12/18/2026	1,500		1,463		1,463	0.6	%
Thrasio, LLC (Delayed Draw) ^{(f) (h)}	L+7.00%	8.00	%	12/18/2020	12/18/2026	990		—		—	0.0	%
						2,490		1,463		1,463	0.6	%
Environmental Industries
Quest Resource Management Group, LLC	L+8.50%	9.75	%	10/19/2020	10/20/2025	1,000		933		979	0.4	%
Quest Resource Management Group, LLC (Delayed Draw) ^(f) (h)	L+8.50%	9.75	%	10/19/2020	10/20/2025	1,087		—		—	0.0	%
StormTrap, LLC	L+5.50%	6.50	%	12/10/2018	12/8/2023	7,840		7,751		7,840	3.4	%
StormTrap, LLC (Revolver) ^(f)	L+5.50%	6.50	%	12/10/2018	12/8/2023	432		—		—	0.0	%
Synergy Environmental Corporation ^(j)	L+6.00%	7.00	%	4/29/2016	9/29/2023	2,885		2,874		2,888	1.2	%
Synergy Environmental Corporation ^(j)	L+6.00%	7.00	%	4/29/2016	9/29/2023	482		481		483	0.2	%
Synergy Environmental Corporation	L+6.00%	7.00	%	4/29/2016	9/29/2023	823		823		824	0.4	%
Synergy Environmental Corporation (Revolver) ^(f)	L+6.00%	7.00	%	4/29/2016	9/29/2023	671		67		67	0.0	%
						15,220		12,929		13,081	5.6	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

December 31, 2020

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate		Acquisition Date ^(c)	Maturity		Principal	Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Healthcare & Pharmaceuticals
American Optics Holdco, Inc. ^{(g) (n)}	L+6.50%	7.50	%	9/13/2017	9/13/2022		2,165	$	2,148	$	2,165	0.9	%
American Optics Holdco, Inc. ^{(g) (n)}	L+6.50%	7.50	%	9/13/2017	9/13/2022		1,637		1,622		1,637	0.7	%
American Optics Holdco, Inc. (Revolver) ^{(f) (g) (n)}	L+6.50%	7.50	%	9/13/2017	9/13/2022		220		—		—	0.0	%
American Optics Holdco, Inc. (Revolver) ^{(f) (g) (n)}	L+6.50%	7.50	%	9/13/2017	9/13/2022		440		—		—	0.0	%
Apotheco, LLC	L+8.50%	6.50% Cash / 3.00% PIK		4/8/2019	4/8/2024		3,541		3,491		3,315	1.4	%
Apotheco, LLC (Revolver)	L+8.50%	6.50% Cash / 3.00% PIK		4/8/2019	4/8/2024		927		927		868	0.4	%
Rockdale Blackhawk, LLC	n/a	n/a	^(o)	3/31/2015	n/a	⁽ⁱ⁾	—		—		1,592	0.7	%
Seran BioScience, LLC	L+7.25%	8.25	%	12/31/2020	12/31/2025		2,500		2,450		2,450	1.0	%
Seran BioScience, LLC (Revolver) ^(f)	L+7.25%	8.25	%	12/31/2020	12/31/2025		444		—		—	0.0	%
							11,874		10,638		12,027	5.1	%
High Tech Industries
MarkLogic Corporation	L+8.00%	9.00	%	10/20/2020	10/20/2025		3,500		3,415		3,544	1.5	%
MarkLogic Corporation (Revolver) ^(f)	L+8.00%	9.00	%	10/20/2020	10/20/2025		269		—		—	0.0	%
Mindbody, Inc.	L+8.50%	8.00% Cash / 1.50% PIK		2/15/2019	2/14/2025		6,389		6,297		6,143	2.6	%
Mindbody, Inc. (Revolver) ^(f)	L+8.00%	9.00	%	2/15/2019	2/14/2025		667		—		—	0.0	%
Newforma, Inc. ^(j)	L+5.00%	6.00	%	6/30/2017	6/30/2022		11,899		11,836		11,899	5.1	%
Newforma, Inc. (Revolver) ^(f)	L+5.00%	6.00	%	6/30/2017	6/30/2022		1,250		—		—	0.0	%
Planful, Inc. (fka Host Analytics, Inc.)	L+6.00%	7.00	%	12/28/2018	12/28/2023		9,500		9,375		9,443	4.0	%
Planful, Inc. (fka Host Analytics, Inc.) (Revolver) ^(f)	L+6.00%	7.00	%	12/28/2018	12/28/2023		442		88		88	0.0	%
RPL Bidco Limited ^{(g) (n) (p)}	L+7.50%	8.00	%	11/9/2017	11/9/2023		14,429		13,867		14,429	6.2	%
RPL Bidco Limited ^{(g) (n) (p)}	L+7.50%	8.00	%	5/22/2018	11/9/2023		1,777		1,639		1,777	0.8	%
RPL Bidco Limited (Revolver) ^{(f) (g) (n) (p)}	L+7.50%	8.00	%	11/9/2017	11/9/2023		547		—		—	0.0	%
							50,669		46,517		47,323	20.2	%
Hotels, Gaming & Leisure
Equine Network, LLC	L+8.00%	9.00	%	12/31/2020	12/31/2025		1,750		1,711		1,711	0.7	%
Equine Network, LLC (Delayed Draw) ^{(f) (h)}	L+8.00%	9.00	%	12/31/2020	12/31/2025		427		—		—	0.0	%
Equine Network, LLC (Revolver) ^(f)	L+8.00%	9.00	%	12/31/2020	12/31/2025		171		—		—	0.0	%
							2,348		1,711		1,711	0.7	%
Media: Advertising, Printing & Publishing
AdTheorent Holding Company, LLC	L+8.50%	9.00	%	12/22/2016	12/22/2021		2,700		2,687		2,683	1.2	%
Destination Media, Inc. ^(j)	L+5.50%	6.50	%	4/7/2017	4/7/2022		4,324		4,304		4,315	1.8	%
Destination Media, Inc. (Revolver)	L+5.50%	6.50	%	4/7/2017	4/7/2022		542		542		542	0.2	%
North Haven USHC Acquisition, Inc.	L+6.50%	7.50	%	10/30/2020	10/30/2025		2,500		2,451		2,525	1.1	%
North Haven USHC Acquisition, Inc. (Revolver) ^(f)	L+6.50%	7.50	%	10/30/2020	10/30/2025		240		—		—	0.0	%
Relevate Health Group, LLC	L+6.25%	7.25	%	11/20/2020	11/20/2025		1,500		1,470		1,506	0.6	%
Relevate Health Group, LLC (Delayed Draw) ^{(f) (h)}	L+6.25%	7.25	%	11/20/2020	11/20/2025		789		671		674	0.3	%
Relevate Health Group, LLC (Revolver) ^(f)	L+6.25%	7.25	%	11/20/2020	11/20/2025		316		—		—	0.0	%
Stratus Unlimited, LLC (fka MC Sign Lessor Corp.)	L+7.00%	8.00	%	12/22/2017	8/30/2024		15,563		15,498		15,465	6.6	%
Stratus Unlimited, LLC (fka MC Sign Lessor Corp.) (Revolver) ^(f)	L+7.00%	8.00	%	12/22/2017	8/30/2024		3,490		—		—	0.0	%
XanEdu Publishing, Inc.	L+6.50%	7.50	%	1/28/2020	1/28/2025		1,886		1,854		1,890	0.8	%
XanEdu Publishing, Inc. (Revolver) ^(f)	L+6.50%	7.50	%	1/28/2020	1/28/2025		495		197		197	0.1	%
							34,345		29,674		29,797	12.7	%
Media: Broadcasting & Subscription
Vice Group Holding, Inc.	L+12.00%	5.50% Cash/ 8.00% PIK		5/2/2019	11/2/2022		1,355		1,348		1,372	0.6	%
Vice Group Holding, Inc.	L+12.00%	5.50% Cash/ 8.00% PIK		11/4/2019	11/2/2022		260		257		263	0.1	%
Vice Group Holding, Inc.	L+12.00%	5.50% Cash/ 8.00% PIK		5/2/2019	11/2/2022		425		425		430	0.2	%
Vice Group Holding, Inc.	L+12.00%	5.50% Cash/ 8.00% PIK		5/2/2019	11/2/2022		160		160		162	0.1	%
							2,200		2,190		2,227	1.0	%
Media: Diversified & Production
Attom Intermediate Holdco, LLC	L+5.75%	6.75	%	1/4/2019	1/4/2024		1,960		1,935		1,927	0.8	%
Attom Intermediate Holdco, LLC	L+7.50%	8.75	%	6/25/2020	1/4/2024		478		469		492	0.2	%
Attom Intermediate Holdco, LLC (Revolver) ^(f)	L+5.75%	6.75	%	1/4/2019	1/4/2024		320		—		—	0.0	%
Crownpeak Technology, Inc.	L+6.25%	7.25	%	2/28/2019	2/28/2024		4,000		3,946		3,962	1.7	%
Crownpeak Technology, Inc.	L+6.25%	7.25	%	2/28/2019	2/28/2024		60		60		59	0.0	%
Crownpeak Technology, Inc. (Revolver) ^(f)	L+6.25%	7.25	%	2/28/2019	2/28/2024		167		—		—	0.0	%
							6,985		6,410		6,440	2.7	%
Retail
BLST Operating Company, LLC (fka Bluestem Brands, Inc.)	L+8.50%	1.00% Cash/ 9.00% PIK	^(l)	8/28/2020	8/28/2025		1,259		1,254		1,039	0.4	%
Forman Mills, Inc. ^(j)	L+9.50%	8.50% Cash/ 2.00% PIK		1/14/2020	12/30/2022		1,308		1,308		1,292	0.5	%
Forman Mills, Inc. ^(j)	L+9.50%	8.50% Cash/ 2.00% PIK		10/4/2016	12/30/2022		744		741		735	0.3	%
Forman Mills, Inc. ^(j)	L+9.50%	8.50% Cash/ 2.00% PIK		10/4/2016	12/30/2022		7,459		7,429		6,944	3.0	%
LuLu’s Fashion Lounge, LLC	L+9.50%	8.00% Cash/ 2.50% PIK		8/21/2017	8/29/2022		4,123		4,074		3,525	1.5	%
The Worth Collection, Ltd. ^(j)	L+8.50%	9.00	%^(l)	9/29/2016	9/29/2021		10,587		10,248		120	0.1	%
							25,480		25,054		13,655	5.8	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

December 31, 2020

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate		Acquisition Date ^(c)	Maturity	Principal	Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Services: Business
Arcserve (USA), LLC	L+6.00%	7.00	%	5/1/2019	5/1/2024	4,634	$	4,567	$	4,644	2.0	%
Atlas Sign Industries of FLA, LLC ^(j)	L+11.50%	11.50% Cash/ 1.00% PIK		5/14/2018	5/15/2023	3,563		3,368		3,324	1.4	%
Burroughs, Inc. ^(j)	L+7.50%	8.50	%	12/22/2017	12/22/2022	5,726		5,681		5,726	2.4	%
Burroughs, Inc. (Revolver) ^(f)	L+7.50%	8.50	%	12/22/2017	12/22/2022	1,220		170		170	0.1	%
Certify, Inc.	L+5.75%	6.75	%	2/28/2019	2/28/2024	9,000		8,907		9,000	3.8	%
Certify, Inc.	L+5.75%	6.75	%	2/28/2019	2/28/2024	1,227		1,227		1,227	0.5	%
Certify, Inc. (Revolver) ^(f)	L+5.75%	6.75	%	2/28/2019	2/28/2024	409		102		102	0.0	%
HS4 Acquisitionco, Inc.	L+6.75%	7.75	%	7/9/2019	7/9/2025	10,050		9,887		9,929	4.2	%
HS4 Acquisitionco, Inc. (Revolver) ^(f)	L+6.75%	7.75	%	7/9/2019	7/9/2025	817		—		—	0.0	%
IT Global Holding, LLC	L+9.00%	10.00	%	11/15/2018	11/10/2023	9,975		9,845		9,794	4.2	%
IT Global Holding, LLC	L+9.00%	10.00	%	7/19/2019	11/10/2023	3,719		3,661		3,651	1.6	%
IT Global Holding, LLC (Revolver)	L+9.00%	10.00	%	11/15/2018	11/10/2023	875		875		875	0.4	%
Madison Logic, Inc. ^(j)	L+7.50%	8.00	%	11/30/2016	11/30/2021	9,080		9,037		9,080	3.9	%
Madison Logic, Inc. (Revolver) ^(f)	L+7.50%	8.00	%	11/30/2016	11/30/2021	988		—		—	0.0	%
RedZone Robotics, Inc.	L+7.25%	7.75% Cash/ 0.50% PIK		6/1/2018	6/5/2023	591		585		556	0.2	%
RedZone Robotics, Inc. (Revolver) ^(f)	L+6.75%	7.75	%	6/1/2018	6/5/2023	158		—		—	0.0	%
Security Services Acquisition Sub Corp. ^(j)	L+6.00%	7.00	%	2/15/2019	2/15/2024	3,439		3,394		3,442	1.5	%
Security Services Acquisition Sub Corp. ^(j)	L+6.00%	7.00	%	2/15/2019	2/15/2024	2,473		2,473		2,476	1.1	%
Security Services Acquisition Sub Corp. ^(j)	L+6.00%	7.00	%	2/15/2019	2/15/2024	2,180		2,180		2,182	0.9	%
Security Services Acquisition Sub Corp.	L+6.00%	7.00	%	2/15/2019	2/15/2024	1,563		1,563		1,564	0.7	%
VPS Holdings, LLC	L+7.00%	8.00	%	10/5/2018	10/4/2024	3,663		3,611		3,469	1.5	%
VPS Holdings, LLC	L+7.00%	8.00	%	10/5/2018	10/4/2024	2,989		2,989		2,831	1.2	%
VPS Holdings, LLC (Revolver) ^(f)	L+7.00%	8.00	%	10/5/2018	10/4/2024	1,000		100		95	0.0	%
						79,339		74,222		74,137	31.6	%
Services: Consumer
Express Wash Acquisition Company, LLC	L+6.50%	7.50	%	12/28/2020	12/26/2025	2,500		2,456		2,456	1.0	%
Express Wash Acquisition Company, LLC (Revolver) ^(f)	L+6.50%	7.50	%	12/28/2020	12/26/2025	1,000		—		—	0.0	%
IDIG Parent, LLC ^(q)	L+6.50%	7.50	%	12/15/2020	12/15/2026	10,200		9,997		9,996	4.3	%
IDIG Parent, LLC (Delayed Draw) ^{(f) (h)}	L+6.50%	7.50	%	12/15/2020	12/15/2026	1,684		—		—	0.0	%
IDIG Parent, LLC (Revolver) ^(f)	L+6.50%	7.50	%	12/15/2020	12/15/2026	723		—		—	0.0	%
Mammoth Holdings, LLC	L+6.00%	7.00	%	10/16/2018	10/16/2023	1,960		1,936		1,949	0.8	%
Mammoth Holdings, LLC	L+6.00%	7.00	%	10/16/2018	10/16/2023	4,115		4,115		4,092	1.8	%
Mammoth Holdings, LLC (Revolver) ^(f)	L+6.00%	7.00	%	10/16/2018	10/16/2023	500		—		—	0.0	%
						22,682		18,504		18,493	7.9	%
Wholesale
Nearly Natural, Inc. ^(j)	L+6.75%	7.75	%	12/15/2017	12/15/2022	6,685		6,625		6,650	2.9	%
Nearly Natural, Inc. ^(j)	L+6.75%	7.75	%	9/22/2020	12/15/2022	1,728		1,698		1,719	0.7	%
Nearly Natural, Inc. ^(j)	L+6.75%	7.75	%	8/28/2019	12/15/2022	1,882		1,882		1,872	0.8	%
Nearly Natural, Inc. (Revolver) ^(f)	L+6.75%	7.75	%	12/15/2017	12/15/2022	2,397		959		959	0.4	%
						12,692		11,164		11,200	4.8	%
Total Non-Controlled/Non-Affiliate Senior Secured Loans						374,330		335,630		319,930	136.5	%

Unitranche Secured Loans ^(r)
Banking, Finance, Insurance & Real Estate
Kudu Investment Holdings, LLC ^(g)	L+5.75%	6.75	%	12/23/2019	12/23/2025	7,932		7,849		7,971	3.4	%
Kudu Investment Holdings, LLC (Delayed Draw) ^{(f) (g) (h)}	L+5.75%	6.75	%	12/23/2019	12/23/2025	2,357		448		451	0.2	%
						10,289		8,297		8,422	3.6	%
Chemicals, Plastics & Rubber
MFG Chemical, LLC ^(j)	L+6.00%	6.50	%	6/23/2017	6/23/2022	9,232		9,184		8,627	3.7	%
MFG Chemical, LLC	L+6.00%	6.50	%	3/15/2018	6/23/2022	976		976		912	0.4	%
						10,208		10,160		9,539	4.1	%
Consumer Goods: Durable
RugsUSA, LLC	L+6.00%	7.00	%	5/2/2018	4/28/2023	3,937		3,918		3,936	1.7	%
						3,937		3,918		3,936	1.7	%
Healthcare & Pharmaceuticals
Priority Ambulance, LLC ^(s)	L+6.50%	7.50	%	7/18/2018	4/12/2022	10,015		10,015		9,930	4.2	%
Priority Ambulance, LLC ^(t)	L+6.50%	7.50	%	4/12/2017	4/12/2022	1,253		1,242		1,243	0.5	%
Priority Ambulance, LLC	L+6.50%	7.50	%	12/13/2018	4/12/2022	672		672		666	0.3	%
Priority Ambulance, LLC (Delayed Draw) ^{(f) (h)}	L+6.50%	7.50	%	10/22/2020	4/12/2022	1,009		—		—	0.0	%
						12,949		11,929		11,839	5.0	%
High Tech Industries
Energy Services Group, LLC	L+8.42%	9.42	%	5/4/2017	5/4/2022	3,948		3,930		3,948	1.7	%
Energy Services Group, LLC ^{(g) (p)}	L+8.42%	9.42	%	5/4/2017	5/4/2022	4,861		4,699		4,861	2.0	%
Energy Services Group, LLC	L+8.42%	9.42	%	5/4/2017	5/4/2022	1,124		1,110		1,124	0.5	%
WillowTree, LLC	L+5.50%	6.50	%	10/9/2018	10/9/2023	7,840		7,755		7,707	3.3	%
						17,773		17,494		17,640	7.5	%
Telecommunications
VB E1, LLC (Delayed Draw) ^{(f) (h)}	L+8.50%	9.00	%	11/18/2020	11/18/2026	2,250		1,100		1,100	0.5	%
						2,250		1,100		1,100	0.5	%
Total Non-Controlled/Non-Affiliate Unitranche Secured Loans						57,406		52,898		52,476	22.4	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

December 31, 2020

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate		Acquisition Date ^(c)	Maturity		Principal	Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Junior Secured Loans
Beverage, Food & Tobacco
California Pizza Kitchen, Inc.	L+12.50%	1.00% Cash/ 14.00% PIK	^(l)	8/19/2016	5/23/2025		1,264	$	1,264	$	1,011	0.4	%
CSM Bakery Solutions, LLC	L+7.75%	8.75	%	5/23/2013	2/4/2022		5,954		5,954		5,909	2.5	%
							7,218		7,218		6,920	2.9	%
Capital Equipment
ALTA Enterprises, LLC ^(g)	L+8.00%	9.80	%	2/14/2020	8/13/2025		3,850		3,732		3,886	1.7	%
							3,850		3,732		3,886	1.7	%
High Tech Industries
Micro Holdings Corp.	L+7.50%	7.65	%	8/16/2017	8/18/2025		3,000		2,981		3,024	1.3	%
							3,000		2,981		3,024	1.3	%
Services: Consumer
Education Corporation of America	L+11.00%	5.75% Cash/ 5.50% PIK	^(l)	9/3/2015	n/a	⁽ⁱ⁾	833		831		762	0.3	%
							833		831		762	0.3	%
Total Non-Controlled/Non-Affiliate Junior Secured Loans							14,901		14,762		14,592	6.2	%

Equity Securities ^{(u) (v)}
Banking, Finance, Insurance & Real Estate
J2 BWA Funding, LLC (0.7% profit sharing) ^(g)	—	—	^(w)	12/24/2020	—		—		—		—	0.0	%
PKS Holdings, LLC (5,680 preferred units) ^(g)	n/a	5.00% PIK		11/30/2017	—		—		58		214	0.1	%
PKS Holdings, LLC (5,714 preferred units) ^(g)	n/a	5.00% PIK		11/30/2017	—		—		9		33	0.0	%
PKS Holdings, LLC (132 preferred units) ^(g)	n/a	5.00% PIK		11/30/2017	—		—		1		5	0.0	%
PKS Holdings, LLC (916 preferred units) ^(g)	n/a	5.00% PIK		11/30/2017	—		—		9		33	0.0	%
									77		285	0.1	%
Beverage, Food & Tobacco
California Pizza Kitchen, Inc. (78,699 preferred units)	—	—	^(w)	8/19/2016	—		—		5,468		866	0.4	%
									5,468		866	0.4	%
Capital Equipment
MCP Shaw Acquisitionco, LLC (118,906 Class A-2 units)	—	—	^(w)	2/28/2020	—		—		119		143	0.1	%
									119		143	0.1	%
Chemicals, Plastics & Rubber
Valudor Products, LLC (501,014 Class A-1 units)	n/a	10.00% PIK	^(l)	6/18/2018	—		—		501		—	0.0	%
									501		—	0.0	%
Environmental Industries
Quest Resource Holding Corporation (warrant to purchase up to 0.2% of the equity)	—	—	^(w)	10/19/2020	3/19/2028		—		67		87	0.0	%
									67		87	0.0	%
Healthcare & Pharmaceuticals
Seran BioScience, LLC (33,333 common units)	—	—	^(w)	12/31/2020	—		—		333		333	0.1	%
									333		333	0.1	%
High Tech Industries
Answers Finance, LLC (76,539 shares of common stock)	—	—	^(w)	4/14/2017	—		—		2,344		54	0.0	%
MarkLogic Corporation (289,941 Class A units)	—	—	^(w)	10/20/2020	—		—		290		286	0.1	%
Planful, Inc. (fka Host Analytics, Inc.) (473,082 Class A units)	n/a	8.00% PIK		12/28/2018	—		—		473		603	0.3	%
Recorded Future, Inc. (80,486 Class A units) ^(x)	—	—	^(w)	7/3/2019	—		—		81		131	0.1	%
									3,188		1,074	0.5	%
Hotels, Gaming & Leisure
Equine Network, LLC (60 Class A units)	n/a	10.00% PIK		12/31/2020	—		—		60		60	0.0	%
									60		60	0.0	%
Media: Advertising, Printing & Publishing
AdTheorent Holding Company, LLC (128,866 Class A voting units)	—	—	^(w)	12/22/2016	—		—		129		445	0.2	%
InMobi Pte, Ltd. (warrant to purchase up to 2.8% of the equity) ^{(g) (n)}	—	—	^(w)	9/18/2015	9/18/2025		—		—		203	0.1	%
Relevate Health Group, LLC (40 preferred units)	n/a	12.00% PIK		11/20/2020	—		—		40		40	0.0	%
Relevate Health Group, LLC (40 Class B common units)	—	—	^(w)	11/20/2020	—		—		—		1	0.0	%
Stratus Unlimited, LLC (fka MC Sign Lessor Corp.) (686 shares of common units)	—	—	^(w)	8/30/2019	—		—		872		996	0.4	%
XanEdu Publishing, Inc. (49,479 Class A units)	n/a	8.00% PIK		1/28/2020	—		—		49		71	0.0	%
									1,090		1,756	0.7	%
Media: Diversified & Production
Attom Intermediate Holdco, LLC (297,197 Class A units)	—	—	^(w)	1/4/2019	—		—		297		371	0.2	%
									297		371	0.2	%
Retail
BLST Operating Company, LLC (fka Bluestem Brands, Inc.) (139,883 Class A units)	—	—	^(w)	8/28/2020	—		—		1,072		140	0.1	%
Forman Mills, Inc. (warrant to purchase up to 2.6% of the equity)	—	—	^(w)	1/14/2020	1/14/2029		—		—		48	0.0	%
The Tie Bar Operating Company, LLC - Class A preferred units (1,275 units)	—	—	^(w)	6/25/2013	—		—		87		4	0.0	%
The Tie Bar Operating Company, LLC - Class B preferred units (1,275 units)	—	—	^(w)	6/25/2013	—		—		—		—	0.0	%
									1,159		192	0.1	%
Services: Business
APCO Worldwide, Inc. (100 Class A voting common stock)	—	—	^(w)	11/1/2017	—		—		395		433	0.2	%
Atlas Sign Industries of FLA, LLC (warrant to purchase up to 0.8% of the equity)	—	—	^(w)	5/14/2018	5/14/2026		—		125		35	0.0	%
									520		468	0.2	%
Services: Consumer
Education Corporation of America - Series G preferred stock (8,333 shares)	n/a	12.00% PIK	^(l)	9/3/2015	—		—		7,492		5,117	2.2	%
Express Wash Acquisition Company, LLC (100,000 Class A units)	n/a	8.00% PIK		12/28/2020	—		—		100		100	0.0	%
									7,592		5,217	2.2	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

December 31, 2020

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate		Acquisition Date ^(c)	Maturity		Principal		Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Wholesale
Nearly Natural, Inc. (152,174 Class A units)	—	—	^(w)	12/15/2017	—			—	$	152	$	190	0.1	%
										152		190	0.1	%
Total Non-Controlled/Non-Affiliate Equity Securities										20,623		11,042	4.7	%
Total Non-Controlled/Non-Affiliate Company Investments									$	423,913	$	398,040	169.8	%

Non-Controlled Affiliate Company Investments ^(y)
Senior Secured Loans
Banking, Finance, Insurance & Real Estate
American Community Homes, Inc.	L+10.00%	11.50% PIK		7/22/2014	2/26/2021			9,401	$	9,401	$	9,401	4.0	%
American Community Homes, Inc.	L+14.50%	16.00% PIK		7/22/2014	2/26/2021			6,239		6,239		6,239	2.7	%
American Community Homes, Inc.	L+14.50%	16.00% PIK		3/17/2016	2/26/2021			825		825		825	0.4	%
American Community Homes, Inc.	L+10.00%	11.50% PIK		5/24/2017	2/26/2021			570		570		570	0.2	%
American Community Homes, Inc.	L+14.50%	16.00% PIK		5/24/2017	2/26/2021			335		335		335	0.2	%
American Community Homes, Inc.	L+10.00%	11.50% PIK		8/10/2018	2/26/2021			2,095		2,095		2,915	1.2	%
American Community Homes, Inc.	L+10.00%	11.50% PIK		3/29/2019	2/26/2021			3,879		3,879		3,879	1.7	%
American Community Homes, Inc.	L+10.00%	11.50% PIK		9/30/2019	2/26/2021			18		18		18	0.0	%
American Community Homes, Inc.	L+10.00%	11.50% PIK		12/30/2019	2/26/2021			89		89		89	0.0	%
HFZ Capital Group, LLC ^(g)^(af)	L+12.50%	14.00% PIK		10/20/2017	n/a	⁽ⁱ⁾		13,242		13,242		13,106	5.6	%
HFZ Capital Group, LLC ^(g)^(af)	L+12.50%	14.00% PIK		10/20/2017	n/a	⁽ⁱ⁾		4,758		4,758		4,709	2.0	%
MC Asset Management (Industrial), LLC ^(g)^(af)	L+17.00%	18.00% PIK		6/11/2019	10/30/2024			10,702		10,695		11,579	4.9	%
								52,153		52,146		53,665	22.9	%
Beverage, Food & Tobacco
TJ Management HoldCo, LLC (Revolver) ^{(f) (k)}	L+5.50%	6.50	%	9/9/2020	9/8/2023			795		—		—	0.0	%
								795		—		—	0.0	%
Containers, Packaging & Glass
Summit Container Corporation	L+8.00%	9.00	%	12/5/2013	3/31/2021			3,259		3,269		3,204	1.4	%
Summit Container Corporation (Revolver) ^(f)	L+8.00%	9.00	%	6/15/2018	3/31/2021			6,015		1,657		1,654	0.7	%
								9,274		4,926		4,858	2.1	%
Healthcare & Pharmaceuticals
Ascent Midco, LLC ^(j)	L+5.50%	6.50	%	2/5/2020	2/5/2025			6,930		6,814		6,997	3.0	%
Ascent Midco, LLC (Delayed Draw) ^{(f) (h) (j)}	L+5.50%	6.50	%	2/5/2020	2/5/2025			2,838		—		—	0.0	%
Ascent Midco, LLC (Revolver) ^(f)	L+5.50%	6.50	%	2/5/2020	2/5/2025			1,129		—		—	0.0	%
SHI Holdings, Inc. ^(j)	L+10.75%	10.90% PIK	^(l)	7/10/2014	n/a	⁽ⁱ⁾		2,899		2,897		188	0.1	%
SHI Holdings, Inc. (Revolver) ^(f)	L+10.75%	10.90% PIK	^(l)	7/10/2014	n/a	⁽ⁱ⁾		4,667		4,585		297	0.1	%
								18,463		14,296		7,482	3.2	%
High Tech Industries
Mnine Holdings, Inc.	L+8.00%	4.00% Cash/ 5.00% PIK		11/2/2018	12/30/2022			11,768		11,665		12,356	5.3	%
								11,768		11,665		12,356	5.3	%
Retail
Luxury Optical Holdings Co.	L+8.00%	9.00% PIK	^(l)	9/12/2014	12/15/2021			1,481		1,481		1,430	0.6	%
Luxury Optical Holdings Co. (Delayed Draw) ^{(f) (h)}	L+11.50%	12.50	%^(l)	9/29/2017	12/15/2021			3,565		624		624	0.3	%
Luxury Optical Holdings Co. (Revolver)	L+8.00%	9.00% PIK	^(l)	9/12/2014	12/15/2021			68		68		66	0.0	%
								5,114		2,173		2,120	0.9	%
Services: Business
Curion Holdings, LLC ^(j)	n/a	14.00% PIK	^(l)	5/2/2017	5/2/2022			4,226		4,189		3,159	1.4	%
Curion Holdings, LLC (Revolver) ^(f)	n/a	14.00% PIK	^(l)	5/2/2017	5/2/2022			871		836		820	0.3	%
								5,097		5,025		3,979	1.7	%
Services: Consumer
NECB Collections, LLC (Revolver) ^(f)	L+11.00%	12.00% PIK	^(l)	6/25/2019	6/30/2021			1,356		1,312		834	0.3	%
								1,356		1,312		834	0.3	%
Total Non-Controlled Affiliate Senior Secured Loans								104,020		91,543		85,294	36.4	%

Unitranche Secured Loans ^(r)
Consumer Goods: Non-Durable
Incipio, LLC ^(z)	L+8.50%	9.50% PIK	^(l)	12/26/2014	8/22/2022			14,701		14,677		1,764	0.8	%
Incipio, LLC ^(aa)	L+8.50%	9.50% PIK		3/9/2018	8/22/2022			4,278		4,278		4,227	1.8	%
Incipio, LLC	L+8.50%	9.50% PIK		7/6/2018	8/22/2022			1,818		1,818		1,805	0.8	%
Incipio, LLC	L+8.50%	9.50% PIK		1/15/2020	8/22/2022			1,530		1,530		1,519	0.6	%
Incipio, LLC	L+8.50%	9.50% PIK		4/17/2019	8/22/2022			766		766		761	0.3	%
Incipio, LLC (Delayed Draw) ^{(f) (h)}	L+8.50%	9.50% PIK		7/8/2020	8/22/2022			2,525		1,498		1,488	0.6	%
								25,618		24,567		11,564	4.9	%
Total Non-Controlled Affiliate Unitranche Secured Loans								25,618		24,567		11,564	4.9	%

Junior Secured Loans
Consumer Goods: Non-Durable
Incipio, LLC ^(ab)	n/a	10.70% PIK	^(l)	6/18/2018	8/22/2022			3,766		—		—	0.0	%
Incipio, LLC ^(ac)	n/a	10.70% PIK	^(l)	6/18/2018	8/22/2022			7,194		—		—	0.0	%
								10,960		—		—	0.0	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

December 31, 2020

(in thousands, except for shares and units)

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate		Acquisition Date ^(c)	Maturity	Principal	Amortized Cost		Fair Value ^(d)		% of Net Assets ^(e)
Services: Business
Curion Holdings, LLC ^(j)	n/a	15.00% PIK	^(l)	8/17/2018	1/2/2023	1,720	$	1	$	—	0.0	%
Curion Holdings, LLC ^(j)	n/a	15.00% PIK	^(l)	8/17/2018	1/2/2023	44		—		—	0.0	%
						1,764		1		—	0.0	%
Total Non-Controlled Affiliate Company Junior Secured Loans						12,724		1		—	0.0	%

Equity Securities ^{(v) (y)}
Banking, Finance, Insurance & Real Estate
American Community Homes, Inc. (warrant to purchase up to 22.3% of the equity)	—	—	^(w)	10/9/2014	12/18/2024	—		—		—	0.0	%
MC Asset Management (Corporate), LLC (15.9% of interests) ^(g) (af)	—	—	^(w)	6/11/2019	—	—		793		785	0.3	%
								793		785	0.3	%
Beverage, Food & Tobacco
TJ Management HoldCo, LLC (16 shares of common stock) ^(k)	—	—	^(w)	9/9/2020	—	—		2,386		3,323	1.4	%
								2,386		3,323	1.4	%
Consumer Goods: Non-Durable
Incipio, LLC (1,774 shares of Series C common units)	—	—	^(w)	7/6/2018	—	—		—		—	0.0	%
								—		—	0.0	%
Containers, Packaging & Glass
Summit Container Corporation (warrant to purchase up to 19.5% of the equity)	—	—	^(w)	1/6/2014	1/6/2024	—		—		139	0.1	%
								—		139	0.1	%
Healthcare & Pharmaceuticals
Ascent Midco, LLC (2,032,258 Class A units)	n/a	8.00% PIK		2/5/2020	—	—		2,032		3,016	1.3	%
Familia Dental Group Holdings, LLC (1,052 Class A units) ^(ad)	—	—	^(w)	4/8/2016	—	—		3,602		3,118	1.3	%
SHI Holdings, Inc. (24 shares of common stock)	—	—	^(w)	12/14/2016	—	—		27		—	0.0	%
								5,661		6,134	2.6	%
High Tech Industries
Mnine Holdings, Inc. (6,400 Class B units)	—	—	^(w)	6/30/2020	—	—		—		—	0.0	%
								—		—	0.0	%
Retail
Luxury Optical Holdings Co. (91 preferred units)	n/a	15.00% PIK	^(l)	9/12/2014	—	—		3,631		2,476	1.1	%
Luxury Optical Holdings Co. (86 shares of common stock)	—	—	^(w)	9/29/2017	—	—		—		—	0.0	%
								3,631		2,476	1.1	%
Services: Business
Curion Holdings, LLC (58,779 shares of common stock)	—	—	^(w)	8/17/2018	—	—		—		—	0.0	%
								—		—	0.0	%
Services: Consumer
NECB Collections, LLC (20.8% of units)	—	—	^(w)	6/21/2019	—	—		1,458		—	0.0	%
								1,458		—	0.0	%
Total Non-Controlled Affiliate Equity Securities								13,929		12,857	5.5	%
Total Non-Controlled Affiliate Company Investments							$	130,040	$	109,715	46.8	%

Controlled Affiliate Company Investments ^(ae)
Equity Securities
Investment Funds & Vehicles
MRCC Senior Loan Fund I, LLC (50.0% of the equity interests) ^(g)	—	—		10/31/2017	—	—	$	42,150	$	39,284	16.7	%
Total Controlled Affiliate Equity Securities								42,150		39,284	16.7	%
Total Controlled Affiliate Company Investments							$	42,150	$	39,284	16.7	%

TOTAL INVESTMENTS							$	596,103	$	547,039	233.3	%

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

December 31, 2020

(in thousands, except for shares and units)

Derivative Instruments

Foreign currency forward contracts

	Notional Amount		Notional Amount				Unrealized Gain
Description	to be Purchased		to be Sold		Counterparty	Settlement Date	(Loss)
Foreign currency forward contract	$	107	£	87	Bannockburn Global Forex, LLC	1/4/2021	$	(12	)
Foreign currency forward contract	$	264	£	206	Bannockburn Global Forex, LLC	3/3/2021		(18	)
Foreign currency forward contract	$	33	£	26	Bannockburn Global Forex, LLC	3/3/2021		(2	)
Foreign currency forward contract	$	103	£	84	Bannockburn Global Forex, LLC	4/2/2021		(12	)
Foreign currency forward contract	$	271	£	212	Bannockburn Global Forex, LLC	6/1/2021		(19	)
Foreign currency forward contract	$	33	£	26	Bannockburn Global Forex, LLC	6/1/2021		(2	)
Foreign currency forward contract	$	103	£	83	Bannockburn Global Forex, LLC	7/2/2021		(11	)
Foreign currency forward contract	$	102	£	83	Bannockburn Global Forex, LLC	10/4/2021		(11	)
Foreign currency forward contract	$	101	£	82	Bannockburn Global Forex, LLC	1/3/2022		(11	)
Foreign currency forward contract	$	97	£	79	Bannockburn Global Forex, LLC	4/4/2022		(11	)
Foreign currency forward contract	$	36	£	29	Bannockburn Global Forex, LLC	5/6/2022		(4	)
							$	(113	)

(a)	All of the Company’s investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All of the Company’s investments are issued by U.S. portfolio companies unless otherwise noted.

(b)

The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“Prime” or “P”) which reset daily, monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at December 31, 2020. Certain investments are subject to a LIBOR or Prime interest rate floor, or rate cap. Certain investments contain a payment-in-kind (“PIK”) provision.

(c)

Except as otherwise noted, all of the Company’s portfolio company investments, which as of December 31, 2020 represented 233.3% of the Company’s net assets or 93.5% of the Company’s total assets, are subject to legal restrictions on sales.

(d)

Because there is no readily available market value for these investments, the fair value of these investments is determined in good faith using significant unobservable inputs by the Company’s board of directors as required by the 1940 Act. (See Note 4 in the accompanying notes to the consolidated financial statements.)

(e)

Percentages are based on net assets of $234,434 as of December 31, 2020.

(f)

All or a portion of this commitment was unfunded at December 31, 2020. As such, interest is earned only on the funded portion of this commitment.

(g)

This investment is treated as a non-qualifying investment under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2020, non-qualifying assets totaled 19.9% of the Company’s total assets.

(h)

This delayed draw loan requires that certain financial covenants be met by the portfolio company prior to any fundings.

(i)

This is a demand note with no stated maturity.

(j)

All of this loan is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.

(k)

During the three months ended September 30, 2020, the senior secured lender group of Toojay’s Management, LLC (“Toojay’s OldCo”) established TJ Management HoldCo, LLC (“Toojay’s NewCo”) in order to acquire certain of the assets of Toojay’s OldCo as part of a bankruptcy restructuring. The Company owns 15.9% of the equity in Toojay’s NewCo. Toojay’s NewCo credit bid a portion of the senior secured debt in Toojay’s OldCo to acquire certain assets of Toojay’s OldCo which constitute the ongoing operations of the portfolio company. The Company’s portion of this credit bid was $2,386, and as such the Company’s outstanding senior secured debt investment in Toojay’s OldCo was reduced by the amount of the credit bid and the Company’s cost basis of its new equity investment in Toojay’s NewCo was increased by the amount of the credit bid. While the Company still has loans outstanding at Toojay’s OldCo, the Company has valued these positions at zero as of December 31, 2020.

(l)

This position was on non-accrual status as of December 31, 2020, meaning that the Company has ceased accruing interest income on the position. See Note 2 in the accompanying notes to the consolidated financial statements for additional information on the Company’s accounting policies.

(m)

This investment represents a note convertible to preferred shares of the borrower.

(n)

This is an international company.

(o)

In May 2020, an arbitrator issued a final award in favor of the estate of Rockdale Blackhawk, LLC (the “Estate”) in the legal proceeding between the Estate and a national insurance carrier. The Company’s share of the net proceeds from the award exceeded the contractual obligations due to the Company as a result of the Company’s right to receive excess proceeds pursuant to the terms of a sharing agreement between the lenders and the Estate. In June 2020, the Company received $33,135 as an initial payment of proceeds from the legal proceedings from the Estate, of which $19,540 was recorded as a reduction in the cost basis of the Company’s investment in Rockdale, $3,878 was recorded as the collection of previously accrued interest, $7,378 was recorded as investment income for previously unaccrued interest and fees and $2,339 was recorded as realized gains. Additionally, as an offset, the Company recorded net change in unrealized (loss) of ($8,243) primarily as a result of the reversal associated with the collection of proceeds from the Estate. Total net income associated with the Company’s investment in Rockdale was $1,887 during the year ended December 31, 2020. As of December 31, 2020, the Company has this remaining investment in Rockdale associated with residual proceeds currently expected from the Estate. This investment is a non-income producing security.

(p)

This loan is denominated in Great Britain pounds and is translated into U.S. dollars as of the valuation date.

(q)

As of December 31, 2020, the Company was party to a subscription agreement with a commitment to fund an equity investment of $289.

(r)

The Company structures its unitranche secured loans as senior secured loans. The Company obtains security interests in the assets of these portfolio companies that serve as collateral in support of the repayment of these loans. This collateral may take the form of first-priority liens on the assets of a portfolio company. Generally, the Company syndicates a “first out” portion of the loan to an investor and retains a “last out” portion of the loan, in which case the “first out” portion of the loan will generally receive priority with respect to payments of principal, interest and any other amounts due thereunder. Unitranche structures combine characteristics of traditional first lien senior secured as well as second lien and subordinated loans and the Company’s unitranche secured loans will expose the Company to the risks associated with second lien and subordinated loans and may limit the Company’s recourse or ability to recover collateral upon a portfolio company’s bankruptcy. Unitranche secured loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity. Unitranche secured loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. In many cases the Company, together with its affiliates, are the sole or majority lender of these unitranche secured loans, which can afford the Company additional influence with a borrower in terms of monitoring and, if necessary, remediation in the event of underperformance.

(s)

A portion of this loan (principal of $9,258) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.

(t)

A portion of this loan (principal of $525) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.

(u)

Represents less than 5% ownership of the portfolio company’s voting securities.

(v)

Ownership of certain equity investments may occur through a holding company or partnership.

(w)

Represents a non-income producing security.

(x)

As of December 31, 2020, the Company was party to a subscription agreement with a commitment to fund an additional equity investment of $16.

(y)

As defined in the 1940 Act, the Company is deemed to be an “Affiliated Person” of the portfolio company as it owns 5% or more of the portfolio company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was an Affiliated Person (but not a portfolio company that the Company is deemed to control).

(z)

A portion of this loan (principal of $5,390) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.

(aa)

A portion of this loan (principal of $54) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.

(ab)

A portion of this loan (principal of $1,015) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.

(ac)

A portion of this loan (principal of $1,938) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.

(ad)

As of December 31, 2020, the Company was party to a subscription agreement with a commitment to fund an additional equity investment of $611.

(ae)

As defined in the 1940 Act, the Company is deemed to be both an “Affiliated Person” of and to “Control” this portfolio company as it owns more than 25% of the portfolio company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.

(af)

The Company restructured its investments in HFZ Capital Group LLC (“HFZ”) and HFZ Member RB portfolio, LLC (“Member RB”) during the three months ended December 31, 2020. As part of the restructuring of HFZ, the Company obtained a 15.9% equity interest in MC Asset Management (Corporate), LLC (“Corporate”). As part of the Member RB restructuring, the Company exchanged its loan in Member RB for a promissory note in MC Asset Management (Industrial), LLC (“Industrial”). Corporate owns 100% of the equity of Industrial. In conjunction with these restructurings, the Company participated $4,758 of principal of its loan to HFZ as an equity contribution to Industrial. This participation did not qualify for sale accounting under ASC Topic 860 – Transfers and Servicing because the sale did not meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. As a result, the Company continues to reflect its full investment in HFZ but has split the loan into two investments.

n/a - not applicable

See Notes to Consolidated Financial Statements.

MONROE CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(in thousands, except share and per share data)

Note 1. Organization and Principal Business

Monroe Capital Corporation (together with its subsidiaries, the “Company”) is an externally managed, non-diversified, closed-end management investment company and has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through investment in senior secured, junior secured and unitranche secured (a combination of senior secured and junior secured debt in the same facility in which the Company syndicates a “first out” portion of the loan to an investor and retains a “last out” portion of the loan) debt and, to a lesser extent, unsecured subordinated debt and equity investments. The Company is managed by Monroe Capital BDC Advisors, LLC (“MC Advisors”), a registered investment adviser under the Investment Advisers Act of 1940, as amended. In addition, for U.S. federal income tax purposes, the Company has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

On February 28, 2014, the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP (“MRCC SBIC”), a Delaware limited partnership, received a license from the Small Business Administration (“SBA”) to operate as a Small Business Investment Company (“SBIC”) under Section 301(c) of the Small Business Investment Act of 1958, as amended. MRCC SBIC commenced operations on September 16, 2013. See Note 7 for additional information.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. The Company has determined it meets the definition of an investment company and follows the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 – Financial Services – Investment Companies (“ASC Topic 946”).

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation

As permitted under ASC Topic 946, the Company will generally not consolidate its investment in a portfolio company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries, including MRCC SBIC and its wholly-owned general partner MCC SBIC GP, LLC, and the Company’s wholly-owned taxable subsidiaries (the “Taxable Subsidies”) in its consolidated financial statements. The purpose of the Taxable Subsidiaries is to permit the Company to hold equity investments in portfolio companies that are taxed as partnerships for U.S. federal income tax purposes while complying with the “source of income” requirements contained in the RIC tax provisions. The Taxable Subsidiaries are not consolidated with the Company for U.S. federal corporate income tax purposes, and each Taxable Subsidiary is subject to U.S. federal corporate income tax on its taxable income. All intercompany balances and transactions have been eliminated. The Company does not consolidate its non-controlling interest in MRCC Senior Loan Fund I, LLC (“SLF”). See further description of the Company’s investment in SLF in Note 3.

Fair Value of Financial Instruments

The Company applies fair value to substantially all of its financial instruments in accordance with ASC Topic 820 – Fair Value Measurements and Disclosures (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value, and requires disclosures for fair value measurements, including the categorization of financial instruments into a three-level hierarchy based on the transparency of valuation inputs. See Note 4 for further discussion regarding the fair value measurements and hierarchy.

Revenue Recognition

The Company’s revenue recognition policies are as follows:

Investments and related investment income: Interest and dividend income is recorded on the accrual basis to the extent that the Company expects to collect such amounts. Interest income is accrued based upon the outstanding principal amount and contractual terms of debt and preferred equity investments. Interest is accrued on a daily basis. The Company records fees on loans based on the determination of whether the fee is considered a yield enhancement or payment for a service. If the fee is considered a yield enhancement associated with a funding of cash on a loan, the fee is generally deferred and recognized into interest income using the effective interest method if captured in the cost basis or using the straight-line method if the loan is unfunded and therefore there is no cost basis. If the fee is not considered a yield enhancement because a service was provided, and the fee is payment for that service, the fee is deemed earned and recognized as fee income in the period the service has been completed.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the applicable distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment. For the three and nine months ended September 30, 2021, the Company received return of capital distributions from its equity investments of $0 and $1,177, respectively. For the three and nine months ended September 30, 2020, the Company did not receive return of capital distributions from its equity investments.

The Company has certain investments in its portfolio that contain a payment-in-kind (“PIK”) provision, which represents contractual interest or dividends that are added to the principal balance and recorded as income. The Company stops accruing PIK interest or PIK dividends when it is determined that PIK interest or PIK dividends are no longer collectible. To maintain RIC tax treatment, and to avoid incurring corporate U.S. federal income tax, substantially all of this income must be paid out to stockholders in the form of distributions, even though the Company has not yet collected the cash.

Loan origination fees, original issue discount and market discount or premiums are capitalized, and the Company then amortizes such amounts using the effective interest method as interest income over the life of the investment. Unamortized discounts and loan origination fees totaled $4,646 and $4,844 as of September 30, 2021 and December 31, 2020, respectively. Upfront loan origination and closing fees received for the three and nine months ended September 30, 2021 totaled $1,611 and $3,114, respectively. Upfront loan origination and closing fees received for the three and nine months ended September 30, 2020 totaled $94 and $1,080, respectively. Upon the prepayment of a loan or debt security, any unamortized premium or discount or loan origination fees are recorded as interest income.

The components of the Company’s investment income were as follows:

	Three months ended September 30,
	2021		2020
Interest income	$	9,444	$	10,179
PIK interest income		2,913		1,563
Dividend income ⁽¹⁾		1,957		1,145
Fee income		288		26
Prepayment gain (loss)		372		192
Accretion of discounts and amortization of premium		240		280
Total investment income	$	15,214	$	13,385

	Nine months ended September 30,
	2021		2020
Interest income	$	26,905	$	35,689
PIK interest income		6,326		5,103
Dividend income ⁽²⁾		4,368		3,185
Fee income		1,065		3,047
Prepayment gain (loss)		1,270		1,045
Accretion of discounts and amortization of premium		857		960
Total investment income	$	40,791	$	49,029

(1)	Includes PIK dividends of $921 and $45, respectively.
(2)	Includes PIK dividends of $1,055 and $35, respectively.

Investment transactions are recorded on a trade-date basis. Realized gains or losses on portfolio investments are calculated based upon the difference between the net proceeds from the disposition and the amortized cost basis of the investment, without regard to unrealized gains or losses previously recognized. Realized gains and losses are recorded within net realized gain (loss) on investments on the consolidated statements of operations. Changes in the fair value of investments from the prior period, as determined by the Company’s board of directors (the “Board”) through the application of the Company’s valuation policy, are included within net change in unrealized gain (loss) on investments on the consolidated statements of operations.

Non-accrual: Loans or preferred equity securities are placed on non-accrual status when principal, interest or dividend payments become materially past due, or when there is reasonable doubt that principal, interest or dividends will be collected. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal, interest, or dividends are paid, or are expected to be paid, and, in management’s judgment are likely to remain current. The fair value of the Company’s investments on non-accrual status totaled $17,028 and $22,273 at September 30, 2021 and December 31, 2020, respectively.

Distributions

Distributions to common stockholders are recorded on the applicable record date. The amount, if any, to be distributed to common stockholders is determined by the Board each quarter and is generally based upon the Company’s earnings estimated by management. Net realized capital gains, if any, are generally distributed at least annually.

The determination of the tax attributes for the Company’s distributions is made annually, based upon its taxable income for the full year and distributions paid for the full year. Ordinary dividend distributions from a RIC do not qualify for the preferential tax rate on qualified dividend income from domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income in the form of qualifying dividends from domestic corporations and qualified foreign corporations. The tax attributes for distributions will generally include both ordinary income and capital gains, but may also include qualified dividends or return of capital.

In October 2012, the Company adopted a dividend reinvestment plan (“DRIP”) that provides for the reinvestment of dividends on behalf of its stockholders, unless a stockholder has elected to receive dividends in cash. When the Company declares a cash dividend, the Company’s stockholders who have not “opted out” of the DRIP at least three days prior to the dividend payment date will have their cash dividend automatically reinvested into additional shares of the Company’s common stock. The Company has the option to satisfy the share requirements of the DRIP through the issuance of new shares of common stock or through open market purchases of common stock by the DRIP plan administrator. Newly issued shares are valued based upon the final closing price of the Company’s common stock on a date determined by the Board. Shares purchased in the open market to satisfy the DRIP requirements will be valued based upon the average price of the applicable shares purchased by the DRIP plan administrator, before any associated brokerage or other costs. See Note 9 for additional information on the Company’s distributions.

Segments

In accordance with ASC Topic 280 – Segment Reporting, the Company has determined that it has a single reporting segment and operating unit structure.

Cash

The Company deposits its cash in a financial institution and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Restricted Cash

Restricted cash includes amounts held within MRCC SBIC. Cash held within an SBIC is generally restricted to the originations of new loans from the SBIC and the payment of SBA debentures and related interest expense.

Unamortized Deferred Financing Costs

Deferred financing costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of September 30, 2021 and December 31, 2020, the Company had unamortized deferred financing costs of $6,318 and $7,052 respectively, presented as a direct reduction of the carrying amount of debt on the consolidated statements of assets and liabilities. These amounts are amortized and included in interest and other debt financing expenses on the consolidated statements of operations over the estimated average life of the borrowings. Amortization of deferred financing costs for the three and nine months ended September 30, 2021 was $539 and $1,677, respectively. Amortization of deferred financing costs for the three and nine months ended September 30, 2020 was $582 and $1,586, respectively.

Offering Costs

Offering costs include, among other things, fees paid in relation to legal, accounting, regulatory and printing work completed in preparation of debt and equity offerings. Offering costs from equity offerings are charged against the proceeds from the offering within the consolidated statements of changes in net assets. Offering costs from debt offerings are reclassified to unamortized deferred financing costs on the consolidated statements of assets and liabilities as noted above. As of September 30, 2021 and December 31, 2020, other assets on the consolidated statements of assets and liabilities included $137 and $562, respectively, of deferred offering costs which will be charged against the proceeds from future debt or equity offerings when completed.

Investments Denominated in Foreign Currency

As of September 30, 2021, the Company held investments in one portfolio company that was denominated in Great Britain pounds and one portfolio company that was denominated in Australian dollars. As of December 31, 2020, the Company held investments in two portfolio companies that were denominated in Great Britain pounds.

At each balance sheet date, portfolio company investments denominated in foreign currencies are translated into U.S. dollars using the spot exchange rate on the last business day of the period. Purchases and sales of foreign portfolio company investments, and any income from such investments, are translated into U.S. dollars using the rates of exchange prevailing on the respective dates of such transactions.

Although the fair values of foreign portfolio company investments and the fluctuation in such fair values are translated into U.S. dollars using the applicable foreign exchange rates described above, the Company does not isolate the portion of the change in fair value resulting from foreign currency exchange rates fluctuations from the change in fair value of the underlying investment. All fluctuations in fair value are included in net change in unrealized gain (loss) on investments on the Company’s consolidated statements of operations.

Investments denominated in foreign currencies and foreign currency transactions may involve certain consideration and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. dollar.

Derivative Instruments

The Company may enter into foreign currency forward contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another, at a pre-determined price at a future date. Foreign currency forward contracts are marked-to-market based on the difference between the forward rate and the exchange rate at the current period end. Unrealized gain (loss) on foreign currency forward contracts are recorded on the Company’s consolidated statements of assets and liabilities by counterparty on a net basis.

The Company does not utilize hedge accounting and as such values its foreign currency forward contracts at fair value with the change in unrealized gain or loss recorded in net change in unrealized gain (loss) on foreign currency forward contracts and the realized gain or loss recorded in net realized gain (loss) on foreign currency forward contracts on the Company’s consolidated statements of operations.

Income Taxes

The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment available to RICs. To maintain qualification as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and distribute to stockholders, for each taxable year, at least 90% of the Company’s “investment company taxable income,” which is generally the Company’s net ordinary income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses. If the Company qualifies as a RIC and satisfies the annual distribution requirement, the Company will not have to pay corporate-level federal income taxes on any income that the Company distributes to its stockholders. The Company intends to make distributions in an amount sufficient to maintain RIC status each year and to avoid any federal income taxes on income. The Company is also subject to nondeductible federal excise taxes if the Company does not distribute at least 98% of net ordinary income, 98.2% of any capital gain net income, if any, and any recognized and undistributed income from prior years for which it paid no federal income taxes. To the extent that the Company determines that its estimated current year annual taxable income may exceed estimated current year dividend distributions, the Company accrues excise tax, calculated as 4% of the estimated excess taxable income, if any, as taxable income is earned. For the three and nine months ended September 30, 2021, the Company recorded a net expense on the consolidated statements of operations of $68 and $251, respectively, for U.S. federal excise tax. For the three and nine months ended September 30, 2020, the Company recorded a net expense on the consolidated statements of operations of $125 and $270, respectively, for U.S. federal excise tax. As of September 30, 2021 and December 31, 2020, the Company had payables of $156 and $306 for excise taxes, respectively, which were included in accounts payable and accrued expenses on the Company’s consolidated statements of assets and liabilities.

The Company’s consolidated Taxable Subsidiaries may be subject to U.S. federal and state corporate-level income taxes. For both the three and nine months ended September 30, 2021, the Company recorded a net tax expense of $3 on the consolidated statements of operations for these subsidiaries. For the three and nine months ended September 30, 2020, the Company recorded a net tax expense of zero and $2, respectively, on the consolidated statements of operations for these subsidiaries. As of both September 30, 2021 and December 31, 2020, no payables for corporate-level income taxes were accrued.

The Company accounts for income taxes in conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in the consolidated financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. The Company did not take any material uncertain income tax positions through September 30, 2021. The 2017 through 2020 tax years remain subject to examination by U.S. federal and state tax authorities.

Subsequent Events

The Company has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the consolidated financial statements were issued. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the nine months ended September 30, 2021.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective as of March 12, 2020 through December 31, 2022. Management is currently evaluating the impact of the optional guidance on the Company’s consolidated financial statements and disclosures. The Company did not utilize the optional expedients and exceptions provided by ASU 2020-04 during the nine months ended September 30, 2021.

Note 3. Investments

The following tables show the composition of the Company’s investment portfolio, at amortized cost and fair value (with corresponding percentage of total portfolio investments):

	September 30, 2021				December 31, 2020
Amortized Cost:
Senior secured loans	$	432,180	74.2	%	$	427,173	71.7	%
Unitranche secured loans		62,820	10.8			77,465	13.0
Junior secured loans		9,311	1.6			14,763	2.4
LLC equity interest in SLF		42,150	7.2			42,150	7.1
Equity securities		36,367	6.2			34,552	5.8
Total	$	582,828	100.0	%	$	596,103	100.0	%

	September 30, 2021				December 31, 2020
Fair Value:
Senior secured loans	$	425,055	76.8	%	$	405,224	74.1	%
Unitranche secured loans		44,420	8.0			64,040	11.7
Junior secured loans		9,181	1.6			14,592	2.6
LLC equity interest in SLF		41,331	7.5			39,284	7.2
Equity securities		33,757	6.1			23,899	4.4
Total	$	553,744	100.0	%	$	547,039	100.0	%

The following tables show the composition of the Company’s investment portfolio by geographic region, at amortized cost and fair value (with corresponding percentage of total portfolio investments). The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business:

	September 30, 2021				December 31, 2020
Amortized Cost:
International	$	11,860	2.0	%	$	19,276	3.2	%
Midwest		133,202	22.9			149,468	25.1
Northeast		114,791	19.7			139,553	23.4
Southeast		167,796	28.8			142,721	24.0
Southwest		38,745	6.6			23,857	4.0
West		116,434	20.0			121,228	20.3
Total	$	582,828	100.0	%	$	596,103	100.0	%

	September 30, 2021				December 31, 2020
Fair Value:
International	$	11,034	2.0	%	$	20,008	3.7	%
Midwest		130,740	23.6			144,261	26.4
Northeast		112,751	20.4			123,349	22.5
Southeast		164,476	29.7			138,406	25.3
Southwest		41,867	7.5			25,557	4.7
West		92,876	16.8			95,458	17.4
Total	$	553,744	100.0	%	$	547,039	100.0	%

The following tables show the composition of the Company’s investment portfolio by industry, at amortized cost and fair value (with corresponding percentage of total portfolio investments):

	September 30, 2021				December 31, 2020
Amortized Cost:
Aerospace & Defense	$	7,842	1.4	%	$	—	—	%
Automotive		21,196	3.6			9,495	1.6
Banking, Finance, Insurance & Real Estate		84,983	14.6			70,779	11.9
Beverage, Food & Tobacco		21,032	3.6			26,308	4.4
Capital Equipment		9,707	1.7			13,603	2.3
Chemicals, Plastics & Rubber		10,405	1.8			28,723	4.8
Construction & Building		13,658	2.4			16,651	2.8
Consumer Goods: Durable		15,276	2.6			24,410	4.1
Consumer Goods: Non-Durable		28,241	4.9			26,030	4.3
Containers, Packaging & Glass		—	—			4,926	0.8
Environmental Industries		12,244	2.1			12,996	2.2
Healthcare & Pharmaceuticals		59,578	10.2			42,857	7.2
High Tech Industries		61,122	10.5			81,845	13.7
Hotels, Gaming & Leisure		2,582	0.4			1,771	0.3
Investment Funds & Vehicles		42,150	7.2			42,150	7.1
Media: Advertising, Printing & Publishing		15,750	2.7			30,764	5.1
Media: Broadcasting & Subscription		2,422	0.4			2,190	0.4
Media: Diversified & Production		17,721	3.0			6,707	1.1
Retail		23,333	4.0			32,017	5.4
Services: Business		72,513	12.4			79,768	13.4
Services: Consumer		41,041	7.0			29,697	5.0
Telecommunications		4,420	0.8			1,100	0.2
Wholesale		15,612	2.7			11,316	1.9
Total	$	582,828	100.0	%	$	596,103	100.0	%

	September 30, 2021				December 31, 2020
Fair Value:
Aerospace & Defense	$	7,840	1.4	%	$	—	—	%
Automotive		21,612	3.9			9,637	1.8
Banking, Finance, Insurance & Real Estate		88,401	16.0			72,627	13.3
Beverage, Food & Tobacco		20,123	3.6			20,676	3.8
Capital Equipment		9,867	1.8			13,750	2.5
Chemicals, Plastics & Rubber		10,354	1.9			27,754	5.1
Construction & Building		13,831	2.5			16,809	3.0
Consumer Goods: Durable		9,743	1.8			18,893	3.4
Consumer Goods: Non-Durable		9,661	1.7			13,027	2.4
Containers, Packaging & Glass		—	—			4,997	0.9
Environmental Industries		12,543	2.3			13,168	2.4
Healthcare & Pharmaceuticals		54,596	9.9			37,815	6.9
High Tech Industries		60,317	10.9			81,417	14.9
Hotels, Gaming & Leisure		2,629	0.5			1,771	0.3
Investment Funds & Vehicles		41,332	7.5			39,284	7.2
Media: Advertising, Printing & Publishing		19,603	3.5			31,553	5.8
Media: Broadcasting & Subscription		2,429	0.4			2,227	0.4
Media: Diversified & Production		17,985	3.2			6,811	1.2
Retail		22,259	4.0			18,443	3.4
Services: Business		73,411	13.3			78,584	14.4
Services: Consumer		35,034	6.3			25,306	4.6
Telecommunications		4,514	0.8			1,100	0.2
Wholesale		15,660	2.8			11,390	2.1
Total	$	553,744	100.0	%	$	547,039	100.0	%

MRCC Senior Loan Fund I, LLC

The Company co-invests with Life Insurance Company of the Southwest (“LSW”) in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as underlying investment transactions are completed, taking into account available debt and equity commitments available for funding these investments. All portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee, consisting of one representative from the Company and one representative from LSW. SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business. Investments held by SLF are measured at fair value using the same valuation methodologies as described in Note 4. The Company’s investment is illiquid in nature as SLF does not allow for withdrawal from the LLC or the sale of a member’s interest unless approved by the board members of SLF. The full withdrawal of a member would result in an orderly wind-down of SLF.

SLF’s profits and losses are allocated to the Company and LSW in accordance with their respective ownership interests. As of both September 30, 2021 and December 31, 2020, the Company and LSW each owned 50.0% of the LLC equity interests of SLF. As of both September 30, 2021 and December 31, 2020, SLF had $100,000 in equity commitments from its members (in the aggregate), of which $84,300 was funded.

As of both September 30, 2021 and December 31, 2020, the Company had committed to fund $50,000 of LLC equity interest subscriptions to SLF. As of both September 30, 2021 and December 31, 2020, $42,150 of the Company’s LLC equity interest subscriptions to SLF had been called and contributed, net of return of capital distributions subject to recall.

For the three and nine months ended September 30, 2021, the Company received $1,025 and $3,300 of dividend income from its LLC equity interest in SLF, respectively. For the three and nine months ended September 30, 2020, the Company received $1,100 and $3,150 of dividend income from its LLC equity interest in SLF, respectively.

SLF has a senior secured revolving credit facility (as amended, the “SLF Credit Facility”) with Capital One, N.A., through its wholly-owned subsidiary MRCC Senior Loan Fund I Financing SPV, LLC (“SLF SPV”), which as of September 30, 2021, allowed SLF SPV to borrow up to $170,000 at any one time, subject to leverage and borrowing base restrictions. Borrowings under the SLF Credit Facility bear interest at an annual rate of LIBOR (three-month) plus 2.25%. The maturity date on the SLF Credit Facility is March 22, 2023.

SLF does not pay any fees to MC Advisors or its affiliates; however, SLF has entered into an administration agreement with Monroe Capital Management Advisors, LLC (“MC Management”), pursuant to which certain loan servicing and administrative functions are delegated to MC Management. SLF may reimburse MC Management for its allocable share of overhead and other expenses incurred by MC Management. For the three and nine months ended September 30, 2021, SLF incurred $51 and $159, respectively, of allocable expenses. For the three and nine months ended September 30, 2020, SLF incurred $51 and $157, respectively, of allocable expenses. There are no agreements or understandings by which the Company guarantees any SLF obligations.

As of September 30, 2021 and December 31, 2020, SLF had total assets at fair value of $196,632 and $209,666, respectively. As of September 30, 2021 and December 31, 2020, SLF had one portfolio company investment on non-accrual status with a fair value of $1,054 and $1,031, respectively. The portfolio companies in SLF are in industries and geographies similar to those in which the Company may invest directly. Additionally, as of September 30, 2021 and December 31, 2020, SLF had $408 and $839, respectively, in outstanding commitments to fund investments under undrawn revolvers and delayed draw commitments.

Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of September 30, 2021 and December 31, 2020:

	As of
	September 30, 2021			December 31, 2020
Senior secured loans ⁽¹⁾		196,230			214,389
Weighted average current interest rate on senior secured loans ⁽²⁾		5.8	%		5.8	%
Number of borrowers in SLF		54			57
Largest portfolio company investment ⁽¹⁾		6,737			6,790
Total of five largest portfolio company investments ⁽¹⁾		28,118			27,064

(1)	Represents outstanding principal amount, excluding unfunded commitments.
(2)	Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at outstanding principal amount.

MRCC SENIOR LOAN FUND I, LLC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(unaudited)

September 30, 2021

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate ^(b)			Maturity		Principal		Fair Value
Non-Controlled/Non-Affiliate Company Investments
Senior Secured Loans
Aerospace & Defense
Bromford Industries Limited ^(c)	L+5.25%		6.25	%		11/5/2025		2,751	$	2,695
Bromford Industries Limited ^(c)	L+5.25%		6.25	%		11/5/2025		1,834		1,796
Trident Maritime SH, Inc.	L+5.50%		6.50	%		2/26/2027		2,473		2,483
Trident Maritime SH, Inc. (Revolver) ^(d)	L+5.50%		6.50	%		2/26/2027		265		37
								7,323		7,011
Automotive
Truck-Lite Co., LLC	L+6.25%		7.25	%		12/14/2026		1,713		1,723
Truck-Lite Co., LLC	L+6.25%		7.25	%		12/14/2026		254		255
Wheel Pros, Inc.	L+4.50%		5.25	%		5/11/2028		1,957		1,957
								3,924		3,935
Banking, Finance, Insurance & Real Estate
Avison Young (USA) Inc. ^(c)	L+6.00%		6.13	%		1/30/2026		4,862		4,814
Harbour Benefit Holdings, Inc.	L+5.25%		6.25	%		12/13/2024		4,617		4,557
Harbour Benefit Holdings, Inc.	L+5.25%		6.25	%		12/13/2024		103		101
Lightbox Intermediate, L.P.	L+5.00%		5.13	%		5/11/2026		4,888		4,863
Minotaur Acquisition, Inc.^(g)	L+4.75%		4.83	%		3/27/2026		5,925		5,903
								20,395		20,238
Beverage, Food & Tobacco
CBC Restaurant Corp. ^(f)	n/a		5.00% PIK	^(e)		12/30/2022		1,116		1,054
SW Ingredients Holdings, LLC	L+4.75%		5.75	%		7/3/2025		3,628		3,628
								4,744		4,682
Capital Equipment
Analogic Corporation	L+5.25%		6.25	%		6/24/2024		4,764		4,582
								4,764		4,582
Chemicals, Plastics & Rubber
Polymer Solutions Group	L+7.00%		8.00	%		1/3/2023		1,187		1,172
								1,187		1,172
Construction & Building
The Cook & Boardman Group LLC	L+5.75%		6.75	%		10/20/2025		2,918		2,891
								2,918		2,891
Consumer Goods: Durable
International Textile Group, Inc.	L+5.00%		5.13	%		5/1/2024		1,723		1,664
								1,723		1,664
Consumer Goods: Non-Durable
PH Beauty Holdings III, INC	L+5.00%		5.12	%		9/26/2025		2,424		2,385
								2,424		2,385
Containers, Packaging & Glass
Liqui-Box Holdings, Inc.	L+4.50%		5.50	%		2/26/2027		4,279		4,058
Polychem Acquisition, LLC	L+5.00%		5.50	%		3/17/2025		2,925		2,925
Port Townsend Holdings Company, Inc. and Crown Corrugated Company	L+6.75%		5.75% Cash/ 2.00% PIK			4/3/2024		4,751		4,300
PVHC Holding Corp	L+4.75%		5.75	%		8/5/2024		3,225		2,983
								15,180		14,266
Energy: Oil & Gas
Drilling Info Holdings, Inc.	L+4.25%		4.33	%		7/30/2025		4,528		4,471
Offen, Inc.	L+5.00%		5.08	%		6/22/2026		2,394		2,394
Offen, Inc.	L+5.00%		5.08	%		6/22/2026		878		878
								7,800		7,743

MRCC SENIOR LOAN FUND I, LLC

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

(unaudited)

September 30, 2021

Portfolio Company ^(a)	Spread Above Index ^(b)	Interest Rate ^(b)			Maturity		Principal		Fair Value
Healthcare & Pharmaceuticals
Cano Health, LLC ^(g)	L+4.50%		5.25	%		11/23/2027		2,000	$	2,004
LSCS Holdings, Inc.	L+4.25%		4.42	%		3/17/2025		2,281		2,259
LSCS Holdings, Inc.	L+4.25%		4.42	%		3/17/2025		589		583
Radiology Partners, Inc.	L+4.25%		4.33	%		7/9/2025		4,760		4,762
Team RMS, LLC^(g)	L+5.00%		6.00	%		12/17/2027		3,000		3,000
								12,630		12,608
High Tech Industries
Corel Inc. ^(c)	L+5.00%		5.12	%		7/2/2026		3,825		3,842
LW Buyer, LLC	L+5.00%		5.08	%		12/30/2024		4,888		4,863
TGG TS Acquisition Company	L+6.50%		6.58	%		12/12/2025		3,496		3,508
								12,209		12,213
Hotels, Gaming & Leisure
Excel Fitness Holdings, Inc.	L+5.25%		6.25	%		10/7/2025		4,176		4,134
North Haven Spartan US Holdco, LLC	L+5.00%		6.00	%		6/6/2025		2,303		2,003
Tait LLC	L+5.00%		5.14	%		3/28/2025		4,136		3,732
Tait LLC (Revolver)	P+4.00%		7.25	%		3/28/2025		769		725
								11,384		10,594
Media: Advertising, Printing & Publishing
Cadent, LLC	L+5.00%		6.00	%		9/11/2023		4,339		4,328
Cadent, LLC (Revolver) ^(d)	L+5.00%		6.00	%		9/11/2023		167		—
Digital Room Holdings, Inc.	L+5.00%		5.08	%		5/21/2026		4,329		4,303
Monotype Imaging Holdings Inc.	L+5.50%		6.50	%		10/9/2026		4,813		4,817
								13,648		13,448
Media: Diversified & Production
Research Now Group, Inc. and Survey Sampling International, LLC	L+5.50%		6.50	%		12/20/2024		6,737		6,675
STATS Intermediate Holdings, LLC	L+5.25%		5.37	%		7/10/2026		4,913		4,909
The Octave Music Group, Inc.	L+6.00%		6.25% Cash/ 0.75% PIK			5/29/2025		4,440		4,418
								16,090		16,002
Services: Business
AQ Carver Buyer, Inc.	L+5.00%		6.00	%		9/23/2025		4,900		4,912
CHA Holdings, Inc	L+4.50%		5.50	%		4/10/2025		1,985		1,983
CHA Holdings, Inc	L+4.50%		5.50	%		4/10/2025		419		418
Eliassen Group LLC	L+4.25%		4.33	%		11/5/2024		3,006		2,987
Engage2Excel, Inc.	L+7.25%		7.00% Cash/ 1.25% PIK			3/7/2023		4,319		4,330
Engage2Excel, Inc.	L+7.25%		7.00% Cash/ 1.25% PIK			3/7/2023		779		781
Engage2Excel, Inc. (Revolver) ^(d)	L+7.25%		7.00% Cash/ 1.25% PIK			3/7/2023		553		539
Legility, LLC	L+6.00%		7.00	%		12/17/2025		4,800		4,747
Orbit Purchaser LLC	L+4.50%		5.50	%		10/21/2024		2,438		2,431
Orbit Purchaser LLC	L+4.50%		5.50	%		10/21/2024		1,882		1,878
Orbit Purchaser LLC	L+4.50%		5.50	%		10/21/2024		550		549
Output Services Group, Inc.	L+4.50%		5.50	%		3/27/2024		4,827		4,167
SIRVA Worldwide Inc.	L+5.50%		5.58	%		8/4/2025		1,863		1,761
Teneo Holdings LLC	L+5.25%		6.25	%		7/11/2025		4,900		4,889
The Kleinfelder Group, Inc.	L+5.25%		6.25	%		11/29/2024		2,393		2,393
								39,614		38,765
Telecommunications
Intermedia Holdings, Inc.	L+6.00%		7.00	%		7/21/2025		1,783		1,784
Mavenir Systems, Inc.	L+4.75%		5.25	%		8/18/2028		1,667		1,673
Sandvine Corporation ^(g)	L+4.50%		4.58	%		11/3/2025		2,000		1,999
								5,450		5,456
Utilities: Oil & Gas
NGS US Finco, LLC	L+4.25%		5.25	%		10/1/2025		1,699		1,648
NGS US Finco, LLC	L+5.25%		6.25	%		10/1/2025		248		244
								1,947		1,892
Wholesale
BMC Acquisition, Inc.	L+5.25%		6.25	%		12/30/2024		4,486		4,475
HALO Buyer, Inc.	L+4.50%		5.50	%		6/30/2025		4,837		4,542
PT Intermediate Holdings III, LLC	L+5.50%		6.50	%		10/15/2025		1,965		1,970
								11,288		10,987

TOTAL INVESTMENTS									$	192,534

(a)	All investments are U.S. companies unless otherwise noted.
(b)	The majority of investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate ("LIBOR" or "L") or Prime ("P") which reset daily, monthly, quarterly or semiannually. The Company has provided the spread over LIBOR or Prime and the current contractual rate of interest in effect at September 30, 2021. Certain investment are subject to a LIBOR or Prime interest rate floor.
(c)	This is an international company.
(d)	All or a portion of this commitment was unfunded as of September 30, 2021. As such, interest is earned only on the funded portion of this commitment. Principal reflects the commitment outstanding.
(e)	This position was on non-accrual status as of September 30, 2021, meaning that the Company has ceased accruing interest income on the position.
(f)	A portion of this loan (principal of $115) is held at the SLF, not at the SLF SPV, and is therefore not collateral to the SLF Credit Facility.
(g)	Investment position or portion thereof unsettled at September 30, 2021.

MRCC SENIOR LOAN FUND I, LLC

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2020

Portfolio Company ^(a)	Spread Above Index ^(b)			Interest Rate ^(b)			Maturity		Principal		Fair Value
Non-Controlled/Non-Affiliate Company Investments
Senior Secured Loans
Aerospace & Defense
Bromford Industries Limited ^(c)		L+5.25	%		6.25	%		11/5/2025		2,772	$	2,685
Bromford Industries Limited ^(c)		L+5.25	%		6.25	%		11/5/2025		1,848		1,790
Trident Maritime SH, Inc.		L+4.75	%		5.75	%		6/4/2024		4,401		4,363
Trident Maritime SH, Inc. (Revolver) ^(d)		L+4.75	%		5.75	%		6/4/2024		340		—
										9,361		8,838
Automotive
Truck-Lite Co., LLC		L+6.25	%		7.25	%		12/14/2026		1,726		1,716
Truck-Lite Co., LLC		L+6.25	%		7.25	%		12/14/2026		256		254
Wheel Pros, Inc.		L+5.25	%		6.25	%		11/10/2027		3,000		2,961
										4,982		4,931
Banking, Finance, Insurance & Real Estate
Avison Young (USA), Inc. ^(c)		L+5.00	%		5.25	%		1/30/2026		4,900		4,659
Harbour Benefit Holdings, Inc. (fka Zenith Merger Sub, Inc.)		L+5.25	%		6.25	%		12/13/2024		4,653		4,585
Harbour Benefit Holdings, Inc. (fka Zenith Merger Sub, Inc.) (Delayed Draw) ^(d)		L+5.25	%		6.25	%		12/13/2024		264		102
Lightbox Intermediate, L.P.		L+5.00	%		5.15	%		5/11/2026		4,925		4,777
Minotaur Acquisition, Inc.		L+5.00	%		5.15	%		3/27/2026		2,947		2,900
										17,689		17,023
Beverage, Food & Tobacco
CBC Restaurant Corp.		n/a			5.00% PIK	^(e)		4/28/2022		1,117		1,031
SW Ingredients Holdings, LLC		L+4.00	%		5.00	%		7/3/2025		3,656		3,647
										4,773		4,678
Capital Equipment
Analogic Corporation		L+5.25	%		6.25	%		6/24/2024		4,800		4,800
										4,800		4,800
Chemicals, Plastics & Rubber
Polymer Solutions Group		L+7.00	%		8.00	%		6/30/2021		1,216		1,189
										1,216		1,189
Construction & Building
ISC Purchaser, LLC		L+4.00	%		5.00	%		7/11/2025		4,937		4,896
The Cook & Boardman Group, LLC		L+5.75	%		6.75	%		10/20/2025		2,940		2,811
										7,877		7,707
Consumer Goods: Durable
International Textile Group, Inc.		L+5.00	%		5.37	%		5/1/2024		1,758		1,597
										1,758		1,597
Consumer Goods: Non-Durable
PH Beauty Holdings III, Inc.		L+5.00	%		5.23	%		9/26/2025		2,442		2,149
										2,442		2,149
Containers, Packaging & Glass
Liqui-Box Holdings, Inc.		L+4.50	%		5.50	%		2/26/2027		4,312		3,848
Polychem Acquisition, LLC		L+5.00	%		5.15	%		3/17/2025		2,948		2,948
Port Townsend Holdings Company, Inc.		L+6.75	%		5.75% Cash/ 2.00% PIK			4/3/2024		4,683		4,263
PVHC Holding Corp.		L+4.75	%		5.75	%		8/5/2024		3,250		2,844
										15,193		13,903
Energy: Oil & Gas
Drilling Info Holdings, Inc.		L+4.25	%		4.40	%		7/30/2025		4,563		4,429
Offen, Inc.		L+5.00	%		5.15	%		6/22/2026		2,412		2,343
Offen, Inc.		L+5.00	%		5.15	%		6/22/2026		885		860
										7,860		7,632
Healthcare & Pharmaceuticals
LSCS Holdings, Inc.		L+4.25	%		4.51	%		3/17/2025		2,299		2,253
LSCS Holdings, Inc.		L+4.25	%		4.51	%		3/17/2025		593		582
Radiology Partners, Inc.		L+4.25	%		4.40	%		7/9/2025		4,760		4,692
										7,652		7,527

MRCC SENIOR LOAN FUND I, LLC

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

December 31, 2020

Portfolio Company ^(a)	Spread Above Index ^(b)		Interest Rate ^(b)		Maturity	Principal		Fair Value
High Tech Industries
AQA Acquisition Holding, Inc.	L+4.25	%	5.25	%	5/24/2023	3,257	$	3,257
Corel, Inc. ^(c)	L+5.00	%	5.23	%	7/2/2026	3,900		3,844
LW Buyer, LLC	L+5.00	%	5.15	%	12/30/2024	4,925		4,900
TGG TS Acquisition Company	L+6.50	%	6.65	%	12/12/2025	3,753		3,720
						15,835		15,721
Hotels, Gaming & Leisure
Excel Fitness Holdings, Inc.	L+5.25	%	6.25	%	10/7/2025	4,207		3,878
North Haven Spartan US Holdco, LLC	L+5.00	%	6.00	%	6/6/2025	2,321		1,979
Tait, LLC	L+5.00	%	5.23	%	3/28/2025	4,167		3,669
Tait, LLC (Revolver)	P+4.00	%	7.25	%	3/28/2025	769		711
						11,464		10,237
Media: Advertising, Printing & Publishing
Cadent, LLC	L+5.50	%	6.50	%	9/11/2023	4,728		4,622
Cadent, LLC (Revolver) ^(d)	L+5.50	%	6.50	%	9/11/2023	167		—
Digital Room Holdings, Inc.	L+5.00	%	5.27	%	5/21/2026	4,362		4,133
Monotype Imaging Holdings, Inc.	L+5.50	%	6.50	%	10/9/2026	4,906		4,653
						14,163		13,408
Media: Diversified & Production
Research Now Group, Inc. and Survey Sampling International, LLC	L+5.50	%	6.50	%	12/20/2024	6,790		6,708
Stats Intermediate Holding, LLC	L+5.25	%	5.47	%	7/10/2026	4,950		4,909
The Octave Music Group, Inc.	L+6.00	%	6.25% Cash/ 0.75% PIK		5/29/2025	4,871		4,335
						16,611		15,952
Services: Business
AQ Carver Buyer, Inc.	L+5.00	%	6.00	%	9/23/2025	4,937		4,888
CHA Holdings, Inc.	L+4.50	%	5.50	%	4/10/2025	2,002		1,872
CHA Holdings, Inc.	L+4.50	%	5.50	%	4/10/2025	422		395
Eliassen Group, LLC	L+4.25	%	4.40	%	11/5/2024	3,017		2,922
Engage2Excel, Inc.	L+8.00	%	7.00% Cash/ 2.00% PIK		3/7/2023	4,299		4,178
Engage2Excel, Inc.	L+8.00	%	7.00% Cash/ 2.00% PIK		3/7/2023	776		754
Engage2Excel, Inc. (Revolver) ^(d)	L+8.00	%	7.00% Cash/ 2.00% PIK		3/7/2023	548		364
GI Revelation Acquisition, LLC	L+5.00	%	5.15	%	4/16/2025	1,365		1,344
Legility, LLC	L+6.00	%	7.00	%	12/17/2025	4,906		4,735
Orbit Purchaser, LLC	L+4.50	%	5.50	%	10/21/2024	2,456		2,407
Orbit Purchaser, LLC	L+4.50	%	5.50	%	10/21/2024	1,897		1,859
Orbit Purchaser, LLC	L+4.50	%	5.50	%	10/21/2024	555		544
Output Services Group, Inc.	L+4.50	%	5.50	%	3/27/2024	4,865		3,648
SIRVA Worldwide, Inc.	L+5.50	%	5.65	%	8/4/2025	1,900		1,741
Teneo Holdings, LLC	L+5.25	%	6.25	%	7/11/2025	4,938		4,903
The Kleinfelder Group, Inc.	L+5.25	%	6.25	%	11/29/2024	2,450		2,450
						41,333		39,004
Services: Consumer
Cambium Learning Group, Inc.	L+4.50	%	4.75	%	12/18/2025	4,900		4,883
LegalZoom.com, Inc.	L+4.50	%	4.65	%	11/21/2024	2,694		2,706
						7,594		7,589
Telecommunications
Intermedia Holdings, Inc.	L+6.00	%	7.00	%	7/21/2025	1,797		1,795
Mavenir Systems, Inc.	L+6.00	%	7.00	%	5/8/2025	3,900		3,893
						5,697		5,688
Transportation: Cargo
GlobalTranz Enterprises, LLC	L+5.00	%	5.15	%	5/15/2026	3,262		3,050
						3,262		3,050
Utilities: Oil & Gas
NGS US Finco, LLC	L+4.25	%	5.25	%	10/1/2025	1,712		1,640
NGS US Finco, LLC	L+5.25	%	6.25	%	10/1/2025	250		246
						1,962		1,886
Wholesale
BMC Acquisition, Inc.	L+5.25	%	6.25	%	12/30/2024	4,850		4,802
HALO Buyer, Inc.	L+4.50	%	5.50	%	6/30/2025	4,875		4,533
PT Intermediate Holdings III, LLC	L+5.50	%	6.50	%	10/15/2025	1,980		1,851
						11,705		11,186

TOTAL INVESTMENTS							$	205,695

^(a)	All investments are U.S. companies unless otherwise noted.
^(b)	The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“Prime” or “P”) which reset daily, monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at December 31, 2020. Certain investments are subject to a LIBOR or Prime interest rate floor, or rate cap.
^(c)	This is an international company.
^(d)	All or a portion of this commitment was unfunded as of December 31, 2020. As such, interest is earned only on the funded portion of this commitment. Principal reflects the commitment outstanding.
^(e)	This position was on non-accrual status as of December 31, 2020, meaning that the Company has ceased accruing interest income on the position.

Below is certain summarized financial information for SLF as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021 and 2020:

	September 30, 2021			December 31, 2020
		(unaudited)
Assets
Investments, at fair value	$	192,534		$	205,695
Cash		78			351
Restricted cash		3,450			2,948
Interest receivable		520			629
Other assets		50			43
Total assets	$	196,632		$	209,666
Liabilities
Revolving credit facility	$	104,564		$	131,497
Less: Unamortized deferred financing costs		(1,173	)		(969	)
Total debt, less unamortized deferred financing costs		103,391			130,528
Payable for open trades		9,964			—
Interest payable		242			294
Accounts payable and accrued expenses		372			277
Total liabilities		113,969			131,099
Members’ capital		82,663			78,567
Total liabilities and members’ capital	$	196,632		$	209,666

	Three months ended September 30,					Nine months ended September 30,
	2021			2020		2021		2020

	(unaudited)					(unaudited)
Investment income:
Interest income	$	3,250		$	3,726	$	9,913	$	11,990
Total investment income		3,250			3,726		9,913		11,990
Expenses:
Interest and other debt financing expenses		972			1,111		2,975		4,213
Professional fees		158			169		490		517
Total expenses		1,130			1,280		3,465		4,730
Net investment income (loss)		2,120			2,446		6,448		7,260
Net gain (loss):
Net realized gain (loss)		—			15		—		15
Net change in unrealized gain (loss)		(177	)		3,677		4,247		(10,751	)
Net gain (loss)		(177	)		3,692		4,247		(10,736	)
Net increase (decrease) in members’ capital	$	1,943		$	6,138	$	10,695	$	(3,476	)

Note 4. Fair Value Measurements

Investments

The Company values all investments in accordance with ASC Topic 820. ASC Topic 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity.

ASC Topic 820 establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Based on the observability of the inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments carried at fair value are classified and disclosed in one of the following three categories:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Valuations based on inputs other than quoted prices in active markets, including quoted prices for similar assets or liabilities, which are either directly or indirectly observable.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. This includes situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. As of September 30, 2021 and December 31, 2020, all investments, with the exception of investments measured at fair value using net asset value (“NAV”), were categorized as Level 3 investments.

With respect to investments for which market quotations are not readily available, the Company’s Board undertakes a multi-step valuation process each quarter, as described below:

	·	the quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the investment professionals of MC Advisors responsible for the credit monitoring of the portfolio investment;

	·	the Board engages one or more independent valuation firm(s) to conduct independent appraisals of a selection of investments for which market quotations are not readily available. The Company will consult with independent valuation firm(s) relative to each portfolio company at least once in every calendar year, but the independent appraisals are generally received quarterly for each investment;

	·	to the extent an independent valuation firm is not engaged to conduct an investment appraisal on an investment for which market quotations are not readily available, the investment will be valued by the MC Advisors investment professional responsible for the credit monitoring;

	·	preliminary valuation conclusions are then documented and discussed with the investment committee of MC Advisors;

	·	the audit committee of the Board reviews the preliminary valuations of MC Advisors and of the independent valuation firm(s) and MC Advisors adjusts or further supplements the valuation recommendations to reflect any comments provided by the audit committee; and

	·	the Board discusses these valuations and determines the fair value of each investment in the portfolio in good faith, based on the input of MC Advisors, the independent valuation firm(s) and the audit committee.

The accompanying consolidated schedules of investments held by the Company consist primarily of private debt instruments (“Level 3 debt”). The Company generally uses the income approach to determine fair value for Level 3 debt where market quotations are not readily available, as long as it is appropriate. If there is deterioration in credit quality or a debt investment is in workout status, the Company may consider other factors in determining the fair value, including the value attributable to the debt investment from the enterprise value of the portfolio company or the proceeds that would be received in a liquidation analysis. This liquidation analysis may include probability weighting of alternative outcomes. The Company generally considers its Level 3 debt to be performing if the borrower is not in default, the borrower is remitting payments in a timely manner; the loan is in covenant compliance or is otherwise not deemed to be impaired. In determining the fair value of the performing Level 3 debt, the Company considers fluctuations in current interest rates, the trends in yields of debt instruments with similar credit ratings, financial condition of the borrower, economic conditions and other relevant factors, both qualitative and quantitative. In the event that a Level 3 debt instrument is not performing, as defined above, the Company will evaluate the value of the collateral utilizing the same framework described above for a performing loan to determine the value of the Level 3 debt instrument.

Under the income approach, discounted cash flow models are utilized to determine the present value of the future cash flow streams of its debt investments, based on future interest and principal payments as set forth in the associated loan agreements. In determining fair value under the income approach, the Company also considers the following factors: applicable market yields and leverage levels, credit quality, prepayment penalties, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, and changes in the interest rate environment and the credit markets that generally may affect the price at which similar investments may be made.

Under the market approach, the enterprise value methodology is typically utilized to determine the fair value of an investment. There is no one methodology to estimate enterprise value and, in fact, for any one portfolio company, enterprise value is generally best expressed as a range of values, from which the Company derives a single estimate of enterprise value. In estimating the enterprise value of a portfolio company, the Company analyzes various factors consistent with industry practice, including but not limited to original transaction multiples, the portfolio company’s historical and projected financial results, applicable market trading and transaction comparables, applicable market yields and leverage levels, the nature and realizable value of any collateral, the markets in which the portfolio company does business, and comparisons of financial ratios of peer companies that are public. Typically, the enterprise values of private companies are based on multiples of earnings before interest, income taxes, depreciation and amortization (“EBITDA”), cash flows, net income, revenues, or in limited cases, book value.

In addition, for certain debt investments, the Company may base its valuation on indicative bid and ask prices provided by an independent third-party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.

As of September 30, 2021, the Board determined, in good faith, the fair value of the Company’s portfolio investments in accordance with GAAP and the Company’s valuation procedures based on the facts and circumstances known by the Company at that time, or reasonably expected to be known at that time. Due to the overall volatility that the COVID-19 pandemic has caused, any valuations conducted in the future in conformity with GAAP could result in a lower fair value of the Company’s portfolio. The potential impact of COVID-19 on the Company’s results going forward will depend to a large extent on future developments or new information that may emerge regarding the full duration and severity of COVID-19, including the actions taken by governments and other entities to contain COVID-19 or treat its impact, all of which are beyond the Company’s control. Accordingly, the Company cannot predict the extent to which its financial condition and results of operations will be affected at this time.

Foreign Currency Forward Contracts

The valuation for the Company’s foreign currency forward contracts is based on the difference between the exchange rate associated with the forward contract and the exchange rate at the current period end. Foreign currency forward contracts are categorized as Level 2 in the fair value hierarchy.

Fair Value Disclosures

The following tables present fair value measurements of investments and foreign currency forward contracts, by major class according to the fair value hierarchy:

	Fair Value Measurements
September 30, 2021	Level 1		Level 2		Level 3		Total
Investments:
Senior secured loans	$	—	$	—	$	425,055	$	425,055
Unitranche secured loans		—		—		44,420		44,420
Junior secured loans		—		—		9,181		9,181
Equity securities		—		—		33,757		33,757
Investments measured at NAV ^(1) (2)		—		—		—		41,331
Total investments	$	—	$	—	$	512,413	$	553,744
Foreign currency forward contracts asset (liability)	$	—	$	863	$	—	$	863

	Fair Value Measurements
December 31, 2020	Level 1		Level 2			Level 3		Total
Investments:
Senior secured loans	$	—	$	—		$	405,224	$	405,224
Unitranche secured loans		—		—			64,040		64,040
Junior secured loans		—		—			14,592		14,592
Equity securities		—		—			23,899		23,899
Investments measured at NAV ^(1) (2)		—		—			—		39,284
Total investments	$	—	$	—		$	507,755	$	547,039
Foreign currency forward contracts asset (liability)	$	—	$	(113	)	$	—	$	(113	)

⁽¹⁾	Certain investments that are measured at fair value using the NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the consolidated statements of assets and liabilities.
⁽²⁾	Represents the Company’s investment in LLC equity interests in SLF. The fair value of this investment has been determined using the NAV of the Company’s ownership interest in SLF’s members’ capital.

Senior secured loans, unitranche secured loans and junior secured loans are collateralized by tangible and intangible assets of the borrowers. These investments include loans to entities that have some level of challenge in obtaining financing from other, more conventional institutions, such as a bank. Interest rates on these loans are either fixed or floating, and are based on current market conditions and credit ratings of the borrower. Excluding loans on non-accrual, the contractual interest rates on the loans ranged from 6.00% to 18.00% at September 30, 2021 and 6.00% to 18.00% at December 31, 2020. The maturity dates on the loans outstanding at September 30, 2021 range between December 2021 and July 2028.

The following tables provide a reconciliation of the beginning and ending balances for investments at fair value that use Level 3 inputs for the three and nine months ended September 30, 2021:

	Investments
	Senior secured loans			Unitranche secured loans			Junior secured loans			Equity securities			Total investments
Balance as of June 30, 2021	$	404,322		$	45,500		$	8,125		$	30,657		$	488,604
Net realized gain (loss) on investments		(9,435	)		—			—			—			(9,435	)
Net change in unrealized gain (loss) on investments		11,209			(904	)		(47	)		(112	)		10,146
Purchases of investments and other adjustments to cost ⁽¹⁾		73,696			20			8,479			3,212			85,407
Proceeds from principal payments and sales of investments ⁽²⁾		(54,737	)		(196	)		(7,376	)		—			(62,309	)
Reclassifications ⁽³⁾		—			—			—			—			—
Balance as of September 30, 2021	$	425,055		$	44,420		$	9,181		$	33,757		$	512,413

	Investments
	Senior secured loans			Unitranche secured loans			Junior secured loans			Equity securities			Total investments
Balance as of December 31, 2020	$	405,224		$	64,040		$	14,592		$	23,899		$	507,755
Net realized gain (loss) on investments		(9,610	)		—			—			892			(8,718	)
Net change in unrealized gain (loss) on investments		14,820			(4,975	)		40			8,048			17,933
Purchases of investments and other adjustments to cost ⁽¹⁾		174,934			1,475			8,647			3,948			189,004
Proceeds from principal payments and sales of investments ⁽²⁾		(160,313	)		(16,120	)		(14,098	)		(3,030	)		(193,561	)
Reclassifications ⁽³⁾		—			—			—			—			—
Balance as of September 30, 2021	$	425,055		$	44,420		$	9,181		$	33,757		$	512,413

⁽¹⁾	Includes purchases of new investments, effects of refinancing and restructurings, premium and discount accretion and amortization and PIK interest.
⁽²⁾	Represents net proceeds from investments sold and principal paydowns received.
⁽³⁾	Represents non-cash reclassification of investment type due to a restructuring.

The following tables provide a reconciliation of the beginning and ending balances for investments at fair value that use Level 3 inputs for the three and nine months ended September 30, 2020:

	Investments
	Senior secured loans			Unitranche secured loans			Junior secured loans			Equity securities		Total investments
Balance as of June 30, 2020	$	449,815		$	54,015		$	12,376		$	11,535	$	527,741
Net realized gain (loss) on investments		(10	)		—			—			—		(10	)
Net change in unrealized gain (loss) on investments		6,727			170			271			1,336		8,504
Purchases of investments and other adjustments to cost ⁽¹⁾		15,456			1,262			166			—		16,884
Proceeds from principal payments and sales of investments ⁽²⁾		(68,157	)		(171	)		(48	)		—		(68,376	)
Reclassifications ⁽³⁾		(2,750	)		—			—			2,750		—
Balance as of September 30, 2020	$	401,081		$	55,276		$	12,765		$	15,621	$	484,743

	Investments
	Senior secured loans			Unitranche secured loans			Junior secured loans			Equity securities			Total investments
Balance as of December 31, 2019	$	475,157		$	76,247		$	13,676		$	8,739		$	573,819
Net realized gain (loss) on investments		2,335			89			—			121			2,545
Net change in unrealized gain (loss) on investments		(21,775	)		(10,277	)		(529	)		1,901			(30,680	)
Purchases of investments and other adjustments to cost ⁽¹⁾		92,888			3,315			4,041			2,270			102,514
Proceeds from principal payments and sales of investments ⁽²⁾		(144,777	)		(14,095	)		(4,423	)		(160	)		(163,455	)
Reclassifications ⁽³⁾		(2,747	)		(3	)		—			2,750			—
Balance as of September 30, 2020	$	401,081		$	55,276		$	12,765		$	15,621		$	484,743

⁽¹⁾	Includes purchases of new investments, effects of refinancing and restructurings, premium and discount accretion and amortization and PIK interest.
⁽²⁾	Represents net proceeds from investments sold and principal paydowns received.
⁽³⁾	Represents non-cash reclassification of investment type due to the restructuring.

The total net change in unrealized gain (loss) on investments included on the consolidated statements of operations for the three and nine months ended September 30, 2021, attributable to Level 3 investments still held at September 30, 2021, was $973 and $8,791, respectively. The total net change in unrealized gain (loss) on investments included on the consolidated statements of operations for the three and nine months ended September 30, 2020, attributable to Level 3 investments still held at September 30, 2020, was $8,579 and ($19,939), respectively. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in or out of Level 3 as of the beginning of the period in which the reclassifications occur. There were no transfers among Levels 1, 2 and 3 during the three and nine months ended September 30, 2021 and 2020.

Significant Unobservable Inputs

ASC Topic 820 requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within the fair value hierarchy. Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company and as such, the disclosures provided below exclude those investments valued in that manner. The tables below are not intended to be all-inclusive, but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets and liabilities as of September 30, 2021 were as follows:

						Weighted
					Unobservable	Average			Range
	Fair Value			Valuation Technique	Input	Mean			Minimum			Maximum
Senior secured loans	$	294,098		Discounted cash flow	EBITDA multiples		7.3	x		4.3	x		19.5	x
					Market yields		9.4	%		5.3	%		20.0	%
Senior secured loans		83,464		Discounted cash flow	Revenue multiples		6.4	x		0.5	x		18.5	x
					Market yields		8.3	%		5.3	%		16.8	%
Senior secured loans		22,789		Enterprise value	Book value multiples		1.5	x		1.5	x		1.5	x
Senior secured loans		16,485		Enterprise value	Revenue multiples		2.4	x		0.7	x		2.9	x
Senior secured loans		3,727		Liquidation	Probability weighting of alternative outcomes		77.3	%		2.2	%		100.0	%
Unitranche secured loans		38,279		Discounted cash flow	EBITDA multiples		8.9	x		5.8	x		11.0	x
					Market yields		8.8	%		7.5	%		13.3	%
Unitranche secured loans		6,141		Enterprise value	Revenue multiples		0.6	x		0.6	x		0.6	x
Junior secured loans		7,105		Discounted cash flow	Market yields		19.2	%		13.8	%		25.6	%
Junior secured loans		1,500		Discounted cash flow	Revenue multiples		16.3	x		16.3	x		16.3	x
					Market yields		12.0	%		12.0	%		12.0	%
Junior secured loans		576		Liquidation	Probability weighting of alternative outcomes		69.1	%		69.1	%		69.1	%
Equity securities		20,651		Enterprise value	EBITDA multiples		8.4	x		4.8	x		16.5	x
Equity securities		3,546		Enterprise value	Revenue multiples		5.1	x		4.4	x		12.3	x
Equity securities		3,272		Liquidation	Probability weighting of alternative outcomes		34.9	%		34.9	%		34.9	%
Equity securities		729		Discounted cash flow	EBITDA multiples		13.3	x		13.3	x		13.3	x
					Market yields		12.3	%		12.3	%		12.3	%
Equity securities		350		Enterprise value	Tangible book value multiples		1.5	x		1.5	x		1.5	x
Equity securities		204		Option pricing model	Volatility		42.5	%		42.5	%		42.5	%
Total Level 3 Assets	$	502,916	⁽¹⁾

⁽¹⁾	Excludes loans of $9,497 at fair value where valuation (unadjusted) is obtained from a third-party pricing service for which such disclosure is not required.

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets and liabilities as of December 31, 2020 were as follows:

	Fair			Valuation		Weighted Average			Range
	Value			Technique	Unobservable Input	Mean			Minimum			Maximum
Assets:
Senior secured loans	$	271,926		Discounted cash flow	EBITDA multiples		7.5	x		2.8	x		16.6	x
					Market yields		9.5	%		6.2	%		18.8	%
Senior secured loans		74,479		Discounted cash flow	Revenue multiples		4.8	x		0.5	x		10.5	x
					Market yields		9.2	%		6.1	%		18.5	%
Senior secured loans		24,271		Enterprise value	Book value multiples		2.0	x		2.0	x		2.0	x
Senior secured loans		15,515		Enterprise value	Revenue multiples		2.0	x		0.7	x		2.4	x
Senior secured loans		7,525		Liquidation	Probability weighting of alternative outcomes		63.2	%		1.1	%		100.0	%
Senior secured loans		6,944		Enterprise value	EBITDA multiples		8.0	x		8.0	x		8.0	x
Unitranche secured loans		52,476		Discounted cash flow	EBITDA multiples		9.7	x		8.0	x		12.5	x
					Market yields		9.3	%		7.5	%		12.8	%
Unitranche secured loans		9,800		Discounted cash flow	Revenue multiples		0.7	x		0.7	x		0.7	x
					Market yields		10.7	%		10.5	%		11.0	%
Unitranche secured loans		1,764		Enterprise value	Revenue multiples		0.7	x		0.7	x		0.7	x
Junior secured loans		3,886		Discounted cash flow	Market yields		10.0	%		10.0	%		10.0	%
Junior secured loans		762		Liquidation	Probability weighting of alternative outcomes		91.5	%		91.5	%		91.5	%
Equity securities		10,865		Enterprise value	EBITDA multiples		7.6	x		2.8	x		15.3	x
Equity securities		6,771		Enterprise value	Revenue multiples		1.3	x		0.5	x		11.0	x
Equity securities		5,117		Liquidation	Probability weighting of alternative outcomes		54.6	%		54.6	%		54.6	%
Equity securities		87		Option pricing model	Volatility		70.0	%		70.0	%		70.0	%
Total Level 3 Assets	$	492,188	⁽¹⁾

⁽¹⁾	Excludes loans of $15,567 at fair value where valuation (unadjusted) is obtained from a third-party pricing service for which such disclosure is not required.

The significant unobservable input used in the income approach of fair value measurement of the Company’s investments is the discount rate used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Increases (decreases) in the discount rate would result in a decrease (increase) in the fair value estimate of the investment. Included in the consideration and selection of discount rates are the following factors: risk of default, rating of the investment and comparable investments, and call provisions.

The significant unobservable inputs used in the market approach of fair value measurement of the Company’s investments are the market multiples of EBITDA or revenue of the comparable guideline public companies. The Company selects a population of public companies for each investment with similar operations and attributes of the portfolio company. Using these guideline public companies’ data, a range of multiples of enterprise value to EBITDA or revenue is calculated. The Company selects percentages from the range of multiples for purposes of determining the portfolio company’s estimated enterprise value based on said multiple and generally the latest twelve months EBITDA or revenue of the portfolio company (or other meaningful measure). Increases (decreases) in the multiple will result in an increase (decrease) in enterprise value, resulting in an increase (decrease) in the fair value estimate of the investment.

Other Financial Assets and Liabilities

ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts of its other financial instruments such as cash, receivables and payables approximate the fair value of such items due to the short maturity of such instruments. Fair value of the Company’s revolving credit facility is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if applicable. As of both September 30, 2021 and December 31, 2020, the Company believes that the carrying value of its revolving credit facility approximates fair value. The 2026 Notes are carried at cost and with their longer maturity dates, fair value is estimated by discounting remaining payments using current market rates for similar instruments and considering such factors as the legal maturity date and the ability of market participants to prepay the notes. As of September 30, 2021, the Company believes that the carrying value of the 2026 Notes approximates fair value. SBA debentures are carried at cost and with their longer maturity dates, fair value is estimated by discounting remaining payments using current market rates for similar instruments and considering such factors as the legal maturity date and the ability of market participants to prepay the SBA debentures. As of both September 30, 2021 and December 31, 2020, the Company believes that the carrying value of the SBA debentures approximates fair value.

Note 5. Transactions with Affiliated Companies

An affiliated company is a company in which the Company has an ownership interest of 5% or more of its voting securities. A controlled affiliate company is a company in which the Company has an ownership interest of more than 25% of its voting securities. Please see the Company’s consolidated schedule of investments for the type of investment, principal amount, interest rate including the spread, and the maturity date. Transactions related to the Company’s investments with affiliates for the nine months ended September 30, 2021 and 2020 were as follows:

Portfolio Company	Fair value at December 31, 2020		Transfers in (out)			Purchases (cost)		Sales and paydowns (cost)			PIK interest (cost)		Discount accretion		Net realized gain (loss)			Net unrealized gain (loss)			Fair value at September 30, 2021
Non-controlled affiliate company investment:
American Community Homes, Inc.	$	9,401	$	—		$	—	$	(90	)	$	848	$	—	$	—		$	—		$	10,159
American Community Homes, Inc.		6,239		—			—		(2,229	)		556		—		—			—			4,566
American Community Homes, Inc.		825		—			—		(838	)		13		—		—			—			—
American Community Homes, Inc.		570		—			—		(5	)		51		—		—			—			616
American Community Homes, Inc.		335		—			—		(341	)		6		—		—			—			—
American Community Homes, Inc.		2,915		—			—		(20	)		189		—		—			14			3,098
American Community Homes, Inc.		3,879		—			—		(37	)		350		—		—			42			4,234
American Community Homes, Inc.		18		—			—		—			2		—		—			—			20
American Community Homes, Inc.		89		—			—		(1	)		8		—		—			—			96
American Community Homes, Inc. (Revolver)		—		—			—		—			—		—		—			—			—
American Community Homes, Inc. (warrant to purchase up to 22.3% of the equity)		—		—			—		—			—		—		—			350			350
		24,271		—			—		(3,561	)		2,023		—		—			406			23,139

Ascent Midco, LLC		6,997		—			—		(513	)		—		19		—			(30	)		6,473
Ascent Midco, LLC (Delayed Draw)		—		—			—		—			—		—		—			—			—
Ascent Midco, LLC (Revolver)		—		—			—		—			—		—		—			—			—
Ascent Midco, LLC (2,032,258 Class A units)		3,016		—			—		—			—		—		—			95			3,111
		10,013		—			—		(513	)		—		19		—			65			9,584

Curion Holdings, LLC		3,159		—			—		—			—		—		—			731			3,890
Curion Holdings, LLC (Revolver)		820		—			—		—			—		—		—			10			830
Curion Holdings, LLC (Junior secured loan)		—		—			—		—			—		—		—			—			—
Curion Holdings, LLC (Junior secured loan)		—		—			—		—			—		—		—			—			—
Curion Holdings, LLC (58,779 shares of common stock)		—		—			—		—			—		—		—			—			—
		3,979		—			—		—			—		—		—			741			4,720

Familia Dental Group Holdings, LLC (1,052 Class A units)		3,118		—			—		—			—		—		—			(677	)		2,441
		3,118		—			—		—			—		—		—			(677	)		2,441

HFZ Capital Group, LLC		13,106		—			—		—			—		—		—			1,708			14,814
HFZ Capital Group, LLC		4,709		—			—		—			—		—		—			613			5,322
MC Asset Management (Corporate), LLC		—		—			6,423		—			450		—		—			—			6,873
MC Asset Management (Corporate), LLC (Delayed Draw)		—		—			793		—			23		—		—			—			816
MC Asset Management (Corporate), LLC (15.9% interests)		785		—			—		—			—		—		—			(65	)		720
MC Asset Management (Industrial), LLC		11,579		—			—		(11,365	)		1,170		1		—			(884	)		501
		30,179		—			7,216		(11,365	)		1,643		1		—			1,372			29,046

Incipio, LLC ⁽¹⁾		1,764		—			—		—			—		—		—			(1,764	)		—
Incipio, LLC ⁽¹⁾		4,227		(1,562	)		—		—			48		—		—			(2,713	)		—
Incipio, LLC ⁽¹⁾		1,805		(1,732	)		—		—			15		—		—			(88	)		—
Incipio, LLC ⁽¹⁾		761		(730	)		—		—			6		—		—			(37	)		—
Incipio, LLC ⁽¹⁾		1,519		(1,458	)		—		—			13		—		—			(74	)		—
Incipio, LLC ⁽¹⁾		1,488		(1,527	)		108		—			9		—		—			(78	)		—
Incipio, LLC (Junior secured loan) ⁽¹⁾		—		—			—		—			—		—		—			—			—
Incipio, LLC (Junior secured loan) ⁽¹⁾		—		—			—		—			—		—		—			—			—
Incipio, LLC (1,774 shares of Series C common units) ⁽¹⁾		—		—			—		—			—		—		—			—			—
		11,564		(7,009	)		108		—			91		—		—			(4,754	)		—

Luxury Optical Holdings Co.		1,430		—			—		—			134		—		—			38			1,602
Luxury Optical Holdings Co. (Delayed Draw)		624		—			1,729		(93	)		—		—		—			93			2,353
Luxury Optical Holdings Co. (Revolver)		66		—			—		—			6		—		—			2			74
Luxury Optical Holdings Co. (91 preferred units)		2,476		—			—		—			694		—		—			434			3,604
Luxury Optical Holdings Co. (86 shares of common stock)		—		—			—		—			—		—		—			—			—
		4,596		—			1,729		(93	)		834		—		—			567			7,633

Mnine Holdings, Inc.		12,356		—			—		(191	)		449		27		—			(46	)		12,595
Mnine Holdings, Inc. (6,400 Class B units)		—		—			—		—			—		—		—			—			—
		12,356		—			—		(191	)		449		27		—			(46	)		12,595

NECB Collections, LLC (Revolver)		834		—			—		—			—		—		—			(147	)		687
NECB Collections, LLC (20.8% of units)		—		—			—		—			—		—		—			—			—
		834		—			—		—			—		—		—			(147	)		687

SHI Holdings, Inc.		188		—			—		—			—		—		—			(57	)		131
SHI Holdings, Inc. (Revolver)		297		—			—		—			—		—		—			(89	)		208
SHI Holdings, Inc. (24 shares of common stock)		—		—			—		—			—		—		—			—			—
		485		—			—		—			—		—		—			(146	)		339

Second Avenue SFR Holdings II LLC (Revolver)		—		—			642		—			—		—		—			—			642
Second Avenue SFR Holdings II LLC (Delayed Draw)		—		—			1,101		—			—		—		—			—			1,101
Second Avenue SFR Holdings II LLC (24.4 % of interests)		—		—			734		—			—		—		—			—			734
		—		—			2,477		—			—		—		—			—			2,477

Summit Container Corporation		3,204		—			—		(3,019	)		—		—		(250	)		65			—
Summit Container Corporation (Revolver)		1,654		—			5,402		(7,059	)		—		—		—			3			—
Summit Container Corporation (warrant to purchase up to 19.5% of the equity)		139		—			—		—			—		—		—			(139	)		—
		4,997		—			5,402		(10,078	)		—		—		(250	)		(71	)		—

TJ Management HoldCo, LLC (Revolver)		—		—			—		—			—		—		—			—			—
TJ Management HoldCo, LLC (16 shares of common stock)		3,323		—			—		(755	)		—		—		—			517			3,085
		3,323		—			—		(755	)		—		—		—			517			3,085

Total non-controlled affiliate company investments	$	109,715	$	(7,009	)	$	16,932	$	(26,556	)	$	5,040	$	47	$	(250	)	$	(2,173	)	$	95,746

Controlled affiliate company investments:
MRCC Senior Loan Fund I, LLC	$	39,284	$	—		$	—	$	—		$	—	$	—	$	—		$	2,047		$	41,331
		39,284		—			—		—			—		—		—			2,047			41,331
Total controlled affiliate company investments	$	39,284	$	—		$	—	$	—		$	—	$	—	$	—		$	2,047		$	41,331

Portfolio Company	Fair value at December 31, 2019		Transfers in (out)		Purchases (cost)		Sales and paydowns (cost)			PIK interest (cost)		Discount accretion		Net realized gain (loss)		Net unrealized gain (loss)			Fair value at September 30, 2020
Non-controlled affiliate company investment:
American Community Homes, Inc.	$	6,764	$	—	$	—	$	—		$	812	$	6	$	—	$	1,601		$	9,183
American Community Homes, Inc.		4,289		—		—		—			726		3		—		1,006			6,024
American Community Homes, Inc.		512		—		—		—			168		1		—		115			796
American Community Homes, Inc.		410		—		—		—			48		2		—		96			556
American Community Homes, Inc.		230		—		—		—			40		—		—		54			324
American Community Homes, Inc.		1,472		—		—		—			236		—		—		450			2,158
American Community Homes, Inc.		2,760		—		—		—			391		—		—		653			3,804
American Community Homes, Inc.		11		—		—		—			5		—		—		2			18
American Community Homes, Inc.		1,168		—		—		(1,111	)		17		—		—		13			87
American Community Homes, Inc. (Revolver)		—		—		2,500		—			25		—		—		(120	)		2,405
American Community Homes, Inc. (warrant to purchase up to 22.3% of the equity)		—		—		—		—			—		—		—		—			—
		17,616		—		2,500		(1,111	)		2,468		12		—		3,870			25,355

Ascent Midco, LLC		—		—		6,860		(52	)		—		17		—		47			6,872
Ascent Midco, LLC (Delayed Draw)		—		—		—		—			—		—		—		—			—
Ascent Midco, LLC (Revolver)		—		—		734		(734	)		—		—		—		—			—
Ascent Midco, LLC (2,032,258 Class A units)		—		—		2,032		—			—		—		—		807			2,839
		—		—		9,626		(786	)		—		17		—		854			9,711

Curion Holdings, LLC		3,279		—		—		—			—		—		—		(158	)		3,121
Curion Holdings, LLC (Revolver)		441		—		—		—			—		—		—		—			441
Curion Holdings, LLC (Junior secured loan)		—		—		—		—			—		—		—		—			—
Curion Holdings, LLC (Junior secured loan)		—		—		—		—			—		—		—		—			—
Curion Holdings, LLC (58,779 shares of common stock)		—		—		—		—			—		—		—		—			—
		3,720		—		—		—			—		—		—		(158	)		3,562

Incipio, LLC		12,343		—		—		—			128		—		—		(9,053	)		3,418
Incipio, LLC		3,750		—		—		—			362		—		—		(7	)		4,105
Incipio, LLC		1,606		—		—		—			154		—		—		(6	)		1,754
Incipio, LLC		686		—		—		—			56		—		—		(3	)		739
Incipio, LLC		—		—		1,404		—			90		—		—		(18	)		1,476
Incipio, LLC (Delayed Draw)		—		—		1,026		—			15		—		—		(12	)		1,029
Incipio, LLC (Junior secured loan)		—		—		—		—			—		—		—		—			—
Incipio, LLC (Junior secured loan)		—		—		—		—			—		—		—		—			—
Incipio, LLC (1,774 shares of Series C common units)		—		—		—		—			—		—		—		—			—
		18,385		—		2,430		—			805		—		—		(9,099	)		12,521

Luxury Optical Holdings Co.		3,457		—		—		—			—		—		—		(75	)		3,382
Luxury Optical Holdings Co. (Delayed Draw)		620		—		—		—			—		—		—		(4	)		616
Luxury Optical Holdings Co. (Revolver)		159		—		—		—			—		—		—		(3	)		156
Luxury Optical Holdings Co. (86 shares of common stock)		—		—		—		—			—		—		—		—			—
		4,236		—		—		—			—		—		—		(82	)		4,154

Mnine Holdings, Inc. ⁽²⁾		—		10,321		—		—			964		14		—		850			12,149
Mnine Holdings, Inc. (6,400 Class B units) ⁽²⁾		—		—		—		—			—		—		—		—			—
		—		10,321		—		—			964		14		—		850			12,149

NECB Collections, LLC (Revolver)		1,148		—		112		—			52		—		—		—			1,312
NECB Collections, LLC (20.8% of units)		318		—		—		—			—		—		—		(304	)		14
		1,466		—		112		—			52		—		—		(304	)		1,326

SHI Holdings, Inc.		2,459		—		—		—			—		—		—		(2,314	)		145
SHI Holdings, Inc. (Revolver)		3,601		—		345		—			—		—		—		(3,716	)		230
SHI Holdings, Inc. (24 shares of common stock)		—		—		—		—			—		—		—		—			—
		6,060		—		345		—			—		—		—		(6,030	)		375

Summit Container Corporation		2,971		—		—		—			—		—		—		174			3,145
Summit Container Corporation (Revolver)		5,406		—		24,103		(27,760	)		—		—		—		56			1,805
Summit Container Corporation (warrant to purchase up to 19.5% of the equity)		—		—		—		—			—		—		—		188			188
		8,377		—		24,103		(27,760	)		—		—		—		418			5,138

TJ Management HoldCo, LLC (Revolver) ⁽³⁾		—		—		—		—			—		—		—		—			—
TJ Management HoldCo, LLC (16 shares of common stock) ⁽³⁾		—		2,222		—		—			—		—		—		1,528			3,750
		—		2,222		—		—			—		—		—		1,528			3,750
Total non-controlled affiliate company investments	$	59,860	$	12,543	$	39,116	$	(29,657	)	$	4,289	$	43	$	—	$	(8,153	)	$	78,041

Controlled affiliate company investments:
MRCC Senior Loan Fund I, LLC	$	42,412	$	—	$	—	$	—		$	—	$	—	$	—	$	(4,888	)	$	37,524
		42,412		—		—		—			—		—		—		(4,888	)		37,524
Total controlled affiliate company investments	$	42,412	$	—	$	—	$	—		$	—	$	—	$	—	$	(4,888	)	$	37,524

⁽¹⁾

During the three months ended September 30, 2021, Incipio, LLC (“Incipio”) underwent a restructuring whereby substantially all of the assets of Incipio were acquired by a new entity, Vinci Brands LLC (“Vinci”). The senior lenders at Incipio, including the Company, were part of the new financing at Vinci. The Company’s investments in Vinci are not categorized as affiliate company investments as the Company does not have an equity interest in Vinci. For the purpose of this schedule, transfers out represents the fair value at June 30, 2021.

⁽²⁾

The Company restructured its investment in Mnine Holdings, Inc. (“Mnine”) during the three months ended June 30, 2020. As a part of the restructuring, the Company also received 5.3% of the equity of Mnine. For the purpose of this schedule, transfers in represents the fair value at March 31, 2020.

⁽³⁾

During the three months ended September 30, 2020, the senior secured lender group of Toojay’s Management, LLC (“Toojay’s OldCo”) established TJ Management HoldCo, LLC (“Toojay’s NewCo”) in order to acquire certain of the assets of Toojay’s OldCo as part of a bankruptcy restructuring. The Company owns 15.9% of the equity in Toojay’s NewCo. Toojay’s NewCo credit bid a portion of the senior secured debt in Toojay’s OldCo to acquire certain assets of Toojay’s OldCo which constitute the ongoing operations of the portfolio company. The Company’s portion of this credit bit was $2,386, and as such the Company’s outstanding senior secured debt investment in Toojay’s OldCo was reduced by the amount of the credit bid and the Company’s cost basis of its new equity investment in Toojay’s NewCo was increased by the amount of the credit bid. For the purpose of this schedule, transfers in represents the fair value at June 30, 2020 of the senior secured debt investment that was exchanged in the credit bid. The Company also provided a follow-on revolver commitment to Toojay’s NewCo.

	Nine months ended September 30,
	2021						2020
Portfolio Company		Interest Income		Dividend Income		Fee Income		Interest Income			Dividend Income		Fee Income
Non-controlled affiliate company investments:
American Community Homes, Inc.	$	846	$	—	$	—	$	815		$	—	$	—
American Community Homes, Inc.		553		—		—		727			—		—
American Community Homes, Inc.		13		—		—		168			—		—
American Community Homes, Inc.		51		—		—		50			—		—
American Community Homes, Inc.		5		—		—		40			—		—
American Community Homes, Inc.		188		—		—		235			—		—
American Community Homes, Inc.		349		—		—		426			—		—
American Community Homes, Inc.		27		—		—		5			—		—
American Community Homes, Inc.		9		—		—		16			—		—
American Community Homes, Inc. (Revolver)		—		—		—		146			—		—
American Community Homes, Inc. (Warrant)		—		—		—		—			—		—
		2,041		—		—		2,628			—		—

Ascent Midco, LLC		359		—		—		334			—		—
Ascent Midco, LLC (Delayed Draw)		9		—		—		10			—		—
Ascent Midco, LLC (Revolver)		3		—		—		19			—		—
Ascent Midco, LLC (Class A units)		—		130		—		—			106		—
		371		130		—		363			106		—

Curion Holdings, LLC		—		—		—		—			—		—
Curion Holdings, LLC (Revolver)		—		—		—		—			—		—
Curion Holdings, LLC (Junior secured loan)		—		—		—		—			—		—
Curion Holdings, LLC (Junior secured loan)		—		—		—		—			—		—
Curion Holdings, LLC (Common units)		—		—		—		—			—		—
		—		—		—		—			—		—

Familia Dental Group Holdings, LLC (Class A units)		—		—		—		n/a			n/a		n/a
		—		—		—		n/a			n/a		n/a

HFZ Capital Group, LLC		1,406		—		—		n/a			n/a		n/a
HFZ Capital Group, LLC		505		—		—		n/a			n/a		n/a
MC Asset Management (Corporate), LLC		731		—		—		n/a			n/a		n/a
MC Asset Management (Corporate), LLC (Delayed Draw)		56		—		—		n/a			n/a		n/a
MC Asset Management (Corporate), LLC (LLC interest)		—		—		—		n/a			n/a		n/a
MC Asset Management (Industrial), LLC		2,113		—		—		n/a			n/a		n/a
		4,811		—		—		n/a			n/a		n/a

Incipio, LLC		—		—		—		(309	)		—		—
Incipio, LLC		—		—		—		299			—		—
Incipio, LLC		—		—		—		126			—		—
Incipio, LLC		—		—		—		53			—		—
Incipio, LLC		—		—		—		101			—		—
Incipio, LLC		—		—		—		23			—		—
Incipio, LLC (Junior secured loan)		—		—		—		—			—		—
Incipio, LLC (Junior secured loan)		—		—		—		—			—		—
Incipio, LLC (Common units)		—		—		—		—			—		—
		—		—		—		293			—		—

Luxury Optical Holdings Co.		135		—		—		—			—		—
Luxury Optical Holdings Co. (Delayed Draw)		74		—		—		61			—		—
Luxury Optical Holdings Co. (Revolver)		6		—		—		—			—		—
Luxury Optical Holdings Co. (Preferred units)		694		654		—		n/a			n/a		n/a
Luxury Optical Holdings Co. (Common stock)		—		—		—		—			—		—
		909		654		—		61			—		—

Mnine Holdings, Inc.		1,019		—		—		602			—		—
Mnine Holdings, Inc. (Common units)		—		—		—		—			—		—
		1,019		—		—		602			—		—

NECB Collections, LLC (Revolver)		—		—		—		77			—		—
NECB Collections, LLC (LLC units)		—		—		—		—			—		—
		—		—		—		77			—		—

Second Avenue SFR Holdings II LLC (Revolver)		5		—		—		n/a			n/a		n/a
Second Avenue SFR Holdings II LLC (Delayed Draw)		8		—		—		n/a			n/a		n/a
Second Avenue SFR Holdings II LLC (LLC interest)		—		—		—		n/a			n/a		n/a
		13		—		—		n/a			n/a		n/a

SHI Holdings, Inc.		—		—		—		(2	)		—		—
SHI Holdings, Inc. (Revolver)		—		—		—		(3	)		—		—
SHI Holdings, Inc. (Common stock)		—		—		—		—			—		—
		—		—		—		(5	)		—		—

Summit Container Corporation		57		—		—		229			—		—
Summit Container Corporation (Revolver)		35		—		—		269			—		—
Summit Container Corporation (Warrant)		—		—		—		—			—		—
		92		—		—		498			—		—

TJ Management HoldCo, LLC (Revolver)		9		—		—		1			—		—
TJ Management HoldCo, LLC (Common stock)		—		—		—		—			—		—
		9		—		—		1			—		—

Total non-controlled affiliate company investments	$	9,265	$	784	$	—	$	4,518		$	106	$	—

Controlled affiliate company investments:
MRCC Senior Loan Fund I, LLC	$	—	$	3,300	$	—	$	—		$	3,150	$	—
		—		3,300		—		—			3,150		—
Total controlled affiliate company investments	$	—	$	3,300	$	—	$	—		$	3,150	$	—

Note 6. Transactions with Related Parties

The Company has entered into an investment advisory agreement with MC Advisors (the “Investment Advisory Agreement”), under which MC Advisors, subject to the overall supervision of the Board, provides investment advisory services to the Company. The Company pays MC Advisors a fee for its services under the Investment Advisory Agreement consisting of two components - a base management fee and an incentive fee. The cost of both the base management fee and the incentive fee are borne by the Company’s stockholders, unless such fees are waived by MC Advisors.

The base management fee is calculated initially at an annual rate equal to 1.75% of average invested assets (calculated as total assets excluding cash, which includes assets financed using leverage); provided, however, the base management fee is calculated at an annual rate equal to 1.00% of the Company’s average invested assets (calculated as total assets excluding cash, which includes assets financed using leverage) that exceeds the product of (i) 200% and (ii) the Company’s average net assets. For the avoidance of doubt, the 200% is calculated in accordance with the asset coverage limitation as defined in the 1940 Act to give effect to the Company’s exemptive relief with respect to MRCC SBIC’s SBA debentures. This has the effect of reducing the Company’s base management fee rate on assets in excess of regulatory leverage of 1:1 debt to equity to 1.00% per annum. The base management fee is payable quarterly in arrears.

Base management fees for the three and nine months ended September 30, 2021 were $2,399 and $7,060, respectively. Base management fees for the three and nine months ended September 30, 2020 were $2,414 and $7,399, respectively.

The incentive fee consists of two parts. The first part is calculated and payable quarterly in arrears and equals 20% of “pre-incentive fee net investment income” for the immediately preceding quarter, subject to a 2% (8% annualized) preferred return, or “hurdle,” and a “catch up” feature. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of pre-incentive fee net investment income will be payable except to the extent that 20% of the cumulative net increase in net assets resulting from operations over the then current and 11 preceding calendar quarters exceeds the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters (the “Incentive Fee Limitation”). Therefore, any ordinary income incentive fee that is payable in a calendar quarter will be limited to the lesser of (1) 20% of the amount by which pre-incentive fee net investment income for such calendar quarter exceeds the 2% hurdle, subject to the “catch-up” provision, and (2) (x) 20% of the cumulative net increase in net assets resulting from operations for the then current and 11 preceding calendar quarters minus (y) the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the sum of pre-incentive fee net investment income, realized gains and losses and unrealized gains and losses for the then current and 11 preceding calendar quarters. The second part of the incentive fee is determined and payable in arrears as of the end of each fiscal year in an amount equal to 20% of realized capital gains, if any, on a cumulative basis from inception through the end of the year, computed net of all realized capital losses on a cumulative basis and unrealized depreciation, less the aggregate amount of any previously paid capital gain incentive fees.

The composition of the Company’s incentive fees was as follows:

	Three months ended September 30,					Nine months ended September 30,
	2021		2020			2021			2020
Part one incentive fees ⁽¹⁾	$	1,578	$	1,129		$	2,828		$	5,012
Part two incentive fees ⁽²⁾		—		—			—			—
Incentive Fee Limitation		—		(1,129	)		—			(5,012	)
Incentive fees, excluding the impact of incentive fee waivers		1,578		—			2,828			—
Incentive fee waivers ⁽³⁾		—		—			(1,057	)		—
Total incentive fees, net of incentive fee waivers	$	1,578	$	—		$	1,771		$	—

⁽¹⁾	Based on pre-incentive fee net investment income.
⁽²⁾	Based upon net realized and unrealized gains and losses, or capital gains. The Company accrues, but does not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. If, on a cumulative basis, the sum of net realized gain (loss) plus net unrealized gain (loss) decreases during a period, the Company will reverse any excess capital gains incentive fee previously accrued such that the amount of capital gains incentive fee accrued is no more than 20% of the sum of net realized gain (loss) plus net unrealized gain (loss).
⁽³⁾	Represents part one incentive fees waived by MC Advisors.

The Company has entered into an administration agreement with MC Management (the “Administration Agreement”), under which the Company reimburses MC Management, subject to the review and approval of the Board, for its allocable portion of overhead and other expenses, including the costs of furnishing the Company with office facilities and equipment and providing clerical, bookkeeping, record-keeping and other administrative services at such facilities, and the Company’s allocable portion of the cost of the chief financial officer and chief compliance officer and their respective staffs. To the extent that MC Management outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis, without incremental profit to MC Management. For the three and nine months ended September 30, 2021, the Company incurred $895 and $2,583, respectively, in administrative expenses (included within Professional fees, Administrative service fees and General and administrative expenses on the consolidated statements of operations) under the Administration Agreement, of which $327 and $1,020, respectively, was related to MC Management overhead and salary allocation and paid directly to MC Management. For the three and nine months ended September 30, 2020, the Company incurred $806 and $2,440, respectively, in administrative expenses (included within Professional fees, Administrative service fees and General and administrative expenses on the consolidated statements of operations) under the Administration Agreement, of which $321 and $973, respectively, was related to MC Management overhead and salary allocation and paid directly to MC Management. As of September 30, 2021 and December 31, 2020, $327 and $327, respectively, of expenses were due to MC Management under this agreement and are included in accounts payable and accrued expenses on the consolidated statements of assets and liabilities.

The Company has entered into a license agreement with Monroe Capital LLC under which Monroe Capital LLC has agreed to grant the Company a non-exclusive, royalty-free license to use the name “Monroe Capital” for specified purposes in its business. Under this agreement, the Company has the right to use the “Monroe Capital” name at no cost, subject to certain conditions, for so long as MC Advisors or one of its affiliates remains its investment adviser. Other than with respect to this limited license, the Company has no legal right to the “Monroe Capital” name or logo.

As of September 30, 2021 and December 31, 2020, the Company had accounts payable to members of the Board of $35 and zero, respectively, representing accrued and unpaid fees for their services.

Note 7. Borrowings

In accordance with the 1940 Act, the Company is permitted to borrow amounts such that its asset coverage ratio, as defined in the 1940 Act, is at least 150% after such borrowing. As of September 30, 2021 and December 31, 2020, the Company’s asset coverage ratio based on aggregate borrowings outstanding was 190% and 200%, respectively.

Revolving Credit Facility: The Company has a $255,000 revolving credit facility with ING Capital LLC, as agent. The revolving credit facility has an accordion feature which permits the Company, under certain circumstances to increase the size of the facility up to $400,000 (subject to maintaining 150% asset coverage, as defined by the 1940 Act). The revolving credit facility is secured by a lien on all of the Company’s assets, including cash on hand, but excluding the assets of the Company’s wholly-owned subsidiary, MRCC SBIC. The Company may make draws under the revolving credit facility to make or purchase additional investments through March 1, 2023 and for general working capital purposes until March 1, 2024, the maturity date of the revolving credit facility.

The Company’s ability to borrow under the revolving credit facility is subject to availability under the borrowing base, which permits the Company to borrow up to 72.5% of the fair market value of its portfolio company investments depending on the type of investment the Company holds and whether the investment is quoted. The Company’s ability to borrow is also subject to certain concentration limits, and continued compliance with the representations, warranties and covenants given by the Company under the facility. The revolving credit facility contains certain financial and restrictive covenants, including, but not limited to, the Company’s maintenance of: (1) minimum consolidated total net assets at least equal to $150,000 plus 65% of the net proceeds to the Company from sales of its equity securities after March 1, 2019; (2) a ratio of total assets (less total liabilities other than indebtedness) to total indebtedness of not less than 1.5 to 1; and (3) a senior debt coverage ratio of at least 2 to 1. The revolving credit facility also requires the Company to undertake customary indemnification obligations with respect to ING Capital LLC and other members of the lending group and to reimburse the lenders for expenses associated with entering into the credit facility. The revolving credit facility also has customary provisions regarding events of default, including events of default for nonpayment, change in control transactions at both Monroe Capital Corporation and MC Advisors, failure to comply with financial and negative covenants, and failure to maintain the Company’s relationship with MC Advisors. If the Company incurs an event of default under the revolving credit facility and fails to remedy such default under any applicable grace period, if any, then the entire revolving credit facility could become immediately due and payable, which would materially and adversely affect the Company’s liquidity, financial condition, results of operations and cash flows.

The Company’s revolving credit facility also imposes certain conditions that may limit the amount of the Company’s distributions to stockholders. Distributions payable in the Company’s common stock under the DRIP are not limited by the revolving credit facility. Distributions in cash or property other than common stock are generally limited to 115% of the amount of distributions required to maintain the Company’s status as a RIC.

As of September 30, 2021, the Company had U.S. dollar borrowings of $139,800 and non-U.S. dollar borrowings denominated in Great Britain pounds of £3,433 ($4,625 in U.S. dollars) under the revolving credit facility. As of December 31, 2020, the Company had U.S. dollar borrowings of $104,550 and non-U.S. dollar borrowings denominated in Great Britain pounds of £16,100 ($22,009 in U.S. dollars) under the revolving credit facility. The borrowings denominated in Great Britain pounds may be positively or negatively affected by movements in the rate of exchange between the U.S. dollar and the Great Britain pound. These movements are beyond the control of the Company and cannot be predicted. The borrowings denominated in Great Britain pounds are translated into U.S. dollars based on the spot rate at each balance sheet date. The impact resulting from changes in foreign currency borrowings is included in net change in unrealized gain (loss) on foreign currency and other transactions on the Company’s consolidated statements of operations and totaled $939 and $680 for the three and nine months ended September 30, 2021, and ($835) and $543 for the three and nine months ended September 30, 2020, respectively. During both the three and nine months ended September 30, 2021, the Company repaid borrowings denominated in Great Britain pounds of £12,667. As a result of this repayment, the Company recognized a realized gain (loss) on foreign currency and other transactions on the Company’s consolidated statements of operations of ($866) for both the three and nine months ended September 30, 2021. There were no repayments of foreign currency borrowings for the three and nine months ended September 30, 2020.

Borrowings under the revolving credit facility bear interest, at the Company’s election, at an annual rate of LIBOR (one-month, three-month or six-month at the Company’s discretion based on the term of the borrowing) plus 2.625% or at a daily rate equal to 1.625% per annum plus the greater of the prime interest rate, the federal funds rate plus 0.5% or LIBOR plus 1.0%, with a LIBOR floor of 0.5%. In addition to the stated interest rate on borrowings under the revolving credit facility, the Company is required to pay a commitment fee and certain conditional fees based on usage of the expanded borrowing base and usage of the asset coverage ratio flexibility. A commitment fee of 0.5% per annum on any unused portion of the revolving credit facility if the unused portion of the facility is less than 35% of the then available maximum borrowing or a commitment fee of 1.0% per annum on any unused portion of the revolving credit facility if the unused portion of the facility is greater than or equal to 35% of the then available maximum borrowing. As of September 30, 2021 and December 31, 2020, the outstanding borrowings were accruing at a weighted average interest rate of 3.3% and 3.2%, respectively.

2023 Notes: On February 18, 2021, the Company redeemed $109,000 in aggregate principal amount of the 2023 Notes. The redemption was accounted for as a debt extinguishment in accordance with ASC Subtopic 470-50, Debt – Modifications and Extinguishments (“ASC 470-50”), which resulted in a realized loss of $2,335 (primarily comprised of the unamortized deferred financing costs at the time of the redemption) recorded in net gain (loss) on extinguishment of debt on the Company’s consolidated statements of operations. The 2023 Notes were delisted from the Nasdaq Global Select Market in conjunction with the redemption.

2026 Notes: On January 25, 2021, the Company closed a private offering of $130,000 in aggregate principal amount of senior unsecured notes (the “2026 Notes”). Aggregate underwriting commissions were $3,325 and other issuance costs were $683, resulting in net proceeds of approximately $125,992. The 2026 Notes mature on February 15, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus a “make-whole” premium, if applicable. The 2026 Notes bear interest at an annual rate of 4.75% payable semi-annually on February 15 and August 15 of each year, commencing on August 15, 2021. The 2026 Notes are general, unsecured obligations and rank equal in right of payment with all of the Company’s existing and future unsecured indebtedness.

SBA Debentures: On February 28, 2014, the Company’s wholly-owned subsidiary, MRCC SBIC received a license from the SBA to operate as a SBIC under Section 301(c) of the Small Business Investment Act of 1958, as amended. MRCC SBIC commenced operations on September 16, 2013.

The SBIC license allows MRCC SBIC to obtain leverage by issuing SBA debentures, subject to the issuance of a leverage commitment by the SBA and other customary procedures. SBA debentures are non-recourse, interest only debentures with interest payable semi-annually and have a 10-year maturity. The principal amount of SBA debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA debentures is fixed on a semi-annual basis (pooling date) at a market-driven spread over U.S. Treasury Notes with 10-year maturities. The SBA, as a creditor, has a superior claim to MRCC SBIC’s assets over the Company’s stockholders in the event the Company liquidates MRCC SBIC, or the SBA exercises its remedies upon an event of default.

On March 1, 2021, the Company repaid $28,100 in aggregate principal amount of the SBA debentures. The repayment was accounted for as a debt extinguishment in accordance with ASC 470-50 which resulted in a realized loss of $439 (primarily comprised of the unamortized deferred financing costs at the time of the repayment) recorded in net gain (loss) on extinguishment of debt on the Company’s consolidated statements of operations. On September 1, 2021, the Company repaid an additional $30,000 in aggregate principal amount of the SBA debentures. The repayment was accounted for as a debt extinguishment in accordance with ASC 470-50 which resulted in a realized loss of $336 (primarily comprised of the unamortized deferred financing costs at the time of the repayment) recorded in net gain (loss) on extinguishment of debt on the Company’s consolidated statements of operations. As of September 30, 2021, MRCC SBIC had $8,045 in cash and $93,301 in investments at fair value. As of December 31, 2020, MRCC SBIC had $25,657 in cash and $131,167 in investments at fair value.

As of September 30, 2021 and December 31, 2020, MRCC SBIC had $57,624 in leverageable capital and the following SBA-guaranteed debentures outstanding:

Maturity Date	Interest Rate			September 30, 2021		December 31, 2020
September 2024		3.4	%	$	2,920	$	12,920
March 2025		3.3	%		14,800		14,800
March 2025		2.9	%		7,080		7,080
September 2025		3.6	%		—		5,200
March 2027		3.5	%		—		20,000
September 2027		3.2	%		32,100		32,100
March 2028		3.9	%		—		18,520
September 2028		4.2	%		—		4,380
Total				$	56,900	$	115,000

The Company has been granted exemptive relief from the SEC for permission to exclude the debt of MRCC SBIC guaranteed by the SBA from the asset coverage test under the 1940 Act. The receipt of this exemption for this SBA debt increases flexibility under the asset coverage test.

Components of interest expense: The components of the Company’s interest expense and other debt financing expenses, average outstanding balances and average stated interest rates (i.e. the rate in effect plus spread) were as follows:

	Three months ended September 30,
	2021			2020
Interest expense - revolving credit facility	$	1,209		$	1,218
Interest expense - 2023 Notes		—			1,567
Interest expense - 2026 Notes		1,544			—
Interest expense - SBA debentures		632			991
Amortization of deferred financing costs		539			582
Total interest and other debt financing expenses	$	3,924		$	4,358
Average debt outstanding	$	329,542		$	350,992
Average stated interest rate		4.0	%		4.3	%

	Nine months ended September 30,
	2021			2020
Interest expense - revolving credit facility	$	3,265		$	4,504
Interest expense - 2023 Notes		837			4,701
Interest expense - 2026 Notes		4,220			—
Interest expense - SBA debentures		2,220			2,952
Amortization of deferred financing costs		1,677			1,586
Total interest and other debt financing expenses	$	12,219		$	13,743
Average debt outstanding	$	332,028		$	384,452
Average stated interest rate		4.2	%		4.2	%

Note 8. Derivative Instruments

The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on future interest cash flows from the Company’s investments denominated in foreign currencies. As of September 30, 2021 and December 31, 2020, the counterparty to these foreign currency forward contracts was Bannockburn Global Forex, LLC. Net unrealized gain or loss on foreign currency forward contracts are included in net change in unrealized gain (loss) on foreign currency forward contracts and net realized gain or loss on forward currency forward contracts are included in net realized gain (loss) on foreign currency forward contracts on the accompanying consolidated statements of operations.

Certain information related to the Company’s foreign currency forward contracts is presented below as of September 30, 2021 and December 31, 2020.

	As of September 30, 2021
Description	Notional Amount to be Sold		Settlement Date		Gross Amount of Unrealized Gain		Gross Amount of Unrealized Loss		Balance Sheet location of Net Amounts
Foreign currency forward contract	£	83	10/4/2021	$	-	$	(10	)	Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	£	82	1/3/2022		-		(10	)	Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	£	79	4/4/2022		-		(9	)	Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	£	29	5/6/2022		-		(3	)	Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	145	10/19/2021		8		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	136	11/16/2021		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	148	12/16/2021		8		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	156	1/19/2022		8		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	136	2/16/2022		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	132	3/16/2022		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	146	4/19/2022		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	138	5/17/2022		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	153	6/17/2022		8		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	138	7/18/2022		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	140	8/16/2022		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	153	9/16/2022		8		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	152	10/19/2022		8		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	136	11/16/2022		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	142	12/16/2022		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	153	1/18/2023		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	140	2/16/2023		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	132	3/16/2023		6		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	160	4/20/2023		8		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	121	5/16/2023		6		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	157	6/19/2023		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	138	7/18/2023		6		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	146	8/16/2023		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	146	9/18/2023		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	148	10/18/2023		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	140	11/16/2023		6		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	142	12/18/2023		6		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	150	1/17/2024		7		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	143	2/16/2024		6		-		Unrealized gain on foreign currency forward contracts
Foreign currency forward contract	AUD	15,410	3/18/2024		691		-		Unrealized gain on foreign currency forward contracts
				$	895	$	(32	)

	As of December 31, 2020
	Notional Amount to be Sold		Settlement Date	Gross Amount of Unrealized Gain		Gross Amount of Unrealized Loss			Balance Sheet location of Net Amounts
Foreign currency forward contract	£	87	1/4/2021	$	—	$	(12	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	206	3/3/2021		—		(18	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	26	3/3/2021		—		(2	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	84	4/2/2021		—		(12	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	212	6/1/2021		—		(19	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	26	6/1/2021		—		(2	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	83	7/2/2021		—		(11	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	83	10/4/2021		—		(11	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	82	1/3/2022		—		(11	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	79	4/4/2022		—		(11	)	Unrealized loss on foreign currency forward contracts
Foreign currency forward contract	£	29	5/6/2022		—		(4	)	Unrealized loss on foreign currency forward contracts
Total				$	—	$	(113	)

For the three and nine months ended September 30, 2021, the Company recognized net change in unrealized gain (loss) on foreign currency forward contracts of $530 and $976, respectively. For the three and nine months ended September 30, 2021, the Company recognized net realized gain (loss) on foreign currency forward contracts of $20 and ($55), respectively.

For the three and nine months ended September 30, 2020, the Company recognized net change in unrealized gain (loss) on foreign currency forward contracts of ($55) and $19, respectively. For the three and nine months ended September 30, 2020, the Company recognized net realized gain (loss) on foreign currency forward contracts of ($15) and $3, respectively.

Note 9. Distributions

The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the nine months ended September 30, 2021 and 2020:

Date Declared	Record Date	Payment Date	Amount Per Share		Cash Distribution		DRIP Shares Issued	DRIP Shares Value		DRIP Shares Repurchased in the Open Market	Cost of DRIP Shares Repurchased
Nine months ended September 30, 2021:
March 2, 2021	March 16, 2021	March 31, 2021	$	0.25	$	5,326	—	$	—	35,611	$	364
June 2, 2021	June 16, 2021	June 30, 2021		0.25		5,386	—		—	31,277		343
September 2, 2021	September 16, 2021	September 30, 2021		0.25		5,386	—		—	35,623		369
Total distributions declared			$	0.75	$	16,098	—	$	—	102,511	$	1,076

Nine months ended September 30, 2020:
March 3, 2020	March 16, 2020	March 31, 2020	$	0.35	$	7,155	—	$	—	55,938	$	374
May 8, 2020	June 15, 2020	June 30, 2020		0.25		5,257	—		—	40,612		283
September 4, 2020	September 16, 2020	September 30, 2020		0.25		5,326	—		—	44,246		305
Total distributions declared			$	0.85	$	17,738	—	$	—	140,796	$	962

Note 10. Stock Issuances and Repurchases

Stock Issuances: On May 12, 2017, the Company entered into at-the-market (“ATM”) equity distribution agreements with each of JMP Securities LLC (“JMP”) and FBR Capital Markets & Co. (“FBR”) (the “ATM Program”) through which the Company could sell, by means of ATM offerings, from time to time, up to $50,000 of the Company’s common stock. On May 8, 2020, the Company entered into an amendment to the ATM Program to extend its term. All other material terms of the ATM Program remain unchanged. During the nine months ended September 30, 2021, the Company sold 240,000 shares at an average price of $11.43 per share for gross proceeds of $2,743 under the ATM program. Aggregate underwriter’s discounts and commissions were $41 and offering costs were $12, resulting in net proceeds of approximately $2,690. During the nine months ended September 30, 2020, the Company sold 858,976 shares at an average price of $7.78 per share for gross proceeds of $6,684 under the ATM program. Aggregate underwriter’s discounts and commissions were $100 and offering costs were $89, resulting in net proceeds of approximately $6,495.

Note 11. Commitments and Contingencies

Commitments: As of September 30, 2021 and December 31, 2020, the Company had $70,780 and $52,252, respectively, in outstanding commitments to fund investments under undrawn revolvers, capital expenditure loans, delayed draw commitments and subscription agreements (excluding SLF). As described in Note 3, the Company had unfunded commitments of $7,850 to SLF as of September 30, 2021 and December 31, 2020 that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee. Drawdowns of the commitments to SLF require authorization from one of the Company’s representatives on SLF’s board of managers. Management believes that the Company’s available cash balances and/or ability to draw on the revolving credit facility provide sufficient funds to cover its unfunded commitments as of September 30, 2021.

Indemnifications: In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these agreements is unknown, as these involve future claims that may be made against the Company but that have not occurred. The Company expects the risk of any future obligations under these indemnifications to be remote.

Concentration of credit and counterparty risk: Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of the contract. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

Market risk: The Company’s investments and borrowings are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments and borrowings are traded.

Legal proceedings: In the normal course of business, the Company may be subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company is not currently aware of any such proceedings or disposition that would have a material adverse effect on the Company’s consolidated financial statements.

Note 12. Financial Highlights

The following is a schedule of financial highlights for the nine months ended September 30, 2021 and 2020:

	September 30, 2021			September 30, 2020
Per share data:
Net asset value at beginning of period	$	11.00		$	12.20
Net investment income ⁽¹⁾		0.78			1.21
Net gain (loss) ⁽¹⁾		0.42			(1.57	)
Net increase (decrease) in net assets resulting from operations ⁽¹⁾		1.20			(0.36	)
Stockholder distributions - income ⁽²⁾		(0.75	)		(0.85	)
Effect of share issuances below NAV ⁽³⁾		—			(0.16	)
Net asset value at end of period	$	11.45		$	10.83
Net assets at end of period	$	246,650		$	230,683
Shares outstanding at end of period		21,543,540			21,303,540
Per share market value at end of period	$	10.39		$	6.84
Total return based on market value ⁽⁴⁾		38.85	%		(28.85	)%
Total return based on average net asset value ⁽⁵⁾		10.65	%		(3.28	)%
Ratio/Supplemental data:
Ratio of net investment income to average net assets ⁽⁶⁾		9.58	%		14.78	%
Ratio of total expenses, net of incentive fee waivers, to average net assets ^(6) (7)		13.09	%		14.13	%
Portfolio turnover ⁽⁸⁾		33.79	%		16.83	%

⁽¹⁾	Calculated using the weighted average shares outstanding during the periods presented.
⁽²⁾	Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The tax character of distributions will be determined at the end of the fiscal year. However, if the character of such distributions were determined as of September 30, 2021 and 2020, none of the distributions would have been characterized as a tax return of capital to the Company’s stockholders; this tax return of capital may differ from the return of capital calculated with reference to net investment income for financial reporting purposes.
⁽³⁾	Includes the effect of share issuances above (below) net asset value and the impact of different share amounts used in calculating per share data as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of a period end or transaction date.
⁽⁴⁾	Total return based on market value is calculated assuming a purchase of common shares at the market value on the first day and a sale at the market value on the last day of the periods reported. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Company’s DRIP. Total return based on market value does not reflect brokerage commissions. Return calculations are not annualized.
⁽⁵⁾	Total return based on average net asset value is calculated by dividing the net increase (decrease) in net assets resulting from operations by the average net asset value. Return calculations are not annualized.
⁽⁶⁾	Ratios are annualized. Incentive fees included within the ratio are not annualized.
⁽⁷⁾	The following is a schedule of supplemental ratios for the nine months ended September 30, 2021 and 2020. These ratios have been annualized unless otherwise noted.

	September 30, 2021			September 30, 2020
Ratio of total investment income to average net assets		22.68	%		28.91	%
Ratio of interest and other debt financing expenses to average net assets		6.79	%		8.10	%
Ratio of total expenses (without incentive fees) to average net assets		12.35	%		14.13	%
Ratio of incentive fees, net of incentive fee waivers, to average net assets ^(8) (9)		0.74	%		0.00	%

⁽⁸⁾	Ratios are not annualized.
⁽⁹⁾	The ratio of waived incentive fees to average net assets was 0.44% and zero for the nine months ended September 30, 2021 and 2020, respectively.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Except as otherwise specified, references to “we,” “us” and “our” refer to Monroe Capital Corporation and its consolidated subsidiaries; MC Advisors refers to Monroe Capital BDC Advisors, LLC, our investment adviser and a Delaware limited liability company; MC Management refers to Monroe Capital Management Advisors, LLC, our administrator and a Delaware limited liability company; Monroe Capital refers to Monroe Capital LLC, a Delaware limited liability company, and its subsidiaries and affiliates; and SLF refers to MRCC Senior Loan Fund I, LLC, an unconsolidated Delaware limited liability company, in which we co-invest with Life Insurance Company of the Southwest (“LSW”) primarily in senior secured loans. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing in our annual report on Form 10-K (the “Annual Report”) for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 2, 2021. The information contained in this section should also be read in conjunction with our unaudited consolidated financial statements and related notes and other financial information appearing elsewhere in this quarterly report on Form 10-Q (the “Quarterly Report”).

FORWARD-LOOKING STATEMENTS

This Quarterly Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that constitute forward-looking statements, which relate to future events or our future performance or future financial condition. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our company, our industry, our beliefs and our assumptions. The forward-looking statements contained in this Quarterly Report involve risks and uncertainties, including statements as to:

•

our future operating results;

•

our business prospects and the prospects of our portfolio companies;

•

the dependence of our future success on the general economy and its impact on the industries in which we invest;

	•	the impact of global health epidemics, such as the current novel coronavirus (“COVID-19”) pandemic, on our or our portfolio companies’ business and the global economy;

	•	the impact of a protracted decline in the liquidity of credit markets on our business;

	•	the impact of changes in London Interbank Offered Rate (“LIBOR”) on our operating results;

•

the impact of increased competition;

•

the impact of fluctuations in interest rates on our business and our portfolio companies;

•

our contractual arrangements and relationships with third parties;

•

the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

•

actual and potential conflicts of interest with MC Advisors, MC Management and other affiliates of Monroe Capital;

•

the ability of our portfolio companies to achieve their objectives;

•

the use of borrowed money to finance a portion of our investments;

•

the adequacy of our financing sources and working capital;

•

the timing of cash flows, if any, from the operations of our portfolio companies;

•

the ability of MC Advisors to locate suitable investments for us and to monitor and administer our investments;

•

the ability of MC Advisors or its affiliates to attract and retain highly talented professionals;

•

our ability to qualify and maintain our qualification as a regulated investment company and as a business development company; and

•

the impact of future legislation and regulation on our business and our portfolio companies.

We use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates,” “targets” and similar expressions to identify forward-looking statements. The forward-looking statements contained in this Quarterly Report involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Part I-Item 1A. Risk Factors” in our Annual Report and “Part II-Item 1A. Risk Factors” in this Quarterly Report.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statements in this Quarterly Report should not be regarded as a representation by us that our plans and objectives will be achieved.

We have based the forward-looking statements included in this Quarterly Report on information available to us on the date of this Quarterly Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements in this Quarterly Report, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we may file in the future with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Overview

Monroe Capital Corporation is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, we have elected to be treated as a regulated investment company (“RIC”) under the subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We are a specialty finance company focused on providing financing solutions primarily to lower middle-market companies in the United States and Canada. We provide customized financing solutions focused primarily on senior secured, junior secured and unitranche secured (a combination of senior secured and junior secured debt in the same facility in which we syndicate a “first out” portion of the loan to an investor and retain a “last out” portion of the loan) debt and, to a lesser extent, unsecured subordinated debt and equity, including equity co-investments in preferred and common stock, and warrants.

Our shares are currently listed on the NASDAQ Global Select Market under the symbol “MRCC”.

Our investment objective is to maximize the total return to our stockholders in the form of current income and capital appreciation through investment in senior secured, unitranche secured and junior secured debt and, to a lesser extent, unsecured subordinated debt and equity investments. We seek to use our extensive leveraged finance origination infrastructure and broad expertise in sourcing loans to invest in primarily senior secured, unitranche secured and junior secured debt of middle-market companies. Our investments will generally range between $2.0 million and $25.0 million each, although this investment size may vary proportionately with the size of our capital base. As of September 30, 2021, our portfolio included approximately 76.8% senior secured loans, 8.0% unitranche secured loans, 1.6% junior secured loans and 13.6% equity securities, compared to December 31, 2020, when our portfolio included approximately 74.1% senior secured loans, 11.7% unitranche secured loans, 2.6% junior secured loans and 11.6% equity securities. We expect that the companies in which we invest may be leveraged, often as a result of leveraged buy-outs or other recapitalization transactions, and, in certain cases, will not be rated by national ratings agencies. If such companies were rated, we believe that they would typically receive a rating below investment grade (between BB and CCC under the Standard & Poor’s system) from the national rating agencies.

While our primary focus is to maximize current income and capital appreciation through debt investments in thinly traded or private U.S. companies, we may invest a portion of the portfolio in opportunistic investments in order to seek to enhance returns to stockholders. Such investments may include investments in high-yield bonds, distressed debt, private equity or securities of public companies that are not thinly traded and securities of middle-market companies located outside of the United States. We expect that these public companies generally will have debt securities that are non-investment grade.

On February 28, 2014, our wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP (“MRCC SBIC”), a Delaware limited partnership, received a license from the Small Business Administration (“SBA”) to operate as a Small Business Investment Company (“SBIC”) under Section 301(c) of the Small Business Investment Act of 1958. MRCC SBIC commenced operations on September 16, 2013. See “SBA Debentures” below for more information.

Investment income

We generate interest income on the debt investments in portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior secured, unitranche secured or junior secured debt, typically have an initial term of three to seven years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. In some cases, our investments provide for deferred interest of payment-in-kind (“PIK”) interest. In addition, we may generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums and prepayment gains (losses) on loans as interest income. As the frequency or volume of the repayments which trigger these prepayment premiums and prepayment gains (losses) may fluctuate significantly from period to period, the associated interest income recorded may also fluctuate significantly from period to period. Interest and fee income are recorded on the accrual basis to the extent we expect to collect such amounts. Interest income is accrued based upon the outstanding principal amount and contractual terms of debt and preferred equity investments. Interest is accrued on a daily basis. We record fees on loans based on the determination of whether the fee is considered a yield enhancement or payment for a service. If the fee is considered a yield enhancement associated with a funding of cash on a loan, the fee is generally deferred and recognized into interest income using the effective interest method if captured in the cost basis or using the straight-line method if the loan is unfunded and therefore there is no cost basis. If the fee is not considered a yield enhancement because a service was provided, and the fee is payment for that service, the fee is deemed earned and recognized as fee income in the period the service has been completed.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment. The frequency and volume of the distributions on common equity securities and LLC and LP investments may fluctuate significantly from period to period.

Expenses

Our primary operating expenses include the payment of base management and incentive fees to MC Advisors, under the investment advisory and management agreement (the “Investment Advisory Agreement”), the payment of fees to MC Management for our allocable portion of overhead and other expenses under the administration agreement (the “Administration Agreement”) and other operating costs. See Note 6 to our consolidated financial statements and “Related Party Transactions” below for additional information on our Investment Advisory Agreement and Administration Agreement. Our expenses also include interest expense on our various forms of indebtedness. We bear all other out-of-pocket costs and expenses of our operations and transactions.

Net gain (loss)

We recognize realized gains or losses on investments, foreign currency forward contracts and foreign currency and other transactions based on the difference between the net proceeds from the disposition and the cost basis without regard to unrealized gains or losses previously recognized within net realized gain (loss) on the consolidated statements of operations. We record current period changes in fair value of investments, foreign currency forward contracts, foreign currency and other transactions within net change in unrealized gain (loss) on the consolidated statements of operations.

Portfolio and Investment Activity

During the three months ended September 30, 2021, we invested $54.7 million in 11 new portfolio companies and $27.5 million in 17 existing portfolio companies and had $62.3 million in aggregate amount of sales and principal repayments, resulting in net investments of $19.9 million for the period.

During the nine months ended September 30, 2021, we invested $118.6 million in 27 new portfolio companies and $63.2 million in 26 existing portfolio companies and had $193.6 million in aggregate amount of sales and principal repayments, resulting in net sales and repayments of $11.8 million for the period.

During the three months ended September 30, 2020, we did not invest in any new portfolio companies. During the three months ended September 30, 2020, we invested $15.0 million in eight existing portfolio companies and had $68.4 million in aggregate amount of sales and principal repayments, resulting in net sales and repayments of $53.4 million for the period.

During the nine months ended September 30, 2020, we invested $41.3 million in six new portfolio companies and $55.1 million in 37 existing portfolio companies and had $163.5 million in aggregate amount of sales and principal repayments, resulting in net sales and repayments of $67.1 million for the period.

The following table shows portfolio yield by security type:

	September 30, 2021						December 31, 2020
	Weighted Average Annualized Contractual Coupon Yield ⁽¹⁾			Weighted Average Annualized Effective Yield ⁽²⁾			Weighted Average Annualized Contractual Coupon Yield ⁽¹⁾			Weighted Average Annualized Effective Yield ⁽²⁾
Senior secured loans		8.4	%		8.4	%		8.1	%		8.1	%
Unitranche secured loans		4.8			5.0			6.3			6.5
Junior secured loans		11.1			11.1			7.6			7.6
Preferred equity securities		5.3			5.3			1.4			1.4
Total		7.9	%		7.9	%		7.7	%		7.7	%

_____________________________

(1)

The weighted average annualized contractual coupon yield at period end is computed by dividing (a) the interest income on our debt investments and preferred equity investments (with a stated coupon rate) at the period end contractual coupon rate for each investment by (b) the par value of our debt investments (excluding debt investments acquired for no cost in a restructuring on non-accrual status) and the cost basis of our preferred equity investments. We exclude loans acquired for no cost in a restructuring on non-accrual status within this metric as management believes this disclosure provides a better indication of return on invested capital. This exclusion impacts only the junior secured loans and total disclosed above. The weighted average contractual coupon yield including debt investments acquired for no cost in a restructuring on non-accrual status was 9.3% for junior secured loans and 7.9% in total as of September 30, 2021. The weighted average contractual coupon yield including debt investments acquired for no cost in a restructuring on non-accrual status was 4.1% for junior secured loans and 7.5% in total as of December 31, 2020.

(2)

The weighted average annualized effective yield on portfolio investments at period end is computed by dividing (a) interest income on our debt investments and preferred equity investments (with a stated coupon rate) at the period end effective rate for each investment by (b) the par value of our debt investments (excluding debt investments acquired for no cost in a restructuring on non-accrual status) and the cost basis of our preferred equity investments. We exclude loans acquired for no cost in a restructuring on non-accrual status within this metric as management believes this disclosure provides a better indication of return on invested capital. This exclusion impacts only the junior secured loans and total disclosed above. The weighted average effective yield including debt investments acquired for no cost in a restructuring on non-accrual status was 9.3% for junior secured loans and 7.9% in total as of September 30, 2021. The weighted average effective yield including debt investments acquired for no cost in a restructuring on non-accrual status was 4.1% for junior secured loans and 7.5% in total as of December 31, 2020. The weighted average annualized effective yield on portfolio investments is a metric on the investment portfolio alone and does not represent a return to stockholders. This metric is not inclusive of our fees and expenses, the impact of leverage on the portfolio or sales load that may be paid by stockholders.

The following table shows the composition of our investment portfolio (in thousands):

	September 30, 2021				December 31, 2020
Fair Value:
Senior secured loans	$	425,055	76.8	%	$	405,224	74.1	%
Unitranche secured loans		44,420	8.0			64,040	11.7
Junior secured loans		9,181	1.6			14,592	2.6
LLC equity interest in SLF		41,331	7.5			39,284	7.2
Equity securities		33,757	6.1			23,899	4.4
Total	$	553,744	100.0	%	$	547,039	100.0	%

Our portfolio composition remained relatively consistent with December 31, 2020. The increase in the effective yield on our portfolio included the benefit of returning certain investments to accrual status during the three months ended September 30, 2021.

The following table shows our portfolio composition by industry (in thousands):

	September 30, 2021				December 31, 2020
Fair Value:
Aerospace & Defense	$	7,840	1.4	%	$	—	—	%
Automotive		21,612	3.9			9,637	1.8
Banking, Finance, Insurance & Real Estate		88,401	16.0			72,627	13.3
Beverage, Food & Tobacco		20,123	3.6			20,676	3.8
Capital Equipment		9,867	1.8			13,750	2.5
Chemicals, Plastics & Rubber		10,354	1.9			27,754	5.1
Construction & Building		13,831	2.5			16,809	3.0
Consumer Goods: Durable		9,743	1.8			18,893	3.4
Consumer Goods: Non-Durable		9,661	1.7			13,027	2.4
Containers, Packaging & Glass		—	—			4,997	0.9
Environmental Industries		12,543	2.3			13,168	2.4
Healthcare & Pharmaceuticals		54,596	9.9			37,815	6.9
High Tech Industries		60,317	10.9			81,417	14.9
Hotels, Gaming & Leisure		2,629	0.5			1,771	0.3
Investment Funds & Vehicles		41,332	7.5			39,284	7.2
Media: Advertising, Printing & Publishing		19,603	3.5			31,553	5.8
Media: Broadcasting & Subscription		2,429	0.4			2,227	0.4
Media: Diversified & Production		17,985	3.2			6,811	1.2
Retail		22,259	4.0			18,443	3.4
Services: Business		73,411	13.3			78,584	14.4
Services: Consumer		35,034	6.3			25,306	4.6
Telecommunications		4,514	0.8			1,100	0.2
Wholesale		15,660	2.8			11,390	2.1
Total	$	553,744	100.0	%	$	547,039	100.0	%

Portfolio Asset Quality

MC Advisors’ portfolio management staff closely monitors all credits, with senior portfolio managers covering agented and more complex investments. MC Advisors segregates our capital markets investments by industry. The MC Advisors’ monitoring process and projections developed by Monroe Capital both have daily, weekly, monthly and quarterly components and related reports, each to evaluate performance against historical, budget and underwriting expectations. MC Advisors’ analysts will monitor performance using standard industry software tools to provide consistent disclosure of performance. When necessary, MC Advisors will update our internal risk ratings, borrowing base criteria and covenant compliance reports.

As part of the monitoring process, MC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal proprietary system that uses the categories listed below, which we refer to as MC Advisors’ investment performance rating. For any investment rated in grades 3, 4 or 5, MC Advisors, through its internal Portfolio Management Group (“PMG”), will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions. The PMG is responsible for oversight and management of any investments rated in grades 3, 4, or 5. MC Advisors monitors and, when appropriate, changes the investment ratings assigned to each investment in our portfolio. In connection with our valuation process, MC Advisors reviews these investment ratings on a quarterly basis. The investment performance rating system is described as follows:

Investment Performance Risk Rating		Summary Description
Grade 1		Includes investments exhibiting the least amount of risk in our portfolio. The issuer is performing above expectations or the issuer’s operating trends and risk factors are generally positive.

Grade 2		Includes investments exhibiting an acceptable level of risk that is similar to the risk at the time of origination. The issuer is generally performing as expected or the risk factors are neutral to positive.

Grade 3		Includes investments performing below expectations and indicates that the investment’s risk has increased somewhat since origination. The issuer may be out of compliance with debt covenants; however, scheduled loan payments are generally not past due.

Grade 4		Includes an issuer performing materially below expectations and indicates that the issuer’s risk has increased materially since origination. In addition to the issuer being generally out of compliance with debt covenants, scheduled loan payments may be past due (but generally not more than six months past due).

Grade 5		Indicates that the issuer is performing substantially below expectations and the investment risk has substantially increased since origination. Most or all of the debt covenants are out of compliance or payments are substantially delinquent. Investments graded 5 are not anticipated to be repaid in full.

Our investment performance risk ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or reflect or represent any third-party assessment of any of our investments.

In the event of a delinquency or a decision to rate an investment grade 4 or grade 5, the PMG, in consultation with the investment committee, will develop an action plan. Such a plan may require a meeting with the borrower’s management or the lender group to discuss reasons for the default and the steps management is undertaking to address the under-performance, as well as amendments and waivers that may be required. In the event of a dramatic deterioration of a credit, MC Advisors and the PMG will form a team or engage outside advisors to analyze, evaluate and take further steps to preserve our value in the credit. In this regard, we would expect to explore all options, including in a private equity sponsored investment, assuming certain responsibilities for the private equity sponsor or a formal sale of the business with oversight of the sale process by us. The PMG and the investment committee have extensive experience in running debt work-out transactions and bankruptcies.

The following table shows the distribution of our investments on the 1 to 5 investment performance risk rating scale as of September 30, 2021 (in thousands):

Investment Performance Risk Rating	Investments at Fair Value		Percentage of Total Investments
1	$	1,592		0.3	%
2		439,086		79.3
3		85,508		15.4
4		21,738		3.9
5		5,820		1.1
Total	$	553,744		100.0	%

The following table shows the distribution of our investments on the 1 to 5 investment performance risk rating scale as of December 31, 2020 (in thousands):

Investment Performance Risk Rating	Investments at Fair Value		Percentage of Total Investments
1	$	1,592		0.3	%
2		428,554		78.4
3		92,001		16.8
4		19,844		3.6
5		5,048		0.9
Total	$	547,039		100.0	%

As of September 30, 2021, we had eight borrowers with loans or preferred equity securities on non-accrual status (BLST Operating Company, LLC (“BLST”), Curion Holdings, LLC (“Curion”), Education Corporation of America (“ECA”), NECB Collections, LLC (“NECB”), Parterre Flooring & Surface Systems, LLC (“Parterre”), SHI Holdings, Inc. (“SHI”), Toojay’s Management, LLC (“Toojay’s OldCo”) and Vinci Brands LLC), and these investments totaled $17.0 million in fair value, or 3.1% of our total investments at fair value. As of December 31, 2020, we had 12 borrowers with loans or preferred equity securities on non-accrual status (BLST, California Pizza Kitchen, Inc., Curion, ECA, Incipio, LLC (“Incipio”) last out term loan and third lien tranches, Luxury Optical Holdings Co., NECB, Parterre, SHI, The Worth Collection, Ltd. (“Worth”), Toojay’s OldCo and Valudor Products, LLC preferred equity), and these investments totaled $22.3 million in fair value, or 4.1% of our total investments at fair value. The Curion promissory notes and the Incipio third lien tranches were obtained in restructurings for no cost. Loans or preferred equity securities are placed on non-accrual status when principal, interest or dividend payments become materially past due, or when there is reasonable doubt that principal, interest or dividends will be collected. Non-accrual loans are restored to accrual status when past due principal, interest, or dividends are paid, or are expected to be paid, and, in management’s judgment are likely to remain current.

Results of Operations

Operating results were as follows (in thousands):

	Three months ended September 30,
	2021			2020
Total investment income	$	15,214		$	13,385
Total expenses, net of incentive fee waivers		8,831			7,616
Net investment income before income taxes		6,383			5,769
Income taxes, including excise taxes		71			125
Net investment income		6,312			5,644
Net realized gain (loss) on investments		(9,435	)		(10	)
Net realized gain (loss) on extinguishment of debt		(336	)		—
Net realized gain (loss) on foreign currency forward contracts		20			(15	)
Net realized gain (loss) on foreign currency and other transactions		(880	)		3
Net realized gain (loss)		(10,631	)		(22	)
Net change in unrealized gain (loss) on investments		10,092			10,473
Net change in unrealized gain (loss) on foreign currency forward contracts		530			(55	)
Net change in unrealized gain (loss) on foreign currency and other transactions		936			(855	)
Net change in unrealized gain (loss)		11,558			9,563
Net increase (decrease) in net assets resulting from operations	$	7,239		$	15,185

	Nine months ended September 30,
	2021			2020⁽¹⁾
Total investment income	$	40,791		$	49,029
Total expenses, net of incentive fee waivers		23,742			23,695
Net investment income before income taxes		17,049			25,334
Income taxes, including excise taxes		254			272
Net investment income		16,795			25,062
Net realized gain (loss) on investments		(8,718	)		2,545
Net realized gain (loss) on extinguishment of debt		(3,110	)		—
Net realized gain (loss) on foreign currency forward contracts		(55	)		3
Net realized gain (loss) on foreign currency and other transactions		(894	)		(13	)
Net realized gain (loss)		(12,777	)		2,535
Net change in unrealized gain (loss) on investments		19,980			(35,568	)
Net change in unrealized gain (loss) on foreign currency forward contracts		976			19
Net change in unrealized gain (loss) on foreign currency and other transactions		650			521
Net change in unrealized gain (loss)		21,606			(35,028	)
Net increase (decrease) in net assets resulting from operations	$	25,624		$	(7,431	)

_____________________________

(1)

In May 2020, an arbitrator issued a final award in favor of the estate of Rockdale Blackhawk, LLC (the “Estate”) in the legal proceeding between the Estate and a national insurance carrier. Our share of the net proceeds from the award exceeded the contractual obligations due to us as a result of our right to receive excess proceeds pursuant to the terms of a sharing agreement between the lenders and the Estate. In June 2020, we received $33.1 million as an initial payment of proceeds from the legal proceedings from the Estate, of which $19.5 million was recorded as a reduction in the cost basis of our investment in Rockdale Blackhawk, LLC (“Rockdale”), $3.9 million was recorded as the collection of previously accrued interest, $7.4 million was recorded as investment income for previously unaccrued interest and fees and $2.3 million was recorded as realized gains. Additionally, as an offset, we recorded net change in unrealized (loss) of ($8.2) million primarily as a result of the reversal associated with the collection of proceeds from the Estate. Total net income associated with our investment in Rockdale was $1.9 million during the nine months ended September 30, 2020. As of September 30, 2021, we have a remaining investment in Rockdale associated with residual proceeds currently expected from the Estate of $1.6 million.

Investment Income

The composition of our investment income was as follows (in thousands):

	Three months ended September 30,
	2021		2020
Interest income	$	9,444	$	10,179
PIK interest income		2,913		1,563
Dividend income ⁽¹⁾		1,957		1,145
Fee income		288		26
Prepayment gain (loss)		372		192
Accretion of discounts and amortization of premium		240		280
Total investment income	$	15,214	$	13,385

	Nine months ended September 30,
	2021		2020
Interest income	$	26,905	$	35,689
PIK interest income		6,326		5,103
Dividend income ⁽²⁾		4,368		3,185
Fee income		1,065		3,047
Prepayment gain (loss)		1,270		1,045
Accretion of discounts and amortization of premium		857		960
Total investment income	$	40,791	$	49,029

_____________________________

(1)	Includes PIK dividends of $921 and $45, respectively.
(2)	Includes PIK dividends of $1,055 and $35, respectively.

The increase in investment income of $1.8 million during the three months ended September 30, 2021, as compared to three months ended September 30, 2020, is primarily the result of the inclusion of $1.7 million in additional interest and dividend income as certain investments were returned to accrual status during the three months ended September 30, 2021 due to improvements in underlying credit performance.

The decrease in investment income of $8.2 million during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020, is primarily the result of the inclusion of $7.4 million of previously unrecorded interest and fee income associated with our investment in Rockdale during the nine months ended September 30, 2020.

Operating Expenses

The composition of our operating expenses was as follows (in thousands):

	Three months ended September 30,
	2021		2020
Interest and other debt financing expenses	$	3,924	$	4,358
Base management fees		2,399		2,414
Incentive fees, net of incentive fee waivers⁽¹⁾		1,578		—
Professional fees		264		201
Administrative service fees		327		321
General and administrative expenses		304		284
Directors’ fees		35		38
Total expenses, net of incentive fee waivers	$	8,831	$	7,616

	Nine months ended September 30,
	2021		2020
Interest and other debt financing expenses	$	12,219	$	13,743
Base management fees		7,060		7,399
Incentive fees, net of incentive fee waivers⁽¹⁾		1,771		—
Professional fees		730		738
Administrative service fees		1,020		973
General and administrative expenses		833		729
Directors’ fees		109		113
Total expenses, net of incentive fee waivers	$	23,742	$	23,695

_____________________________

(1)

During the three and nine months ended September 30, 2021, MC Advisors waived part one incentive fees (based on net investment income) of zero and $1,057, respectively, and incentive fees were not subject to the Incentive Fee Limitation. During the three and nine months ended September 30, 2020, no incentive fees were waived as incentive fees were fully limited by $1,129 and $5,012, respectively, due to the Incentive Fee Limitation. See Note 6 in our attached consolidated financial statements for additional information on the Incentive Fee Limitation.

The composition of our interest and other debt financing expenses, average outstanding balances and average stated interest rates (i.e. the rate in effect plus spread) were as follows (in thousands):

	Three months ended September 30,
	2021			2020
Interest expense - revolving credit facility	$	1,209		$	1,218
Interest expense - 2023 Notes		—			1,567
Interest expense - 2026 Notes		1,544			—
Interest expense - SBA debentures		632			991
Amortization of deferred financing costs		539			582
Total interest and other debt financing expenses	$	3,924		$	4,358
Average debt outstanding	$	329,542		$	350,992
Average stated interest rate		4.0	%		4.3	%

	Nine months ended September 30,
	2021			2020
Interest expense - revolving credit facility	$	3,265		$	4,504
Interest expense - 2023 Notes		837			4,701
Interest expense - 2026 Notes		4,220			—
Interest expense - SBA debentures		2,220			2,952
Amortization of deferred financing costs		1,677			1,586
Total interest and other debt financing expenses	$	12,219		$	13,743
Average debt outstanding	$	332,028		$	384,452
Average stated interest rate		4.2	%		4.2	%

The increase in expenses of $1.2 million during the three months ended September 30, 2021, as compared to the three months ended September 30, 2020, is primarily the result of an increase in incentive fees partially offset by a decrease in interest expense due to lower average debt outstanding (including our repayment of $58.1 million in SBA debentures during the nine months ended September 30, 2021). Additionally, the refinance of our 5.75% 2023 Notes with the 4.75% 2026 Notes during the three months ended March 31, 2021 contributed to the decline in interest expense.

Total expenses remained relatively flat during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020. Increases in incentive fees were offset by decreases in base management fees and interest expense, resulting primarily from lower average debt outstanding.

Income Taxes, Including Excise Taxes

We have elected to be treated as a RIC under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment available to RICs. To maintain qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements and distribute to stockholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses.

Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions from such current year taxable income into the next year and pay a 4% excise tax on such income, as required. To the extent that we determine that our estimated current year annual taxable income may exceed estimated current year dividend distributions, we accrue excise tax, if any, on estimated excess taxable income as such taxable income is earned. For the three and nine months ended September 30, 2021, we recorded a net expense on the consolidated statements of operations of $0.1 million and $0.3 million for U.S. federal excise tax, respectively. For the three and nine months ended September 30, 2020, we recorded a net expense on the consolidated statements of operations of $0.1 million and $0.3 million, respectively, for U.S. federal excise tax.

Certain of our consolidated subsidiaries are subject to U.S. federal and state corporate-level income taxes. For both the three and nine months ended September 30, 2021, we recorded a net tax expense of $3 thousand on the consolidated statements of operations for these subsidiaries. For the three and nine months ended September 30, 2020, we recorded a net tax expense of zero and $2 thousand, respectively, on the consolidated statements of operations for these subsidiaries.

Net Realized Gain (Loss)

During the three months ended September 30, 2021 and 2020, we had sales or dispositions of investments resulting in ($9.4) million and ($10) thousand of net realized gain (loss) on investments, respectively. During the nine months ended September 30, 2021 and 2020, we had sales or dispositions of investments resulting in ($8.7) million and $2.5 million of net realized gain (loss) on investments, respectively. During the three and nine months ended September 30, 2021, $10.3 million of the realized losses were attributable to the realization of the previously recorded unrealized loss on our investment in Worth. During the three and nine months ended September 30, 2020, $2.3 million of the net realized gains were attributable to our investment in Rockdale.

During the three and nine months ended September 30, 2021, we recognized net losses on extinguishment of debt of $0.3 million and $3.1 million, respectively, which were due to our $109.0 million repayment of the 2023 Notes on February 18, 2021 and repayment of the $28.1 million of SBA debentures on March 1, 2021 and $30.0 million of SBA debentures on September 1, 2021.

We may enter into foreign currency forward contracts to reduce our exposure to foreign currency exchange rate fluctuations. During the three months ended September 30, 2021 and 2020, we had $20 thousand and ($15) thousand of net realized gain (loss) on foreign currency forward contracts, respectively. During the nine months ended September 30, 2021 and 2020, we had ($0.1) million and $3 thousand of net realized gain (loss) on foreign currency forward contracts, respectively. During the three months ended September 30, 2021 and 2020, we had ($0.9) million and $3 thousand of net realized gain (loss) on foreign currency and other transactions, respectively. During the nine months ended September 30, 2021 and 2020, we had ($0.9) million and ($13) thousand of net realized gain (loss) on foreign currency and other transactions, respectively.

Net Change in Unrealized Gain (Loss)

For the three months ended September 30, 2021 and 2020, our investments had $10.1 million and $10.5 million of net change in unrealized gain (loss), respectively. The net change in unrealized gain (loss) includes both unrealized gain on investments in our portfolio with mark-to-market gains during the periods and unrealized loss on investments in our portfolio with mark-to-market losses during the periods.

During the three months ended September 30, 2021, portfolio valuations remained relatively stable and the net change in unrealized gain (loss) was primarily comprised of the reversal of previously recognized unrealized losses on our investment in Worth as the loss on this investment was realized this period. The fair value of our portfolio investments may be further negatively impacted after September 30, 2021 by circumstances and events that are not yet known. We estimate that during the three months ended September 30, 2020, we recorded net unrealized gains of $6.3 million attributable to broad market movements and tightening of credit spreads, of which $2.0 million was attributable to our investment in the SLF, and $4.2 million in unrealized gains attributable to specific credit or fundamental performance of certain underlying portfolio companies.

For the nine months ended September 30, 2021 and 2020, our investments had $20.0 million and ($35.6) million of net change in unrealized gain (loss), respectively. Excluding the $10.3 million reversal of previously recognized unrealized losses on our investment in Worth as the loss on this investment was realized this period, we estimate approximately $6.7 million of the net unrealized gain on investments during the nine months ended September 30, 2021 was attributable to broad market movements and tightening of credit spreads in the loan markets. Approximately $4.7 million of these net unrealized gains were attributable to investments held in the portfolio directly, while approximately $2.0 million of these gains were attributable to our investment in SLF. Additionally, $3.0 million in net unrealized gain on investments was attributable to portfolio companies that have underlying credit or fundamental performance concerns resulting in a risk rating of Grade 3, 4 or 5 on our investment performance risk rating scale.

We estimate that during the nine months ended September 30, 2020, we recorded net unrealized losses of ($9.7) million attributable to broad market movements and widening of credit spreads, of which ($4.9) million was attributable to our investment in the SLF. The SLF’s underlying investments are loans to middle-market borrowers that are generally larger than the rest of our portfolio, which is focused on lower middle-market companies. These upper middle-market loans held within the SLF experienced higher volatility in valuation than the rest of the portfolio. Additionally, we estimate approximately ($17.7) million of the net unrealized losses were attributable to specific credit or fundamental performance of the underlying portfolio companies, a significant portion of which is as a result of the impact of the COVID-19 pandemic on individual credit performance. We also recorded ($8.2) million of net change in unrealized (loss) as a result of the reversal of previously recorded unrealized gains associated with the collection of proceeds from Rockdale.

For the three months ended September 30, 2021 and 2020, our foreign currency forward contracts had $0.5 million and ($0.1) million of net change in unrealized gain (loss), respectively. For the three months ended September 30, 2021 and 2020, our foreign currency borrowings and cash denominated in foreign currencies had $0.9 million and ($0.9) million of net change in unrealized gain (loss), respectively. For the nine months ended September 30, 2021 and 2020, our foreign currency forward contracts had $1.0 million and $19 thousand of net change in unrealized gain (loss), respectively. For the nine months ended September 30, 2021 and 2020, our foreign currency borrowings and cash denominated in foreign currencies had $0.7 million and $0.5 million of net change in unrealized gain (loss), respectively.

Net Increase (Decrease) in Net Assets Resulting from Operations

For the three months ended September 30, 2021 and 2020, the net increase (decrease) in net assets resulting from operations was $7.2 million and $15.2 million, respectively. Based on the weighted average shares of common stock outstanding for the three months ended September 30, 2021 and 2020, our per share net increase (decrease) in net assets resulting from operations was $0.34 and $0.71, respectively.

For the nine months ended September 30, 2021 and 2020, the net increase (decrease) in net assets resulting from operations was $25.6 million and ($7.4) million, respectively. Based on the weighted average shares of common stock outstanding for the nine months ended September 30, 2021 and 2020, our per share net increase (decrease) in net assets resulting from operations was $1.20 and ($0.36), respectively. The $33.0 million increase during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020, is primarily the result of net unrealized mark-to-market gains on investments in the portfolio during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020, where investments in the portfolio experienced significant net unrealized mark to mark-to-market losses, primarily as a result of market volatility and deterioration of fundamental performance on certain portfolio companies related to the COVID-19 pandemic.

Liquidity and Capital Resources

As of September 30, 2021, we had $7.0 million in cash, $8.0 million in cash at MRCC SBIC, $144.4 million of total debt outstanding on our revolving credit facility, $130.0 million in 2026 Notes and $56.9 million in outstanding SBA debentures. We had $110.6 million available for additional borrowings on our revolving credit facility, subject to borrowing base availability. See “Borrowings” below for additional information.

In accordance with the 1940 Act, we are permitted to borrow amounts such that our asset coverage ratio, as defined in the 1940 Act, is at least 150% after such borrowing. As of September 30, 2021 and December 31, 2020, our asset coverage ratio based on aggregate borrowings outstanding was 190% and 200%, respectively.

Cash Flows

For the nine months ended September 30, 2021 and 2020, we experienced a net increase (decrease) in cash and restricted cash of ($16.4) million and ($6.1) million, respectively. For the nine months ended September 30, 2021 and 2020, operating activities provided $19.6 million and $86.6 million, respectively, primarily as a result of principal repayments on and sales of portfolio investments, partially offset by purchases of portfolio investments. During the nine months ended September 30, 2021, we used $36.0 million in financing activities, primarily as a result of repayments on our 2023 Notes and SBA debentures and distributions to stockholders, partially offset by net proceeds from our 2026 Notes (net of deferred financing cost payments) and net borrowings on our revolving credit facility. During the nine months ended September 30, 2020, we used $92.7 million in financing activities, primarily as a result of net repayments on our revolving credit facility and distributions to stockholders, partially offset by proceeds from shares issued under the at-the-market (“ATM”) securities offering program.

Capital Resources

As a BDC, we distribute substantially all of our net income to our stockholders and have an ongoing need to raise additional capital for investment purposes. We intend to generate additional cash primarily from future offerings of securities, future borrowings and cash flows from operations, including income earned from investments in our portfolio companies. On both a short-term and long-term basis, our primary use of funds will be to invest in portfolio companies and make cash distributions to our stockholders. We may also use available funds to repay outstanding borrowings.

As a BDC, we are generally not permitted to issue and sell our common stock at a price below net asset value (“NAV”) per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current NAV per share of our common stock if our board of directors (“Board”), including our independent directors, determines that such sale is in the best interests of us and our stockholders, and if our stockholders have approved such sales. On June 16, 2021, our stockholders voted to allow us to sell or otherwise issue common stock at a price below NAV per share for a period of one year, subject to certain limitations. As of September 30, 2021 and December 31, 2020, we had 21,543,540 and 21,303,540 shares outstanding, respectively.

On June 24, 2015, our stockholders approved a proposal to authorize us to issue warrants, options or rights to subscribe to, convert to, or purchase our common stock in one or more offerings. This is a standing authorization and does not require annual re-approval by our stockholders.

Stock Issuances: On May 12, 2017, we entered into at-the-market (“ATM”) equity distribution agreements with each of JMP Securities LLC (“JMP”) and FBR Capital Markets & Co. (“FBR”) (the “ATM Program”) through which we can sell, by means of ATM offerings, from time to time, up to $50.0 million of our common stock. On May 8, 2020, we entered into an amendment to the ATM Program to extend its term. All other material terms of the ATM Program remain unchanged. During the nine months ended September 30, 2021, we sold 240,000 shares at an average price of $11.43 per share for gross proceeds of $2.7 million under the ATM program. Aggregate underwriter’s discounts and commissions were $41 thousand and offering costs were $12 thousand, resulting in net proceeds of approximately $2.7 million. During the nine months ended September 30, 2020, we sold 858,976 shares at an average price of $7.78 per share for gross proceeds of $6.7 million under the ATM program. Aggregate underwriter’s discounts and commissions were $0.1 million and offering costs were $0.1 million, resulting in net proceeds of approximately $6.5 million.

Borrowings

Revolving Credit Facility: We have a $255.0 million revolving credit facility with ING Capital LLC, as agent. The revolving credit facility has an accordion feature which permits us, under certain circumstances to increase the size of the facility up to $400.0 million (subject to maintaining 150% asset coverage, as defined by the 1940 Act). The revolving credit facility is secured by a lien on all of our assets, including cash on hand, but excluding the assets of our wholly-owned subsidiary, MRCC SBIC. We may make draws under the revolving credit facility to make or purchase additional investments through March 1, 2023 and for general working capital purposes until March 1, 2024, the maturity date of the revolving credit facility.

Our ability to borrow under the revolving credit facility is subject to availability under the borrowing base, which permits us to borrow up to 72.5% of the fair market value of our portfolio company investments depending on the type of investment we hold and whether the investment is quoted. Our ability to borrow is also subject to certain concentration limits, and continued compliance with the representations, warranties and covenants given by us under the facility. The revolving credit facility contains certain financial and restrictive covenants, including, but not limited to, our maintenance of: (1) minimum consolidated total net assets at least equal to $150.0 million plus 65% of the net proceeds to us from sales of our equity securities after March 1, 2019; (2) a ratio of total assets (less total liabilities other than indebtedness) to total indebtedness of not less than 1.5 to 1; and (3) a senior debt coverage ratio of at least 2 to 1. The revolving credit facility also requires us to undertake customary indemnification obligations with respect to ING Capital LLC and other members of the lending group and to reimburse the lenders for expenses associated with entering into the credit facility. The revolving credit facility also has customary provisions regarding events of default, including events of default for nonpayment, change in control transactions at both Monroe Capital Corporation and MC Advisors, failure to comply with financial and negative covenants, and failure to maintain our relationship with MC Advisors. If we incur an event of default under the revolving credit facility and fail to remedy such default under any applicable grace period, if any, then the entire revolving credit facility could become immediately due and payable, which would materially and adversely affect our liquidity, financial condition, results of operations and cash flows.

Our revolving credit facility also imposes certain conditions that may limit the amount of our distributions to stockholders. Distributions payable in our common stock under the DRIP are not limited by the revolving credit facility. Distributions in cash or property other than common stock are generally limited to 115% of the amount of distributions required to maintain our status as a RIC.

As of September 30, 2021, we had U.S. dollar borrowings of $139.8 million and non-U.S. dollar borrowings denominated in Great Britain pounds of £3.4 million ($4.6 million in U.S. dollars) under the revolving credit facility. As of December 31, 2020, we had U.S. dollar borrowings of $104.6 million and non-U.S. dollar borrowings denominated in Great Britain pounds of £16.1 million ($22.0 million in U.S. dollars) under the revolving credit facility. The borrowings denominated in Great Britain pounds may be positively or negatively affected by movements in the rate of exchange between the U.S. dollar and the Great Britain pound. These movements are beyond our control and cannot be predicted. The borrowings denominated in Great Britain pounds are translated into U.S. dollars based on the spot rate at each balance sheet date. The impact resulting from changes in foreign currency borrowings is included in net change in unrealized gain (loss) on foreign currency and other transactions on our consolidated statements of operations and totaled $1.0 million and $0.7 million for the three and nine months ended September 30, 2021, and ($0.8) million and $0.5 million for the three and nine months ended September 30, 2020 respectively. During both the three and nine months ended September 30, 2021, we repaid borrowings denominated in Great Britain pounds of £12.7 million. As a result of this repayment, we recognized a realized gain (loss) on foreign currency and other transactions on our consolidated statements of operations of ($0.9) million for both the three and nine months ended September 30, 2021. There were no repayments of foreign currency borrowings for the three and nine months ended September 30, 2020.

Borrowings under the revolving credit facility bear interest, at our election, at an annual rate of LIBOR (one-month, three-month or six-month at our discretion based on the term of the borrowing) plus 2.625% or at a daily rate equal to 1.625% per annum plus the greater of the prime interest rate, the federal funds rate plus 0.5% or LIBOR plus 1.0%, with a LIBOR floor of 0.5%. In addition to the stated interest rate on borrowings under the revolving credit facility, we are required to pay a commitment fee and certain conditional fees based on usage of the expanded borrowing base and usage of the asset coverage ratio flexibility. A commitment fee of 0.5% per annum on any unused portion of the revolving credit facility if the unused portion of the facility is less than 35% of the then available maximum borrowing or a commitment fee of 1.0% per annum on any unused portion of the revolving credit facility if the unused portion of the facility is greater than or equal to 35% of the then available maximum borrowing. As of September 30, 2021 and December 31, 2020, the outstanding borrowings were accruing at a weighted average interest rate of 3.3% and 3.2%, respectively.

2023 Notes: On February 18, 2021, we redeemed $109.0 million in aggregate principal amount of the 2023 Notes. The redemption was accounted for as a debt extinguishment in accordance with ASC Subtopic 470-50, Debt – Modifications and Extinguishment (“ASC 470-50”), which resulted in a realized loss of $2.3 million (primarily comprised of the unamortized deferred financing costs at the time of the redemption) and was recorded in net gain (loss) on extinguishment of debt on our consolidated statements of operations. The 2023 Notes were delisted from the Nasdaq Global Select Market, in conjunction with the redemption.

2026 Notes: On January 25, 2021, we closed a private offering of $130.0 million in aggregate principal amount of senior unsecured notes (the “2026 Notes”). Aggregate underwriting commissions were $3.3 million and other issuance costs were $0.7 million, resulting in proceeds of approximately $126.0 million. The 2026 Notes mature on February 15, 2026 and may be redeemed in whole or in part at any time or from time to time at our option at par plus a “make-whole” premium, if applicable. The 2026 Notes bear interest at an annual rate of 4.75% payable semi-annually on February 15 and August 15 of each year, commencing on August 15, 2021. The 2026 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future unsecured indebtedness.

SBA Debentures: On February 28, 2014, our wholly-owned subsidiary, MRCC SBIC, received a license from the SBA to operate as a SBIC under Section 301(c) of the Small Business Investment Act of 1958, as amended. MRCC SBIC commenced operations on September 16, 2013.

The SBIC license allows MRCC SBIC to obtain leverage by issuing SBA debentures, subject to the issuance of a leverage commitment by the SBA and other customary procedures. SBA debentures are non-recourse, interest only debentures with interest payable semi-annually and have a ten-year maturity. The principal amount of SBA debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA debentures is fixed on a semi-annual basis (pooling date) at a market-driven spread over U.S. Treasury Notes with 10-year maturities. The SBA, as a creditor, has a superior claim to MRCC SBIC’s assets over our stockholders in the event we liquidate MRCC SBIC, or the SBA exercises its remedies upon an event of default.

On March 1, 2021, we repaid $28.1 million in aggregate principal amount of the SBA debentures. The repayment was accounted for as a debt extinguishment in accordance with ASC 470-50 which resulted in a realized loss of $0.5 million (primarily comprised of the unamortized deferred financing costs at the time of the repayment) recorded in net gain (loss) on extinguishment of debt on our consolidated statements of operations. On September 1, 2021, we repaid an additional $30.0 million in aggregate principal amount of the SBA debentures. The repayment was accounted for as a debt extinguishment in accordance with ASC 470-50 which resulted in a realized loss of $0.3 million (primarily comprised of the unamortized deferred financing costs at the time of the repayment) recorded in net gain (loss) on extinguishment of debt on our consolidated statements of operations. As of September 30, 2021, MRCC SBIC had $8.0 million in cash and $93.3 million in investments at fair value. As of December 31, 2020, MRCC SBIC had $25.7 million in cash and $131.2 million in investments at fair value.

As of September 30, 2021 and December 31, 2020, MRCC SBIC had $57.6 million in leverageable capital and the following SBA-guaranteed debentures outstanding:

Maturity Date	Interest Rate			September 30, 2021		December 31, 2020
September 2024		3.4	%	$	2,920	$	12,920
March 2025		3.3	%		14,800		14,800
March 2025		2.9	%		7,080		7,080
September 2025		3.6	%		—		5,200
March 2027		3.5	%		—		20,000
September 2027		3.2	%		32,100		32,100
March 2028		3.9	%		—		18,520
September 2028		4.2	%		—		4,380
Total				$	56,900	$	115,000

We were granted exemptive relief from the SEC for permission to exclude the debt of MRCC SBIC guaranteed by the SBA from the asset coverage test under the 1940 Act. The receipt of this exemption for this SBA debt increases flexibility under the asset coverage test.

Distributions

Our Board will determine the timing and amount, if any, of our distributions. We intend to pay distributions on a quarterly basis. In order to avoid corporate-level tax on the income we distribute as a RIC, we must distribute to our stockholders at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, on an annual basis out of the assets legally available for such distributions. In addition, we also intend to distribute any realized net capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) at least annually out of the assets legally available for such distributions. Distributions to stockholders for the three and nine months ended September 30, 2021, totaled $5.4 million ($0.25 per share) and $16.1 million ($0.75 per share), respectively. Distributions to stockholders for the three and nine months ended September 30, 2020, totaled $5.3 million ($0.25 per share) and $17.7 million ($0.85 per share), respectively. The tax character of such distributions is determined at the end of the fiscal year. However, if the character of such distributions were determined as of September 30, 2021 and 2020, no portion of these distributions would have been characterized as a tax return of capital to stockholders.

In October 2012, we adopted an “opt out” dividend reinvestment plan (“DRIP”) for our common stockholders. When we declare a distribution, our stockholders’ cash distributions will automatically be reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our DRIP. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders participating in our DRIP will not receive any corresponding cash distributions with which to pay any such applicable taxes.

MRCC Senior Loan Fund I, LLC

We co-invest with LSW in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as underlying investment transactions are completed, taking into account available debt and equity commitments available for funding these investments. All portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee, consisting of one representative of each of us and LSW. SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business. Investments held by SLF are measured at fair value using the same valuation methodologies as described below. Our investment is illiquid in nature as SLF does not allow for withdrawal from the LLC or the sale of a member’s interest unless approved by the board members of SLF. The full withdrawal of a member would result in an orderly wind-down of SLF.

SLF’s profits and losses are allocated to us and LSW in accordance with the respective ownership interests. As of both September 30, 2021 and December 31, 2020, we and LSW each owned 50.0% of the LLC equity interests of SLF. As of both September 30, 2021 and December 31, 2020, SLF had $100.0 million in equity commitments from its members (in the aggregate), of which $84.3 million was funded.

As of both September 30, 2021 and December 31, 2020, we have committed to fund $50.0 million of LLC equity interest subscriptions to SLF. As of both September 30, 2021 and December 31, 2020, $42.2 million of our LLC equity interest subscriptions to SLF had been called and contributed, net of return of capital distributions subject to recall.

For the three and nine months ended September 30, 2021, we received $1.0 million and $3.3 million of dividend income from our LLC equity interest in SLF, respectively. For the three and nine months ended September 30, 2020, we received $1.1 million and $3.2 million of dividend income from our LLC equity interest in SLF, respectively.

SLF has a senior secured revolving credit facility (as amended, the “SLF Credit Facility”) with Capital One, N.A., through its wholly-owned subsidiary MRCC Senior Loan Fund I Financing SPV, LLC (“SLF SPV”), which as of September 30, 2021, allowed SLF SPV to borrow up to $170.0 million at any one time, subject to leverage and borrowing base restrictions. Borrowings under the SLF Credit Facility bear interest at an annual rate of LIBOR (three-month) plus 2.25%. The maturity date on the SLF Credit Facility is March 22, 2023.

SLF does not pay any fees to MC Advisors or its affiliates; however, SLF has entered into an administration agreement with Monroe Capital Management Advisors, LLC (“MC Management”), pursuant to which certain loan servicing and administrative functions are delegated to MC Management. SLF may reimburse MC Management for its allocable share of overhead and other expenses incurred by MC Management. For the three and nine months ended September 30, 2021, SLF incurred $0.1 million and $0.2 million of allocable expenses, respectively. For the three and nine months ended September 30, 2020, SLF incurred $0.1 million and $0.2 million, respectively, of allocable expenses. There are no agreements or understandings by which we guarantee any SLF obligations.

As of September 30, 2021 and December 31, 2020, SLF had total assets at fair value of $196.6 million and $209.7 million, respectively. As of September 30, 2021 and December 31, 2020, SLF had one portfolio company investment on non-accrual status with a fair value of $1.1 million and $1.0 million, respectively. The portfolio companies in SLF are in industries and geographies similar to those in which we may invest directly. Additionally, as of September 30, 2021 and December 31, 2020, SLF had $0.4 million and $0.8 million, respectively, in outstanding commitments to fund investments under undrawn revolvers and delayed draw commitments.

Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of September 30, 2021 and December 31, 2020:

	As of
	September 30, 2021			December 31, 2020
Senior secured loans ⁽¹⁾		196,230			214,389
Weighted average current interest rate on senior secured loans ⁽²⁾		5.8	%		5.8	%
Number of borrowers in SLF		54			57
Largest portfolio company investment ⁽¹⁾		6,737			6,790
Total of five largest portfolio company investments ⁽¹⁾		28,118			27,064

(1)	Represents outstanding principal amount, excluding unfunded commitments. Principal amounts in thousands.
(2)	Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at outstanding principal amount.

MRCC SENIOR LOAN FUND I, LLC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(unaudited)

September 30, 2021

(in thousands)

Portfolio Company ^(a)	Spread Above Index ^(b)		Interest Rate ^(b)			Maturity		Principal		Fair Value
Non-Controlled/Non-Affiliate Company Investments
Senior Secured Loans
Aerospace & Defense
Bromford Industries Limited ^(c)		L+5.25%		6.25	%		11/5/2025		2,751	$	2,695
Bromford Industries Limited ^(c)		L+5.25%		6.25	%		11/5/2025		1,834		1,796
Trident Maritime SH, Inc.		L+5.50%		6.50	%		2/26/2027		2,473		2,483
Trident Maritime SH, Inc. (Revolver) ^(d)		L+5.50%		6.50	%		2/26/2027		265		37
									7,323		7,011
Automotive
Truck-Lite Co., LLC		L+6.25%		7.25	%		12/14/2026		1,713		1,723
Truck-Lite Co., LLC		L+6.25%		7.25	%		12/14/2026		254		255
Wheel Pros, Inc.		L+4.50%		5.25	%		5/11/2028		1,957		1,957
									3,924		3,935
Banking, Finance, Insurance & Real Estate
Avison Young (USA) Inc. ^(c)		L+6.00%		6.13	%		1/30/2026		4,862		4,814
Harbour Benefit Holdings, Inc.		L+5.25%		6.25	%		12/13/2024		4,617		4,557
Harbour Benefit Holdings, Inc.		L+5.25%		6.25	%		12/13/2024		103		101
Lightbox Intermediate, L.P.		L+5.00%		5.13	%		5/11/2026		4,888		4,863
Minotaur Acquisition, Inc.^(g)		L+4.75%		4.83	%		3/27/2026		5,925		5,903
									20,395		20,238
Beverage, Food & Tobacco
CBC Restaurant Corp. ^(f)		n/a		5.00% PIK	^(e)		12/30/2022		1,116		1,054
SW Ingredients Holdings, LLC		L+4.75%		5.75	%		7/3/2025		3,628		3,628
									4,744		4,682
Capital Equipment
Analogic Corporation		L+5.25%		6.25	%		6/24/2024		4,764		4,582
									4,764		4,582
Chemicals, Plastics & Rubber
Polymer Solutions Group		L+7.00%		8.00	%		1/3/2023		1,187		1,172
									1,187		1,172
Construction & Building
The Cook & Boardman Group LLC		L+5.75%		6.75	%		10/20/2025		2,918		2,891
									2,918		2,891
Consumer Goods: Durable
International Textile Group, Inc.		L+5.00%		5.13	%		5/1/2024		1,723		1,664
									1,723		1,664
Consumer Goods: Non-Durable
PH Beauty Holdings III, INC		L+5.00%		5.12	%		9/26/2025		2,424		2,385
									2,424		2,385
Containers, Packaging & Glass
Liqui-Box Holdings, Inc.		L+4.50%		5.50	%		2/26/2027		4,279		4,058
Polychem Acquisition, LLC		L+5.00%		5.50	%		3/17/2025		2,925		2,925
Port Townsend Holdings Company, Inc. and Crown Corrugated Company		L+6.75%		5.75% Cash/ 2.00% PIK			4/3/2024		4,751		4,300
PVHC Holding Corp		L+4.75%		5.75	%		8/5/2024		3,225		2,983
									15,180		14,266
Energy: Oil & Gas
Drilling Info Holdings, Inc.		L+4.25%		4.33	%		7/30/2025		4,528		4,471
Offen, Inc.		L+5.00%		5.08	%		6/22/2026		2,394		2,394
Offen, Inc.		L+5.00%		5.08	%		6/22/2026		878		878
									7,800		7,743

MRCC SENIOR LOAN FUND I, LLC

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

(unaudited)

September 30, 2021

(in thousands)

Portfolio Company ^(a)	Spread Above Index ^(b)		Interest Rate ^(b)			Maturity		Principal		Fair Value
Healthcare & Pharmaceuticals
Cano Health, LLC ^(g)		L+4.50%		5.25	%		11/23/2027		2,000	$	2,004
LSCS Holdings, Inc.		L+4.25%		4.42	%		3/17/2025		2,281		2,259
LSCS Holdings, Inc.		L+4.25%		4.42	%		3/17/2025		589		583
Radiology Partners, Inc.		L+4.25%		4.33	%		7/9/2025		4,760		4,762
Team RMS, LLC ^(g)		L+5.00%		6.00	%		12/17/2027		3,000		3,000
									12,630		12,608
High Tech Industries
Corel Inc. ^(c)		L+5.00%		5.12	%		7/2/2026		3,825		3,842
LW Buyer, LLC		L+5.00%		5.08	%		12/30/2024		4,888		4,863
TGG TS Acquisition Company		L+6.50%		6.58	%		12/12/2025		3,496		3,508
									12,209		12,213
Hotels, Gaming & Leisure
Excel Fitness Holdings, Inc.		L+5.25%		6.25	%		10/7/2025		4,176		4,134
North Haven Spartan US Holdco, LLC		L+5.00%		6.00	%		6/6/2025		2,303		2,003
Tait LLC		L+5.00%		5.14	%		3/28/2025		4,136		3,732
Tait LLC (Revolver)		P+4.00%		7.25	%		3/28/2025		769		725
									11,384		10,594
Media: Advertising, Printing & Publishing
Cadent, LLC		L+5.00%		6.00	%		9/11/2023		4,339		4,328
Cadent, LLC (Revolver) ^(d)		L+5.00%		6.00	%		9/11/2023		167		—
Digital Room Holdings, Inc.		L+5.00%		5.08	%		5/21/2026		4,329		4,303
Monotype Imaging Holdings Inc.		L+5.50%		6.50	%		10/9/2026		4,813		4,817
									13,648		13,448
Media: Diversified & Production
Research Now Group, Inc. and Survey Sampling International, LLC		L+5.50%		6.50	%		12/20/2024		6,737		6,675
STATS Intermediate Holdings, LLC		L+5.25%		5.37	%		7/10/2026		4,913		4,909
The Octave Music Group, Inc.		L+6.00%		6.25% Cash/ 0.75% PIK			5/29/2025		4,440		4,418
									16,090		16,002
Services: Business
AQ Carver Buyer, Inc.		L+5.00%		6.00	%		9/23/2025		4,900		4,912
CHA Holdings, Inc		L+4.50%		5.50	%		4/10/2025		1,985		1,983
CHA Holdings, Inc		L+4.50%		5.50	%		4/10/2025		419		418
Eliassen Group LLC		L+4.25%		4.33	%		11/5/2024		3,006		2,987
Engage2Excel, Inc.		L+7.25%		7.00% Cash/ 1.25% PIK			3/7/2023		4,319		4,330
Engage2Excel, Inc.		L+7.25%		7.00% Cash/ 1.25% PIK			3/7/2023		779		781
Engage2Excel, Inc. (Revolver) ^(d)		L+7.25%		7.00% Cash/ 1.25% PIK			3/7/2023		553		539
Legility, LLC		L+6.00%		7.00	%		12/17/2025		4,800		4,747
Orbit Purchaser LLC		L+4.50%		5.50	%		10/21/2024		2,438		2,431
Orbit Purchaser LLC		L+4.50%		5.50	%		10/21/2024		1,882		1,878
Orbit Purchaser LLC		L+4.50%		5.50	%		10/21/2024		550		549
Output Services Group, Inc.		L+4.50%		5.50	%		3/27/2024		4,827		4,167
SIRVA Worldwide Inc.		L+5.50%		5.58	%		8/4/2025		1,863		1,761
Teneo Holdings LLC		L+5.25%		6.25	%		7/11/2025		4,900		4,889
The Kleinfelder Group, Inc.		L+5.25%		6.25	%		11/29/2024		2,393		2,393
									39,614		38,765
Telecommunications
Intermedia Holdings, Inc.		L+6.00%		7.00	%		7/21/2025		1,783		1,784
Mavenir Systems, Inc.		L+4.75%		5.25	%		8/18/2028		1,667		1,673
Sandvine Corporation ^(g)		L+4.50%		4.58	%		11/3/2025		2,000		1,999
									5,450		5,456
Utilities: Oil & Gas
NGS US Finco, LLC		L+4.25%		5.25	%		10/1/2025		1,699		1,648
NGS US Finco, LLC		L+5.25%		6.25	%		10/1/2025		248		244
									1,947		1,892
Wholesale
BMC Acquisition, Inc.		L+5.25%		6.25	%		12/30/2024		4,486		4,475
HALO Buyer, Inc.		L+4.50%		5.50	%		6/30/2025		4,837		4,542
PT Intermediate Holdings III, LLC		L+5.50%		6.50	%		10/15/2025		1,965		1,970
									11,288		10,987

TOTAL INVESTMENTS										$	192,534

(a)	All investments are U.S. companies unless otherwise noted.
(b)	The majority of investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate ("LIBOR" or "L") or Prime Rate (“Prime” or “P”) which reset daily, monthly, quarterly or semiannually. We have provided the spread over LIBOR or Prime and the current contractual rate of interest in effect at September 30, 2021. Certain investments are subject to a LIBOR or Prime interest rate floor.
(c)	This is an international company.
(d)	All or a portion of this commitment was unfunded as of September 30, 2021. As such, interest is earned only on the funded portion of this commitment. Principal reflects the commitment outstanding.
(e)	This position was on non-accrual status as of September 30, 2021, meaning that we have ceased accruing interest income on the position.
(f)	A portion of this loan (principal of $115) is held at the SLF, not at the SLF SPV, and is therefore not collateral to the SLF Credit Facility.
(g)	Investment position or portion thereof unsettled at September 30, 2021.

MRCC SENIOR LOAN FUND I, LLC

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2020

(in thousands)

Portfolio Company ^(a)	Spread Above Index ^(b)		Interest Rate ^(b)			Maturity		Principal		Fair Value
Non-Controlled/Non-Affiliate Company Investments
Senior Secured Loans
Aerospace & Defense
Bromford Industries Limited ^(c)	L+5.25	%		6.25	%		11/5/2025		2,772	$	2,685
Bromford Industries Limited ^(c)	L+5.25	%		6.25	%		11/5/2025		1,848		1,790
Trident Maritime SH, Inc.	L+4.75	%		5.75	%		6/4/2024		4,401		4,363
Trident Maritime SH, Inc. (Revolver) ^(d)	L+4.75	%		5.75	%		6/4/2024		340		—
									9,361		8,838
Automotive
Truck-Lite Co., LLC	L+6.25	%		7.25	%		12/14/2026		1,726		1,716
Truck-Lite Co., LLC	L+6.25	%		7.25	%		12/14/2026		256		254
Wheel Pros, Inc.	L+5.25	%		6.25	%		11/10/2027		3,000		2,961
									4,982		4,931
Banking, Finance, Insurance & Real Estate
Avison Young (USA), Inc. ^(c)	L+5.00	%		5.25	%		1/30/2026		4,900		4,659
Harbour Benefit Holdings, Inc. (fka Zenith Merger Sub, Inc.)	L+5.25	%		6.25	%		12/13/2024		4,653		4,585
Harbour Benefit Holdings, Inc. (fka Zenith Merger Sub, Inc.) (Delayed Draw) ^(d)	L+5.25	%		6.25	%		12/13/2024		264		102
Lightbox Intermediate, L.P.	L+5.00	%		5.15	%		5/11/2026		4,925		4,777
Minotaur Acquisition, Inc.	L+5.00	%		5.15	%		3/27/2026		2,947		2,900
									17,689		17,023
Beverage, Food & Tobacco
CBC Restaurant Corp.	n/a			5.00% PIK	^(e)		4/28/2022		1,117		1,031
SW Ingredients Holdings, LLC	L+4.00	%		5.00	%		7/3/2025		3,656		3,647
									4,773		4,678
Capital Equipment
Analogic Corporation	L+5.25	%		6.25	%		6/24/2024		4,800		4,800
									4,800		4,800
Chemicals, Plastics & Rubber
Polymer Solutions Group	L+7.00	%		8.00	%		6/30/2021		1,216		1,189
									1,216		1,189
Construction & Building
ISC Purchaser, LLC	L+4.00	%		5.00	%		7/11/2025		4,937		4,896
The Cook & Boardman Group, LLC	L+5.75	%		6.75	%		10/20/2025		2,940		2,811
									7,877		7,707
Consumer Goods: Durable
International Textile Group, Inc.	L+5.00	%		5.37	%		5/1/2024		1,758		1,597
									1,758		1,597
Consumer Goods: Non-Durable
PH Beauty Holdings III, Inc.	L+5.00	%		5.23	%		9/26/2025		2,442		2,149
									2,442		2,149
Containers, Packaging & Glass
Liqui-Box Holdings, Inc.	L+4.50	%		5.50	%		2/26/2027		4,312		3,848
Polychem Acquisition, LLC	L+5.00	%		5.15	%		3/17/2025		2,948		2,948
Port Townsend Holdings Company, Inc.	L+6.75	%		5.75% Cash/ 2.00% PIK			4/3/2024		4,683		4,263
PVHC Holding Corp.	L+4.75	%		5.75	%		8/5/2024		3,250		2,844
									15,193		13,903
Energy: Oil & Gas
Drilling Info Holdings, Inc.	L+4.25	%		4.40	%		7/30/2025		4,563		4,429
Offen, Inc.	L+5.00	%		5.15	%		6/22/2026		2,412		2,343
Offen, Inc.	L+5.00	%		5.15	%		6/22/2026		885		860
									7,860		7,632
Healthcare & Pharmaceuticals
LSCS Holdings, Inc.	L+4.25	%		4.51	%		3/17/2025		2,299		2,253
LSCS Holdings, Inc.	L+4.25	%		4.51	%		3/17/2025		593		582
Radiology Partners, Inc.	L+4.25	%		4.40	%		7/9/2025		4,760		4,692
									7,652		7,527
High Tech Industries
AQA Acquisition Holding, Inc.	L+4.25	%		5.25	%		5/24/2023		3,257		3,257
Corel, Inc. ^(c)	L+5.00	%		5.23	%		7/2/2026		3,900		3,844
LW Buyer, LLC	L+5.00	%		5.15	%		12/30/2024		4,925		4,900
TGG TS Acquisition Company	L+6.50	%		6.65	%		12/12/2025		3,753		3,720
									15,835		15,721
Hotels, Gaming & Leisure
Excel Fitness Holdings, Inc.	L+5.25	%		6.25	%		10/7/2025		4,207		3,878
North Haven Spartan US Holdco, LLC	L+5.00	%		6.00	%		6/6/2025		2,321		1,979
Tait, LLC	L+5.00	%		5.23	%		3/28/2025		4,167		3,669
Tait, LLC (Revolver)	P+4.00	%		7.25	%		3/28/2025		769		711
									11,464		10,237
Media: Advertising, Printing & Publishing
Cadent, LLC	L+5.50	%		6.50	%		9/11/2023		4,728		4,622
Cadent, LLC (Revolver) ^(d)	L+5.50	%		6.50	%		9/11/2023		167		—
Digital Room Holdings, Inc.	L+5.00	%		5.27	%		5/21/2026		4,362		4,133
Monotype Imaging Holdings, Inc.	L+5.50	%		6.50	%		10/9/2026		4,906		4,653
									14,163		13,408
Media: Diversified & Production
Research Now Group, Inc. and Survey Sampling International, LLC	L+5.50	%		6.50	%		12/20/2024		6,790		6,708
Stats Intermediate Holding, LLC	L+5.25	%		5.47	%		7/10/2026		4,950		4,909
The Octave Music Group, Inc.	L+6.00	%		6.25% Cash/ 0.75% PIK			5/29/2025		4,871		4,335
									16,611		15,952

MRCC SENIOR LOAN FUND I, LLC

CONSOLIDATED SCHEDULE OF INVESTMENTS - (continued)

December 31, 2020

(in thousands)

Portfolio Company ^(a)	Spread Above Index ^(b)		Interest Rate ^(b)			Maturity		Principal		Fair Value
Services: Business
AQ Carver Buyer, Inc.	L+5.00	%		6.00	%		9/23/2025		4,937	$	4,888
CHA Holdings, Inc.	L+4.50	%		5.50	%		4/10/2025		2,002		1,872
CHA Holdings, Inc.	L+4.50	%		5.50	%		4/10/2025		422		395
Eliassen Group, LLC	L+4.25	%		4.40	%		11/5/2024		3,017		2,922
Engage2Excel, Inc.	L+8.00	%		7.00% Cash/ 2.00% PIK			3/7/2023		4,299		4,178
Engage2Excel, Inc.	L+8.00	%		7.00% Cash/ 2.00% PIK			3/7/2023		776		754
Engage2Excel, Inc. (Revolver) ^(d)	L+8.00	%		7.00% Cash/ 2.00% PIK			3/7/2023		548		364
GI Revelation Acquisition, LLC	L+5.00	%		5.15	%		4/16/2025		1,365		1,344
Legility, LLC	L+6.00	%		7.00	%		12/17/2025		4,906		4,735
Orbit Purchaser, LLC	L+4.50	%		5.50	%		10/21/2024		2,456		2,407
Orbit Purchaser, LLC	L+4.50	%		5.50	%		10/21/2024		1,897		1,859
Orbit Purchaser, LLC	L+4.50	%		5.50	%		10/21/2024		555		544
Output Services Group, Inc.	L+4.50	%		5.50	%		3/27/2024		4,865		3,648
SIRVA Worldwide, Inc.	L+5.50	%		5.65	%		8/4/2025		1,900		1,741
Teneo Holdings, LLC	L+5.25	%		6.25	%		7/11/2025		4,938		4,903
The Kleinfelder Group, Inc.	L+5.25	%		6.25	%		11/29/2024		2,450		2,450
									41,333		39,004
Services: Consumer
Cambium Learning Group, Inc.	L+4.50	%		4.75	%		12/18/2025		4,900		4,883
LegalZoom.com, Inc.	L+4.50	%		4.65	%		11/21/2024		2,694		2,706
									7,594		7,589
Telecommunications
Intermedia Holdings, Inc.	L+6.00	%		7.00	%		7/21/2025		1,797		1,795
Mavenir Systems, Inc.	L+6.00	%		7.00	%		5/8/2025		3,900		3,893
									5,697		5,688
Transportation: Cargo
GlobalTranz Enterprises, LLC	L+5.00	%		5.15	%		5/15/2026		3,262		3,050
									3,262		3,050
Utilities: Oil & Gas
NGS US Finco, LLC	L+4.25	%		5.25	%		10/1/2025		1,712		1,640
NGS US Finco, LLC	L+5.25	%		6.25	%		10/1/2025		250		246
									1,962		1,886
Wholesale
BMC Acquisition, Inc.	L+5.25	%		6.25	%		12/30/2024		4,850		4,802
HALO Buyer, Inc.	L+4.50	%		5.50	%		6/30/2025		4,875		4,533
PT Intermediate Holdings III, LLC	L+5.50	%		6.50	%		10/15/2025		1,980		1,851
									11,705		11,186

TOTAL INVESTMENTS										$	205,695

	^(a)	All investments are U.S. companies unless otherwise noted.
	^(b)	The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“Prime” or “P”) which reset daily, monthly, quarterly, or semiannually. For each such investment, we have provided the spread over LIBOR or Prime and the current contractual interest rate in effect at December 31, 2020. Certain investments are subject to a LIBOR or Prime interest rate floor, or rate cap.
	^(c)	This is an international company.
	^(d)	All or a portion of this commitment was unfunded as of December 31, 2020. As such, interest is earned only on the funded portion of this commitment. Principal reflects the commitment outstanding.
	^(e)	This position was on non-accrual status as of December 31, 2020, meaning that we have ceased accruing interest income on the position.

Below is certain summarized financial information for SLF as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021 and 2020 (in thousands):

	September 30, 2021			December 31, 2020
	(unaudited)
Assets
Investments, at fair value	$	192,534		$	205,695
Cash		78			351
Restricted cash		3,450			2,948
Interest receivable		520			629
Other assets		50			43
Total assets	$	196,632		$	209,666
Liabilities
Revolving credit facility	$	104,564		$	131,497
Less: Unamortized deferred financing costs		(1,173	)		(969	)
Total debt, less unamortized deferred financing costs		103,391			130,528
Payable for open trades		9,964			—
Interest payable		242			294
Accounts payable and accrued expenses		372			277
Total liabilities		113,969			131,099
Members’ capital		82,663			78,567
Total liabilities and members’ capital	$	196,632		$	209,666

	Three months ended September 30,					Nine months ended September 30,
	2021			2020		2021		2020

	(unaudited)					(unaudited)
Investment income:
Interest income	$	3,250		$	3,726	$	9,913	$	11,990
Total investment income		3,250			3,726		9,913		11,990
Expenses:
Interest and other debt financing expenses		972			1,111		2,975		4,213
Professional fees		158			169		490		517
Total expenses		1,130			1,280		3,465		4,730
Net investment income (loss)		2,120			2,446		6,448		7,260
Net gain (loss):
Net realized gain (loss)		—			15		—		15
Net change in unrealized gain (loss)		(177	)		3,677		4,247		(10,751	)
Net gain (loss)		(177	)		3,692		4,247		(10,736	)
Net increase (decrease) in members’ capital	$	1,943		$	6,138	$	10,695	$	(3,476	)

Related Party Transactions

We have a number of business relationships with affiliated or related parties, including the following:

We have an Investment Advisory Agreement with MC Advisors, an investment advisor registered with the SEC, to manage our investing activities. We pay MC Advisors a fee for its services under the Investment Advisory Agreement consisting of two components - a base management fee and an incentive fee. See Note 6 to our consolidated financial statements and “Significant Accounting Estimates and Critical Accounting Policies - Capital Gains Incentive Fee” for additional information.

We have an Administration Agreement with MC Management to provide us with the office facilities and administrative services necessary to conduct our day-to-day operations. See Note 6 to our consolidated financial statements for additional information.

SLF has an administration agreement with MC Management to provide SLF with certain loan servicing and administrative functions. SLF may reimburse MC Management for its allocable share of overhead and other expenses incurred by MC Management. See Note 3 to our consolidated financial statements and “Liquidity and Capital Resources - MRCC Senior Loan Fund I, LLC” for additional information.

Theodore L. Koenig, our Chief Executive Officer and Chairman of our Board is also a manager of MC Advisors and the President and Chief Executive Officer of MC Management. Aaron D. Peck, our Chief Financial Officer and Chief Investment Officer, serves as a director on our Board and is also a managing director of MC Management.

We have a license agreement with Monroe Capital LLC, under which Monroe Capital LLC has agreed to grant us a non-exclusive, royalty-free license to use the name “Monroe Capital” for specified purposes in our business.

In addition, we have adopted a formal code of ethics that governs the conduct of MC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and Maryland General Corporation Law.

Commitments and Contingencies and Off-Balance Sheet Arrangements

Commitments and Contingencies

As of September 30, 2021 and December 31, 2020, we had outstanding commitments to fund investments under undrawn revolvers, capital expenditure loans, delayed draw commitments and subscription agreements, excluding unfunded commitments in SLF, totaling $70.8 million and $52.3 million, respectively. As of both September 30, 2021 and December 31, 2020, we had unfunded commitments to SLF of $7.8 million that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee. Drawdowns of the commitments to SLF require authorization from one of our representatives on SLF’s board of managers. Additionally, we have entered into certain contracts with other parties that contain a variety of indemnifications. Our maximum exposure under these arrangements is unknown. However, we have not experienced claims or losses pursuant to these contracts and believe the risk of loss related to such indemnifications to be remote.

Off-Balance Sheet Arrangements

Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any off-balance sheet financings or liabilities.

Market Trends

In late 2019 and early 2020, COVID-19 emerged in China and spread rapidly across the world, including to the United States. This outbreak has led to disruptions in local, regional, national and global markets and economies affected thereby and will continue to cause disruptions for an unknown and potentially significant amount of time. To date, cross border commercial activity and market sentiment have been negatively impacted by the outbreak and government and other measures seeking to contain its spread. The federal government and the Federal Reserve, as well as foreign governments and central banks, have implemented significant fiscal and monetary policies in response to these disruptions, and additional government and regulatory responses may be possible. It is currently impossible to determine the scope of this or any future outbreak, how long any such outbreak and market disruption, volatility or uncertainty may last, the effect any governmental actions and changes in base interest rates will have or the full potential impact on us, our industry and our portfolio companies.

We have also identified the following general trends that may affect our business:

Target Market: We believe that small and middle-market companies in the United States with annual revenues between $10.0 million and $2.5 billion represent a significant growth segment of the U.S. economy and often require substantial capital investments to grow. Middle-market companies have generated a significant number of investment opportunities for investment funds managed or advised by Monroe Capital, and we believe that this market segment will continue to produce significant investment opportunities for us.

Specialized Lending Requirements: We believe that several factors render many U.S. financial institutions ill-suited to lend to U.S. middle-market companies. For example, based on the experience of our management team, lending to U.S. middle-market companies (1) is generally more labor intensive than lending to larger companies due to the smaller size of each investment and the fragmented nature of information for such companies, (2) requires due diligence and underwriting practices consistent with the demands and economic limitations of the middle-market and (3) may also require more extensive ongoing monitoring by the lender.

Demand for Debt Capital: We believe there is a large pool of uninvested private equity capital for middle-market companies. We expect private equity firms will seek to leverage their investments by combining equity capital with senior secured loans and mezzanine debt from other sources, such as us.

Competition from Other Lenders: We believe that many traditional bank lenders, in recent years, de-emphasized their service and product offerings to middle-market businesses in favor of lending to large corporate clients and managing capital market transactions. In addition, many commercial banks face significant balance sheet constraints as they seek to build capital and meet future regulatory capital requirements. These factors may result in opportunities for alternative funding sources to middle-market companies and therefore drive increased new investment opportunities for us. Conversely, there has been a significant amount of capital raised over the past several years dedicated to middle market lending which has increased competitive pressure in the BDC and investment company marketplace for senior and subordinated debt, which in turn could result in lower yields and weaker financial covenants for new assets.

Pricing and Deal Structures: We believe that the volatility in global markets over the last several years and current macroeconomic issues including changes in bank regulations for middle-market banks has reduced access to, and availability of, debt capital to middle-market companies, causing a reduction in competition and generally more favorable capital structures and deal terms. Recent capital raises in the BDC and investment company marketplace have created increased competition; however, we believe that current market conditions may continue to create favorable opportunities to invest at attractive risk-adjusted returns.

Significant Accounting Estimates and Critical Accounting Policies

Revenue Recognition

We record interest and fee income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest, we do not accrue PIK interest if the portfolio company valuation indicates that such PIK interest is not collectible. We do not accrue as a receivable interest on loans and debt securities if we have reason to doubt our ability to collect such interest. Loan origination fees, original issue discount and market discount or premium are capitalized, and then we amortize such amounts using the effective interest method as interest income over the life of the investment. Upon the prepayment of a loan or debt security, any unamortized premium or discount or loan origination fees are recorded as interest income. We record prepayment premiums on loans and debt securities as interest income when we receive such amounts. Interest income is accrued based upon the outstanding principal amount and contractual terms of debt and preferred equity investments. Interest is accrued on a daily basis. We record fees on loans based on the determination of whether the fee is considered a yield enhancement or payment for a service. If the fee is considered a yield enhancement associated with a funding of cash on a loan, the fee is generally deferred and recognized into interest income using the effective interest method if captured in the cost basis or using the straight-line method if the loan is unfunded and therefore there is no cost basis. If the fee is not considered a yield enhancement because a service was provided, and the fee is payment for that service, the fee is deemed earned and recognized as fee income in the period the service has been completed.

Valuation of Portfolio Investments

As a BDC, we generally invest in illiquid securities including debt and, to a lesser extent, equity securities of middle-market companies. Under procedures established by our Board, we value investments for which market quotations are readily available and within a recent date at such market quotations. When doing so, we determine whether the quote obtained is sufficient in accordance with generally accepted accounting principles in the United States of America to determine the fair value of the security. Debt and equity securities that are not publicly traded or whose market prices are not readily available or whose market prices are not regularly updated are valued at fair value as determined in good faith by our Board. Such determination of fair values may involve subjective judgments and estimates. Investments purchased within 60 days of maturity are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value.

Our Board is ultimately and solely responsible for determining the fair value of the portfolio investments that are not publicly traded, whose market prices are not readily available on a quarterly basis in good faith or in any other situation where portfolio investments require a fair value determination. Because we expect that there will not be a readily available market for many of the investments in our portfolio, we expect to value many of our portfolio investments at fair value as determined in good faith by our Board using a documented valuation policy and a consistently applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

With respect to investments for which market quotations are not readily available, our Board undertakes a multi-step valuation process each quarter, as described below:

the quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the investment professionals of MC Advisors responsible for the credit monitoring of the portfolio investment;

our Board engages one or more independent valuation firm(s) to conduct independent appraisals of a selection of investments for which market quotations are not readily available. We will consult with independent valuation firm(s) relative to each portfolio company at least once in every calendar year, but the independent appraisals are generally received quarterly for each investment;

to the extent an independent valuation firm is not engaged to conduct an investment appraisal on an investment for which market quotations are not readily available, the investment will be valued by the MC Advisors investment professional responsible for the credit monitoring;

preliminary valuation conclusions are then documented and discussed with the investment committee of MC Advisors;

the audit committee of our Board reviews the preliminary valuations of MC Advisors and of the independent valuation firm(s) and MC Advisors adjusts or further supplements the valuation recommendations to reflect any comments provided by the audit committee; and

our Board discusses these valuations and determines the fair value of each investment in the portfolio in good faith, based on the input of MC Advisors, the independent valuation firm(s) and the audit committee.

We generally use the income approach to determine fair value for loans where market quotations are not readily available, as long as it is appropriate. If there is deterioration in credit quality or a debt investment is in workout status, we may consider other factors in determining the fair value, including the value attributable to the debt investment from the enterprise value of the portfolio company or the proceeds that would be received in a liquidation analysis. This liquidation analysis may also include probability weighting of alternative outcomes. We generally consider our debt to be performing if the borrower is not in default, the borrower is remitting payments in a timely manner, the loan is in covenant compliance and the loan is otherwise not deemed to be impaired. In determining the fair value of the performing debt, we consider fluctuations in current interest rates, the trends in yields of debt instruments with similar credit ratings, financial condition of the borrower, economic conditions and other relevant factors, both qualitative and quantitative. In the event that a debt instrument is not performing, as defined above, we will evaluate the value of the collateral utilizing the same framework described above for a performing loan to determine the value of the debt instrument.

Under the income approach, discounted cash flow models are utilized to determine the present value of the future cash flow streams of our debt investments, based on future interest and principal payments as set forth in the associated loan agreements. In determining fair value under the income approach, we also consider the following factors: applicable market yields and leverage levels, credit quality, prepayment penalties, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, and changes in the interest rate environment and the credit markets that generally may affect the price at which similar investments may be made.

Under the market approach, the enterprise value methodology is typically utilized to determine the fair value of an investment. There is no one methodology to estimate enterprise value and, in fact, for any one portfolio company, enterprise value is generally best expressed as a range of values, from which we derive a single estimate of enterprise value. In estimating the enterprise value of a portfolio company, we analyze various factors consistent with industry practice, including but not limited to original transaction multiples, the portfolio company’s historical and projected financial results, applicable market trading and transaction comparables, applicable market yields and leverage levels, the nature and realizable value of any collateral, the markets in which the portfolio company does business, and comparisons of financial ratios of peer companies that are public. Typically, the enterprise values of private companies are based on multiples of earnings before interest, income taxes, depreciation and amortization, cash flows, net income, revenues, or in limited cases, book value.

In addition, for certain debt investments, we may base our valuation on indicative bid and ask prices provided by an independent third-party pricing service. Bid prices reflect the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing to accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.

As of September 30, 2021, our Board determined, in good faith, the fair value of our investment portfolio in accordance with GAAP and our valuation procedures based on the facts and circumstances known by us at that time, or reasonably expected to be known at that time. Due to the overall volatility that the COVID-19 pandemic has caused, any valuations conducted in the future in conformity with GAAP could result in a lower fair value of our portfolio. The potential impact of COVID-19 on our results going forward will depend to a large extent on future developments or new information that may emerge regarding the full duration and severity of COVID-19 including the actions taken by governments and other entities to contain COVID-19 or treat its impact, all of which are beyond our control. Accordingly, we cannot predict the extent to which our financial condition and results of operations will be affected at this time.

Net Realized Gain or Loss and Net Change in Unrealized Gain or Loss

We measure realized gain or loss by the difference between the net proceeds from the sale and the amortized cost basis of the investment, without regard to unrealized gain or loss previously recognized. Net change in unrealized gain or loss reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when gain or loss is realized. Additionally, we do not isolate the portion of the change in fair value resulting from foreign currency exchange rate fluctuations from the changes in fair values of the underlying investment. All fluctuations in fair value are included in net change in unrealized gain (loss) on our consolidated statements of operations. The impact resulting from changes in foreign exchange rates on the revolving credit facility borrowings is included in net change in unrealized gain (loss) on foreign currency and other transactions.

Capital Gains Incentive Fee

Pursuant to the terms of the Investment Advisory Agreement with MC Advisors, the incentive fee on capital gains earned on liquidated investments of our portfolio is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement). This fee equals 20% of our incentive fee capital gains (i.e., our realized capital gains on a cumulative basis from inception, calculated as of the end of the applicable period, net of all realized capital losses and unrealized capital depreciation on a cumulative basis), less the aggregate amount of any previously paid capital gains incentive fees. On a quarterly basis, we accrue for the capital gains incentive fee by calculating such fee as if it were due and payable as of the end of such period.

While the Investment Advisory Agreement with MC Advisors neither includes nor contemplates the inclusion of unrealized gains in the calculation of the capital gains incentive fee, pursuant to an interpretation of an American Institute for Certified Public Accountants Technical Practice Aid for investment companies, we include unrealized gains in the calculation of the capital gains incentive fee expense and related accrued capital gains incentive fee. This accrual reflects the incentive fees that would be payable to MC Advisors if our entire portfolio was liquidated at its fair value as of the balance sheet date even though MC Advisors is not entitled to an incentive fee with respect to unrealized gains unless and until such gains are actually realized.

During the three and nine months ended September 30, 2021 and 2020, we did not have any further reductions in accrued capital gains incentive fees as they were already at zero, primarily as a result of accumulated realized and unrealized losses on the portfolio.

New Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective as of March 12, 2020 through December 31, 2022. Management is currently evaluating the impact of the optional guidance on our consolidated financial statements and disclosures. We did not utilize the optional expedients and exceptions provided by ASU 2020-04 during the nine months ended September 30, 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to financial market risks, including changes in interest rates and the valuations of our investment portfolio. Uncertainty with respect to the economic effects of the COVID-19 outbreak has introduced significant volatility in the financial markets, and the effects of this volatility could materially impact our market risks. For additional information concerning the COVID-19 pandemic and its potential impact on our business and our operating results, see Part II – Other Information, Item 1A. Risk Factors, “Risk Factors – The COVID-19 pandemic has caused severe disruptions in the global economy, which has had, and may continue to have, a negative impact on our portfolio companies and our business and operations.”

The majority of the loans in our portfolio have floating interest rates, and we expect that our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate re-set provisions that adjust applicable interest rates under such loans to current market rates on a monthly or quarterly basis. The majority of the loans in our current portfolio have interest rate floors which will effectively convert the loans to fixed rate loans in the event interest rates decrease. In addition, our revolving credit facility has a floating interest rate provision, whereas our SBA debentures and the 2026 Notes have fixed interest rates until maturity. We expect that other credit facilities into which we may enter in the future may also have floating interest rate provisions.

The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced that it intends to phase out LIBOR. It is unclear if at that time LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist. At this time, it is not possible to predict the effect of any such changes, any establishment of alternative reference rates or any other reforms to LIBOR that may be enacted. The elimination of LIBOR or any other changes or reforms to the determination or supervision of LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations. In addition, if LIBOR ceases to exist, we may need to renegotiate agreements with our portfolio companies that utilize LIBOR as a factor in determining the interest rate, in order to replace LIBOR with the new standard that is established, which may have an adverse effect on our overall financial condition or results of operations. Following the replacement of LIBOR, some or all of these agreements may bear interest a lower interest rate, which could have an adverse impact on our results of operations. Moreover, if LIBOR ceases to exist, we may need to renegotiate certain terms of our credit facilities. If we are unable to do so, amounts drawn under our credit facilities may bear interest at a higher rate, which would increase the cost of our borrowings and, in turn, affect our results of operations.

Assuming that the consolidated statement of assets and liabilities as of September 30, 2021 was to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates (in thousands):

	Increase (decrease) in		Increase (decrease) in			Net increase (decrease) in net
Change in Interest Rates	interest income		interest expense			investment income
Down 25 basis points	$	—	$	(27	)	$	27
Up 100 basis points		353		881			(528	)
Up 200 basis points		4,469		2,326			2,143
Up 300 basis points		8,808		3,770			5,038

Although we believe that this analysis is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowing under the credit facility or other borrowings that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above.

We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts to the extent permitted under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates or interest rate floors.

We may also have exposure to foreign currencies (currently the Great Britain pound and Australian dollar) related to certain investments. Such investments are translated into U.S. dollars based on the spot rate at each balance sheet date, exposing us to movements in the exchange rate. In order to reduce our exposure to fluctuations in exchange rates, we may borrow in foreign currency under our revolving credit facility to finance such investments or we may enter into foreign currency forward contracts. As of September 30, 2021, we have non-U.S. dollar borrowings denominated in Great Britain pounds of £3.4 million ($4.6 million U.S. dollars) outstanding under the revolving credit facility. As of September 30, 2021, we had foreign currency forward contracts in place for £0.3 million and AUD 19.6 million associated with future principal and interest payments on certain investments.

ITEM 4. CONTROLS AND PROCEDURES

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that, at the end of the period covered by our Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.

No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

Neither we, our subsidiaries nor our investment adviser are currently subject to any material legal proceedings.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 2, 2021, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results. Other than as set forth below, there have been no material changes during the three months ended September 30, 2021 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020.

The COVID-19 pandemic has caused severe disruptions in the global economy, which has had, and may continue to have, a negative impact on our portfolio companies and our business and operations.

In late 2019 and early 2020, COVID-19 emerged in China and spread rapidly to across the world, including to the United States. This outbreak has led and for an unknown period of time will continue to lead to disruptions in local, regional, national and global markets and economies affected thereby. With respect to the U.S. credit markets (in particular for middle market loans), this outbreak has resulted in, and until fully resolved is likely to continue to result in, the following among other things: (i) government imposition of various forms of “stay at home” orders and the closing of “non-essential” businesses, resulting in significant disruption to the businesses of many middle-market loan borrowers including supply chains, demand and practical aspects of their operations, as well as in lay-offs of employees, and, while these effects are hoped to be temporary, some effects could be persistent or even permanent; (ii) increased draws by borrowers on revolving lines of credit; (iii) increased requests by borrowers for amendments and waivers of their credit agreements to avoid default, increased defaults by such borrowers and/or increased difficulty in obtaining refinancing at the maturity dates of their loans; (iv) volatility and disruption of these markets including greater volatility in pricing and spreads and difficulty in valuing loans during periods of increased volatility, and liquidity issues; and (v) rapidly evolving proposals and/or actions by state and federal governments to address problems being experienced by the markets and by businesses and the economy in general that will not necessarily adequately address the problems facing the loan market and middle market businesses. This outbreak is having, and any future outbreaks could have, an adverse impact on our portfolio companies and us and on the markets and the economy in general, and that impact could be material. Such effects will likely continue for the duration of the pandemic, which is uncertain, and for some period thereafter. It is impossible to determine the scope of the COVID-19 pandemic, or any future outbreaks, how long any such outbreak, market disruption or uncertainties may last, the effect any governmental actions will have or the full potential impact on us, MC Advisors and our portfolio companies.

The COVID-19 pandemic (including the preventative measures taken in response thereto) has to date (i) created significant business disruption issues for certain of our portfolio companies, and (ii) adversely impacted the value and performance of certain of our portfolio companies. The COVID-19 pandemic is continuing as of the filing date of this Quarterly Report, and its extended duration may have further adverse impacts on our portfolio companies after September 30, 2021, including for the reasons described below. As a result of this disruption and the pressures on their liquidity, certain of our portfolio companies have been, or may continue to be, incentivized to draw on most, if not all, of the unfunded portion of any revolving or delayed draw term loans made by us, subject to availability under the terms of such loans.

The effects described above on our portfolio companies have, for certain of our portfolio companies to date, impacted their ability to make payments on their loans on a timely basis and in some cases have required us to amend certain terms, including payment terms. In addition, an extended duration of the COVID-19 pandemic may impact the ability of our portfolio companies to continue making their loan payments on a timely basis or meeting their loan covenants. The inability of portfolio companies to make timely payments or meet loan covenants may in the future require us to undertake similar amendment actions with respect to other of our investments or to restructure our investments. The amendment or restructuring of our investments may include the need for us to make additional investments in our portfolio companies (including debt or equity investments) beyond any existing commitments, exchange debt for equity, or change the payment terms of our investments to permit a portfolio company to pay a portion of its interest through payment-in-kind, which would defer the cash collection of such interest and add it to the principal balance, which would generally be due upon repayment of the outstanding principal.

If the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, loan non-accruals, problem assets, and bankruptcies may increase. In addition, collateral for our loans may decline in value, which could cause loan losses to increase and the net worth and liquidity of loan guarantors could decline, impairing their ability to honor commitments to us. An increase in loan delinquencies and non-accruals or a decrease in loan collateral and guarantor net worth could result in increased costs and reduced income, which would have a material adverse effect on our business, financial condition or results of operations.

The COVID-19 pandemic has adversely impacted the fair value of certain of our investments as of September 30, 2021 and the values assigned as of this date may differ materially from the values that we may ultimately realize with respect to our investments. Our Board approved the fair value of our investment portfolio as of September 30, 2021 and these valuations were determined in good faith in accordance with our valuation policy based on information known or knowable as of the valuation date. As a result, the long term impacts of the COVID-19 pandemic may not yet be fully reflected in the valuation of our investments and the fair value of our portfolio investments may be further negatively impacted after September 30, 2021 by circumstances and events that are not yet known, including the complete or continuing impact of the COVID-19 pandemic and the resulting measures taken in response thereto. In addition, write downs in the value of our investments have reduced, and any additional write downs may further reduce, our net asset value (and, as a result, our asset coverage calculation). Accordingly, we may continue to incur additional net unrealized losses or may incur realized losses after September 30, 2021, which could have a material adverse effect on our business, financial condition and results of operations.

The volatility and disruption to the global economy from the COVID-19 pandemic has affected, and may continue to affect, the pace of our investment activity, which may have a material adverse impact on our results of operations. Such volatility and disruption have also led to the increased credit spreads in the private debt capital markets.

Further, from an operational perspective, MC Advisors’ investment professionals are currently partially working remotely. An extended period of remote work arrangements could strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business. In addition, we are highly dependent on third party service providers for certain communication and information systems. As a result, we rely upon the successful implementation and execution of the business continuity planning of such providers in the current environment. If one or more of these third parties to whom we outsource certain critical business activities experience operational failures as a result of the impacts from the spread of COVID-19, or claim that they cannot perform due to a force majeure, it may have a material adverse effect on our business, financial condition, results of operations, liquidity and cash flows.

The 1940 Act allows us to incur additional leverage, which could increase the risk of investing in us.

The 1940 Act generally prohibits us from incurring indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our total assets). However, under the Small Business Credit Availability Act (the “SBCAA”), which became law in March 2018, BDCs have the ability to elect to become subject to a lower asset coverage requirement of 150%, subject to the receipt of the requisite board or stockholder approvals under the SBCAA and satisfaction of certain other conditions.

On June 20, 2018, our stockholders approved the application of the modified asset coverage requirements, as approved by our board of directors on March 27, 2018, and we became subject to the 150% minimum asset coverage ratio, effective June 21, 2018.

Leverage is generally considered a speculative investment technique and may increase the risk of investing in our securities. Leverage magnifies the potential for loss on investments in our indebtedness and on invested equity capital. As we use leverage to partially finance our investments, you will experience increased risks of investing in our securities. If the value of our assets increases, then leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged our business. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without the leverage, while any decrease in our income would cause net investment income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to pay distributions, scheduled debt payments or other payments related to our securities. The effects of leverage would cause any decrease in net asset value for any losses to be greater than any increase in net asset value for any corresponding gains. If we incur additional leverage, you will experience increased risks of investing in our common stock.

We maintain a revolving credit facility and use other borrowed funds to make investments or fund our business operations, which exposes us to risks typically associated with leverage and increases the risk of investing in us.

We maintain a revolving credit facility, have issued debt securities and may borrow money, including through the issuance of additional debt securities or preferred stock, to leverage our capital structure, which is generally considered a speculative investment technique. As a result:

our common stock is exposed to an increased risk of loss because a decrease in the value of our investments would have a greater negative impact on the value of our common stock than if we did not use leverage;

if we do not appropriately match the assets and liabilities of our business, adverse changes in interest rates could reduce or eliminate the incremental income we make with the proceeds of any leverage;

our ability to pay distributions on our common stock may be restricted if our asset coverage ratio, as provided in the 1940 Act, is not at least 150% and any amounts used to service indebtedness or preferred stock would not be available for such distributions;

any credit facility is subject to periodic renewal by its lenders, whose continued participation cannot be guaranteed;

our revolving credit facility with ING Capital LLC, as agent, is, and any other credit facility we may enter into would be, subject to various financial and operating covenants, including that our portfolio of investments satisfies certain eligibility and concentration limits as well as valuation methodologies;

such securities would be governed by an indenture or other instrument containing covenants restricting our operating flexibility;

we bear the cost of issuing and paying interest or distributions on such securities, which costs are entirely borne by our common stockholders; and

any convertible or exchangeable securities that we issue may have rights, preferences and privileges more favorable than those of our common stock.

The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing in the table below.

	Assumed Return on Our Portfolio (Net of Expenses) ⁽¹⁾
	-10%			-5%			0%			5%			10%
Corresponding return to common stockholder ⁽²⁾⁽³⁾		-31.02	%		-18.54	%		-6.06	%		6.42	%		18.90	%

⁽¹⁾	The assumed return on our portfolio is required by regulation of the SEC to assist investors in understanding the effects of leverage and is not a prediction of, and does not represent, our projected or actual performance.
⁽²⁾	Assumes $585.1 million in total assets, $350.7 million in debt outstanding, of which $235.6 million is senior securities outstanding, $234.4 million in net assets and an average cost of funds of 4.05%, which was the weighted average interest rate of borrowing on our revolving credit facility, SBA debentures and 2023 Notes as of December 31, 2020. The interest rate on our revolving credit facility is a variable rate. Actual interest payments may be different.
⁽³⁾	In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our December 31, 2020 total portfolio assets of at least 2.43%.

We are subject to risks associated with our revolving credit facility and the terms of our revolving credit facility may contractually limit our ability to incur additional indebtedness.

Our revolving credit facility, as amended, imposes certain conditions that may limit the amount of our distributions to stockholders. Distributions payable in our common stock under our dividend reinvestment plan are not limited by the revolving credit facility. Distributions in cash or property other than our common stock are generally limited to 115% of the amount of distributions required to maintain our ability to be subject to taxation as a RIC. We are required under the revolving credit facility to maintain our ability to be subject to taxation as a RIC.

The revolving credit facility requires us to comply with certain financial and operational covenants, including asset coverage ratios and a minimum net worth. For example, the revolving credit facility requires that we maintain an asset coverage ratio of at least 1.5 to 1 and a senior debt coverage ratio of at least 2 to 1 at all times. We may divert cash to pay the lenders in amounts sufficient to cause these tests to be satisfied. Our compliance with these covenants depends on many factors, some of which, such as market conditions, are beyond our control.

Our ability to sell our investments is also limited under the revolving credit facility. Under the revolving credit facility, the sale of any portfolio investment may not cause our covered debt amount to exceed our borrowing base. As a result, there may be times or circumstances during which we are unable to sell investments, pay distributions or take other actions that might be in our best interests.

Availability of borrowings under the revolving credit facility is linked to the valuation of the collateral pursuant to a borrowing base mechanism. As such, declines in the fair market value of our investments which are collateral to the revolving credit facility may reduce availability under our revolving credit facility.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit
Number		Description of Document

3.1		Amended and Restated Articles of Incorporation of Monroe Capital Corporation (Incorporated by reference to Exhibit (a)(1) of the Registrant’s Pre-Effective Amendment No. 8 to the Registration Statement on Form N-2 (File No. 333-172601) filed on October 18, 2012)

3.2		Bylaws of Monroe Capital Corporation (Incorporated by reference to Exhibit (b)(1) of the Registrant’s Pre-Effective Amendment No. 8 to the Registration Statement on Form N-2 (File No. 333-172601) filed on October 18, 2012)

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 2, 2021	By	/s/ Theodore L. Koenig
		Theodore L. Koenig
		Chairman, Chief Executive Officer and Director
		(Principal Executive Officer)
		Monroe Capital Corporation

Date: November 2, 2021	By	/s/ Aaron D. Peck
		Aaron D. Peck
		Chief Financial Officer, Chief Investment Officer and Director
		(Principal Financial and Accounting Officer)
		Monroe Capital Corporation