WhiteHorse Finance, Inc.

WhiteHorse Finance, Inc. is an externally managed, non-diversified, closed-end management investment company that operates as a business development company (BDC) under the Investment Company Act of 1940. For 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. The company acts as a direct lender, focusing on debt investments in privately held, lower middle market companies within the United States. It defines the lower middle market as companies with enterprise values ranging from $50 million to $350 million. WhiteHorse Finance's primary investment objective is to achieve attractive risk-adjusted returns by originating and investing in senior secured loans, including first lien and second lien facilities, to performing lower middle market companies across various industries. These loans typically feature a floating interest rate index, such as the Secured Overnight Financing Rate (SOFR), plus a spread, and generally have a term of three to six years. While the main focus is on originating senior secured loans to lower middle market companies, WhiteHorse Finance may also make opportunistic investments in other parts of a company's capital structure, such as mezzanine loans or equity interests. This can include investments in companies outside the U.S. lower middle market if they present an opportunity for attractive risk-adjusted returns. The company may also receive warrants to purchase common stock alongside its debt investments. Income is generated through interest payments, origination and other fees, capital appreciation, and dividends. WhiteHorse Finance primarily invests in loans and securities that are rated below investment grade by rating agencies, or would likely be rated below investment grade if rated. These below investment grade securities are considered speculative due to concerns about the issuer's ability to pay interest and repay principal.