Capital Southwest

What Capital Southwest does

Capital Southwest Corporation (NASDAQ: CSWC) is an internally managed, publicly traded business development company (BDC) regulated under the Investment Company Act of 1940, headquartered in Dallas, Texas. The company provides flexible capital solutions to lower middle market companies, primarily originating directly sourced first lien senior secured debt to private-equity-backed borrowers with $3–25 million of EBITDA, with deal hold sizes typically between $5 million and $45 million and total financings up to $75 million. As of March 2026, Capital Southwest manages approximately $2.0–2.2 billion in assets across 131–132 portfolio companies, having invested over $2.5 billion in more than 150 companies since transitioning to its internally managed structure in 2015.

The company's investment approach spans unitranche debt (including last-out), first lien debt, subordinated debt, and minority equity co-investments. Approximately 99% of the portfolio is in first lien senior secured debt and roughly 95% is floating rate, yielding a weighted-average lending yield of 11.3% against a weighted-average borrowing cost of 5.95%. Capital Southwest also operates a Dividend Reinvestment Plan (DRIP) administered through Equiniti Trust Company and has paid dividends for 44 consecutive years.

Capital Southwest earns revenue primarily through interest income on its loan portfolio, supplemented by equity co-investment gains and NAV appreciation. The firm originated $762 million across 79 investments in the trailing twelve months, supports a quarterly regular dividend of $0.58 per share plus a $0.06 supplemental dividend, and is rated BBB- (Fitch) / Baa3 (Moody's). Its Q3 FY2026 investment income was $61.45 million, up 17% year-over-year, with 106% dividend coverage over the trailing twelve months. Recent strategic actions include the formation of a $100 million joint venture with Trinity Capital (March 2026), a $350 million public notes offering (September 2025), a $52.6 million ATM equity raise at 127% of NAV (January 2026), and an upsized $485 million senior secured credit facility (accordion to $750 million).

Name

Capital Southwest

Legal name

Capital Southwest Corporation

Website

https://capitalsouthwest.com

Company type

Public

Founded year

2015

Operating status

Operating

Headcount range

11–50 employees

Short description

Capital Southwest Corporation is an internally managed, publicly traded business development company that provides flexible first lien senior secured debt and equity co-investments to lower middle market companies with $3–25 million in EBITDA, managing approximately $2.0–$2.2 billion across roughly 131 portfolio companies.

Ownership category

akta.pro rank

Product category

Middle Market Direct Lending

NAICS

Other Financial Investment Activities (5239)

SIC

Miscellaneous Business Credit Institution (6159)

akta.pro primary industry

BDC / Public Vehicle Venture Debt Providers (FSANAIAC)

akta.pro secondary industry

Middle-Market Lending (FSANADAI)

Keywords

• Business development company
• Lower middle market lending
• Senior secured debt
• Direct lending services
• Equity co-investments

Headquarters

HQ city

Dallas

HQ country

United States

HQ region

North America

Offices1 record

Markets served

GTM type

B2B

Offering type

Services

Cost components

Operations, Personnel, Technology or R&D, Marketing or Sales, Others

Revenue model

1. Interest Income from Debt Investments: Capital Southwest generates the majority of its revenue from interest income on its floating-rate loan portfolio. The company has a $2.01 billion portfolio across 132 private-equity-backed lower middle market companies, with 99% in first lien senior secured floating-rate debt yielding approximately 11.3% weighted average lending yield.
2. Equity Co-Investments: The company generates additional returns through minority equity co-investments alongside debt investments, benefiting from successful portfolio company exits and realizations.
3. Capital Appreciation: NAV growth and unrealized gains on the investment portfolio contribute to shareholder returns, with the company expanding its portfolio to approximately $2.0 billion in total fair value across 132 companies.

Pricing tiers

Go-to-market motion2 records

Distribution channels1 record

Marketing channels4 records

Core offering

Capital Southwest is an internally managed business development company (BDC) that originates and holds direct debt and equity investments in U.S. lower middle market companies with $3–25 million of EBITDA, providing financing of $5–75 million per transaction. Its core offerings include first lien senior secured floating-rate debt (99% of the portfolio), unitranche debt (including last-out), subordinated debt, and minority equity co-investments, with an approximately $2.0–2.2 billion portfolio across roughly 131 portfolio companies.

Product overview

Capital Southwest is an internally managed, credit-focused Business Development Company (BDC) providing flexible capital solutions to lower middle market companies. The company operates a unified platform offering multiple investment structures including First Lien Senior Secured Debt, Unitranche Debt (including Last-Out), Subordinated Debt, and Equity Co-Investments for companies with $3-25 million EBITDA seeking $5-75 million financing. In addition to its core lending products, the company offers shareholder value services including monthly dividend payments, supplemental dividends, and a Dividend Reinvestment Plan (DRIP) administered through Equiniti Trust Company. The company also formed a $100 million joint venture with Trinity Capital in March 2026 for first-out senior secured debt investments in the lower middle market.

Differentiator

Problem solved

Functional benefit

Products and services

• First Lien Senior Secured Debt Core credit-focused investment product providing first lien senior secured debt to U.S. lower middle market companies with $3–25 million EBITDA; represents approximately 99% of Capital Southwest's investment portfolio.
• Unitranche Debt (including Last-Out) Combined senior secured debt financing that merges first and second lien characteristics into a single instrument, offered as part of flexible capital structures for lower middle market borrowers.
• Subordinated Debt Subordinated debt investments provided as part of comprehensive financing solutions for lower middle market portfolio companies.
• Equity Co-Investments Non-control minority equity co-investments made alongside debt investments to support portfolio company growth and align Capital Southwest's interests with sponsors and management.
• Dividend Reinvestment Plan (DRIP) Plan administered through Equiniti Trust Company that allows registered shareholders of Capital Southwest common stock to automatically reinvest dividends into additional shares through open market purchases.

Quantifiable outcome

• 11.3% weighted average lending yield against 5.95% borrowing costs, generating meaningful net interest margin spread
• +4 more outcomes

Named customers4 records

Segments4 records

Ideal customer profiles3 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Partnerships

Two partnerships are on record, tiered core and minor.

• Trinity Capital Inc.coreStrategic or Co-development Partner · 19 March 2026Capital Southwest and Trinity Capital formed a $100 million joint venture focused on investing in first-out senior secured debt opportunities in the lower middle market. Each company contributed $50 million for a 50% equity stake. The venture is governed by a joint board with equal representation from both partners and leverages a senior-secured credit facility for funding. The partnership enhances competitive positioning and diversifies portfolios in the lower middle market segment.
• Equiniti Trust CompanyminorOthersEquiniti Trust Company serves as the transfer agent, dividend-paying agent, and registrar for Capital Southwest's common stock. The company also administers Capital Southwest's Dividend Reinvestment Plan (DRIP) for registered shareholders who have opted in.

Scale indicators17 records

Recent moves7 records

Direct peers

• Hercules Capital: Hercules Capital (NYSE: HTGC) is a BDC providing senior secured loans to venture growth and lower middle market companies. Comparable BDC structure and senior-secured lending approach.
• Trinity Capital: Trinity Capital (NASDAQ: TRIN) is a specialty lending BDC focused on sponsor-backed and equipment financing in the lower middle market. Capital Southwest's joint venture partner and most direct peer in size, strategy, and geography.
• Main Street Capital: Main Street Capital (NYSE: MAIN) is the largest publicly traded BDC focused on lower middle market companies. Direct comparable in business model, target segment, and product mix including first-lien debt and equity co-investments.
• Golub Capital BDC: Golub Capital BDC (NASDAQ: GBDC) is a leading BDC focused on one-stop senior secured loans to middle market sponsor-backed companies. Comparable in lower middle market focus and direct lending model.
• Oaktree Specialty Lending: Oaktree Specialty Lending (NASDAQ: OCSL) is a BDC managed by Oaktree Capital that provides senior secured loans to middle market companies. Direct peer in product structure and lower middle market focus.
• Sixth Street Specialty Lending: Sixth Street Specialty Lending (NYSE: TSLX) is a BDC providing flexible financing solutions to middle market companies. Comparable in lower middle market focus, floating-rate lending, and equity co-investments.
• New Mountain Finance: New Mountain Finance (NASDAQ: NMFC) is a BDC providing senior and subordinated loans to defensive middle market companies. Comparable in middle market direct lending strategy.

Broad incumbents

• Ares Capital: Ares Capital (NASDAQ: ARCC) is the largest U.S. BDC with broad middle market exposure. Larger and more diversified than CSWC but overlapping in first-lien senior secured lending to sponsor-backed companies.
• FS KKR Capital: FS KKR Capital (NYSE: FSK) is a large BDC providing capital across the structure to middle market companies. Larger, broader incumbent with overlapping lower middle market focus.
• Blackstone Private Credit Fund: Blackstone Private Credit Fund (BCRED) is a leading private credit BDC managed by Blackstone Credit. Represents a broader incumbent competitor with significant capital raising and sponsor relationships.

Market position

Strengths4 records

Weaknesses4 records

Competitive moat5 records

Key risks5 records

Key highlights6 records

Customer concentration

• LinkedInlinkedin.com/company/capital-southwest-corporation

Revenue estimate

Valuation estimate

Number of profiles

Profiles7 records

Subsidiaries1 record

Funding overview

Funding rounds8 records

Investors1 record

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A1 record

Investments11 records

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Capital Southwest