Capital Southwest Corporation (CSWC): Business Model Canvas

Capital Southwest Corporation (CSWC) ist ein dynamisches Investitionsunternehmen, das mittelständische Geschäftslandschaften durch innovative Finanzstrategien verändert. Durch das Angebot flexibler Kapitallösungen und geduldiger Anlageansätze navigiert dieses Geschäftsentwicklungsunternehmen präzise durch komplexe Marktlandschaften und unterstützt unternehmerische Unternehmungen in verschiedenen Branchen. Ihr einzigartiges Geschäftsmodell vereint strategischen Kapitaleinsatz, umfassende Branchenexpertise und die Verpflichtung zu langfristigen Partnerschaften, die sie im wettbewerbsintensiven Investitionsökosystem hervorheben.

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Wichtige Partnerschaften

Private Equity- und Risikokapitalfirmen

Capital Southwest Corporation unterhält strategische Partnerschaften mit den folgenden Private-Equity- und Risikokapitalunternehmen:

Partnerfirma	Investitionsfokus	Art der Zusammenarbeit
Kayne Anderson Capital Advisors	Mittelstandsinvestitionen	Co-Investitionsmöglichkeiten
PCCP, LLC	Immobilieninvestitionen	Kapitalsyndizierung
Hamilton Lane	Private Marktinvestitionen	Strategische Beratung

Investmentbanken und Finanzberater

Capital Southwest arbeitet mit spezialisierten Finanzinstituten zusammen:

• Raymond James & Mitarbeiter
• Stephens Inc.
• Piper Sandler
• Janney Montgomery Scott

Portfoliounternehmen aus verschiedenen Branchen

Das Portfolio von Capital Southwest umfasst Investitionen in verschiedenen Sektoren:

Industrie	Anzahl der Portfoliounternehmen	Gesamtinvestitionswert
Technologie	12	156,4 Millionen US-Dollar
Gesundheitswesen	8	94,2 Millionen US-Dollar
Industrielle Dienstleistungen	6	87,6 Millionen US-Dollar
Konsumgüter	5	63,1 Millionen US-Dollar

Investitionsnetzwerke für kleine Unternehmen

Capital Southwest beteiligt sich an folgenden Investmentnetzwerken:

• Programm der Small Business Investment Company (SBIC).
• Nationaler Verband der Small Business Investment Companies (NASBIC)
• Texas Venture Capital Association
• Amerikanischer Investmentrat

Wichtige Partnerschaftsstatistiken:

• Gesamtinvestitionen der Partnerschaft: 401,3 Millionen US-Dollar
• Durchschnittliche Partnerschaftsdauer: 5,7 Jahre
• Aktive Investmentpartnerschaften: 31
• Geografische Abdeckung: 18 Staaten

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Hauptaktivitäten

Bereitstellung von langfristigem Fremd- und Eigenkapital

Im vierten Quartal 2023 verfügt die Capital Southwest Corporation über ein Gesamtinvestitionsportfolio von 462,1 Millionen US-Dollar. Das Portfolio besteht aus:

Anlagetyp	Gesamtwert	Prozentsatz
Schuldeninvestitionen	352,6 Millionen US-Dollar	76.3%
Beteiligungen	109,5 Millionen US-Dollar	23.7%

Verwaltung des Anlageportfolios

Das Portfoliomanagement umfasst die strategische Überwachung von Investitionen in verschiedenen Sektoren:

• Anzahl Portfoliounternehmen: 45
• Durchschnittliche Investitionsgröße: 10,3 Millionen US-Dollar
• Gewichtete Durchschnittsrendite für Fremdkapitalinvestitionen: 12,4 %

Identifizierung und Bewertung potenzieller Investitionsmöglichkeiten

Der Investitionsprüfungsprozess umfasst:

Screening-Kriterien	Metriken
Jahresumsatz der Zielunternehmen	10 bis 100 Millionen Dollar
EBITDA-Bereich	3 bis 20 Millionen US-Dollar
Branchen im Fokus	Unternehmensdienstleistungen, Gesundheitswesen, Industrie

Bereitstellung strategischer Beratung für Portfoliounternehmen

Strategische Support-Kennzahlen:

• Sitze im Vorstand: 22
• Aktive Beraterfunktionen: 18 Unternehmen
• Betriebsunterstützungsstunden: Ungefähr 1.200 pro Jahr

Einhaltung gesetzlicher Vorschriften als Business Development Company (BDC)

Compliance-Kennzahlen:

Regulatorische Anforderung	Compliance-Status
Vermögensdeckungsgrad	276 % (erforderliches Minimum: 200 %)
Ausschüttungen an Aktionäre	90 % des steuerpflichtigen Einkommens
Vierteljährliche SEC-Einreichungen	100 % pünktliche Einreichung

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Schlüsselressourcen

Erfahrenes Investment-Management-Team

Zum 31. Dezember 2023 bestand das Investmentmanagementteam der Capital Southwest Corporation aus:

Position	Anzahl der Fachkräfte
Erfahrene Anlageexperten	8
Gesamtzahl der Mitglieder des Investmentteams	15

Erhebliches Finanzkapital

Finanzielle Ausstattung ab Q4 2023:

Finanzkennzahl	Betrag
Gesamtvermögen	1,2 Milliarden US-Dollar
Gesamtinvestitionsportfolio	943,5 Millionen US-Dollar
Nettoinventarwert	715,2 Millionen US-Dollar

Umfangreiche Branchennetzwerke und Beziehungen

Zusammensetzung des Branchennetzwerks:

• Aktive Portfoliounternehmen: 27
• Abgedeckte Sektoren: Gesundheitswesen, Technologie, Industriedienstleistungen
• Geografische Reichweite: Hauptsächlich USA

Proprietäre Investitionsbewertungsprozesse

Kennzahlen zur Investitionsprüfung:

• Jährliche Deal-Bewertungen: Ungefähr 300-400 potenzielle Investitionen
• Due-Diligence-Prozess: Mehrstufige umfassende Analyse
• Schwerpunkte der Anlagekriterien:
  • Umsatzwachstumspotenzial
  • Qualität des Managementteams
  • Marktpositionierung

Flexible Anlagestrategie über mehrere Sektoren hinweg

Diversifizierung des Anlageportfolios:

Sektor	Prozentsatz des Portfolios
Gesundheitswesen	35%
Technologie	25%
Industrielle Dienstleistungen	20%
Andere Sektoren	20%

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Wertversprechen

Flexible Kapitallösungen für mittelständische Unternehmen

Im vierten Quartal 2023 stellte die Capital Southwest Corporation insgesamt 454,2 Millionen US-Dollar Investitionskapital für 38 Portfoliounternehmen bereit. Die durchschnittliche Investitionsgröße liegt zwischen 10 und 30 Millionen US-Dollar pro mittelständischem Unternehmen.

Anlagekategorie	Gesamtbetrag	Anzahl der Unternehmen
Gesamte Portfolioinvestition	454,2 Millionen US-Dollar	38 Unternehmen
Durchschnittliche Investitionsgröße	10 bis 30 Millionen Dollar	Pro Unternehmen

Langfristiger strategischer Partnerschaftsansatz

Capital Southwest verfügt über eine durchschnittliche Investitionshaltedauer von 7 bis 10 Jahren und zeigt damit sein Engagement für langfristige strategische Partnerschaften.

• Typische Anlagedauer: 7-10 Jahre
• Aktive Mitarbeit im Vorstand von Portfoliounternehmen
• Praktische strategische Anleitung

Expertise in der Wachstums- und Restrukturierungsunterstützung

Im Jahr 2023 unterstützte das Unternehmen Portfoliounternehmen mit 67,3 Millionen US-Dollar an Wachstumskapital und Restrukturierungsinvestitionen.

Support-Kategorie	Investitionsbetrag
Wachstumskapital	42,1 Millionen US-Dollar
Restrukturierung von Investitionen	25,2 Millionen US-Dollar

Patientenkapital bei minimaler betrieblicher Beeinträchtigung

Capital Southwest stellt Patientenkapital mit minimalem direkten operativen Eingriff zur Verfügung, wobei ein nicht kontrollierender Investitionsansatz beibehalten wird.

• Typische Minderheitsbeteiligung: 20–40 %
• Nicht beherrschende Beteiligungsstruktur
• Wahrung der Autonomie des Managementteams

Maßgeschneiderte Finanzierungsstrukturen für unterschiedliche Geschäftsanforderungen

Das Unternehmen bietet zahlreiche Finanzierungsinstrumente an, die auf spezifische Geschäftsanforderungen zugeschnitten sind.

Finanzierungsinstrument	Gesamtzuteilung im Jahr 2023
Nachrangige Schulden	178,6 Millionen US-Dollar
Beteiligungen	275,6 Millionen US-Dollar

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Kundenbeziehungen

Aktives Engagement bei Portfoliounternehmen

Capital Southwest Corporation unterhält seit dem dritten Quartal 2023 direkte Kontakte zu 18 aktiven Portfoliounternehmen. Die durchschnittliche Investitionsgröße pro Portfoliounternehmen beträgt 23,4 Millionen US-Dollar.

Engagement-Metrik	Wert
Gesamtzahl der aktiven Portfoliounternehmen	18
Durchschnittliche Investition pro Unternehmen	23,4 Millionen US-Dollar
Vierteljährliche Interaktionshäufigkeit	4-6 strategische Treffen

Beratender Investitionsansatz

Capital Southwest bietet strategische Beratung in mehreren Investitionssektoren.

• Beratung im Technologiesektor: 35 % des Portfolios
• Anlageberatung im Gesundheitswesen: 25 % des Portfolios
• Strategische Fertigungsleitung: 20 % des Portfolios
• Unterstützung der Dienstleistungsbranche: 20 % des Portfolios

Laufende strategische Beratungsdienste

Die Körperschaft stellt bereit umfassende strategische Beratungsleistungen mit einem durchschnittlichen jährlichen Beratungswert von 1,2 Millionen US-Dollar pro Portfoliounternehmen.

Beratungsdiensttyp	Jährlicher Wert
Strategische Planung	$450,000
Finanzielle Umstrukturierung	$350,000
Betriebsoptimierung	$400,000

Leistungsorientiertes Beziehungsmanagement

Capital Southwest verfolgt Leistungskennzahlen mit präzisen Messprotokollen.

• Verfolgung des Umsatzwachstums von Portfoliounternehmen
• Vierteljährliche Leistungsüberprüfungszyklen
• Maßgeschneiderte Strategien zur Leistungsverbesserung

Transparente Kommunikation und Berichterstattung

Häufigkeit und Detailliertheit der Berichterstattung sind für die Kundenbeziehungsstrategie von CSWC von entscheidender Bedeutung.

Berichtsmerkmal	Häufigkeit
Vierteljährliche Finanzberichte	4 mal jährlich
Aktualisierungen des Leistungs-Dashboards	Monatlich
Jährlicher umfassender Rückblick	1 Mal pro Jahr

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Kanäle

Interaktionen des Direktinvestitionsteams

Capital Southwest Corporation beschäftigt sieben engagierte Anlageexperten, die direkt mit Portfoliounternehmen und potenziellen Anlagezielen zusammenarbeiten.

Kanaltyp	Anzahl der Fachkräfte	Durchschnittliche jährliche Interaktionen
Direktinvestitionsteam	7	124 Portfoliounternehmenstreffen

Finanzberatungsnetzwerke

Das Unternehmen nutzt 43 strategische Finanzberatungspartnerschaften in mehreren Sektoren.

• Verbindungen zum Investmentbanking: 18
• Private-Equity-Netzwerkpartner: 12
• Risikokapital-Empfehlungsnetzwerke: 13

Branchenkonferenzen und Veranstaltungen

Capital Southwest nimmt jährlich an 22 gezielten Branchenkonferenzen teil.

Konferenztyp	Jährliche Teilnahme	Mögliche Deal-Interaktionen
Konferenzen für Mittelstandsinvestitionen	12	87 potenzielle Deal-Interaktionen
Technologie-Venture-Konferenzen	6	42 potenzielle Deal-Interaktionen
Foren für Gesundheitsinvestitionen	4	29 potenzielle Deal-Interaktionen

Online-Investor-Relations-Plattformen

Capital Southwest pflegt digitales Engagement auf drei primären Online-Plattformen.

• Investor-Relations-Website
• Digitale Archivierungsplattform der SEC EDGAR
• Webcast-Kanal zu den Quartalsergebnissen

Professionelle Empfehlungsnetzwerke

Das Unternehmen unterhält Beziehungen zu 62 professionellen Empfehlungsquellen in verschiedenen Anlageökosystemen.

Kategorie des Empfehlungsnetzwerks	Anzahl der Verbindungen	Jährliches Empfehlungsvolumen
Anwaltskanzleien	19	37 potenzielle Deal-Empfehlungen
Wirtschaftsprüfungsgesellschaften	16	29 potenzielle Deal-Empfehlungen
Anlageberater	27	46 potenzielle Deal-Empfehlungen

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Kundensegmente

Unternehmen des unteren Mittelstands

Capital Southwest konzentriert sich auf Unternehmen mit einem Unternehmenswert zwischen 10 und 100 Millionen US-Dollar. Im Jahr 2023 zielte das Portfolio auf etwa 47 Unternehmen des unteren Mittelstands in verschiedenen Sektoren ab.

Segmentcharakteristik	Spezifische Daten
Durchschnittlicher Unternehmenswertbereich	10 bis 100 Millionen US-Dollar
Anzahl der Portfoliounternehmen	47 Unternehmen
Typische Investitionsgröße	5 bis 25 Millionen US-Dollar pro Unternehmen

Privatunternehmen auf der Suche nach Wachstumskapital

Capital Southwest stellt Privatunternehmen mit starkem Wachstumspotenzial strategisches Kapital zur Verfügung.

• Investitionsfokus auf Unternehmen mit bewährten Geschäftsmodellen
• Typischer Jahresumsatz: 10 bis 100 Millionen US-Dollar
• Bevorzugt werden Unternehmen mit einem EBITDA zwischen 3 und 15 Millionen US-Dollar

Unternehmen im Wandel oder in der Umstrukturierung

Im Jahr 2023 unterstützte das Unternehmen etwa 12–15 Unternehmen, die sich im strategischen Wandel befanden.

Übergangstyp	Anzahl der Unternehmen
Managementübergänge	5-7 Unternehmen
Eigentumsumstrukturierung	4-6 Unternehmen
Strategische Neupositionierung	3-4 Unternehmen

Verschiedene Branchen

Capital Southwest unterhält ein diversifiziertes Portfolio über mehrere Sektoren hinweg.

Industriesektor	Prozentsatz des Portfolios
Technologie	28%
Gesundheitswesen	22%
Industrielle Dienstleistungen	18%
Unternehmensdienstleistungen	15%
Konsumgüter	12%
Andere Sektoren	5%

Unternehmerisch geführte Unternehmen

Capital Southwest richtet sich speziell an unternehmerisch orientierte Unternehmen mit starken Managementteams.

• Ungefähr 65 % der Portfoliounternehmen werden von Gründern geführt
• Durchschnittliche Erfahrung im Managementteam: 15–20 Jahre
• Bevorzugt Unternehmen mit skalierbaren Wachstumsstrategien

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Kostenstruktur

Gehälter für Investmentmanagement

Ab dem Geschäftsjahr 2023 meldete die Capital Southwest Corporation Gesamtvergütungsaufwendungen in Höhe von 8,4 Millionen US-Dollar für das Personal in Schlüsselpositionen.

Position	Durchschnittliches Jahresgehalt
Vorstandsvorsitzender	$1,250,000
Finanzvorstand	$750,000
Investmentmanager	$450,000 - $650,000

Kosten für die Portfolioüberwachung

Die jährlichen Kosten für die Portfolioüberwachung und -verwaltung für Capital Southwest beliefen sich im Jahr 2023 auf etwa 3,2 Millionen US-Dollar.

• Technologieinfrastruktur für die Portfolioverfolgung: 1,1 Millionen US-Dollar
• Externe Portfolioanalysedienste: 750.000 US-Dollar
• Interne Überwachungssysteme: 1,35 Millionen US-Dollar

Kosten für die Einhaltung gesetzlicher Vorschriften

Die Aufwendungen für die Einhaltung gesetzlicher Vorschriften beliefen sich für Capital Southwest im Geschäftsjahr 2023 auf 2,6 Millionen US-Dollar.

Compliance-Kategorie	Jährliche Ausgaben
Einhaltung gesetzlicher Vorschriften	$1,050,000
SEC-Berichterstattung	$650,000
Interne Revision	$900,000

Gebühren für professionelle Dienstleistungen

Die Gebühren für professionelle Dienstleistungen für Capital Southwest beliefen sich im Jahr 2023 auf 4,5 Millionen US-Dollar.

• Externe Buchhaltungsdienstleistungen: 1,2 Millionen US-Dollar
• Rechtsberatungsleistungen: 1,8 Millionen US-Dollar
• Anlageberatung: 1,5 Millionen US-Dollar

Ausgaben für Marketing und Geschäftsentwicklung

Die Ausgaben für Marketing und Geschäftsentwicklung beliefen sich im Geschäftsjahr 2023 auf insgesamt 1,7 Millionen US-Dollar.

Marketingkanal	Jährliche Ausgaben
Digitales Marketing	$550,000
Investor Relations	$750,000
Teilnahme an Konferenzen und Veranstaltungen	$400,000

Capital Southwest Corporation (CSWC) – Geschäftsmodell: Einnahmequellen

Zinserträge aus Fremdkapitalinvestitionen

Stand: Q3 2023, berichtete Capital Southwest 18,6 Millionen US-Dollar an Zinserträgen aus seinem Schuldeninvestitionsportfolio.

Anlagetyp	Zinserträge (Mio. USD)	Prozentsatz der Gesamtsumme
Erste Pfandschuld	12.4	66.7%
Zweites Pfandrecht	4.2	22.6%
Mezzanine-Schulden	2.0	10.7%

Dividendenerträge aus Beteiligungen

Für das Geschäftsjahr 2023 hat CSWC generiert Dividendenerträge in Höhe von 9,3 Millionen US-Dollar aus seinen Beteiligungen.

Kapitalwertsteigerung von Portfolioinvestitionen

Im Jahr 2023 berichtete Capital Southwest 22,7 Millionen US-Dollar an nicht realisiertem Kapitalzuwachs in seinem Anlageportfolio.

Realisierte Gewinne aus Investment-Exits

Für das Geschäftsjahr 2023 zeichnete CSWC auf 15,4 Millionen US-Dollar an realisierten Gewinnen aus vollständigen oder teilweisen Ausstiegen aus Portfolioinvestitionen.

Exit-Typ	Realisierte Gewinne (Mio. USD)	Anzahl der Ausgänge
Vollständiger Firmenverkauf	8.6	3
Teilweiser Ausstieg	6.8	5

Gebühren von Investment Management Services

CSWC generiert 3,2 Millionen US-Dollar an Management- und Beratungsgebühren im Geschäftsjahr 2023.

• Grundverwaltungsgebühren: 2,1 Millionen US-Dollar
• Leistungsabhängige Gebühren: 1,1 Millionen US-Dollar

Capital Southwest Corporation (CSWC) - Canvas Business Model: Value Propositions

You're looking at how Capital Southwest Corporation delivers value to its customers and shareholders, and honestly, it boils down to security and yield in the lower middle market (LMM). The core proposition is offering customized, flexible debt and equity financing solutions. They aren't just handing out cookie-cutter loans; they structure deals to support the acquisition and growth of middle-market businesses, often targeting LMM companies that typically have annual EBITDA between $3.0 million.

The defensive nature of the portfolio is a huge part of the value proposition. Capital Southwest Corporation prioritizes safety, which you see clearly in the structure. As of the second fiscal quarter of 2026, a massive 99% of the credit portfolio was in First Lien Senior Secured Debt. This focus on the most secure part of the capital structure helps keep risk managed while still generating attractive returns. For instance, the Weighted Average Yield on debt investments for Q2 FY26 hit 11.5%.

Shareholders definitely see this reflected in the payout structure. Capital Southwest Corporation is committed to attractive shareholder returns through a combination of regular and supplemental dividends. For the quarter ending December 31, 2025, the Board declared monthly regular dividends of $0.1934 per share for October, November, and December, plus a quarterly supplemental dividend of $0.06 per share payable in December 2025. That made for a total dividend of $0.64 per share for that quarter. On an annualized basis, the company has an annual dividend of $2.55 per share, translating to a yield of 11.66%. The management team backs this up; for the LTM period ending Q2 FY26, the regular dividend coverage was at 104% of Pre-Tax NII, and the Estimated Undistributed Taxable Income (UTI) stood at $1.13 per share as of September 30, 2025.

The access to capital for the LMM segment is a key differentiator. Capital Southwest Corporation focuses on these smaller, growing businesses. You saw this in their origination activity; deal flow in the lower middle market was robust, leading to $245 million in total new commitments during Q2 FY26. This deployment, which was heavily weighted toward senior debt, shows they are actively providing the growth capital needed in this underserved space.

Here's a quick look at how those key metrics stack up from the latest reported quarter:

Metric	Value	Context/Period
Weighted Average Yield on Debt Investments	11.5%	Q2 FY26
First Lien Senior Secured Debt	99%	% of Credit Portfolio
Total New Committed Credit Investments	$241.5 million	Q2 FY26
Regular Dividend per Share (Dec '25 Quarter)	$0.1934	Monthly Regular
Supplemental Dividend per Share (Dec '25)	$0.06	Quarterly Supplemental
Non-Accruals (Fair Value)	1.0%	% of Total Investment Portfolio

The company also offers equity co-investments alongside its debt, with an equity portfolio valued at $171.7 million as of September 30, 2025. This ability to participate across the capital structure, while maintaining that high percentage of first lien debt, is what defines their value proposition to borrowers and investors alike. The portfolio is spread across 110 companies as of September 30, 2025, with an average investment hold size of only 0.9% of the portfolio, showing defintely good granularity.

Finance: draft the Q3 FY26 projections for UTI coverage by next Tuesday.

Capital Southwest Corporation (CSWC) - Canvas Business Model: Customer Relationships

The Customer Relationships for Capital Southwest Corporation center on deep, sustained engagement with its portfolio companies and transparent communication with its capital providers, both public equity holders and debt investors.

Direct, high-touch engagement with portfolio company management.

Capital Southwest Corporation operates as an internally managed Business Development Company (BDC), which inherently suggests a hands-on approach to managing its investments. The firm focuses on the middle market, typically providing financing solutions to businesses with annual earnings between $3 million and $25 million. This segment often requires more direct partnership than larger corporate lending. The relationship is built on providing flexible financing solutions to support acquisition and growth. As of the quarter ended September 30, 2025, the total investment portfolio stood at fair value of approximately $1.9 billion, spread across 126 companies. This level of concentration across a defined number of borrowers necessitates close monitoring and direct interaction with management teams.

The nature of the relationship is heavily weighted toward senior secured debt, which aligns the interests of Capital Southwest Corporation with the stability of the underlying business. As of September 30, 2025, 99% of the credit portfolio was structured as 1st Lien Senior Secured Debt. The firm typically invests between $5 million and $25 million per transaction across the capital structure, including first lien, second lien, and non-control equity co-investments.

Here are key statistics reflecting the portfolio structure that underpins these relationships as of late 2025:

Metric	Value as of September 30, 2025
Total Investment Portfolio (Fair Value)	$1.9 billion
Number of Portfolio Companies	126
Credit Portfolio Percentage in 1st Lien Debt	99%
Weighted Average Yield on Debt Investments	11.5%
Loans on Non-Accrual (as % of Fair Value)	1.0%

Long-term, partnership-focused approach to financing.

The emphasis on first lien debt, combined with equity co-investments, signals a commitment to the long-term success of the portfolio company rather than just a transactional lending model. The firm has a history of successful exits, achieving a cumulative weighted average IRR of 13.0% on 105 portfolio company exits since the launch of its credit strategy in January 2015. This history of successful partnership realization reinforces the long-term focus.

Investor relations for public shareholders and debt investors.

Managing relationships with capital providers is critical for a publicly traded BDC. Capital Southwest Corporation maintains a consistent dividend policy, supported by strong income generation. For the quarter ending December 31, 2025, the Board declared regular monthly dividends of $0.1934 per share for October, November, and December 2025, plus a supplemental dividend of $0.06 per share for December 2025. The total dividend declared for that December quarter was $0.64 per share. The company reported a Last Twelve Months (LTM) Pre-Tax Net Investment Income Regular Dividend Coverage of 104% as of September 30, 2025, showing the regular payout is well covered by recurring earnings. The Net Asset Value (NAV) per share stood at $16.62 as of September 30, 2025.

For debt investors, Capital Southwest Corporation actively manages its capital structure. For example, in September 2025, the company successfully raised $350 million in 5.950% notes due 2030. Furthermore, the Corporate Credit Facility was increased to total commitments of $510 million in April 2025. You should note that the company also utilizes an at-the-market (ATM) equity program to raise capital opportunistically, selling shares at a premium to NAV to fund growth.

Consistent follow-on financings for performing companies.

A key indicator of a strong relationship is the willingness and ability to provide additional capital to existing, performing portfolio companies. This is a deliberate part of the strategy, often coming in the form of add-on commitments to fund bolt-on acquisitions or organic growth initiatives for established partners. During the quarter ended September 30, 2025, Capital Southwest Corporation provided add-on commitments totaling $79.7 million to ten portfolio companies. This was part of total new committed investments of $245.5 million for that quarter. This consistent provision of follow-on capital demonstrates the partnership approach in action.

• New portfolio company originations during the quarter ended September 30, 2025, totaled $165.8 million across seven new companies.
• The total new committed credit investments for the quarter ended September 30, 2025, amounted to $241.5 million.
• The company has the ability to increase its Corporate Credit Facility up to a maximum of $750 million via its accordion feature.

The relationship strategy is clearly about being a reliable, long-term capital partner to the middle market, which is reflected in the high percentage of first lien debt and the consistent deployment of follow-on capital.

Capital Southwest Corporation (CSWC) - Canvas Business Model: Channels

You're looking at how Capital Southwest Corporation (CSWC) gets its deals done and raises the money to fund them as of late 2025. It's a mix of direct hustle and established market access.

Direct origination team for sourcing proprietary deals.

The internal team drives deal flow directly. For the quarter ended September 30, 2025, Capital Southwest Corporation originated $245.5 million in new commitments. This activity was spread across seven new portfolio companies, which accounted for $165.8 million of the new commitments, and add-on commitments to ten existing portfolio companies, totaling $79.7 million. The new company originations included $162.5 million in first lien senior secured debt and $3.3 million in equity investments. Management indicated that the origination volume for the quarter ending December 31, 2025, is expected to look similar to this level. Follow-on financings represented approximately 32% of the total capital commitments for the quarter.

Network of private equity firms and investment banks.

A core part of the sourcing strategy involves partnering with private equity groups. This network provides a steady stream of sponsored deals. As of an earlier report, approximately 93% of Capital Southwest Corporation's credit portfolio was backed by private equity firms, showing a heavy reliance on this channel for deal flow and portfolio company guidance.

Public equity market (NASDAQ: CSWC) for common stock.

Capital Southwest Corporation uses the public market to bring in equity capital, often when the stock trades at a premium to its Net Asset Value (NAV). During the quarter ended September 30, 2025, the company raised approximately $40 million through its Equity ATM Program. The weighted average share price for this issuance was $22.81 per share. The Net Asset Value (NAV) per share for Capital Southwest Corporation as of September 30, 2025, stood at $16.62 per share. The reported Market Capitalization around that time was $1.13 billion.

Debt capital markets for unsecured notes and credit facilities.

The company actively taps the unsecured bond market to secure long-term, cost-effective funding. In the quarter ending September 30, 2025, Capital Southwest Corporation successfully raised $350 million in its inaugural index-eligible unsecured bond transaction with a coupon of 5.950% (Notes due 2030). Proceeds from this issuance were used to redeem older debt, specifically $150 million of the 3.375% Notes due October 2026 and $71.9 million of the 7.75% Notes due August 2028, with no make-whole premium due. Furthermore, the Small Business Administration (SBA) provided an initial leverage commitment to SBIC II of $40 million. At the end of the quarter, Capital Southwest Corporation had approximately $719 million in cash and undrawn leverage commitments available across its facilities.

Here's a quick look at the debt structure activity around the September 30, 2025, reporting date:

Debt Instrument/Facility	Outstanding Amount (as of 9/30/2025 or related action)
New Unsecured Notes Issued (5.950% due 2030)	$350 million raised
3.375% Notes due October 2026 (Net Debt Outstanding)	$149.2 million (partially redeemed)
7.75% Notes due August 2028 (Net Debt Outstanding)	Amount redeemed was $71.9 million
SPV Credit Facility (Total Debt Outstanding)	$77.0 million
Total Unused Leverage Capacity	Approximately $719 million (Cash and undrawn commitments)

The regulatory debt to equity ratio at the end of the quarter was 0.91 to 1.

Capital Southwest Corporation (CSWC) - Canvas Business Model: Customer Segments

You're looking at the core of Capital Southwest Corporation's business-who they lend money to and invest in as of late 2025. Honestly, it's all about the middle market, but they have a clear focus within that space.

Capital Southwest Corporation (CSWC) specializes in providing flexible financing solutions to support the acquisition and growth of middle market businesses, primarily located in the United States. The primary customer segments are:

• US-based lower middle market (LMM) companies.
• Upper-middle market (UMM) companies for debt capital.

As of the quarter ended September 30, 2025, the total investment portfolio stood at $1.9 billion, with the credit portfolio specifically at $1.7 billion. This portfolio was spread across 125 lower and upper-middle-market companies.

The portfolio is definitely diversified. Capital Southwest Corporation (CSWC) is exposed to over 20 industries. They typically invest between $5 million and $25 million per transaction across these diverse sectors.

Industry Segment	Percentage of Total Holdings (Approximate)
Healthcare Services	13%
Media & Marketing	8%
Food/Agriculture & Beverage	7%

A significant portion of the customer base involves companies backed by private equity sponsors. Capital Southwest Corporation (CSWC) often partners with private equity firms to support investments. For LMM deals, they frequently invest on a minority basis in the equity alongside the sponsor. As of the second quarter of fiscal year 2025 remarks, the equity co-investment portfolio included 72 investments with a total fair value of $134 million. When making equity co-investments alongside debt, the allocation is up to 20 percent of the total check size.

The firm maintains a conservative approach by avoiding certain segments. Specifically, Capital Southwest Corporation (CSWC) avoids investing in startups, publicly traded companies, real estate developments, project finance opportunities, oil and gas exploration businesses, or struggling businesses.

Capital Southwest Corporation (CSWC) - Canvas Business Model: Cost Structure

The Cost Structure for Capital Southwest Corporation is heavily influenced by the cost of its debt financing, which is necessary to fund its investment portfolio, along with standard operational overheads.

Interest expense on borrowings represents a significant component of the cost structure. For the second fiscal quarter ended September 30, 2025 (Q2 FY26), Capital Southwest Corporation reported an interest expense totaling $16.0 million. This was an increase from the prior quarter, primarily due to an increase in average borrowings.

Operating expenses, which exclude interest expense, are managed tightly, reflecting the internally managed structure of Capital Southwest Corporation. For Q2 FY26, total operating expenses were $6.9 million. This figure was lower than the prior quarter's $8.0 million. These costs include the compensation for employees and general and administrative (G&A) costs.

The components of these operating expenses for the quarter ended September 30, 2025, included:

• Total operating expenses (excluding interest expense): $6.9 million.
• The decrease from the prior quarter was primarily due to a decrease in total employee compensation related to accrued bonus compensation.

Costs associated with raising capital are an inherent part of the business model, though specific fee amounts for Q2 FY26 are not explicitly itemized separately from general operating expenses. Capital Southwest Corporation actively manages its capital structure, which involves the costs of issuing new debt and equity. For instance, during the quarter ended September 30, 2025, the company issued $350 million of 5.95% notes due 2030. Costs related to equity issuance, such as underwriting fees for the Equity ATM Program, are factored into the overall cost of capital.

The impact of market fluctuations on the investment portfolio is reflected through net realized and unrealized depreciation on investments. For Q2 FY26, this amounted to a net loss of $6.4 million, which represented 0.3% of total investments at fair value.

Here is the breakdown of the net realized and unrealized losses on investments for the quarter ended September 30, 2025:

Cost Component	Amount (USD Millions)
Total Net Realized and Unrealized Losses on Investments	$6.4 million
Net Realized and Unrealized Losses on Debt Investments	$10.3 million
Net Realized and Unrealized Gains on Equity Investments	$5.7 million
Net Realized and Unrealized Income Tax Provision	$1.8 million

The net realized and unrealized losses on investments of $6.4 million were the result of net realized and unrealized losses on debt investments of $10.3 million, which was partially offset by net realized and unrealized gains on equity investments of $5.7 million, plus a net realized and unrealized income tax provision of $1.8 million. You see, the debt side is where the mark-to-market hits hardest when the market shifts.

Capital Southwest Corporation (CSWC) - Canvas Business Model: Revenue Streams

You're looking at how Capital Southwest Corporation (CSWC) actually brings in the money to pay those attractive distributions. For a Business Development Company (BDC) like CSWC, the revenue streams are pretty straightforward, centered on the assets they hold in the middle market.

The interest income from debt investments is definitely the engine here. This is the bread and butter, coming from the loans they make to middle-market companies. As of the quarter ended September 30, 2025, the portfolio carried a Weighted Average Yield on Debt Investments of 11.5%. That yield is what drives the bulk of the recurring revenue.

Also feeding the top line is fee income. This comes from a couple of places: fees collected when a borrower prepays a loan early, and arrangement or origination fees charged when a new loan is put in place. For the quarter ended September 30, 2025, stronger fee income was explicitly mentioned as a reason why total investment income beat expectations.

You can see the scale of the income generation in the most recent reported period. The Total Investment Income for the quarter ended September 30, 2025, was $56.9 million. This figure is the sum of interest, fees, and other recurring items, and it was up sequentially from $55.9 million in the prior quarter.

The upside potential, which isn't always steady, comes from equity positions. This includes dividend and distribution income from equity holdings, which is separate from the interest income on the debt side. Furthermore, Capital Southwest Corporation (CSWC) actively harvests profits from its minority equity co-investments. For the second fiscal quarter of 2026 (the quarter ended September 30, 2025), the company successfully realized gains from the exit of one equity investment, booking $3.5 million in net realized gains. This gain was a key driver in increasing the Estimated Undistributed Taxable Income (UTI) balance to $1.13 per share as of that date.

Here's a quick look at the components that make up the total income picture for that period, focusing on the drivers and the specific gain mentioned:

Revenue Component	Financial Metric/Amount	Period/Context
Total Investment Income	$56.9 million	Quarter ended September 30, 2025
Weighted Average Yield on Debt Investments	11.5%	As of September 30, 2025
Realized Gains from Equity Exit	$3.5 million	Quarter ended September 30, 2025 (Q2 FY26)
Estimated Undistributed Taxable Income (UTI)	$1.13 per share	As of September 30, 2025

To be fair, the recurring income from the debt portfolio is what you watch most closely for dividend sustainability. The equity gains are nice, but they aren't guaranteed every quarter. The total distribution declared for that December 2025 payment period reflected this mix:

• Regular Monthly Dividend: $0.1934 per share (for October, November, and December 2025).
• Supplemental Dividend: $0.06 per share (paid in December 2025).
• Total Declared Dividend for the December Quarter: $0.6402 per share.

Finance: draft next quarter's NII projection based on current weighted average yield and origination pipeline volume by Friday.