SLR Investment Corp. (SLRC): Business Model Canvas [11-2024 Updated]

In the dynamic world of finance, understanding the business model of a company can provide invaluable insights for investors and analysts alike. SLR Investment Corp. (SLRC) stands out with its strategic approach to investment management, focusing primarily on middle-market companies that often face capital constraints. This blog post delves into SLRC's Business Model Canvas, exploring its key partnerships, activities, and revenue streams that drive its operations and value creation. Discover how SLRC navigates the investment landscape and what makes it a compelling choice for investors seeking high returns.

SLR Investment Corp. (SLRC) - Business Model: Key Partnerships

Banks for credit facilities

SLR Investment Corp. collaborates with various banks to secure credit facilities essential for its operations. As of September 30, 2024, SLR Credit had approximately $208.3 million in borrowings outstanding from its credit facility, which is non-recourse to the Company. The terms of these facilities are crucial for maintaining liquidity and funding new investments.

Financial sponsors for investment opportunities

The Company actively partners with financial sponsors to identify and capitalize on investment opportunities. As of September 30, 2024, SLR Business Credit managed a diverse portfolio totaling approximately $927.2 million in commitments, with a net investment of approximately $352.5 million. This partnership allows SLR Investment Corp. to leverage additional capital and expertise in sourcing high-quality investments.

Investment advisers for portfolio management

Investment advisers play a vital role in the management of SLR Investment Corp.'s portfolio. The Company has engaged advisers to optimize its asset allocation and investment strategies. For instance, SLR Credit reported net income of $21.3 million for the nine months ended September 30, 2024, reflecting effective portfolio management and advisory support.

Service providers for administrative tasks

SLR Investment Corp. relies on various service providers to handle administrative tasks, which enhances operational efficiency. Administrative expenses for the three months ended September 30, 2024, amounted to approximately $1.4 million. These partnerships ensure that the Company can focus on core investment activities while maintaining compliance and operational integrity.

Partnership Type	Details	Financial Impact
Banks	Credit facilities for liquidity	Borrowings of $208.3 million as of September 30, 2024
Financial Sponsors	Capitalizing on investment opportunities	Managed portfolio commitments of $927.2 million
Investment Advisers	Portfolio management and optimization	Net income of $21.3 million for nine months ended September 30, 2024
Service Providers	Administrative support	Administrative expenses of $1.4 million for three months ended September 30, 2024

SLR Investment Corp. (SLRC) - Business Model: Key Activities

Direct origination of investments

As of September 30, 2024, SLR Investment Corp. had total funded loans amounting to approximately $401.4 million across 32 funded commitments to 26 different issuers. The company reported an average exposure per issuer of approximately $15.4 million. For the nine months ended September 30, 2024, SLR Investment Corp. achieved a net investment income of $72.5 million.

Managing a diversified investment portfolio

SLR Investment Corp.'s investment portfolio includes a range of financial assets. As of September 30, 2024, the portfolio totaled approximately $2.4 billion in assets. This includes $1.66 billion in floating-rate investments (80.8% of the portfolio) and $393.8 million in fixed-rate investments (19.2% of the portfolio). Notably, the company had commitments totaling approximately $927.2 million from SLR Business Credit, with $352.5 million funded.

Conducting due diligence on potential investments

SLR Investment Corp. employs a rigorous due diligence process to assess potential investments. The company focuses on credit analysis and risk assessment, ensuring a thorough examination of financial statements, market conditions, and competitive positioning. As of September 30, 2024, SLR Credit Solutions had a total of $300 million in commitments to its revolving credit facility.

Monitoring and managing risk across investments

Risk management is a critical activity for SLR Investment Corp. The company monitors its investments actively, with risk management strategies in place to mitigate potential losses. As of September 30, 2024, SLR Investment Corp. reported total liabilities of $1.45 billion, indicating the scale of its operations and the importance of effective risk management. The company's credit facility had approximately $208.3 million in borrowings outstanding.

Key Metrics	As of September 30, 2024
Total Funded Loans	$401.4 million
Average Exposure per Issuer	$15.4 million
Net Investment Income (Nine months)	$72.5 million
Total Assets	$2.4 billion
Floating-Rate Investments	$1.66 billion (80.8%)
Fixed-Rate Investments	$393.8 million (19.2%)
SLR Business Credit Commitments	$927.2 million
SLR Credit Solutions Revolving Credit Facility	$300 million
Total Liabilities	$1.45 billion
Borrowings Outstanding	$208.3 million

SLR Investment Corp. (SLRC) - Business Model: Key Resources

Capital from shareholders and debt instruments

As of September 30, 2024, SLR Investment Corp. reported total net assets of approximately $992.7 million, compared to $986.6 million at the end of 2023. The company has a capital structure that includes equity from shareholders and various debt instruments. Notably, the average annualized interest cost for all borrowings for the nine months ended September 30, 2024, was 6.01%.

Experienced investment management team

The investment management team at SLR Investment Corp. is crucial for navigating the complexities of the investment landscape. The company manages a diversified portfolio of loans and investments. As of September 30, 2024, SLR Credit had a total of 32 funded commitments to 26 different issuers, with total funded loans amounting to $401.4 million. The experience and expertise of the team are reflected in the net investment income of $72.5 million for the nine months ended September 30, 2024.

Strong relationships with middle-market companies

SLR Investment Corp. has developed strong relationships with numerous middle-market companies, supporting its investment strategy. As of September 30, 2024, SLR Equipment Finance had 293 funded equipment-backed leases and loans to 158 different customers, with a total net investment in leases and loans of approximately $274.3 million. This extensive network facilitates access to lucrative investment opportunities and enhances the company's market presence.

Technology for investment analysis and monitoring

The company employs advanced technology for investment analysis and monitoring, which aids in decision-making and risk management. SLR Investment Corp. utilizes proprietary systems to track performance metrics and manage its portfolio effectively. This includes an extensive portfolio of directly-originated and underwritten senior-secured commitments that totaled approximately $927.2 million as of September 30, 2024.

Key Resource	Value/Description
Total Net Assets	$992.7 million (September 30, 2024)
Average Annualized Interest Cost	6.01% (Nine months ended September 30, 2024)
Funded Commitments (SLR Credit)	32 to 26 issuers, $401.4 million (September 30, 2024)
Net Investment Income	$72.5 million (Nine months ended September 30, 2024)
Equipment-Backed Leases and Loans	293 to 158 customers, $274.3 million (September 30, 2024)
Total Commitments (Business Credit)	$927.2 million (September 30, 2024)

SLR Investment Corp. (SLRC) - Business Model: Value Propositions

Access to high-yield investment opportunities

SLR Investment Corp. provides investors with access to a diversified portfolio of high-yield investment opportunities. As of September 30, 2024, the total assets under management were approximately $2.44 billion. The company focuses on generating income through its investments, which include senior secured loans and leases across various sectors.

Focus on middle-market companies with limited capital access

SLR Investment Corp. targets middle-market companies that often face challenges in accessing capital. As of September 30, 2024, SLR Credit had 32 funded commitments to 26 different issuers, amounting to approximately $401.4 million in total funded loans. This focus allows SLR to leverage opportunities in a market segment that is typically underserved by traditional lending institutions.

Potential for capital appreciation and income generation

The investment strategy of SLR Investment Corp. is designed to provide both capital appreciation and income generation. For the nine months ended September 30, 2024, SLR Credit reported net income of $21.3 million on gross income of $42.3 million. This demonstrates the company's ability to not only preserve capital but also generate substantial returns for its stakeholders.

Customized investment solutions for stakeholders

SLR Investment Corp. offers customized investment solutions tailored to meet the unique needs of its investors. The company manages a diverse portfolio, including SLR Equipment Finance, which had a total net investment in leases and loans of approximately $274.3 million across 293 funded leases as of September 30, 2024. This reflects SLR's commitment to providing flexible investment options that cater to the specific requirements of its stakeholders.

Investment Segment	Total Funded Loans (as of Sept 30, 2024)	Net Income (9 months ended Sept 30, 2024)	Total Assets (as of Sept 30, 2024)
SLR Credit	$401.4 million	$21.3 million	$429.7 million
SLR Equipment Finance	$274.3 million	Net Loss of $6.1 million	$321.5 million
SLR Business Credit	$352.5 million	$6.3 million	$580.6 million

SLR Investment Corp. (SLRC) - Business Model: Customer Relationships

Regular communication with shareholders

SLR Investment Corp. maintains consistent communication with its shareholders through quarterly earnings calls and regular updates. As of September 30, 2024, the company had approximately 54.55 million shares outstanding. The net asset value (NAV) per share at the end of the third quarter of 2024 was reported at $18.20. The total net assets of the company stood at $992.685 million. This level of transparency is critical for fostering trust and ensuring that shareholders are informed about the company's performance and strategic direction.

Transparent reporting on investment performance

SLR Investment Corp. is committed to transparent reporting on its investment performance. For the three months ended September 30, 2024, the company reported gross investment income of $59.77 million, compared to $59.64 million for the same period in 2023. The net investment income for the same period was $24.35 million, reflecting a year-over-year increase from $23.36 million. The company also reported a net increase in net assets resulting from operations of $22.05 million for the third quarter of 2024. Such detailed financial disclosures help build credibility with shareholders and stakeholders alike.

Active engagement with portfolio companies

SLR Investment Corp. actively engages with its portfolio companies, which is essential for maximizing investment returns. As of September 30, 2024, SLR Credit had 32 funded commitments to 26 different issuers, with total funded loans amounting to approximately $401.42 million. In addition, SLR Equipment Finance had a net investment in leases and loans of approximately $274.27 million, with 293 funded equipment-backed leases and loans to 158 different customers. This engagement allows SLR to monitor performance closely and provide necessary support to its portfolio companies.

Focus on long-term relationships with stakeholders

SLR Investment Corp. emphasizes building long-term relationships with its stakeholders, including shareholders, portfolio companies, and partners. The company’s strategic focus on maintaining a diversified investment portfolio, which totaled approximately $2.11 billion as of September 30, 2024, reflects its commitment to sustainable growth. Moreover, the company has a stock repurchase program aimed at enhancing shareholder value, with an authorized amount of up to $50 million for share repurchases. This focus on long-term value creation is integral to its customer relationship strategy.

Metric	As of September 30, 2024	As of December 31, 2023
Total Funded Loans	$401.42 million	$406.55 million
Net Investment Income	$24.35 million	$23.36 million
Net Assets	$992.685 million	$986.639 million
Net Asset Value Per Share	$18.20	$18.09
Shares Outstanding	54.55 million	54.55 million

SLR Investment Corp. (SLRC) - Business Model: Channels

Direct investment through private placements

SLR Investment Corp. engages in direct investments primarily through private placements. As of September 30, 2024, SLR Credit had 32 funded commitments to 26 different issuers with total funded loans of approximately $401.4 million on total assets of $429.7 million. In comparison, as of December 31, 2023, total funded loans were approximately $406.6 million on total assets of $438.4 million.

Financial reports and updates to shareholders

SLR Investment Corp. regularly publishes financial reports to keep shareholders informed. For the three months ended September 30, 2024, SLR Credit reported a net income of $8.8 million and a gross income of $13.7 million. For the nine-month period ending September 30, 2024, net income was $21.3 million on gross income of $42.3 million.

Investor presentations and conferences

SLR Investment Corp. actively participates in investor presentations and conferences to communicate its strategies and performance. The company has a stock repurchase program authorized for up to $50 million of its common stock. The program is expected to remain in place until May 7, 2025, or until the authorized amount is repurchased.

Digital platforms for investor relations

SLR Investment Corp. utilizes digital platforms for investor relations to enhance communication. The company's digital engagement includes providing access to financial statements, press releases, and other relevant information online. As of September 30, 2024, SLR's net asset value per share was $18.20, an increase from $18.09 at the end of the previous fiscal year.

Channel	Details	Financial Data
Direct Investment	Private placements with 32 funded commitments to 26 issuers	Total funded loans: $401.4 million
Financial Reports	Regular updates to shareholders	Net income (Q3 2024): $8.8 million
Investor Presentations	Participation in conferences	Stock repurchase program: $50 million authorized
Digital Platforms	Investor relations and financial access online	Net asset value per share: $18.20

SLR Investment Corp. (SLRC) - Business Model: Customer Segments

Institutional investors seeking high returns

SLR Investment Corp. targets institutional investors, which include pension funds, endowments, and insurance companies. These entities typically seek high returns on their investments, often looking for yield-enhancing strategies. As of September 30, 2024, SLR’s income-producing investment portfolio amounted to approximately $2.44 billion, with around 80.8% or $1.66 billion allocated to floating-rate investments.

Accredited individual investors

Accredited individual investors represent a significant customer segment for SLR Investment Corp. These investors are typically high-net-worth individuals who are eligible to invest in private placements and other investment vehicles. The company has focused on offering products that cater to the needs of this group, including structured financing solutions. As of September 30, 2024, SLR reported total net assets of approximately $992.7 million, reflecting the growing interest from this segment.

Middle-market companies needing capital

SLR Investment Corp. serves middle-market companies looking for capital to fund growth, acquisitions, or operational needs. As of September 30, 2024, SLR's business credit segment managed a diverse portfolio with approximately $927.2 million in commitments, of which approximately $352.5 million were funded, showcasing its engagement with this sector. The average balance per issuer in this segment was approximately $2.7 million.

Financial advisors looking for investment opportunities

Financial advisors are also a critical customer segment for SLR Investment Corp. They seek investment opportunities that can provide high yields for their clients. The company’s structured finance products and its commitment to providing transparent reporting are attractive to advisors managing client portfolios. As of September 30, 2024, SLR's credit facilities, which are non-recourse to the company, amounted to approximately $210 million.

Customer Segment	Key Characteristics	Financial Metrics
Institutional Investors	Pension funds, endowments, insurance companies	Portfolio: $2.44 billion; Floating-rate: $1.66 billion (80.8%)
Accredited Individual Investors	High-net-worth individuals, eligible for private placements	Total net assets: $992.7 million
Middle-Market Companies	Companies seeking capital for growth and operations	Total commitments: $927.2 million; Funded: $352.5 million
Financial Advisors	Advisors managing client portfolios, seeking high yields	Credit facilities: $210 million (non-recourse)

SLR Investment Corp. (SLRC) - Business Model: Cost Structure

Interest expenses on debt financing

As of September 30, 2024, SLR Investment Corp. reported interest and other credit facility expenses amounting to approximately $18.9 million for the three months ended September 30, 2024, and $55.3 million for the nine months ended September 30, 2024. The company had an average debt outstanding of $1.138 billion. The interest rate on these obligations includes a spread of approximately 5.58%.

Management and administrative fees

Management fees for the three months ended September 30, 2024, were approximately $7.9 million, while for the nine months ended September 30, 2024, these fees totaled $23.7 million. Administrative services expense for the same periods was recorded at $1.4 million for the three months and approximately $4.1 million for the nine months. Additionally, performance-based incentive fees amounted to $6.1 million for the three months and $18.1 million for the nine months.

Operational costs for investment management

Total operational expenses related to investment management for SLR Investment Corp. were approximately $35.5 million for the three months ended September 30, 2024, and $104.5 million for the nine months ended September 30, 2024. This includes various general and administrative expenses, which were around $1.2 million for the three months and approximately $3.3 million for the nine months.

Legal and compliance expenses

Legal and compliance expenses, which are essential for adhering to regulatory requirements, include costs associated with independent audits, reporting, and compliance obligations under the 1940 Act. These costs are part of the general and administrative expenses and are expected to increase moderately in dollar terms as the company continues to grow. The specific amount allocated to legal and compliance expenses is not detailed, but they contribute to the overall administrative services expense of approximately $4.1 million for the nine months ended September 30, 2024.

Cost Category	Q3 2024 Expenses (in millions)	9M 2024 Expenses (in millions)
Interest Expenses	$18.9	$55.3
Management Fees	$7.9	$23.7
Administrative Services	$1.4	$4.1
Performance-Based Fees	$6.1	$18.1
Operational Costs	$35.5	$104.5
General and Administrative Expenses	$1.2	$3.3

SLR Investment Corp. (SLRC) - Business Model: Revenue Streams

Interest income from debt investments

As of September 30, 2024, SLR Investment Corp. generated interest income of approximately $41.1 million from companies less than 5% owned, $926,000 from companies 5% to 25% owned, and $3.4 million from companies more than 25% owned. For the nine months ended September 30, 2024, the total interest income amounted to $122.1 million from companies less than 5% owned, $2.6 million from companies 5% to 25% owned, and $10.0 million from companies more than 25% owned.

Dividend income from equity holdings

For the three months ended September 30, 2024, SLR Investment Corp. recognized dividend income of $12.5 million from companies more than 25% owned and $91,000 from companies 5% to 25% owned. For the nine months ending September 30, 2024, total dividend income was $37.2 million from companies more than 25% owned.

Capital gains from investment sales

During the three months ended September 30, 2024, SLR Investment Corp. reported net realized losses on investments of approximately $2.7 million. For the nine months ended September 30, 2024, net realized losses totaled $2.5 million. The company's portfolio included various investments, with a fair value of $1.1 billion for companies less than 5% owned and $874.5 million for companies more than 25% owned as of September 30, 2024.

Fees for advisory and management services

For the three months ended September 30, 2024, SLR Investment Corp. incurred management fees of $7.9 million and performance-based incentive fees of $6.1 million. Over the nine-month period, management fees totaled $23.7 million, and performance-based fees reached $18.1 million.

Revenue Stream	Q3 2024 (in millions)	YTD 2024 (in millions)
Interest Income from Debt Investments	$41.1	$122.1
Dividend Income from Equity Holdings	$12.5	$37.2
Capital Gains from Investment Sales	Net Realized Losses: ($2.7)	Net Realized Losses: ($2.5)
Fees for Advisory and Management Services	$14.0	$41.8

Updated on 16 Nov 2024

Resources:

1. SLR Investment Corp. (SLRC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SLR Investment Corp. (SLRC)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View SLR Investment Corp. (SLRC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.