Monroe Capital’s $1 Billion ‘M-LEND’ BDC Declared Effective

The U.S. Securities and Exchange Commission has declared effective a non-traded business development company from Chicago-headquartered asset management firm Monroe Capital LLC.

Monroe Capital Enhanced Corporate Lending Fund, or M-LEND, seeks to raise up to $1 billion in common shares of beneficial interest and is focusing on directly originated and proprietary lending to the U.S. lower middle market.

The lower middle market, the fund’s target borrowers, are generally defined as companies with between $50 million and $350 million in annual revenue; $3 million and $35 million of annual net income before net interest expense, income tax expense, depreciation and amortization; and/or $50 million and $250 million in annual recurring revenue. The BDC may also selectively invest in foreign instruments and illiquid and restricted securities.

Providing capital solutions within the United States and Canada since 2004, Monroe Capital specializes in private credit markets across various strategies, including direct lending, asset-based lending, specialty finance, alternative credit solutions, structured credit, venture debt, and equity. The firm reported $21.6 billion in committed and managed assets under management as of July 1, 2025.

As of Nov. 30, 2025, the fund had investments in 28 portfolio companies, having an aggregate amortized cost of $157.1 million. Also, the fund had accepted capital contributions of approximately $100 million and had $71.3 million of principal debt outstanding, resulting in a debt-to-equity ratio of approximately 0.71x. As of the end of November, 100% of the debt investments at amortized cost in the fund’s portfolio were floating rate.

M-LEND’s primary objective is to originate and invest primarily in senior secured loans, as well as club transactions – loans arranged by smaller lender groups – and syndicated loans offered to multiple lenders.

Under normal circumstances, the fund seeks to invest at least 80% of total assets (net assets plus borrowings for investment purposes) in credit and credit-related instruments issued by corporate issuers. Eligible credit instruments include notes, bills, debentures, bank loans, and convertible or preferred securities. A smaller portion of the fund’s investments may be comprised of what it calls “covenant-lite loans,” referring to loans that do not have a complete set of financial maintenance covenants.

M-LEND will be externally managed by Monroe Capital BDC Advisors LLC. The fund also intends to elect to be treated as a regulated investment company for federal income tax purposes.

The offering will include three separate share classes – Class S, Class D, and Class I – to accommodate different investment platforms and fee structures. The minimum initial investment for Class S and D shares is $2,500, and the minimum for Class I shares (unless waived by the fund or managing dealer) is $1 million. The company intends to pay regular monthly distributions.

Summary of Share Classes

Class I shares are designed for institutional and advisory platform investors, such as registered investment advisers, family offices, and qualified institutional buyers accessing the fund through fee-based programs. Class I carries no sales load or servicing fees, making it the lowest-cost share class.

Class D shares are geared toward brokerage and advisory clients accessing the fund through broker-dealer or hybrid advisory platforms that charge a modest servicing fee. Class D includes a 0.25% annual distribution and servicing fee, with no upfront sales load, and typically suits investors working through low-commission or advisory channels.

Class S shares are intended for retail investors purchasing through traditional brokerage channels. This class includes an ongoing 0.85% servicing fee and may be subject to up to a 3.5% upfront placement fee from intermediaries. It is designed to compensate selling brokers for distribution and shareholder servicing.

The purchase price for each share class will be equal to the fund’s net asset value per share, calculated as of the day preceding the monthly share purchase. M-LEND has already secured an exemptive order from the SEC, which permits it to issue these multiple share classes with varying shareholder servicing and distribution fees.

Fee Breakdown

Each class is subject to different fees and expenses.

Management fee: The adviser will be paid an annual management fee of 1.25% of the fund’s average total assets (which includes assets financed using leverage). No management fee will be charged on the portion of the fund’s total assets below a 200% asset-coverage ratio. Through Dec. 31, 2026, the adviser has voluntarily agreed to waive a portion of this fee, reducing it to 0.95% of average total assets.

Incentive fee: The incentive fee consists of two components:

• Income incentive fee: 12.5% of the pre-incentive fee net investment income for each calendar quarter, subject to a 6% annualized hurdle rate, with a catch-up to 1.7143% per quarter and 12.5% thereafter; and
• Capital gains incentive fee: 12.5% of cumulative realized capital gains, net of realized losses and unrealized depreciation, paid annually in arrears.

Distribution and servicing fees, all paid monthly in arrears:

• Class S: 0.85% of NAV (annual);
• Class D: 0.25% of NAV (annual); and
• Class I: None

Upfront sales load: No upfront sales are charged by the fund; however, intermediaries may charge up to 3.5% (Class S) or 1.5% (Class D) directly to investors.

Managing dealer fee: The fund pays a 0.02% (2 bps) fee on capital raised to its managing dealer, InspereX LLC.

Leverage/interest expenses are variable and dependent on borrowing costs; there is not a fixed percentage.

The offering is being conducted on a “best efforts” basis by InspereX LLC, meaning the firm is not obligated to sell a specific amount of shares. Furthermore, for its Class S and Class D shares, M-LEND intends to hold investor funds in escrow until purchase orders are received from at least 100 investors for each respective class.

The registration of M-LEND underscores continued momentum in the non-traded BDC market, as managers seek to expand access to private credit through perpetual vehicles.

Fee Summary by Share Class

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