We intend to distribute monthly 90% or more of our net investment income and short-term capital gains, if any.  All cash distributions will be distributed to you unless you elect to have your dividends reinvested under our dividend reinvestment plan in additional whole and fractional shares.  If you hold your shares in the name of a broker or other nominee, you should contact the broker or nominee regarding participation in the dividend reinvestment plan on your behalf.

For more information about our dividend reinvestment plan go to the dividend reinvestment plan page or contact our transfer agent.

We have five types of distributions that we make to shareholders.

1. Ordinary Income: This type of income arises from the receipt of interest income on the notes we buy from businesses. This type of income is the same from a tax viewpoint as if you received this interest income directly from the borrower. For US taxpayers this is considered ordinary income. For foreign taxpayers, there may be some tax advantage. We mark this income as Income on the chart below.

2. Short Term Capital Gains: This type of income arises from the sale of a stock or other security in less than one year. This income is the same as if the tax payer had sold the security. For US taxpayers this is considered income that is the same as ordinary income and would be taxed accordingly. In the chart below this is marked as ST Capital Gains.

3. Long Term Capital Gains: This is income that arises from the sale of stock after holding it for over one year. It is to be treated as if the taxpayer has sold the stock and can be entered on a tax return as Long Term Capital Gains. For a US taxpayer this is considered capital gains and the usual rate is 15%. In the chart below this is marked LT Capital Gains.

4. Dividends: This income arises when we receive a dividend on the stock we hold. It is treated as if the taxpayer has sold the stock and can be entered on a tax return as a Dividend. This income is considered as “qualified” for the sake of the 15% tax rate on Dividends in the United States. In the chart below, this income is marked Dividend.

5. Return of Capital: Sometimes due to tax timing differences, we may make a distribution that contains a return of your capital. There is no tax on the return of capital. In the chart below we mark this distribution as Return of Capital.

To help shareholders we have set out a separate column to let you know which of our dividends fall into the categories set out above. We have a second column that will help you determine quickly if the income you received is Qualified for the new 15% tax advantage.

You should always check with your tax consultant to confirm the information set out above because the tax code changes and some taxpayers are treated differently from other taxpayers.

If you are a U.S. Taxpayer, please click here for a PDF table showing our dividend history.