As filed with the Securities and Exchange Commission on November 20, 2009

Securities Act File No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM N-2

 

x	REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

o	Pre-effective Amendment No.
o	Post-effective Amendment No.

 

GOLUB CAPITAL BDC LLC

(Exact Name of Registrant as Specified in Charter)

 

150 South Wacker Drive, Suite 800
Chicago, Illinois 60606

(Address of Principal Executive Offices)

(312) 205-5050

(Registrant’s Telephone Number, Including Area Code)

David B. Golub
Golub Capital BDC LLC
150 South Wacker Drive, Suite 800
Chicago, Illinois 60606

(Name and Address of Agent for Service)

 

Copies to:

Thomas J. Friedmann David J. Harris Dechert LLP 1775 I Street, N.W. Washington, D.C. 20006 (202) 261-3300	Jay L. Bernstein Andrew S. Epstein Clifford Chance US LLP 31 West 52nd Street New York, NY 10019 (212) 878-8000

 

Approximate date of proposed public offering: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box. o

It is proposed that this filing will become effective (check appropriate box):

o when declared effective pursuant to section 8(c).

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

Title of Securities Being Registered	Proposed Maximum Aggregate Offering Price(1)		Amount of Registration Fee(2)
Common Stock, par value $0.001 per share	$	172,500,000	$	9,625.50

(1) Includes the underwriters’ over-allotment option.

(2) Estimated pursuant to Rule 457(o) solely for purpose of determining the registration fee.

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS	SUBJECT TO COMPLETION   , 2009

               Shares

GOLUB CAPITAL BDC, INC.

Common Stock

We are an externally managed, closed-end, non-diversified management investment company that intends to file an election to be treated as a business development company under the Investment Company Act of 1940. We were formed to continue and expand the business of Golub Capital Master Funding LLC, which commenced operations in July 2007 and is our direct, wholly owned subsidiary. Our investment objective is to provide our stockholders with current income and capital appreciation through debt and minority equity investments in middle-market companies.

GC Advisors LLC will serve as our external manager. GC Service Company, LLC will serve as our administrator. These entities are affiliated with Golub Capital, a leading lender to middle-market companies that had more than $3.5 billion of investments and outstanding loan commitments as of October 31, 2009.

This is an initial public offering of our shares of common stock. All of the     shares of common stock offered by this prospectus are being sold by us.

Our shares of common stock have no history of public trading. We currently expect that the initial public offering price per share of our common stock will be $    . We intend to apply to have our common stock approved for quotation on The Nasdaq Global Market under the symbol “GBDC”.

Prior to our conversion into a corporation and the completion of this offering, GEMS, L.P., an affiliate of GC Advisors LLC, is expected to purchase in a private placement      limited liability company interests in us for an aggregate of $     million, which limited liability company interests will be converted into shares of our common stock at the time of such conversion.

Investing in our common stock involves a high degree of risk. Before buying any shares, you should read the discussion of the material risks of investing in our common stock, including the risk of leverage, in “Risk Factors” beginning on page 16 of this prospectus.

This prospectus contains important information you should know before investing in our common stock. Please read it before you invest and keep it for future reference. Upon completion of this offering, we will file annual, quarterly and current reports, proxy statements and other information about us with the Securities and Exchange Commission, or the SEC. This information will be available free of charge by contacting us at 150 South Wacker Drive, Suite 800, Chicago, Illinois 60606, Attention: Investor Relations, or by calling us collect at (312) 205-5050. The SEC also maintains a website at http://www.sec.gov that contains such information.

Shares of closed-end investment companies, including business development companies, frequently trade at a discount to their net asset value. If our shares trade at a discount to our net asset value, it may increase the risk of loss for purchasers in this offering. Assuming an initial public offering price of $     per share, purchasers in this offering will experience immediate dilution of approximately $     per share. See “Dilution” for more information.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

	Per Share	Total
Public offering price	$	$
Sales load (underwriting discounts and commissions)	$	$
Proceeds to us, before expenses(1)	$	$

(1) We estimate that we will incur expenses of approximately $       in connection with this offering.

In addition, the underwriters may purchase up to an additional       shares of our common stock at the public offering price, less the sales load payable by us, to cover over-allotments, if any, within 30 days from the date of this prospectus. If the underwriters exercise this option in full, the total sales load will be $      , and total proceeds, before expenses, will be $      .

 

The underwriters are offering the common stock as set forth in “Underwriting.” Delivery of the shares will be made on or about       , 2010.

Joint Book-Running Managers
Wells Fargo Securities	UBS Investment Bank

Co-Managers
Stifel Nicolaus	BMO Capital Markets

The date of this prospectus is       , 2010

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date. We will update these documents to reflect material changes only as required by law.

Through and including           , 2010 (25) days after the date of the prospectus, U.S. federal securities laws may require all dealers that effect transactions in our common stock, whether or not participating in this offering, to deliver a prospectus. This is in addition to the dealers’ obligations to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

TABLE OF CONTENTS

	Page
Prospectus Summary		1
The Offering		8
Fees and Expenses		13
Risk Factors		16
Special Note Regarding Forward-Looking Statements		37
Use of Proceeds		38
Distributions		38
The BDC Conversion		39
Capitalization		40
Dilution		42
Selected Financial and Other Information		43
Management’s Discussion and Analysis of Financial Condition and Results of Operations		44
The Company		59
Portfolio Companies		70
Management		77
Management Agreeements		82
Certain Relationships		91
Control Persons and Principal Stockholders		94
Determination of Net Asset Value		95
Dividend Reinvestment Plan		97
Material U.S. Federal Income Tax Considerations		99
Description of Our Capital Stock		106
Regulation		111
Shares Eligible for Future Sale		117
Custodian, Transfer and Dividend Paying Agent and Registrar		118
Brokerage Allocation and Other Practices		118
Underwriting		119
Legal Matters		126
Independent Registered Public Accounting Firm		126
Available Information		126
Index to Financial Statements		F-1

i

PROSPECTUS SUMMARY

This summary highlights some of the information in this prospectus. It is not complete and may not contain all of the information that you may want to consider. You should read the more detailed information set forth under “Risk Factors” and the other information included in this prospectus carefully. Except where the context suggests otherwise, the terms “we,” “us,” “our” and “Golub Capital BDC” refer to Golub Capital BDC LLC, a Delaware limited liability company, and its consolidated subsidiaries for the periods prior to consummation of the BDC Conversion, and refer to Golub Capital BDC, Inc., a Delaware corporation, and its consolidated subsidiaries for the periods after the consummation of the BDC Conversion. “GCMF” refers to Golub Capital Master Funding LLC, a Delaware limited liability company and our wholly owned subsidiary and predecessor; “GC Advisors” refers to GC Advisors LLC, our external adviser; “GC Service” refers to GC Service Company, LLC, an affiliate of GC Advisors and our administrator; “Golub Capital” refers, collectively, to the activities and operations of Golub Capital Incorporated and Golub Capital Management LLC (the two entities which employ all of Golub Capital’s investment professionals) as well as GC Advisors, GC Service, associated investment funds and their respective affiliates. We refer in this prospectus to our directors and officers, and to the officers of GC Advisors and GC Service, collectively, as the “Management.”

Prior to the date of this prospectus and our election to be treated as a business development company, we will complete a conversion under which Golub Capital BDC, Inc. will succeed to the business of Golub Capital BDC LLC and its consolidated subsidiaries, and the members of Golub Capital BDC LLC will become stockholders of Golub Capital BDC, Inc. In this prospectus, we refer to such transactions as the “BDC Conversion.” Unless otherwise indicated, the disclosure in this prospectus gives effect to the BDC Conversion.

Golub Capital BDC

We are an externally managed, closed-end, non-diversified management investment company that intends to file an election to be regulated as a business development company under the Investment Company Act of 1940, or the 1940 Act. We were formed to continue and expand the business of our predecessor, GCMF, which commenced operations in July 2007, in making investments in senior secured, one-stop, second lien, mezzanine loans and warrants and minority equity securities of middle-market companies that are, in most cases, sponsored by private equity investors. In this prospectus, the term “middle-market” generally refers to companies having earnings before interest, taxes, depreciation and amortization, or EBITDA, of between $5 million and $40 million annually, and “one-stop loan” refers to a loan that combines characteristics of traditional first-lien senior secured loans and second-lien or subordinated loans.

Our investment objective is to maximize the total return to our stockholders through both current income and capital appreciation through debt and minority equity investments. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital, a leading lender to middle-market companies with more than $3.5 billion of investments and loan commitments as of October 31, 2009.

As of September 30, 2009, our portfolio primarily consisted of investments in senior secured loans ($248.5 million) and, to a lesser extent, one-stop loans ($117.4 million) and second-lien loans ($10.5 million), to middle-market companies organized and located primarily in the United States. While our portfolio on the date of this prospectus comprises primarily senior secured loans, going forward we intend to pursue a strategy focused on investing in one-stop, second lien and mezzanine loans and warrants and minority equity securities in U.S. middle-market companies. Accordingly, over time we expect that senior secured loans will represent a smaller percentage of our investment portfolio as these investments are repaid and we shift to a different mix of assets. We expect that our investments in loans will initially range between $10 million and $25 million each. In many cases, we anticipate that we will have opportunities to make equity co-investments or receive warrants to purchase equity securities of portfolio companies. We may also selectively invest more than $25 million in the securities of some portfolio companies, and we expect that the size of our individual investments will vary proportionally with the size of our capital base.

1

As discussed in the “Market Opportunity” section below, we believe one-stop, second lien and mezzanine loans represent particularly attractive investments when compared to similar loans originated in the 2006-2008 period due to what we expect to be more attractive pricing in connection with more conservative borrowing terms and deal structures.

Our Advisor

Our investment activities are managed by our external manager, GC Advisors. GC Advisors is responsible for sourcing potential investments, conducting research on prospective investments, analyzing investment opportunities, structuring our investments and monitoring our investments and portfolio companies on an ongoing basis. GC Advisors was organized in September 2008 and is a registered investment adviser under the Investment Advisers Act of 1940.

GC Advisors is an affiliate of Golub Capital and has entered into a staffing agreement, or the Staffing Agreement, with two Golub Capital affiliates, Golub Capital Incorporated and Golub Capital Management LLC, under which these companies will make experienced investment professionals available to GC Advisors and provide access to the senior investment personnel of Golub Capital and its affiliates. The Staffing Agreement should provide GC Advisors with access to deal flow generated by Golub Capital and its affiliates and commits the members of our investment committee to serve in that capacity. GC Advisors intends to capitalize on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of Golub Capital’s investment professionals.

An affiliate of GC Advisors, GC Service, will provide the administrative services necessary for us to operate.

About Golub Capital

Golub Capital, founded in 1994, is a top-ranked lender to middle-market companies. Reuters Loan Pricing Corporation ranked Golub Capital as the leading senior lender for middle-market leveraged buyouts (defined as total debt financing of under $100 million) for the first three calendar quarters of 2009 and as the third-leading senior lender for the same category in 2008, based both on deal value and number of deals. In 2008, Golub Capital was presented with three major middle-market lender awards from leading industry publications, including: Buyouts Magazine’s “Middle-market Lender of the Year,” M&A Advisor’s “Financing Firm of the Year” and ACG Mergers & Acquisitions’ “M&A Lender of the Year.” In addition, M&A Advisor named Golub Capital the “Mezzanine Financing Agent of the Year” in 2009. As of October 31, 2009, Golub Capital managed more than $3.5 billion of investments and outstanding loan commitments, with a team of 39 investment professionals dedicated to U.S. middle-market lending in New York, Chicago and Atlanta.

Since its founding Golub Capital has completed debt financings with more than 110 middle-market sponsors, and closed multiple debt financings with more than 40 sponsors. We believe that Golub Capital enjoys robust deal flow. Golub Capital received notice of over 1,300 and 650 potential investments in 2008 and the first nine months of 2009, respectively, many of which we believe were proprietary, relationship-based opportunities.

We believe Golub Capital has a long track record of investing in one-stop and junior capital financings, which will be our long-term investment focus, and invested more than $1.8 billion in one-stop and mezzanine transactions across a variety of market environments and industries between 2001 and September 30, 2009. From 2004 through September 30, 2009, Golub Capital invested in more than 240 middle-market companies and, as of September 30, 2009, it held debt investments in more than 180 middle-market companies. Golub Capital has developed expertise in industries such as business and consumer services, consumer products, defense, value-added distribution, healthcare services, manufacturing, media and restaurants.

Golub Capital’s middle-market lending group is managed by a four member senior management team consisting of Lawrence E. Golub, David B. Golub, Gregory W. Cashman and Andrew H. Steuerman. As of September 30, 2009, Golub Capital’s 39 investment professionals had an average of over 12 years of investment experience and were supported by 47 administrative and back office personnel that focus on operations, finance, legal and compliance, accounting and reporting, marketing, information technology and office management.

2

Market Opportunity

We intend to pursue a strategy focused on investing in one-stop, second lien and mezzanine loans and warrants and minority equity securities in U.S. middle-market companies.

Specialized Lending Requirements.  We believe that several factors render many U.S. financial institutions ill-suited to lend to U.S. middle-market companies. For example, we believe that lending to private middle-market companies in the United States (1) is generally more labor intensive than lending to larger companies due in part to the smaller size of each investment and the fragmented nature of information for such companies, (2) requires due diligence and underwriting practices consistent with the demands and economic limitations of the middle-market and (3) may also require more extensive ongoing monitoring by the lender.

Robust Demand for Debt Capital.  Private equity firms raised record amounts of equity commitments in 2006-2008, far in excess of the amount of equity they invested. As of September 30, 2009, there was approximately $735 billion of private equity capital available and uninvested in the United States. We believe the large amount of unfunded buyout commitments will drive demand for leveraged buyouts over the next several years, which we believe will, in turn, create leveraged lending opportunities for us.

Significant Refinancing Requirements.  We believe the debt associated with a large number of middle-market leveraged merger and acquisition transactions completed from 2005 to 2008 should start to come due in the 2010-2013 time period. In many cases, this debt will need to be refinanced as the existing debt facilities mature. When combined with the decreased availability of debt financing for middle market companies generally, we believe these factors should increase lending opportunities for us.

Attractive Pricing.  We believe that reduced access to, and availability of, debt capital has improved available loan pricing for middle-market lenders. For example, we believe that interest rates charged on mezzanine credit facilities have been at or above 16% per annum in many instances, versus typical rates of 11% to 13% in 2007. Recent mezzanine deals typically have included meaningful upfront fees, prepayment protections and, in some cases, warrants, all of which should enhance the profitability to lenders.

Conservative Deal Structures.  As a result of the credit crisis, we believe lenders are requiring less leverage, more equity and more comprehensive loan covenants than was customary in the years leading up to the credit crisis. Lower debt multiples on purchase prices suggest that the cash flow of borrowing companies should enable them to service their debt more easily, creating a greater buffer against a downturn. Based on our review of a number of middle-market debt transactions completed in the first three quarters of 2009, we believe total leverage multiples declined significantly in the first half of 2009, and we expect leverage levels to remain at these levels through 2011.

Increased Equity Cushions.  As leverage has decreased, equity contributions to buyouts of middle-market companies have increased. Based on our review of a number of middle-market debt transactions completed in the first half of 2009, we believe the equity component of the purchase price of buyouts of middle market companies increased substantially in the first half of 2009. We believe lower leverage reduces risk to providers of debt financing.

3

Competitive Strengths

Deep, Experienced Management Team.  We are managed by GC Advisors, which will have access through a staffing agreement with Golub Capital to the resources and expertise of Golub Capital’s 86 employees, led by our chairman, Lawrence E. Golub, and our chief executive officer, David B. Golub. As of September 30, 2009, the 39 investment professionals of Golub Capital had an average of over 12 years of investment experience and were supported by 47 administrative and back office personnel that focus on operations, finance, legal and compliance, accounting and reporting, marketing, information technology, and office management.

Leading U.S. Debt Platform Provides Access to Proprietary Relationship-Based Deal Flow.  GC Advisors gives us access to the deal flow of Golub Capital, which we believe to be one of the leading middle-market lenders in the United States. Reuters Loan Pricing Corporation ranked Golub Capital as the leading senior lender for middle-market leveraged buyouts (total debt financing of under $100 million) for the first three calendar quarters of 2009 and third-leading senior lender for the same category in 2008, based both on deal volume and number of deals. Since its inception, Golub Capital has completed at least one debt financing with over 110 sponsors and multiple debt financings with over 40 sponsors. We believe that Golub Capital receives relationship-based “early looks” and “last looks” at many investment opportunities in the U.S. middle-market market, allowing it to be highly selective in the transactions it pursues.

Disciplined Investment and Underwriting Process.  GC Advisors intends to utilize the time-tested, efficient and reliable investment process of Golub Capital for reviewing lending opportunities, structuring transactions and monitoring investments. Under its disciplined approach to lending, GC Advisors will seek to minimize credit losses through effective underwriting, comprehensive due diligence investigations, structuring and the implementation of restrictive debt covenants.

Regimented Credit Monitoring.  Following each investment, GC Advisors implements a regimented credit monitoring system. We believe this careful approach, which involves ongoing review and analysis by teams of professionals, enables us to identify problems early and to assist borrowers before they face difficult liquidity constraints.

Concentrated Middle-Market Focus:  We believe there are significant advantages to our focus on the middle-market:

• Middle-market companies are generally less leveraged than large companies and, we believe, offer more attractive investment returns in the form of upfront fees, prepayment penalties and higher interest rates;

• Middle-market issuers are more likely to have simple capital structures;

• Carefully structured covenant packages enable middle-market lenders to take early action to remediate poor financial performance; and

• Middle-market lenders can undertake thorough due diligence investigations prior to investment.

Recent Developments

BDC Conversion.  Golub Capital BDC LLC was formed in November 2009 to continue and expand the business of our predecessor, GCMF, which commenced operations in July 2007. All of the outstanding limited liability company interests in GCMF were held initially by three Delaware limited liability companies, Golub Capital Company IV, LLC, Golub Capital Company V, LLC and Golub Capital Company VI, LLC, or the GCMF Owners. In November 2009, the GCMF Owners formed Golub Capital BDC LLC, into which they contributed 100% of the membership interests of GCMF and from which they received a proportionate number of units representing limited liability company interests in Golub Capital BDC LLC. Immediately prior to the completion of this offering, Golub Capital BDC LLC intends to convert into a Delaware corporation, Golub Capital BDC, Inc., and all of the outstanding limited liability company interests will be converted into shares of common stock. In this prospectus, we refer to this conversion as the “BDC Conversion.” See “BDC Conversion.”

4

GC Private Placement. In       , GEMS, a limited partnership affiliated with GC Advisors, purchased      limited liability company interests in Golub Capital BDC LLC for gross proceeds of $     million (before deducting related expenses, which were not significant). Investors in GEMS include employees and management of Golub Capital and its affiliates as well as a small number of long-time investors in funds sponsored by Golub Capital. The limited liability company interests in Golub Capital BDC LLC and, after giving effect to the BDC Conversion, the shares of common stock of Golub Capital BDC, Inc., purchased by GEMS have not been registered under the Securities Act of 1933, as amended, or the Securities Act, and are, accordingly, subject to restrictions on transfer and to a   -day lock-up agreement with the underwriters of this offering. See “Capitalization,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Recent Developments and Estimates,” “Certain Transactions — Registration Rights” and “Underwriting.”

GCMF Asset Sales.  In       , our wholly owned subsidiary and predecessor, GCMF, sold portfolio assets with a fair value of $61.3 million as of September 30, 2009 for gross proceeds of $     million. We refer to this sale as the GCMF Asset Sales. We decided to undertake the GCMF Asset Sales to remove from our portfolio certain widely syndicated senior secured loans and other assets that were not consistent with the investment strategy that we intend to pursue after the completion of this offering. The GCMF Asset Sales were completed with unaffiliated third-party buyers in market transactions and, in a limited number of cases, through negotiated sales with the GCMF Owners, which held all of our limited liability interests prior to the completion of the GC Private Placement. After giving effect to the GCMF Asset Sales, our investment portfolio had a net asset value of $     million, or $       per Golub Capital BDC LLC limited liability company interest, and a weighted average annualized yield as of September 30, 2009 of    %.

SBIC License.  Golub Capital is an experienced manager of Small Business Investment Companies, or SBICs, licensed by the U.S. Small Business Administration, or SBA. Golub Capital currently operates two SBIC licensees and recently received a letter from the Investment Division of the SBA, inviting Golub Capital to complete an application to form a third SBIC. This step formally commences the licensing process. Shortly after the closing of the offering, we intend to amend Golub Capital’s pending application, or submit a new application, so that one of our subsidiaries will be the applicant for a new SBIC license. If this application is approved, our SBIC subsidiary will be a wholly owned subsidiary and will be able to rely on an exclusion from the definition of “investment company” under the 1940 Act. As such, this subsidiary will not elect to be treated as a business development company under the 1940 Act. Our SBIC subsidiary will have an investment objective similar to ours and will make similar types of investments in accordance with SBIC regulations.

To the extent that we receive an SBIC license, our SBIC subsidiary will be allowed to issue SBA-guaranteed debentures, subject to the required capitalization of the SBIC subsidiary. SBA guaranteed debentures carry long-term fixed rates that are generally lower than rates on comparable bank and other debt. Under the regulations applicable to SBICs, an SBIC may have outstanding debentures guaranteed by the SBA generally in an amount up to twice its regulatory capital, which generally equates to the amount of its equity capital. The SBIC regulations currently limit the amount that our SBIC subsidiary may borrow to a maximum of $150 million. This means that our SBIC subsidiary may access the full $150 million maximum available if it has $75 million of equity capital, and we may decide to capitalize it with a lesser amount. In addition, if we are able to obtain financing under the SBIC program, our SBIC subsidiary will be subject to regulation and oversight by the SBA, including requirements with respect to maintaining certain minimum financial ratios and other covenants.

Operating and Regulatory Structure

Our investment activities will be managed by GC Advisors under the direction of our board of directors, a majority of whom are independent of Golub Capital BDC, GC Advisors and their respective affiliates.

As a business development company, we will be required to comply with certain regulatory requirements. For example, while we are permitted to finance investments using leverage, which may include the issuance of shares of preferred stock, or notes and other borrowings, our ability to use leverage is limited in significant respects. See “Regulation.” Any decision on our part to use leverage will depend upon our assessment of the attractiveness of available investment opportunities in relation to the costs and perceived risks of such

5

leverage. The use of leverage to finance investments creates certain risks and potential conflicts of interest. See “Risk Factors — Risks Relating to our Business and Structure — Regulations governing our operation as a business development company affect our ability to and the way in which we raise additional capital. As a business development company, we will need to raise additional capital, which will expose us to risks, including the typical risks associated with leverage.” and “Risk Factors — Risks Relating to our Business and Structure — We intend to finance our investments with borrowed money, which will magnify the potential for gain or loss on amounts invested and may increase the risk of investing in us.”

Also, as a business development company, we will be generally prohibited from acquiring assets other than “qualifying assets” unless, after giving effect to any acquisition, at least 70% of our total assets are qualifying assets. Qualifying assets generally include securities of “eligible portfolio companies,” cash, cash equivalents, U.S. government securities and high-quality debt instruments maturing in one year or less from the time of investment. Under the rules of the Investment Company Act of 1940, as amended, or the 1940 Act, “eligible portfolio companies” include (1) private domestic operating companies, (2) public domestic operating companies whose securities are not listed on a national securities exchange (e.g., the New York Stock Exchange, American Stock Exchange and The Nasdaq Global Market) or registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and (3) public domestic operating companies having a market capitalization of less than $250 million. Public domestic operating companies whose securities are quoted on the over-the-counter bulletin board and through Pink Sheets LLC are not listed on a national securities exchange and therefore are eligible portfolio companies. See “Regulation.”

We intend to elect to be treated for U.S. federal income tax purposes as a regulated investment company, or RIC, under the Internal Revenue Code of 1986, or the Code. In order to be treated as a RIC, we must satisfy certain source of income, asset diversification and distribution requirements. See “Material U.S. Federal Income Tax Considerations.”

Conflicts of Interests

Subject to certain 1940 Act restrictions on co-investments with affiliates, GC Advisors will offer us the right to participate in all investment opportunities that it determines are appropriate for us in view of our investment objective, policies and strategies and other relevant factors. Such offers will be subject to the exception that, in accordance with GC Advisors’ conflict of interest and allocation policies, we might not participate in each individual opportunity but will, on an overall basis, be entitled to participate equitably with other entities managed by GC Advisors and its affiliates.

To the extent that we compete with entities managed by GC Advisors or any of its affiliates for a particular investment opportunity, GC Advisors will allocate investment opportunities across the entities for which such opportunities are appropriate consistent with (1) its internal conflict of interest and allocation policies, (2) the requirements of the Investment Advisers Act of 1940, as amended, or the Advisers Act, and (3) certain restrictions under the 1940 Act regarding co-investments with affiliates. GC Advisors’ allocation policies are intended to ensure that we may generally share equitably with other investment funds managed by GC Advisors or its affiliates in investment opportunities, particularly those involving a security with limited supply or involving differing classes of securities of the same issuer which may be suitable for us and such other investment funds.

GC Advisors has historically managed, and currently manages, investment vehicles with similar or overlapping investment strategies and has put in place a conflict-resolution policy that addresses the co-investment restrictions set forth under the 1940 Act and seeks to ensure the equitable allocation of investment opportunities when we are able to invest alongside other accounts managed by our adviser and its affiliates. When we invest alongside such other accounts as permitted, such investments are made consistent with GC Advisors’ allocation policy. Under this allocation policy, a fixed percentage of each opportunity, which may vary based on asset class and from time to time, will be offered to us and similar eligible accounts, as periodically determined by GC Advisors and approved by our board directors, including our independent directors. The allocation policy further provides that allocations among us and these other accounts will generally be made pro rata based on each account’s capital available for investment, as determined, in our case, by our board of directors, including our independent directors. It is our policy to base our determinations as to the amount of capital available for investment based on such factors as: the amount

6

of cash on-hand, existing commitments and, reserves, if any, the targeted leverage level, the targeted asset mix and diversification requirements and other investment policies and restrictions set by our board of directors, or imposed by applicable laws, rules, regulations or interpretations. We expect that these determinations will be made similarly for other accounts. In situations where co-investment with other entities managed by GC Advisors or its affiliates is not permitted or appropriate, such as when there is an opportunity to invest in different securities of the same issuer, GC Advisors will need to decide whether we or such other entity or entities will proceed with the investment. GC Advisors will make these determinations based on its policies and procedures which generally require that such opportunities be offered to eligible accounts on a basis that will be fair and equitable over time, including, for example, through random or rotational methods. We and GC Advisors may in the future submit an exemptive application to the SEC to permit greater flexibility to negotiate the terms of co-investments if our board of directors determines that it would be advantageous for us to co-invest with other funds managed by GC Advisors or its affiliates in a manner consistent with our investment objectives, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. See “Certain Relationships.”

GC Advisors and its affiliates have other clients with similar or competing investment objectives, including one private fund that is continuing to seek capital commitments and will pursue an investment strategy similar to our strategy. In serving these clients, GC Advisors may have obligations to other clients or investors in those entities. Our investment objective may overlap with such affiliated investment funds, accounts or other investment vehicles. GC Advisors’ allocation procedures are designed to allocate investment opportunities among the investment vehicles managed by GC Advisors and its affiliates in a manner consistent with its obligations under the Advisers Act. If two or more investment vehicles with similar investment strategies are actively investing, GC Advisors will seek to allocate investment opportunities among eligible accounts in a manner that is fair and equitable over time and consistent with its allocation policy. See “Risk Factors — Risks Relating to our Business and Structure — Conflicts related to obligations our investment committee, GC Advisors or its affiliates have to other clients.”

 

Our principal executive offices are located at 150 South Wacker Drive, Suite 800, Chicago, Illinois 60606, and our telephone number is (312) 205-5050. Our corporate website is located at                       . Information on our website is not incorporated into or a part of this prospectus.

7

THE OFFERING

Common Stock Offered by Us

           shares, excluding            shares of common stock issuable pursuant to the over-allotment option granted to the underwriters.

GC Private Placement

Prior to the BDC Conversion, GEMS, L.P., or GEMS, a limited partnership affiliated with GC Advisors, has agreed to purchase      limited liability company interests in Golub Capital BDC LLC for $     million. We anticipate that the use of proceeds from the GC Private Placement will be similar to the use of proceeds from this offering. The limited liability company interests acquired by GEMS will convert into shares of our common stock as part of the BDC conversion.

Common Stock to be Outstanding after this Offering

     shares (including      shares acquired by GEMS as limited liability company interests in Golub Capital BDC LLC in the GC Private Placement and converted into shares in the BDC Conversion), excluding      shares of common stock issuable pursuant to the over-allotment option granted to the underwriters.

Use of Proceeds

Our net proceeds from this offering will be approximately $      , or approximately $      if the underwriters fully exercise their over-allotment option in full, in each case assuming an initial public offering price of $      per share (the initial public offering price set forth on the cover page of this prospectus).

We intend to use $     million of the net proceeds of this offering, together with the proceeds of the GC Private Placement not yet invested on the date of this prospectus, to (1) repay $     of the outstanding principal of, and accrued and unpaid interest on, Existing Credit Facility and (2) invest the balance of the net proceeds in portfolio companies in accordance with our investment objective and the strategies described in this prospectus and for general corporate purposes. We expect that our new investments will consist primarily of one-stop, second lien and mezzanine loans. Pending such investments, we intend to invest the net proceeds of this offering primarily in cash, cash equivalents, U.S. Government securities and high-quality debt investments that mature in one year or less from the date of investment. These temporary investments may have lower yields than our other investments and, accordingly, may result in lower distributions, if any, during such period. See “Use of Proceeds.”

Investment Management Agreement

We pay GC Advisors a fee for its service under the investment management agreement, or the Investment Management Agreement. This fee consists of two components — a base management fee and an incentive fee. The base management fee is calculated at an annual rate of 1.375% of our average adjusted gross

8

assets (excluding cash and cash equivalents and including assets purchased with borrowed funds). The base management fee will be payable quarterly in arrears. The incentive fee is payable quarterly in arrears in an amount equal to the lesser of (a) the “Income and Capital Gains Incentive Fee Calculation” and (b) the “Cumulative Income Incentive Fee Calculation.”

The “Income and Capital Gains Incentive Fee Calculation” consists of two parts. The income component is calculated quarterly in arrears and equals 20% of our “pre-incentive fee net investment income” for the immediately preceding quarter, subject to a preferred return, or “hurdle,” and a “catch up” feature. The second part, the capital gain component, is calculated in arrears as of the end of each calendar year (or earlier, upon termination of the Investment Management Agreement) in an amount equal to 20% of our realized capital gains, if any, on a cumulative basis from the date of our election to become a BDC through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation, less the aggregate amount of any incentive fees previously paid that are attributable to the capital gain component.

The “Cumulative Income Incentive Fee Calculation” is based on our cumulative pre-incentive fee net income. This amount represents the sum of our:

•  

cumulative pre-incentive fee net investment income since the date of our election to become a BDC;

•  

cumulative aggregate realized capital gains since the date of our election to become a BDC;

•  

cumulative aggregate realized capital losses since the date of our election to become a BDC;

•  

cumulative aggregate unrealized capital depreciation since the date of our election to become a BDC; and

•  

cumulative aggregate unrealized capital appreciation since the date of our election to become a BDC.

The “Cumulative Income Incentive Fee Calculation” will equal 20.0% of our cumulative pre-incentive fee net income, less any incentive fees previously paid, and is calculated quarterly in arrears. Unlike the Income and Capital Gains Incentive Fee Calculation, the Cumulative Income Incentive Fee Calculation combines investment income and net capital gains (or losses) and looks back to the date of our election to become a BDC.

If at the end of any fiscal quarter the result of the Income and Capital Gains Incentive Fee Calculation described

9

above exceeds the result of the Cumulative Income Incentive Fee Calculation, the difference will be carried over to subsequent fiscal quarters. GC Advisors may “recapture” a portion of such carried over amount as part of the incentive fee payable to it at the end of any future fiscal quarter in which the result of the Cumulative Income Incentive Fee Calculation exceeds the result of the Income and Capital Gains Incentive Fee Calculation. The amount “recaptured” by GC Advisors at the end of such future period will equal the difference between the two calculations; provided that it cannot at any time exceed the aggregate amounts “carried over” from prior periods.

We will not pay an incentive fee at any time when, after giving effect to such payment, the cumulative incentive fees paid to date would exceed 20% of our cumulative pre-incentive fee net income since the date of our election to become a BDC. See “Management Agreements —  Management Fee.”

Proposed Symbol on the Nasdaq Stock Market

“GBDC”

Trading at a Discount

Shares of closed-end investment companies, including business development companies, frequently trade at a discount to their net asset value.

Distributions

We intend to make quarterly distributions to our stockholders out of assets legally available for distribution. Our quarterly distributions, if any, will be determined by our board of directors.

Taxation

We intend to elect to be treated for U.S. federal income tax purposes as a RIC. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any net ordinary income or capital gains that we distribute to our stockholders as distributions. To maintain RIC status and the associated tax benefits, we must meet specified source-of-income and asset diversification requirements and distribute annually at least 90% of our net ordinary income and net short-term capital gains, if any, in excess of our net long-term capital losses. See “Distributions.”

Leverage

As a business development company, we are permitted under the 1940 Act to borrow funds to finance a portion of our investments. As of September 30, 2009, we had $315.3 million of indebtedness outstanding under a variable funding note indenture, dated as of July 27, 2007, between GCMF, as issuer, and U.S. Bank National Association, as indenture trustee. We refer to this facility in this prospectus as the “Existing Credit Facility.”

Prior to the closing of this offering, we anticipate entering into a commitment letter with a lender for a new credit facility, or the New Credit Facility. Upon closing the

10

New Credit Facility, we would expect to borrow funds under it to repay the remaining outstanding principal amount of, and any accrued and unpaid interest on, the Existing Credit Facility and to finance additional investments. Our common stockholders will bear the costs associated with any borrowings under the Existing Credit Facility, the New Credit Facility or otherwise, or to finance new investments, including increased investment advisory fees payable to GC Advisors, as a result of such borrowings. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for details on our debt facilities.

Dividend Reinvestment Plan

We have adopted a dividend reinvestment plan for our stockholders, which is an “opt out” dividend reinvestment plan. Under this plan, if we declare a distribution, cash distributions to our stockholders will be reinvested automatically in additional shares of our common stock unless a stockholder specifically “opts out” of the dividend reinvestment plan. If a stockholder opts out, that stockholder will receive cash dividends or other distributions. Stockholders who receive distributions in the form of shares of common stock generally will be subject to the same U.S. federal, state and local tax consequences as stockholders who elect to receive their distributions in cash but will not receive cash with which any applicable taxes on reinvested dividends could be paid. See “Dividend Reinvestment Plan.”

Administration Agreement

We will reimburse GC Service under the Administration Agreement for our allocable portion (subject to the review and approval of our board of directors) of overhead and other expenses, including furnishing us with office facilities and equipment, providing clerical, bookkeeping, record-keeping and other administrative services at such facilities. To the extent that GC Service outsources any of its functions, we will pay the fees associated with such functions on a direct basis without incremental profit to GC Service. See “Management Agreements —  Administration Agreement.”

License Arrangements

We have entered into a license agreement with Golub Capital Management LLC, under which Golub Capital Management LLC has agreed to grant us a non-exclusive, royalty-free license to use the name “Golub Capital”. For a description of the license agreement, see “Management Agreements — License Agreement.”

Custodian and Transfer Agent

     will serve as our custodian, and      will serve as our transfer and dividend paying agent and registrar. See “Custodian, Transfer and Dividend Paying Agent and Registrar.”

Anti-Takeover Provisions

Our board of directors is divided into three classes of directors serving staggered three-year terms. This structure is intended to provide us with a greater

11

likelihood of continuity of management, which may be necessary for us to realize the full value of our investments. A staggered board of directors also may serve to deter hostile takeovers or proxy contests, as may certain other measures adopted by us. See “Description of Our Capital Stock.”

Available Information

We have filed with the SEC a registration statement on Form N-2, of which this prospectus is a part, under the Securities Act. This registration statement contains additional information about us and the shares of our common stock being offered by this prospectus. After the completion of this offering, we will be required to file periodic reports, proxy statements and other information with the SEC. This information will be available at the SEC’s public reference room at 100 F. Street, N.E., Washington, D.C. 20549 and on the SEC’s website at http://www.sec.gov. Information on the operation of the SEC’s public reference room may be obtained by calling the SEC at 1-800-SEC-0330.

We maintain a website at                      and intend to make all of our annual, quarterly and current reports, proxy statements and other information available, free of charge, on or through our website. Information on our website is not incorporated into or part of this prospectus. You may also obtain such information free of charge by contacting us in writing at 150 South Wacker Drive, Suite 800, Chicago, Illinois 60606, Attention: Investor Relations.

Risk Factors

An investment in our common stock is subject to risks. See “Risk Factors” on page 16 of this prospectus to read about factors you should consider before deciding to invest in shares of our common stock.

12

FEES AND EXPENSES

The following table is intended to assist you in understanding the costs and expenses that an investor in shares of our common stock will bear directly or indirectly. Except where the context suggests otherwise, whenever this prospectus contains a reference to fees or expenses paid by “you,” “us” or “Golub Capital BDC,” or that “we” will pay fees or expenses, common stockholders will indirectly bear such fees or expenses as investors in Golub Capital BDC.

Stockholder transaction expenses:
Sales load (as a percentage of offering price)			%(1)
Offering expenses (as a percentage of offering price)			%(2)
Dividend reinvestment plan expenses		—	(3)
Total stockholder transaction expenses (as a percentage of offering price)			%
Estimated annual expenses (as percentage of net assets attributable to common stock):
Management fees			%(4)
Incentive fees payable under the Investment Management Agreement			%(5)
Interest payments on borrowed funds			%(6)
Other expenses			%(7)
Total annual expenses (estimated)			%

We caution you that some of the percentages indicated in the table above are estimates and may vary.

(1) The underwriting discount and commission with respect to shares of our common stock sold in this offering, which is a one-time fee paid to the underwriters, is the only sales load paid in connection with this offering.

(2) Amount reflects estimated offering expenses of approximately $      .

(3) The expenses of the dividend reinvestment plan are included in “Other expenses.” See “Dividend Reinvestment Plan.”

(4) Our management fee is calculated at an annual rate of 1.375%, is based on our average adjusted gross assets (excluding cash and cash equivalents and including assets purchased with borrowed funds) and is payable quarterly in arrears. See “Management Agreements — Management Fee.”

(5) The Investment Management Agreement provides for an incentive fee that will equal the lesser of two calculated amounts, which we refer to in this prospectus as the “Income and Capital Gains Incentive Fee Calculation” and the “Cumulative Income Incentive Fee Calculation.”

The “Income and Capital Gains Incentive Fee Calculation” consists of two parts. The income component of the Income and Capital Gains Incentive Fee Calculation is calculated quarterly in arrears and equals 20% of the amount, if any, by which our “Pre-Incentive Fee Net Investment Income” exceeds a hurdle rate (the “Hurdle”). This calculation is subject to a “catch-up” provision measured at the end of each calendar quarter. This income component will include both cash income and income, if any, that is accrued but not yet received in cash, and is computed as follows:

• zero in any calendar quarter in which our Pre-Incentive Fee Net Investment Income does not exceed the Hurdle of 2.0% quarterly (8.0% annualized);

• 100% of that portion of our Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle but is less than 2.5% in any calendar quarter (10.0% annualized). We refer to the portion of our Pre-Incentive Fee Net Investment Income that exceeds the Hurdle but is less than 2.5% in any calendar quarter (10.0% annualized) as the “catch-up.” The “catch-up” is meant to provide our investment adviser with 20% of our Pre-Incentive Fee Net Investment Income, as if a Hurdle did not apply, when our Pre-Incentive Fee Net Investment Income exceeds 2.0% in any calendar quarter; and

• 20% of the amount of our Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any calendar quarter (10.0% annualized) (i.e., once the Hurdle is reached and the full catch-up is achieved, 20% of all Pre-Incentive Fee Investment Income thereafter is included in the calculation).

13

The capital gain component of our Income and Capital Gains Incentive Fee calculation will equal 20% of our “Incentive Fee Capital Gains,” if any. Incentive Fee Capital Gains equal (a) the sum of (1) our realized capital gains on a cumulative basis from the date of our election to become a BDC through the end of each calendar year, (2) all realized capital losses on a cumulative basis, and (3) all unrealized capital depreciation on a cumulative basis, less (b) the aggregate amount of any previously paid capital gain incentive fees. The capital gain component of the Income and Capital Gains Incentive Fee Calculation will be calculated, in arrears, at the end of each calendar year (or earlier upon termination of the Investment Advisory and Management Agreement), commencing with the year ending December 31, 2010. The “Income and Capital Gains Incentive Fee Calculation” will equal the sum of these two fee components.

The “Cumulative Income Incentive Fee Calculation” is based on our cumulative pre-incentive fee net income. This amount equals the sum of (1) our cumulative Pre-Incentive Fee Net Investment Income since our election to be treated as a business development company, (2) cumulative aggregate realized capital gains since our election to be treated as a business development company, (3) cumulative aggregate realized capital losses since our election to be treated as a business development company, (4) cumulative aggregate unrealized capital depreciation since our election to be treated as a business development company and (5) cumulative aggregate unrealized capital appreciation since our election to be treated as a business development company. The “Cumulative Income Incentive Fee Calculation” will equal 20.0% of our cumulative pre-incentive fee net income less the aggregate amount of any incentive fees previously paid. Unlike the Income and Capital Gains Incentive Fee Calculation, the Cumulative Income Incentive Fee Calculation combines investment income and net capital gains (or losses) and looks back to the date of our election to become a business development company. The incentive fee for any given period will be the lesser of the amounts determined under the two calculations and will be paid in arrears.

If at the end of any fiscal quarter the result of the Income and Capital Gains Incentive Fee Calculation described above exceeds the result of the Cumulative Income Incentive Fee Calculation, the difference will be carried over to subsequent fiscal quarters. GC Advisors may “recapture” a portion of such carried over amount as part of the incentive fee payable to it at the end of any future fiscal quarter in which the result of the Cumulative Income Incentive Fee Calculation exceeds the result of the Income and Capital Gains Incentive Fee Calculation. The amount “recaptured” by GC Advisors at the end of such future period will equal the difference between the two calculations; provided that it cannot at any time exceed the aggregate amounts “carried over” from prior periods.

We will not pay an incentive fee at any time when, after giving effect to such payment, the cumulative incentive fees paid to date would exceed 20% of our cumulative pre-incentive fee net income since the effective date of our election to become a BDC. For a more detailed discussion of the calculation of the incentive fee, see “Management Agreements — Management Fee.”

(6) We expect to use borrowed funds to (1) repay $     of the outstanding principal of, and accrued and unpaid interest on, the Existing Credit Facility, (2) invest in portfolio companies in accordance with our investment objective and the strategies described in this prospectus and (3) use the balance for general corporate purposes. GCMF is the borrower under the Existing Credit Facility, which had $315.3 million in outstanding borrowings as of September 30, 2009. Prior to the closing of this offering, we intend to execute a commitment letter with respect to the New Credit Facility which, as currently contemplated, would provide for borrowings of up to $• million. We intend to use borrowings under the New Credit Facility to repay the balance of the outstanding principal amount of, and any accrued and unpaid interest on, the Existing Credit Facility and to finance a portion of our additional investments.

Our stockholders bear directly or indirectly the costs of borrowings under the Existing Credit Facility, the New Credit Facility and other debt instruments. The borrowing costs included in the table above reflect our assumptions that (1) the Existing Credit Facility will be repaid in full and terminated shortly after the closing of this offering using a portion of the amount available under the New Credit Facility, (2) amounts borrowed under the New Credit Facility will bear interest at an annual rate equal to the London Interbank Offer Rate, or LIBOR, plus a margin of     %, (3) there will be an initial fee equal to   % of the stated principal amount of the New Credit Facility and (4) annual maintenance fees of     % will be payable by the borrower under the New Credit Facility.

(7) Includes estimated organizational expenses of $       (which are non-recurring) and our overhead expenses, including payments under the Administration Agreement based on our allocable portion of overhead and other expenses incurred by GC Service. See “Management Agreements — Administration Agreement.” “Other Expenses” are based on estimated amounts for the current fiscal year.

14

Example

The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have no indebtedness and that our annual operating expenses would remain at the levels set forth in the table above.

	1 year	3 years	5 years	10 years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return	$	$	$	$

While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. The incentive fee under the Investment Management Agreement, which, assuming a 5% annual return, would either not be payable or have an insignificant impact on the expense amounts shown above, is not included in the example. This illustration assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation in any of the indicated time periods. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger an incentive fee of a material amount, our expenses, and returns to our investors, would be higher. In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, participants in our dividend reinvestment plan will receive a number of shares of our common stock, determined by dividing the total dollar amount of the dividend payable to a participant by the market price per share of our common stock at the close of trading on the valuation date for the dividend.

This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown. The amounts included in the table above for “other expenses” represent our estimates for the fiscal year ending September 30, 2010.

15

RISK FACTORS

Investing in our common stock involves a number of significant risks. Before you invest in our common stock, you should be aware of various risks, including those described below. You should carefully consider these risk factors, together with all of the other information included in this prospectus, before you decide whether to make an investment in our common stock. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us may also impair our operations and performance. If any of the following events occur, our business, financial condition and results of operations could be materially and adversely affected. In such case, our net asset value and the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Business and Structure

We have only a two-year operating history and may not be able to operate our business successfully or generate sufficient revenue to make or sustain distributions to our stockholders.

We were formed in June 2007 and commenced operations in July 2007. As a result of our limited operating history, we are subject to the business risks and uncertainties associated with recently formed businesses, including the risk that we will not achieve our investment objective and that the value of your investment could decline substantially.

Neither we nor GC Advisors has any experience operating under the constraints imposed on a business development company or a RIC.

The 1940 Act and the Code impose numerous constraints on the operations of business development companies and RICs that do not apply to other investment vehicles managed by GC Advisors and its affiliates. Business development companies are required, for example, to invest at least 70% of their total assets primarily in securities of U.S. private or thinly traded public companies, cash, cash equivalents, U.S. government securities and other high-quality debt instruments that mature in one year or less from the date of investment. Moreover, qualification for taxation as a RIC requires satisfaction of source-of-income, asset diversification and distribution requirements. Neither we nor GC Advisors has any experience operating under these constraints, which may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective.

We are dependent upon key personnel of GC Advisors for our future success and upon their access to the investment professionals and partners of Golub Capital and its affiliates.

We do not have any internal management capacity or employees. We will depend on the diligence, skill and network of business contacts of the senior professionals of GC Advisors to achieve our investment objective. We expect that GC Advisors will evaluate, negotiate, structure, close and monitor our investments in accordance with the terms of the Investment Management Agreement. We can offer no assurance, however, that senior professionals of GC Advisors will continue to provide investment advice to us. If these individuals do not maintain their existing relationships with Golub Capital and its affiliates and do not develop new relationships with other sources of investment opportunities, we may not be able to grow our investment portfolio. In addition, individuals with whom the senior professionals of GC Advisors have relationships are not obligated to provide us with investment opportunities. Therefore, we can offer no assurance that such relationships will generate investment opportunities for us.

GC Advisors is an affiliate of Golub Capital and will depend upon access to the investment professionals and other resources of Golub Capital and its affiliates to fulfill its obligations to us under the Investment Management Agreement. GC Advisors will also depend upon Golub Capital to obtain access to deal flow generated by the professionals of Golub Capital and its affiliates. Under a Staffing Agreement between Golub Capital and GC Advisors, Golub Capital has agreed to provide GC Advisors with the resources necessary to fulfill these obligations. The Staffing Agreement provides that Golub Capital will make available to GC Advisors experienced investment professionals and access to the senior investment personnel of Golub Capital for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. We are not a party to this staffing agreement and cannot assure you that Golub Capital will fulfill its obligations under the agreement. If Golub Capital fails to perform, we cannot assure you that GC Advisors will enforce the Staffing

16

Agreement or that such agreement will not be terminated by either party or that we will continue to have access to the investment professionals of Golub Capital and its affiliates or their information and deal flow.

Our investment committee, which provides oversight over our investment activities, is provided by GC Advisors under the Investment Management Agreement. Our investment committee consists of two members of our board of directors and two employees of Golub Capital. The loss of any member of our investment committee or of other senior professionals of GC Advisors and its affiliates would limit our ability to achieve our investment objective and operate as we anticipate. This could have a material adverse effect on our financial condition and results of operation.

Our business model depends to a significant extent upon strong referral relationships with sponsors. Any inability of GC Advisors to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.

We depend upon GC Advisors to maintain Golub Capital’s relationships with sponsors, and we intend to rely to a significant extent upon these relationships to provide us with potential investment opportunities. If GC Advisors fails to maintain such relationships, or to develop new relationships with other sponsors or sources of investment opportunities, we will not be able to grow our investment portfolio. In addition, individuals with whom the principals of GC Advisors have relationships are not obligated to provide us with investment opportunities, and, therefore, we can offer no assurance that these relationships will generate investment opportunities for us in the future.

We may not replicate the historical results achieved by our predecessor, GCMF, or other entities managed or sponsored by members of our investment committee, or by GC Advisors or its affiliates.

Our primary focus in making investments may differ from those of our predecessor, GCMF, and existing investment funds, accounts or other investment vehicles that are or have been managed by members of our investment committee or sponsored by affiliates of GC Advisors. For example, while GCMF’s portfolio consisted primarily of senior secured loans as of September 30, 2009, we intend to pursue an investment strategy that is focused on a more diverse range of assets, including one-stop, second lien and mezzanine loans and minority equity investments. In addition, investors in our common stock are not acquiring an interest in any such investment funds, accounts or other investment vehicles that are or have been managed by members of our investment committee or sponsored by affiliates of GC Advisors. We may consider co-investing in portfolio investments with other investment funds, accounts or investment vehicles managed by members of the investment committee or sponsored by GC Advisors or its affiliates. Any such investments will be subject to regulatory limitations and approvals by directors who are not “interested persons,” as defined in the 1940 Act. We can offer no assurance, however, that we will obtain such approvals or develop opportunities that comply with such limitations. We also cannot assure you that we will replicate the historical results achieved by members of our investment committee, and we caution you that our investment returns could be substantially lower than the returns achieved by them in prior periods. Additionally, all or a portion of the prior results may have been achieved in particular market conditions which may never be repeated. Moreover, current or future market volatility and regulatory uncertainty may have an adverse impact on our future performance.

Our financial condition and results of operation will depend on our ability to manage our business effectively.

Our ability to achieve our investment objective will depend on our ability to manage our business and to grow. This will depend, in turn, on GC Advisors’ ability to identify, invest in and monitor companies that meet our investment criteria. The achievement of our investment objectives on a cost-effective basis will depend upon GC Advisors’ execution of our investment process, its ability to provide competent, attentive and efficient services to us and, to a lesser extent, our access to financing on acceptable terms. GC Advisors will have substantial responsibilities under the Investment Management Agreement, as well as responsibilities in connection with the management of other investment funds, accounts and vehicles managed by members of GC Advisors or sponsored by Golub Capital and its affiliates. The personnel of GC Advisors and its affiliates, including GC Service, may be called upon to provide managerial assistance to our portfolio companies. These

17

activities may distract them or slow our rate of investment. Any failure to manage our business and our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.

There are significant potential conflicts of interest that could affect our investment returns.

As a result of our arrangements with GC Advisors and its affiliates and our investment committee, there may be times when GC Advisors or such persons have interests that differ from those of our stockholders, giving rising to a conflict of interest.

Conflicts related to obligations our investment committee, GC Advisors or its affiliates have to other clients.

The members of our investment committee serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do, or of investment funds managed by GC Advisors or its affiliates. Similarly, GC Advisors or its affiliates may have other clients with similar, different or competing investment objectives. In serving in these multiple capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the best interests of us or our stockholders. For example, our chairman, Lawrence E. Golub, and our chief executive officer, David B. Golub, have and, following this offering, will continue to have management responsibilities for other investment funds, accounts or other investment vehicles managed by GC Advisors or sponsored by Golub Capital and its affiliates. Our investment objective may overlap with the investment objectives of such affiliated investment funds, accounts or other investment vehicles. For example, GC Advisors currently manages an entity that is continuing to seek new capital commitments and will pursue an investment strategy similar to our strategy, and we may compete with this and other entities managed by GC Advisors and its affiliates for capital and investment opportunities. As a result, those individuals may face conflicts in the allocation of investment opportunities among us and other investment funds or accounts advised by or affiliated with GC Advisors. GC Advisors will seek to allocate investment opportunities among eligible accounts in a manner that is fair and equitable over time and consistent with its allocation policy. GC Advisors has agreed with our board of directors that allocations among us and other investment funds managed by GC Advisors or its affiliates will generally be made based on capital available for investment in the asset class being allocated. Our board of directors will determine the amount of capital we have available for investment by asset class, and we expect that available capital for our investments will be determined based on the amount of cash on-hand, existing commitments and reserves, if any, the targeted leverage level, targeted asset mix and diversification requirements and other investment policies and restrictions set by our board of directors imposed by applicable laws, rules, regulations or interpretations. However, there can be no assurance that we will be able to participate in all investment opportunities that are suitable to us.

Our investment committee, GC Advisors or its affiliates may, from time to time, possess material non-public information, limiting our investment discretion.

Principals of GC Advisors and its affiliates and members of our investment committee may serve as directors of, or in a similar capacity with, companies in which we invest, the securities of which are purchased or sold on our behalf. In the event that material nonpublic information is obtained with respect to such companies, or we become subject to trading restrictions under the internal trading policies of those companies or as a result of applicable law or regulations, we could be prohibited for a period of time from purchasing or selling the securities of such companies, and this prohibition may have an adverse effect on us.

Our incentive fee structure may create incentives for GC Advisors that are not fully aligned with the interests of our stockholders.

In the course of our investing activities, we will pay management and incentive fees to GC Advisors. As a result, investors in our common stock will invest on a “gross” basis and receive distributions on a “net” basis after expenses, resulting in a lower rate of return than one might achieve through direct investments. As a result of this arrangement, GC Advisors or its affiliates may from time to time have interests that differ from those of our stockholders, giving rise to a conflict.

The part of the incentive fee payable to GC Advisors that relates to our net investment income will be computed and paid on income that may include interest income that has been accrued but not yet received in

18

cash. This fee structure may be considered to involve a conflict of interest for GC Advisors to the extent that it may encourage GC Advisors to favor debt financings that provide for deferred interest, rather than current cash payments of interest. GC Advisors may have an incentive to invest in deferred interest securities in circumstances where it would not have done so but for the opportunity to continue to earn the incentive fee even when the issuers of the deferred interest securities would not be able to make actual cash payments to us on such securities. This risk could be increased because GC Advisors is not obligated to reimburse us for any incentive fees received even if we subsequently incur losses or never receive in cash the deferred income that was previously accrued.

The valuation process for certain of our portfolio holdings creates a conflict of interest.

Many of our portfolio investments are expected to be made in the form of securities that are not publicly traded. As a result, our board of directors will determine the fair value of these securities in good faith as described below in “Many of our portfolio investments will be recorded at fair value as determined in good faith by our board of directors and, as a result, there may be uncertainty as to the value of our portfolio investments.” In connection with that determination, investment professionals from GC Advisors may provide our board of directors with portfolio company valuations based upon the most recent portfolio company financial statements available and projected financial results of each portfolio company. In addition, certain members of our board of directors, including Lawrence E. Golub and David B. Golub, have an indirect pecuniary interest in GC Advisors. The participation of GC Advisors’ investment professionals in our valuation process, and the indirect pecuniary interest in GC Advisors by certain members of our board of directors, could result in a conflict of interest as GC Advisors’ management fee is based, in part, on our gross assets and our incentive fees will be based, in part, on unrealized gains and losses.

Conflicts related to other arrangements with GC Advisors or its affiliates.

We have entered into a license agreement with Golub Capital Management LLC under which Golub Capital Management LLC has agreed to grant us a non-exclusive, royalty-free license to use the name “Golub Capital”. See “Management Agreements — License Agreement.” In addition, we will rent office space from GC Service, an affiliate of GC Advisors, and pay to GC Service our allocable portion of overhead and other expenses incurred by GC Service in performing its obligations under the Administration Agreement, such as rent and our allocable portion of the cost of our officers, including our chief financial officer and chief compliance officer. This will create conflicts of interest that our board of directors must monitor.

The Investment Management Agreement with GC Advisors and the Administration Agreement with GC Service were not negotiated on an arm’s length basis and may not be as favorable to us as if they had been negotiated with an unaffiliated third party.

The Investment Management Agreement and the Administration Agreement were negotiated between related parties. Consequently, their terms, including fees payable to GC Advisors, may not be as favorable to us as if they had been negotiated with an unaffiliated third party. In addition, we may choose not to enforce, or to enforce less vigorously, our rights and remedies under these agreements because of our desire to maintain our ongoing relationship with GC Advisors, GC Service and their respective affiliates.

We operate in a highly competitive market for investment opportunities, which could reduce returns and result in losses.

A number of entities compete with us to make the types of investments that we plan to make. We will compete with public and private funds, commercial and investment banks commercial financing companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, we believe some competitors may have access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a business development company or the source of income, asset diversification and distribution requirements we must satisfy to maintain our RIC status. The competitive pressures we face

19

may have a material adverse effect on our business, financial condition and results of operations. As a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we may not be able to identify and make investments that are consistent with our investment objective.

With respect to the investments we make, we will not seek to compete based primarily on the interest rates we will offer, and we believe that some of our competitors may make loans with interest rates that will be lower than the rates we offer. In the secondary market for acquiring existing loans, we expect to compete generally on the basis of pricing terms. With respect to all investments, we may lose some investment opportunities if we do not match our competitors’ pricing, terms and structure. However, if we match our competitors’ pricing, terms and structure, we may experience decreased net interest income, lower yields and increased risk of credit loss. We may also compete for investment opportunities with accounts managed by GC Advisors or its affiliates. Although GC Advisors will allocate opportunities in accordance with its policies and procedures, allocations to such other accounts will reduce the amount and frequency of opportunities available to us. Moreover, the performance of investments will not be known at the time of allocation.

We will be subject to corporate-level income tax if we are unable to qualify as a RIC.

To qualify as a RIC under the Code, we must meet certain source-of-income, asset diversification and distribution requirements. The distribution requirement for a RIC is satisfied if we distribute at least 90% of our net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, to our stockholders on an annual basis. We may be subject, to the extent we use debt financing, to certain asset coverage ratio requirements under the 1940 Act and financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to qualify as a RIC. If we are unable to obtain cash from other sources, we may fail to qualify as a RIC and, thus, may be subject to corporate-level income tax. To qualify as a RIC, we must also meet certain asset diversification requirements at the end of each calendar quarter. Failure to meet these tests may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private or thinly traded public companies, any such dispositions could be made at disadvantageous prices and may result in substantial losses. If we fail to qualify as a RIC for any reason and become subject to corporate income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distributions to stockholders and the amount of our distributions and the amount of funds available for new investments. Such a failure would have a material adverse effect on us and our stockholders. See “Material U.S. Federal Income Tax Considerations — Taxation as a RIC.”

We may have difficulty paying our required distributions if we recognize income before, or without, receiving cash representing such income.

For U.S. federal income tax purposes, we will include in income certain amounts that we have not yet received in cash, such as the accretion of original issue discount. This may arise if we receive warrants in connection with the making of a loan and in other circumstances, or through contracted payment-in-kind, or PIK, interest, which represents contractual interest added to the loan balance and due at the end of the loan term. Such original issue discount, which could be significant relative to our overall investment activities, or increases in loan balances as a result of contracted PIK arrangements, will be included in income before we receive any corresponding cash payments. We also may be required to include in income certain other amounts that we will not receive in cash.

That part of the incentive fee payable by us that relates to our net investment income will be computed and paid on income that may include interest that has been accrued but not yet received in cash. If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously used in the calculation of the incentive fee will become uncollectible.

Since in certain cases we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90% of our net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, to maintain our status as a RIC. In such a case, we may have to sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment originations to meet these

20

distribution requirements. If we are not able to obtain such cash from other sources, we may fail to qualify as a RIC and thus be subject to corporate-level income tax. See “Material U.S. Federal Income Tax Considerations —  Taxation as a RIC.”

Regulations governing our operation as a business development company affect our ability to and the way in which we raise additional capital. As a business development company, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.

We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the 1940 Act. Under the provisions of the 1940 Act, we will be permitted as a business development company to issue senior securities in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 200% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders. If we issue senior securities, we will be exposed to typical risks associated with leverage, including an increased risk of loss. As of September 30, 2009, we had $315.3 million outstanding under our Existing Credit Facility.

In addition, we intend to execute a commitment letter with a lender and enter into a New Credit Facility. We expect this lending commitment to be contingent upon, among other things, the closing of this offering. If and when we close the New Credit Facility, we plan to borrow under the New Credit Facility to repay and terminate the Existing Credit Facility and finance additional investments. However, there can be no assurance that we will be able to close the New Credit Facility or obtain other financing. If we issue preferred stock, the preferred stock would rank “senior” to common stock in our capital structure, preferred stockholders would have separate voting rights on certain matters and might have other rights, preferences or privileges more favorable than those of our common stockholders, and the issuance of preferred stock could have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for holders of our common stock or otherwise be in your best interest.

We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock if our board of directors determines that such sale is in the best interests of us and our stockholders, and if our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our board of directors, closely approximates the market value of such securities (less any distributing commission or discount). If we raise additional funds by issuing common stock or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease, and you might experience dilution.

Our ability to invest in public companies may be limited in certain circumstances.

To maintain our status as a BDC, we are not permitted to acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Subject to certain exceptions for follow-on investments and distressed companies, an investment in an issuer that has outstanding securities listed on a national securities exchange may be treated as qualifying assets only if such issuer has a market capitalization that is less than $250 million at the time of such investment.

We intend to finance our investments with borrowed money, which will magnify the potential for gain or loss on amounts invested and may increase the risk of investing in us.

The use of leverage magnifies the potential for gain or loss on amounts invested. The use of leverage is generally considered a speculative investment technique and increases the risks associated with investing in our securities. We intend to borrow from, and issue senior debt securities, to banks, insurance companies and

21

other lenders. Lenders of these senior securities will have fixed dollar claims on our assets that are superior to the claims of our common stockholders, and we would expect such lenders to seek recovery against our assets in the event of a default. In addition, under the terms of any credit facility or other debt instrument we enter into, we are likely to be required by its terms to use the net proceeds of any investments that we sell to repay a portion of the amount borrowed under such facility or instrument before applying such net proceeds to any other uses. If the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any decrease in our income will cause our net income to decline more sharply than it would have had we not borrowed. Such a decline would also negatively affect our ability to make dividend payments on our common stock. Our ability to service our debt will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures. Moreover, as the management fee payable to GC Advisors is payable based on our gross assets, including those assets acquired through the use of leverage, GC Advisors will have a financial incentive to incur leverage which may not be consistent with our stockholders’ interests. In addition, our common stockholders will bear the burden of any increase in our expenses as a result of leverage, including interest expenses and any increase in the management fee payable to GC Advisors.

As a business development company, we generally are required to meet a coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings and any preferred stock that we may issue in the future, of at least 200%. If this ratio declines below 200%, we cannot incur additional debt and could be required to sell a portion of our investments to repay some debt when it is disadvantageous to do so. This could have a material adverse effect on our operations, and we may not be able to make distributions. The amount of leverage that we employ will depend on GC Advisors’ and our board of directors’ assessment of market and other factors at the time of any proposed borrowing. We cannot assure you that we will be able to obtain credit at all or on terms acceptable to us.

In addition, our debt facilities impose, and will in the future impose, financial and operating covenants that restrict our business activities, including limitations that hinder our ability to finance additional loans and investments or to make the distributions required to maintain our status as a RIC under the Code. As of September 30, 2009, we had $315.3 million outstanding under our Existing Credit Facility.

The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing in the table below.

	Assumed Return on Our Portfolio (Net of Expenses)
	(10)%		(5)%		0%		5%		10%
Corresponding return to common stockholder(1)		(     )%		(     )%		(     )%		%		%

(1) Assumes $409.1 million in total assets, $315.3 million in debt outstanding and $        million in net assets as of September 30, 2009 and an average cost of funds of 1.5%, which was our weighted average borrowing for the year ended September 30, 2009. Excludes non-portfolio investment assets and non-leverage related liabilities.

Based on our outstanding indebtedness of $315.3 million as of September 30, 2009 and the effective annual interest rate under the Existing Credit Facility of 1.5% as of that date, our investment portfolio must experience an annual return of at least     % to cover annual interest payments on the Existing Credit Facility.

To the extent we use debt to finance our investments, changes in interest rates will affect our cost of capital and net investment income.

To the extent we borrow money to make investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income in the event we use debt to finance our investments. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment

22

income. We expect that our long-term fixed-rate investments will be financed primarily with equity and long-term debt. We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act.

You should also be aware that a rise in the general level of interest rates typically leads to higher interest rates applicable to our debt investments. Accordingly, an increase in interest rates may result in an increase of the amount of incentive fees payable to GC Advisors.

We are currently operating in a period of capital markets disruption and recession.

The U.S. capital markets have been experiencing extreme volatility and disruption for more than a year, and the U.S. economy was in a recession for several consecutive calendar quarters during the same period. Disruptions in the capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets. A prolonged period of market illiquidity may have an adverse effect on our business, financial condition and results of operations. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could limit our investment originations, limit our ability to grow and negatively impact our operating results.

Adverse developments in the credit markets may impair our ability to enter into a new credit facility or to extend or refinance an existing credit facility.

During the economic downturn in the United States that began in mid-2007, many commercial banks and other financial institutions stopped lending or significantly curtailed their lending activity. In addition, in an effort to stem losses and reduce their exposure to segments of the economy deemed to be high risk, some financial institutions limited routine refinancing and loan modification transactions and even reviewed the terms of existing facilities to identify bases for accelerating the maturity of existing lending facilities. As a result, it may be difficult for us to renew, extend or refinance our Existing Credit Facility or to enter into the New Credit Facility or to obtain other financing to finance the growth of our investments on acceptable economic terms, or at all.

Our ability to enter into transactions with our affiliates will be restricted.

We are prohibited under the 1940 Act from participating in certain transactions with our affiliates without the prior approval of our independent directors and, in some cases, of the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities will be our affiliate for purposes of the 1940 Act, and we are generally prohibited from buying or selling any security from or to such affiliate, absent the prior approval of our independent directors. We consider GC Advisors and its affiliates to be our affiliates for such purposes. The 1940 Act also prohibits certain “joint” transactions with certain of our affiliates, which could include investments in the same portfolio company, without prior approval of our independent directors and, in some cases, of the SEC. We are prohibited from buying or selling any security from or to any person who owns more than 25% of our voting securities or certain of that person’s affiliates, or entering into prohibited joint transactions with such persons, absent the prior approval of the SEC.

We may, however, invest alongside our manager’s, and its affiliates’ other clients in certain circumstances where doing so is consistent with applicable law and SEC staff interpretations. For example, we may invest alongside such accounts consistent with guidance promulgated by the SEC Staff permitting us and such other accounts to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that our adviser, acting on our behalf and on behalf of other clients, negotiates no term other than price. We may also invest alongside our adviser’s other clients as otherwise permissible under regulatory guidance, applicable regulations and GC Advisors’ allocation policy. Under this allocation policy, a fixed percentage of each opportunity, which may vary based on asset class and from time to time, will be offered to us and similar eligible accounts, as periodically determined by GC Advisors and approved by our board of directors, including our independent directors. The allocation policy further provides that allocations among us and these other accounts will generally be made pro rata based on each account’s capital available for investment, as determined, in our case, by our board of directors. It is our policy to base our determinations as

23

to the amount of capital available for investment based on such factors as: the amount of cash on-hand, existing commitments and reserves, if any, the targeted leverage level, the targeted asset mix and diversification requirements and other investment policies and restrictions set by our board of directors or imposed by applicable laws, rules, regulations or interpretations. We expect that these determinations will be made similarly for other accounts.

In situations where co-investment with other funds managed by GC Advisors or its affiliates is not permitted or appropriate, such as when there is an opportunity to invest in different securities of the same issuer or where the different investments could be expected to result in a conflict between our interests and those of other GC Advisors clients, GC Advisors will need to decide which client will proceed with the investment. Moreover, except in certain circumstances, we will be unable to invest in any issuer in which a fund managed by GC Advisors or its affiliates has previously invested. Similar restrictions limit our ability to transact business with our officers or directors or their affiliates. These restrictions may limit the scope of investment opportunities that would otherwise be available to us.

We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our board of directors who are not interested persons and, in some cases, prior approval by the SEC. The SEC has interpreted the business development company regulations governing transactions with affiliates to prohibit certain “joint transactions” between entities that share a common investment adviser.

We and GC Advisors may in the future submit an exemptive application to the SEC to permit greater flexibility to negotiate the terms of co-investments if our board of directors determines that it would be advantageous for us to co-invest with other funds managed by GC Advisors or its affiliates in a manner consistent with our investment objectives, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. We believe that co-investment by us and other funds managed by GC Advisors and its affiliates may afford us additional investment opportunities and an ability to achieve greater diversification. Accordingly, any such application would seek an exemptive order permitting us to invest with funds managed by GC Advisors or its affiliates in the same portfolio companies in circumstances in which such investments would otherwise be permitted by the 1940 Act. We expect that such exemptive relief permitting co-investments, if granted, would apply only upon the condition that, before such a co-investment transaction is effected, GC Advisors would make a written investment presentation and recommendation regarding the proposed co-investment to our independent directors.

If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a business development company or be precluded from investing according to our current business strategy.

As a business development company, we may not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets. See “Regulation.”

We believe that most of the investments that we may acquire in the future will constitute qualifying assets. However, we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could violate the 1940 Act provisions applicable to business development companies. As a result of such violation, specific rules under the 1940 Act could prevent us, for example, from making follow-on investments in existing portfolio companies (which could result in the dilution of our position) or could require us to dispose of investments at inappropriate times in order to come into compliance with the 1940 Act. If we need to dispose of such investments quickly, it could be difficult to dispose of such investments on favorable terms. We may not be able to find a buyer for such investments and, even if we do find a buyer, we may have to sell the investments at a substantial loss. Any such outcomes would have a material adverse effect on our business, financial condition and results of operations.

If we do not maintain our status as a business development company, we would be subject to regulation as a registered closed-end investment company under the 1940 Act. As a registered closed-end fund, we would be subject to substantially more regulatory restrictions under the 1940 Act which would significantly decrease our operating flexibility.

24

We may need to raise additional capital to grow because we must distribute most of our income.

We may need additional capital to fund new investments and grow our investments once we have fully invested the proceeds of this offering. We intend to access the capital markets periodically to issue debt or equity securities or borrowing from financial institutions in order to obtain such additional capital. Unfavorable economic conditions could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. A reduction in the availability of new capital could limit our ability to grow. In addition, we will be required to distribute at least 90% of our net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, to our stockholders to maintain our RIC status. As a result, these earnings will not be available to fund new investments. An inability to access the capital markets successfully could limit our ability to grow our business and execute our business strategy fully and could decrease our earnings, if any, which may have an adverse effect on the value of our securities.

Many of our portfolio investments will be recorded at fair value as determined in good faith by our board of directors and, as a result, there may be uncertainty as to the value of our portfolio investments.

We expect that many of our portfolio investments will take the form of securities that are not publicly traded. The fair value of securities and other investments that are not publicly traded may not be readily determinable, and we will value these securities at fair value as determined in good faith by our board of directors, including to reflect significant events affecting the value of our securities. Most, if not all, of our investments (other than cash and cash equivalents) be classified as Level 3 under Statement of Financial Accounting Standards 157, Fair Value Measurement, or SFAS 157 (ASC Topic 820). This means that our portfolio valuations will be based on unobservable inputs and our own assumptions about how market participants would price the asset or liability in question. We expect that inputs into the determination of fair value of our portfolio investments will require significant management judgment or estimation. Even if observable market data are available, such information may be the result of consensus pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information. We expect to retain the services of one or more independent service providers to review the valuation of these securities. The types of factors that the board of directors may take into account in determining the fair value of our investments generally include, as appropriate, comparison to publicly traded securities including such factors as yield, maturity and measures of credit quality, the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Our net asset value could be adversely affected if our determinations regarding the fair value of our investments were materially higher than the values that we ultimately realize upon the disposal of such securities.

We will adjust quarterly the valuation of our portfolio to reflect our board of directors’ determination of the fair value of each investment in our portfolio. Any changes in fair value are recorded in our statement of operations as net change in unrealized appreciation or depreciation.

We may experience fluctuations in our quarterly operating results.

We could experience fluctuations in our quarterly operating results due to a number of factors, including the interest rate payable on the debt securities we acquire, the default rate on such securities, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. In light of these factors, results for any period should not be relied upon as being indicative of performance in future periods.

New or modified laws or regulations governing our operations may adversely affect our business.

We and our portfolio companies will be subject to regulation by laws at the U.S. federal, state and local levels. These laws and regulations, as well as their interpretation, may change from time to time, and new

25

laws, regulations and interpretations may also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business.

Additionally, changes to the laws and regulations governing our operations related to permitted investments may cause us to alter our investment strategy in order to avail ourselves of new or different opportunities. Such changes could result in material differences to the strategies and plans set forth in this prospectus and may shift our investment focus from the areas of expertise of GC Advisors to other types of investments in which GC Advisors may have little or no expertise or experience. Any such changes, if they occur, could have a material adverse effect on our results of operations and the value of your investment.

Our board of directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.

Our board of directors has the authority, except as otherwise provided in the 1940 Act, to modify or waive certain of our operating policies and strategies without prior notice and without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a business development company. We cannot predict the effect any changes to our current operating policies and strategies would have on our business, operating results and the price value of our common stock. Nevertheless, any such changes could adversely affect our business and impair our ability to make distributions.

Provisions of the General Corporation Law of the State of Delaware and our certificate of incorporation and bylaws could deter takeover attempts and have an adverse effect on the price of our common stock.

The General Corporation Law of the State of Delaware, or the DGCL, contains provisions that may discourage, delay or make more difficult a change in control of us or the removal of our directors. Our certificate of incorporation and bylaws contain provisions that limit liability and provide for indemnification of our directors and officers. These provisions and others also may have the effect of deterring hostile takeovers or delaying changes in control or management. We are subject to Section 203 of the DGCL, the application of which is subject to any applicable requirements of the 1940 Act. This section generally prohibits us from engaging in mergers and other business combinations with stockholders that beneficially own 15% or more of our voting stock, or with their affiliates, unless our directors or stockholders approve the business combination in the prescribed manner. Our board of directors has adopted a resolution exempting from Section 203 of the DGCL any business combination between us and any other person, subject to prior approval of such business combination by our board of directors, including approval by a majority of our directors who are not “interested persons.” If the resolution exempting business combinations is repealed or our board of directors does not approve a business combination, Section 203 of the DGCL may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer.

We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our certificate of incorporation classifying our board of directors in three classes serving staggered three-year terms, and provisions of our certificate of incorporation authorizing our board of directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock, and to amend our certificate of incorporation, without stockholder approval, to increase or decrease the number of shares of stock that we have authority to issue. These provisions, as well as other provisions of our certificate of incorporation and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.

GC Advisors can resign on 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.

GC Advisors has the right, under the Investment Management Agreement, to resign at any time upon not less than 60 days’ written notice, whether we have found a replacement or not. If GC Advisors resigns, we may not be able to find a new investment adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business

26

and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by GC Advisors and its affiliates. Even if we are able to retain comparable management, whether internal or external, the integration of such management and their lack of familiarity with our investment objective may result in additional costs and time delays that may adversely affect our financial condition, business and results of operations.

GC Service can resign from its role as our Administrator under the Administration Agreement, and we may not be able to find a suitable replacement, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.

GC Service has the right to resign under the Administration Agreement, whether we have found a replacement or not. If GC Service resigns, we may not be able to find a new administrator or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline. In addition, the coordination of our internal management and administrative activities is likely to suffer if we are unable to identify and reach an agreement with a service provider or individuals with the expertise possessed by GC Service. Even if we are able to retain a comparable service provider or individuals to perform such services, whether internal or external, their integration into our business and lack of familiarity with our investment objective may result in additional costs and time delays that may adversely affect our financial condition, business and results of operations.

We will incur significant costs as a result of being a publicly traded company.

As a publicly traded company, we will incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to a company whose securities are registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as well as additional corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC.

Efforts to comply with Section 404 of the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance with Section 404 of the Sarbanes-Oxley Act may adversely affect us and the market price of our common stock.

Under current SEC rules, beginning with our fiscal year ending September 30, 2010, we will be required to report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and related rules and regulations of the SEC. We will be required to review on an annual basis our internal control over financial reporting, and on a quarterly and annual basis to evaluate and disclose changes in our internal control over financial reporting.

As a result, we expect to incur additional expenses in the near term that may negatively impact our financial performance and our ability to make distributions. This process also will result in a diversion of management’s time and attention. We cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or the impact of the same on our operations, and we may not be able to ensure that the process is effective or that our internal control over financial reporting is or will be effective in a timely manner. In the event that we are unable to maintain or achieve compliance with Section 404 of the Sarbanes-Oxley Act and related rules, we and the market price of our common stock may be adversely affected.

We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to pay dividends.

Our business is highly dependent on the communications and information systems of GC Advisors and its affiliates. Any failure or interruption of such systems could cause delays or other problems in our activities.

27

This, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay dividends to our stockholders.

Risks Related to Our Investments

Economic recessions or downturns could impair our portfolio companies and harm our operating results.

Many of our portfolio companies are susceptible to economic slowdowns or recessions and may be unable to repay our loans during these periods. Therefore, our non-performing assets are likely to increase and the value of our portfolio is likely to decrease during these periods. Adverse economic conditions may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing our investments and harm our operating results.

A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize our portfolio company’s ability to meet its obligations under the debt securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, lenders in certain cases can be subject to lender liability claims for actions taken by them when they become too involved in the borrower’s business or exercise control over the borrower. It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken if we render significant managerial assistance to the borrower. Furthermore, if one of our portfolio companies were to file for bankruptcy protection, even though we may have structured our investment as senior secured debt, depending on the facts and circumstances, including the extent to which we provided managerial assistance to that portfolio company, a bankruptcy court might re-characterize our debt holding and subordinate all or a portion of our claim to that of other creditors.

Current market conditions have materially and adversely affected debt and equity capital markets in the United States and around the world.

Beginning in 2007 and continuing into 2009, the global capital markets have experienced a period of disruption resulting in increasing spreads between the yields realized on riskier debt securities and those realized on risk-free securities and a lack of liquidity in parts of the debt capital markets, significant write-offs in the financial services sector relating to subprime mortgages and the re-pricing of credit risk in the broadly syndicated market. These events, along with the deterioration of the housing market, illiquid market conditions, declining business and consumer confidence and the failure of major financial institutions in the United States, led to a decline general of economic conditions. This economic decline has materially and adversely affected the broader financial and credit markets and has reduced the availability of debt and equity capital for the market as a whole and to financial firms in particular. To the extent that we wish to use debt to fund our investments, the debt capital that will be available to us, if at all, may be at a higher cost, and on terms and conditions that may be less favorable, than what we expect, which could negatively affect our financial performance and results. A prolonged period of market illiquidity may cause us to reduce the volume of loans we originate and/or fund and adversely affect the value of our portfolio investments, which could have a material and adverse effect on our business, financial condition, and results of operations. The continuation or further deterioration of current market conditions could materially and adversely affect our business.

Our investments in leveraged portfolio companies may be risky, and you could lose all or part of your investment.

Investment in leveraged companies involves a number of significant risks. Leveraged companies in which we invest may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold. Such developments may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of our realizing any guarantees that we may have obtained in

28

connection with our investment. Smaller leveraged companies also may have less predictable operating results and may require substantial additional capital to support their operations, finance their expansion or maintain their competitive position.

Our investments in private and middle-market portfolio companies are risky, and you could lose all or part of your investment.

Investment in private and middle-market companies involves a number of significant risks. Generally, little public information exists about these companies, and we are required to rely on the ability of GC Advisors’ investment professionals to obtain adequate information to evaluate the potential returns from investing in these companies. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. Middle-market companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of our realizing any guarantees we may have obtained in connection with our investment. In addition, such companies typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. Additionally, middle-market companies are more likely to depend on the management talents and efforts of a small group of persons, therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us. Middle-market companies also may be parties to litigation and may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence. In addition, our executive officers, directors and GC Advisors may, in the ordinary course of business, be named as defendants in litigation arising from our investments in the portfolio companies.

The lack of liquidity in our investments may adversely affect our business.

A substantial portion of our investments in leveraged companies will be subject to legal and other restrictions on resale or will otherwise be less liquid than more broadly traded public securities. The illiquidity of these investments may make it difficult for us to sell such investments if the need arises. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our investments. We may also face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that we, GC Advisors, Golub Capital or any of its affiliates have material nonpublic information regarding such portfolio company.

Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.

As a business development company, we are required to carry our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by our board of directors. As part of the valuation process, we may take into account the following types of factors, if relevant, in determining the fair value of our investments:

• a comparison of the portfolio company’s securities to publicly traded securities,

• the enterprise value of a portfolio company,

• the nature and realizable value of any collateral,

• the portfolio company’s ability to make payments and its earnings and discounted cash flow,

• the markets in which the portfolio company does business, and

• changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made in the future and other relevant factors.

When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to corroborate our valuation. We record decreases in the market values or fair values of our investments as unrealized depreciation. Declines in prices and liquidity in the corporate debt markets may result in significant net unrealized depreciation in our portfolio. The effect of

29

all of these factors on our portfolio may reduce our net asset value by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer additional unrealized losses in future periods, which could have a material adverse effect on our business, financial condition and results of operations.

We have not yet identified the portfolio company investments we will acquire using the proceeds of this offering.

While we currently hold a portfolio of investments, we have not yet identified additional potential investments for our portfolio that we will acquire with the proceeds of this offering. Privately negotiated investments in illiquid securities or private middle-market companies require substantial due diligence and structuring, and we cannot assure you that we will achieve our anticipated investment pace. As a result, you will be unable to evaluate any future portfolio company investments prior to purchasing our shares of common stock. Additionally, our investment adviser will select our investments subsequent to the closing of this offering, and our stockholders will have no input with respect to such investment decisions. These factors increase the uncertainty, and thus the risk, of investing in our common stock.

During this period, we will invest these amounts in cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less from the date of investment. We expect these temporary investments to earn yields substantially lower than the income that we expect to receive in respect of investments in senior, one-stop, second lien, mezzanine and equity securities. As a result, any distributions we make during this period may be substantially smaller than the distributions that we expect to pay when our portfolio is fully invested.

We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be invested in securities of a single issuer.

We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer. To the extent that we assume large positions in the securities of a small number of issuers, our net asset value may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. Beyond our asset diversification requirements as a RIC under the Code, we do not have fixed guidelines for diversification, and our investments could be concentrated in relatively few portfolio companies.

Our portfolio may be concentrated in a limited number of portfolio companies and industries, which will subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.

Our portfolio may be concentrated in a limited number of portfolio companies and industries. Beyond the asset diversification requirements associated with our qualification as a RIC under the Code, we do not have fixed guidelines for diversification. As a result, the aggregate returns we realize may be significantly adversely affected if a small number of investments perform poorly or if we need to write down the value of any one investment. Additionally, while we are not targeting any specific industries, our investments may be concentrated in relatively few industries. As a result, a downturn in any particular industry in which we are invested could also significantly impact the aggregate returns we realize.

We may hold the debt securities of leveraged companies that may, due to the significant volatility of such companies, enter into bankruptcy proceedings.

Leveraged companies may experience bankruptcy or similar financial distress. The bankruptcy process has a number of significant inherent risks. Many events in a bankruptcy proceeding are the product of contested matters and adversary proceedings and are beyond the control of the creditors. A bankruptcy filing by an issuer may adversely and permanently affect the issuer. If the proceeding is converted to a liquidation, the value of the issuer may not equal the liquidation value that was believed to exist at the time of the investment. The duration of a bankruptcy proceeding is also difficult to predict, and a creditor’s return on

30

investment can be adversely affected by delays until the plan of reorganization or liquidation ultimately becomes effective. The administrative costs in connection with a bankruptcy proceeding are frequently high and would be paid out of the debtor’s estate prior to any return to creditors. Because the standards for classification of claims under bankruptcy law are vague, our influence with respect to the class of securities or other obligations we own may be lost by increases in the number and amount of claims in the same class or by different classification and treatment. In the early stages of the bankruptcy process, it is often difficult to estimate the extent of, or even to identify, any contingent claims that might be made. In addition, certain claims that have priority by law (for example, claims for taxes) may be substantial.

Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.

Following an initial investment in a portfolio company, we may make additional investments in that portfolio company as “follow-on” investments, in seeking to:

• increase or maintain in whole or in part our position as a creditor or equity ownership percentage in a portfolio company;

• exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or

• preserve or enhance the value of our investment.

We have discretion to make follow-on investments, subject to the availability of capital resources. Failure on our part to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful operation. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our level of risk, because we prefer other opportunities or because we are inhibited by compliance with business development company requirements or the desire to maintain our RIC status. Our ability to make follow-on investments may also be limited by GC Advisors’ allocation policy.

Because we generally do not hold controlling equity interests in our portfolio companies, we may not be able to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.

Although we may do so in the future, we do not currently hold controlling equity positions in our portfolio companies. As a result, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and that the management and/or stockholders of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity of the debt and equity investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company and may therefore suffer a decrease in the value of our investments.

Defaults by our portfolio companies will harm our operating results.

A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its assets. This could trigger cross-defaults under other agreements and jeopardize such portfolio company’s ability to meet its obligations under the debt or equity securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company.

Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.

We intend to invest a portion of our capital in second lien and mezzanine loans issued by our portfolio companies. The portfolio companies usually have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt securities in which we invest. By their terms, such debt instruments may provide

31

that the holders are entitled to receive payment of interest or principal on or before the dates on which we are entitled to receive payments in respect of the debt securities in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying senior creditors, the portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities in which we invest, we would have to share any distributions on an equal and ratable basis with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

Additionally, certain loans that we make to portfolio companies may be secured on a second priority basis by the same collateral securing senior secured debt of such companies. The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the loans. The holders of obligations secured by first priority liens on the collateral will generally control the liquidation of, and be entitled to receive proceeds from, any realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of all of the collateral would be sufficient to satisfy the loan obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral. If such proceeds were not sufficient to repay amounts outstanding under the loan obligations secured by the second priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the portfolio company’s remaining assets, if any.

We may also make unsecured loans to portfolio companies, meaning that such loans will not benefit from any interest in collateral of such companies. Liens on such portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all secured loan obligations. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.

The rights we may have with respect to the collateral securing the loans we make to our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of such senior debt. Under a typical intercreditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens:

• the ability to cause the commencement of enforcement proceedings against the collateral;

• the ability to control the conduct of such proceedings;

• the approval of amendments to collateral documents;

• releases of liens on the collateral; and

• waivers of past defaults under collateral documents.

We may not have the ability to control or direct such actions, even if our rights are adversely affected.

32

If we make subordinated investments, the obligors or the portfolio companies may not generate sufficient cash flow to service their debt obligations to us.

We may make subordinated investments that rank below other obligations of the obligor in right of payment. Subordinated investments are subject to greater risk of default then senior obligations as a result of adverse changes in the financial condition of the obligor or in general economic conditions. If we make a subordinated investment in a portfolio company, the portfolio company may be highly leveraged, and its relatively high debt-to-equity ratio may create increased risks that its operations might not generate sufficient cash flow to service all of its debt obligations.

The disposition of our investments may result in contingent liabilities.

We currently expect that a significant portion of our investments will involve private securities. In connection with the disposition of an investment in private securities, we may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that any such representations turn out to be inaccurate or with respect to potential liabilities. These arrangements may result in contingent liabilities that ultimately result in funding obligations that we must satisfy through our return of distributions previously made to us.

Our base management fee may induce GC Advisors to incur leverage.

Our base management fee is payable based upon our gross assets, which include any borrowings that we make for investment purposes. This fee structure may encourage GC Advisors to borrow money to finance additional investments. Under certain circumstances, the use of borrowed money may increase the likelihood of default, which would disfavor holders of our common stock, including investors in the common stock offered by this prospectus. Given the subjective nature of the investment decisions made by GC Advisors on our behalf, our board of directors may not be able to monitor this potential conflict of interest effectively.

Our incentive fee may induce GC Advisors to make certain investments, including speculative investments.

The incentive fee payable by us to GC Advisors may create an incentive for GC Advisors to make investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement. The way in which the incentive fee payable to GC Advisors is determined may encourage GC Advisors to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would disfavor the holders of our common stock, including investors in this offering.

The incentive fee payable by us to GC Advisors also may create an incentive for GC Advisors to invest on our behalf in instruments that have a deferred interest feature. Under these investments, we would accrue the interest over the life of the investment but would not receive the cash income from the investment until the end of the term. Our net investment income used to calculate the income portion of our investment fee, however, includes accrued interest. Thus, a portion of this incentive fee would be based on income that we have not yet received in cash.

GC Advisors’ liability will be limited under the Investment Management Agreement, and we are required to indemnify GC Advisors against certain liabilities, which may lead GC Advisors to act in a riskier manner on our behalf than it would when acting for its own account.

Under the Investment Management Agreement, GC Advisors will not assume any responsibility to us other than to render the services called for under that agreement, and it will not be responsible for any action of our board of directors in following or declining to follow GC Advisors’ advice or recommendations. GC Advisors maintains a contractual, as opposed to a fiduciary, relationship with us. Under the terms of the Investment Management Agreement, GC Advisors, its officers, members, personnel, any person controlling or controlled by GC Advisors will not be liable to us, any subsidiary of ours, our directors, our stockholders or any subsidiary’s stockholders or partners for acts or omissions performed in accordance with and pursuant to the Investment Management Agreement, except those resulting from acts constituting gross negligence, willful misconduct, bad faith or reckless disregard of GC Advisors’ duties under the Investment Management

33

Agreement. In addition, we have agreed to indemnify GC Advisors and each of its officers, directors, members, managers and employees from and against any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with our business and operations or any action taken or omitted on our behalf pursuant to authority granted by the Investment Management Agreement, except where attributable to gross negligence, willful misconduct, bad faith or reckless disregard of such person’s duties under the Investment Management Agreement. These protections may lead GC Advisors to act in a riskier manner when acting on our behalf than it would when acting for its own account.

We may be subject to additional risks if we engage in hedging transactions and/or invest in foreign securities.

We currently anticipate that we will not use hedging transactions or invest in foreign securities. Engaging in either or both of these activities would entail additional risks to our stockholders. We could, for example, use instruments such as interest rate swaps, caps, collars and floors and, if we invest in foreign securities, we could use instruments such as forward contracts or currency options and borrow under a credit facility in currencies selected to minimize our foreign currency exposure. In each such case, we generally would seek to hedge against fluctuations of the relative values of our portfolio positions from changes in market interest rates or currency exchange rates. Hedging against a decline in the values of our portfolio positions would not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of the positions declined. However, such hedging could establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions could also limit the opportunity for gain if the values of the underlying portfolio positions increased. Moreover, it might not be possible to hedge against an exchange rate or interest rate fluctuation that was so generally anticipated that we would not be able to enter into a hedging transaction at an acceptable price.

While we may enter into such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates could result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged could vary. Moreover, for a variety of reasons, we might not seek to establish a perfect correlation between the hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation could prevent us from achieving the intended hedge and expose us to risk of loss. In addition, it might not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities would likely fluctuate as a result of factors not related to currency fluctuations.

We may not realize gains from our equity investments.

When we invest in one-stop, second lien and mezzanine loans, we may acquire warrants or other equity securities of portfolio companies as well. We may also invest in equity securities directly. To the extent we hold equity investments, we will attempt to dispose of them and realize gains upon our disposition of them. However, the equity interests we receive may not appreciate in value and, may decline in value. As a result, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.

If one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we actually provided managerial assistance to that portfolio company, a bankruptcy court might re-characterize our debt investment and subordinate all or a portion of our claim to that of other creditors. We may also be subject to lender liability claims for actions taken by us with respect to a borrower’s business or instances where we exercise control over the borrower. It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken in rendering significant managerial assistance.

34

We may not be approved for a Small Business Investment Company license.

Golub Capital has submitted an application to the Small Business Administration, or SBA, to form a third Small Business Investment Company, or SBIC. Shortly after the closing of this offering, we intend to amend the pending application, or substitute a new application, so that one of our subsidiaries becomes the applicant for such license. We cannot assure you that we will amend such application, or substitute a new application, or that we will be successful in receiving an SBIC license from the SBA.

Risks Relating to This Offering

We cannot assure you that we will be able to deploy the proceeds of our initial public offering and the GC Private Placement within the timeframe we have contemplated.

We anticipate that approximately $     million of the net proceeds of our initial public offering and the GC Private Placement will be invested in portfolio companies in accordance with our investment objective within three to six months after the completion of our initial public offering. We cannot assure you, however, that we will be able to locate a sufficient number of suitable investment opportunities to allow us to deploy those proceeds successfully in that timeframe. To the extent we are unable to invest those proceeds within our contemplated timeframe after the completion of our initial public offering, our investment income and, in turn, our results of operations, will likely be materially adversely affected.

There is a risk that you may not receive distributions or that our distributions may not grow over time and a portion of our distributions may be a return of capital.

We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this prospectus. In addition, due to the asset coverage test applicable to us under the 1940 Act as a business development company, we may be limited in our ability to make distributions.

Investing in our common stock may involve an above average degree of risk.

The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and volatility or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive and, therefore, an investment in our common stock may not be suitable for someone with lower risk tolerance.

Shares of closed-end investment companies, including business development companies, often trade at a discount to their net asset value.

Shares of closed-end investment companies, including business development companies, often trade at a discount to net asset value. This characteristic of closed-end investment companies and business development companies is separate and distinct from the risk that our net asset value per share may decline. We cannot predict whether our common stock will trade at, above or below net asset value.

The market price of our common stock may fluctuate significantly.

The market price and liquidity of the market for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:

• significant volatility in the market price and trading volume of securities of business development companies or other companies in our sector, which is not necessarily related to the operating performance of these companies;

• changes in regulatory policies or tax guidelines, particularly with respect to RICs or business development companies;

• loss of RIC or BDC status;

35

• changes in earnings or variations in operating results;

• changes in the value of our portfolio of investments;

• changes in accounting guidelines governing valuation of our investments;

• any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;

• departure of GC Advisors’ or any of its affiliates’ key personnel;

• operating performance of companies comparable to us;

• general economic trends and other external factors; and

• loss of a major funding source.

We may allocate the net proceeds from this offering in ways with which you may disagree.

We will have significant flexibility in investing the net proceeds of this offering and may use the net proceeds from this offering in ways with which you may disagree or for purposes other than those contemplated at the time of the offering.

Prior to this offering, there has been no public market for our common stock, and we cannot assure you that the market price of shares of our common stock will not decline following the offering.

We cannot assure you that a trading market will develop for our common stock after this offering or, if one develops, that such trading market can be sustained. Shares of companies offered in an initial public offering often trade at a discount to the initial offering price due to underwriting discounts and related offering expenses. Also, shares of closed-end investment companies, including business development companies, frequently trade at a discount from their net asset value. This characteristic of closed-end investment companies is separate and distinct from the risk that our net asset value per share of common stock may decline. We cannot predict whether our common stock will trade at, above or below net asset value.

Investors in this offering will experience immediate dilution upon the closing of the offering.

If you purchase shares of our common stock in this offering, you will experience immediate dilution of      per share because the price that you pay will be greater than the pro forma net asset value per share of the common stock you acquire. This dilution is in large part due to the expenses incurred by us in connection with the consummation of this offering. Investors in this offering will pay a price per share of common stock that exceeds the tangible book value per share after the closing of the offering.

Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.

As a result of agreements with our existing investors, we are contractually obligated to register for resale an aggregate of approximately            million shares that will be held by such persons upon completion of the BDC Conversion. Upon expiration of any applicable lock-up periods, such shares will generally be freely tradable in the public market, subject to the provisions of Rule 144 under the Securities Act. In connection with the GC Private Placement, we entered into a registration rights agreement with respect to            million shares acquired by GEMS. Some holders of these shares through GEMS are or will be held by affiliates of GC Advisors upon completion of the BDC Conversion. Under this registration rights agreement, holders of shares acquired by GEMS were granted certain demand, piggy-back and shelf registration rights beginning       days after the consummation of an initial public offering. Sales of substantial amounts of our common stock, or the availability of such common stock for sale, could adversely affect the prevailing market prices for our common stock. If this occurs and continues, it could impair our ability to raise additional capital through the sale of securities should we desire to do so.

36

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements in this prospectus constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this prospectus involve risks and uncertainties, including statements as to:

• our future operating results;

• our business prospects and the prospects of our portfolio companies;

• the effect of investments that we expect to make;

• our contractual arrangements and relationships with third parties;

• actual and potential conflicts of interest with GC Advisors and other affiliates of Golub Capital;

• the dependence of our future success on the general economy and its effect on the industries in which we invest;

• the ability of our portfolio companies to achieve their objectives;

• the use of borrowed money to finance a portion of our investments;

• the adequacy of our financing sources and working capital;

• the timing of cash flows, if any, from the operations of our portfolio companies;

• the ability of GC Advisors to locate suitable investments for us and to monitor and administer our investments;

• the ability of GC Advisors or its affiliates to attract and retain highly talented professionals;

• our ability to qualify and maintain our qualification as a RIC and as a business development company; and

• the effect of changes to tax legislation and our tax position.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words.

We have based the forward-looking statements included in this prospectus on information available to us on the date of this prospectus, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

You should understand that, under Sections 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in connection with any offering of securities pursuant to this prospectus.

37

USE OF PROCEEDS

We estimate that the net proceeds we will receive from the sale of    shares of our common stock in this offering will be approximately $   million (or approximately $   million if the underwriters fully exercise their over-allotment option), assuming an initial public offering price of $   per share, after deducting the underwriting discounts and commissions and estimated organization and offering expenses of approximately $         payable by us.

We intend to use the net proceeds of this offering, together with the proceeds of the GC Private Placement, which have not yet been invested on the date of this prospectus, to (1) repay $   of the outstanding principal of, and accrued and unpaid interest on, the Existing Credit Facility and (2) invest the balance of the net proceeds in portfolio companies in accordance with our investment objective and the strategies described in this prospectus and for general corporate purposes. We will also pay operating expenses, including management and administrative fees, and may pay other expenses such as due diligence expenses of potential new investments, from the net proceeds of this offering. As of September 30, 2009, we had outstanding borrowings of $315.3 million under the Existing Credit Facility. The Existing Credit Facility has a stated maturity date of December 29, 2010. The interest rate on borrowings under the Existing Credit Facility depends on the amount outstanding under such facility, the diversity of our investments and the collateral securing such borrowings. With respect to borrowings under $300.0 million, the interest rate equals LIBOR plus a margin ranging from 0.65% to 0.80%, depending on such factors. For borrowings in excess of $300.0 million, the interest rate equals LIBOR plus a range from 1.15% to 1.45%, depending on the same factors. The weighted average annual interest cost for the year ended September 30, 2009 was 1.5%, and the weighted average rate as of September 30, 2009 was 0.9%. The Existing Credit Facility provides for customary borrowing conditions, restrictive covenants, events of default and remedies. We anticipate that we will use substantially all of the net proceeds of this offering for the above purposes within three to six months, depending on the availability of appropriate investment opportunities consistent with our investment objective and market conditions. We cannot assure you we will achieve our targeted investment pace.

Pending such investments, we will invest the remaining net proceeds of this offering primarily in cash, cash equivalents, U.S. Government securities and high-quality debt investments that mature in one year or less from the date of investment. These temporary investments may have lower yields than our other investments and, accordingly, may result in lower distributions, if any, during such period. See “Regulation — Temporary Investments” for additional information about temporary investments we may make while waiting to make longer-term investments in pursuit of our investment objective.

DISTRIBUTIONS

To the extent that we have income available, we intend to distribute quarterly dividends to our stockholders, beginning with our first full quarter after the completion of this offering. Our quarterly dividends, if any, will be determined by our board of directors. Any dividends to our stockholders will be declared out of assets legally available for distribution.

Our    fiscal quarter dividend distribution, payable in      2010, is expected to be between $     and $     per share. We anticipate that this dividend will be paid from income primarily generated by interest and dividend income earned on our investment portfolio. The specific tax characteristics of the dividend will be reported to stockholders after the end of the calendar year.

We intend to elect to be treated, and intend to qualify annually thereafter, as a RIC under the Code, beginning with our first taxable year. To obtain and maintain RIC tax treatment, we must distribute at least 90% of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses, if any. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute during each calendar year an amount at least equal to the sum of: (1) 98% of our net ordinary income for such calendar year; (2) 98% of our net capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year; and (3) any net ordinary income and net capital gains for preceding years that were not distributed during such years and on which we previously paid no U.S. federal income tax.

38

We currently intend to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain such capital gains for investment and elect to treat such gains as deemed distributions to you. If this happens, you will be treated for U.S. federal income tax purposes as if you had received an actual distribution of the capital gains that we retain and reinvested the net after tax proceeds in us. In this situation, you would be eligible to claim a tax credit (or, in certain circumstances, a tax refund) equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. See “Material U.S. Federal Income Tax Considerations.” We cannot assure you that we will achieve results that will permit us to pay any cash distributions, and if we issue senior securities, we will be prohibited from making distributions if doing so would cause us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if such distributions are limited by the terms of any of our borrowings.

Unless you elect to receive your dividends in cash, we intend to make such distributions in additional shares of our common stock under our dividend reinvestment plan. If you hold shares of our common stock in the name of a broker or financial intermediary, you should contact such broker or financial intermediary regarding your election to receive distributions in cash or to reinvest them through our dividend reinvestment programs. See “Dividend Reinvestment Plan.”

THE BDC CONVERSION

Substantially all of the investments that we expect to own upon the closing of this offering are held by our predecessor and direct, wholly owned subsidiary, GCMF. From its inception in July 2007 through November 2009, all of the outstanding limited liability company interests in GCMF were held by three Delaware limited liability companies, Golub Capital Company IV, LLC, Golub Capital Company V, LLC and Golub Capital Company VI, LLC, whom we refer to in this prospectus, collectively, as the GCMF Owners. The GCMF Owners are investment vehicles advised by GC Advisors or one of its related persons. Prior to the filing of the registration statement of which this prospectus is a part, the GCMF Owners caused to be formed a new Delaware limited liability company, Golub Capital BDC LLC, into which they contributed all of the limited liability company interests in GCMF in consideration for proportionate interests in Golub Capital BDC LLC.

Immediately prior to the date of this prospectus and our election to be treated as a business development company, we will complete a conversion under which Golub Capital BDC, Inc. will succeed to the business of Golub Capital BDC LLC and its consolidated subsidiaries, and the members of Golub Capital BDC LLC will become stockholders of Golub Capital BDC, Inc. The entity issuing and selling shares of common stock to investors in this offering is Golub Capital BDC, Inc.

39

CAPITALIZATION

The following table sets forth:

• the actual capitalization of GCMF at September 30, 2009; and

• The pro forma capitalization of Golub Capital BDC, Inc. gives effect to: (a) the formation of Golub Capital BDC LLC and the contribution into Golub Capital BDC LLC of all of the limited liability company interests in GCMF; (b) sales of certain assets of GCMF valued at $        million after September 30, 2009, or the GCMF Asset Sales; (c) the completion of the GC Private Placement of limited liability company interests in Golub Capital BDC LLC to GEMS prior to this offering; and (d) completion of the BDC Conversion, including the conversion of all outstanding limited liability company interests in Golub Capital BDC LLC into shares of common stock of Golub Capital BDC, Inc.

• The pro forma capitalization of Golub Capital BDC, Inc. as adjusted to reflect (a) the sale of      shares of our common stock in this offering at an assumed public offering price of $     per share (the estimated initial public offering price set forth on the cover page of this prospectus) after deducting the underwriting discounts and commissions and estimated organization and offering expenses of approximately $       million payable by us; and (b) the application of the proceeds of this offering as described under “Use of Proceeds.”

	As of September 30, 2009
	GCMF		Golub Capital BDC, Inc.
	Actual		Pro Forma(1)(2)(3)(4)		Pro Forma as Adjusted(5)
	(Unaudited)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	30,614	$		$
Investments at fair value		376,294
Other assets		2,214
Total assets	$	409,122	$		$
Liabilities:
Existing Credit Facility	$	315,306	$		$
New Credit Facility		—		—		—
Unitholders’ Equity:
Net assets	$	92,752	$	—	$	—
Stockholders’ equity:
Common stock, par value $      per share;             shares authorized;          shares issued and outstanding, pro forma          shares issued and outstanding, pro forma as adjusted		—	$		$
Capital in excess of par		—
Total stockholders’ equity		—
Pro forma net asset value

(1) Reflects the formation of Golub Capital BDC LLC and the contribution of GCMF into Golub Capital BDC LLC in consideration of the issuance to the GCMF Owners of    limited liability company interests in Golub Capital BDC LLC. The number of limited liability interests received by the GCMF Owners was determined based on the net asset value of the assets held by GCMF as of September 30, 2009. See “The BDC Conversion” and “Management’s Discussion and Analysis of Results of Operations and Financial Condition — Recent Developments and Estimates.”

40

(2) Reflects the sale of certain assets of GCMF that settled after September 30, 2009. Proceeds from such asset sales totaled an aggregate of $   million. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition.”

(3) Reflects the GC Private Placement in    of    limited liability interests in Golub Capital BDC LLC to GEMS for gross proceeds of $   million (before deducting related expenses, which were not significant). The limited liability company interests acquired by GEMS will convert into shares of our common stock as part of the BDC conversion. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition — Recent Developments and Estimates” and “Certain Transactions.”

(4) Reflects the completion of the BDC Conversion, including the conversion of    outstanding limited liability company interests of Golub Capital BDC LLC into    shares of common stock of Golub Capital BDC, Inc., immediately prior to the date of this prospectus. See “The BDC Conversion.”

(5) Adjusts the pro forma information to give effect to this offering (assuming no exercise of the underwriters’ over-allotment option) and the application of the proceeds from this offering as described under “Use of Proceeds.”

41

DILUTION

The dilution to investors in this offering is represented by the difference between the offering price per share and the pro forma net asset value per share after this offering. Net asset value per share is determined by dividing our net asset value, which is our total tangible assets less total liabilities, by the number of outstanding shares of common stock.

After giving effect to the GC Private Placement, we had    limited liability interest outstanding, and our net asset value was $      , or approximately $       per share of common stock (giving pro forma effect to the BDC Conversions). After giving effect to the sale of the shares to be sold in this offering and the deduction of discounts and estimated expenses of this offering before stabilization, our pro forma net asset value would have been approximately $      , or $       per share, representing an immediate increase in net asset value of $       per share and an immediate dilution of $       per share or       % to shares sold in this offering.

The following table illustrates the dilution to the shares on a per share basis:

Offering price	$
Net asset value after GC Private Placement	$
Increase attributable to stockholders	$
Pro forma net asset value after this offering	$
Dilution to stockholders (without exercise of the over-allotment option)	$

The following table sets forth information with respect to the shares prior to and following the offering:

	Shares Purchased		Total Consideration		Average Price Per Share
	Number	%	Amount	%
Shares outstanding after completion of GC Private Placement
Shares to be sold in this offering (without exercise of underwriters’ over-allotment option)
Total

The pro forma net asset value after the offering (without exercise of the over-allotment option) is calculated as follows:

Numerator:
Net asset book value after completion of the GC Private Placement	$
Proceeds from this offering (after deduction of certain estimated expenses of this offering as described in Use of Proceeds and without exercise of the over-allotment option)	$
Denominator:
Shares outstanding after completion of GC Private Placement
Shares included in this offering (without exercise of the over-allotment option)

42

SELECTED FINANCIAL AND OTHER INFORMATION

We have derived the selected historical balance sheet information as of September 30, 2007, 2008 and 2009 and the selected statement of operations information for the fiscal period from July 27, 2007 (inception) through September 30, 2007 and for the fiscal years ended September 30, 2008 and 2009 from our predecessor’s financial statements included elsewhere in this prospectus, which were audited by McGladrey & Pullen, LLP, an independent registered public accounting firm.

The financial and other information below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited historical financial statements included elsewhere in this prospectus.

	Years Ended September 30,						Period from July 27, (Inception) Through September 30, 2007
	2009			2008
	(Dollars in Thousands)
Income Statement Data:
Total investment income	$	33,338		$	20,686		$	1,868
Total expenses		7,860			10,642			1,251
Net investment income		25,478			10,044			617
Net realized loss from investments		(3,972	)		(4,503	)		—
Net unrealized depreciation on investments		(1,489	)		(8,957	)		(558	)
Net income (loss)	$	20,017		$	3,416		$	59
Other Data:
Weighted average annualized yield on income producing investments at fair value(1)		9.68	%		9.47	%		6.51	%
Number of portfolio companies (at period end)		95			60			56

	September 30,				Fiscal Period for July 27 (Inception) Through September 30, 2007
	2009		2008
					(Unaudited)
	(Dollars in Thousands)
Balance Sheet Data:
Total investment portfolio	$	376,294	$	135,476	$	201,147
Total cash and cash equivalents		30,614		4,252		4,237
Total assets		409,122		140,941		208,203
Net assets		92,752		16,853		33,481
Per Unit Data:
Net asset value per unit	$		$		$
Net investment income
Net realized and unrealized gain (loss)

(1) Weighted average yield on income producing investments is computed as (a) the sum of (i) annual stated interest on accruing loans and debt securities and (ii) the annual amortization of loan origination fees, original issue discount and market discount on accruing loans and debt securities divided by (b) total income producing investments at fair value.

43

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of our financial condition and results of operations should be read in conjunction with “Selected Financial and Other Data” and the financial statements and the related notes thereto of our predecessor, GCMF, appearing elsewhere in this prospectus. The information in this section contains forward-looking statements that involve risks and uncertainties. Please see “Risk Factors” and “Special Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Overview

We are an externally managed, closed-end, non-diversified management investment company that intends to file an election to be regulated as a business development company under the 1940 Act. In addition, for tax purposes we intend to elect to be treated as a RIC under the Code. We were formed in November 2009 to continue and expand the business of GCMF, our wholly owned subsidiary and predecessor, which commenced operations in July 2007.

Our investment objective is to provide our stockholders with both current income and capital appreciation through debt and minority equity investments. We invest in senior secured, one-stop, second lien and mezzanine loans and minority equity securities of middle-market companies that are, in most cases, sponsored by private equity investors.

Our investment activities are managed by GC Advisors and supervised by our board of directors, a majority of whom are independent of us, GC Advisors and its affiliates. Under our Investment Management Agreement, we have agreed to pay GC Advisors an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. We have also entered into an Administration Agreement with GC Service. Under our Administration Agreement, we have agreed to reimburse GC Service for our allocable portion (subject to the review and approval of our board of directors) of overhead and other expenses incurred by GC Service in performing its obligations under the Administration Agreement.

While our portfolio on the date of this prospectus comprises primarily senior secured loans, we intend to pursue an investment strategy focused on investing in one-stop, second lien and mezzanine loans and warrants and minority equity co-investments in middle-market companies. Accordingly, over time we expect that senior secured loans will represent a smaller percentage of our investment portfolio as we grow our business, the loans amortize, and we invest in a different mix of assets.

We seek to create a diverse portfolio that includes senior secured, one-stop, second lien and mezzanine loans and warrants and minority equity securities by investing approximately $10 to $25 million of capital, on average, in the securities of middle-market companies. We may also selectively invest more than $25 million in the securities of some portfolio companies and generally expect that the size of our individual investments will vary proportionately with the size of our capital base.

As of September 30, 2009, our net asset value was $     million, or $     per share, and we had long-term investments totaling $376.3 million. As of that date, our portfolio comprised debt in 95 portfolio companies, and our income producing assets, which represented 99.2% of our total portfolio, had a weighted average annualized yield of approximately    %.

Revenues.  We generate revenue in the form of interest income on debt investments and capital gains and distributions, if any, on investment securities that we acquire in portfolio companies. Our debt investments, whether in the form of senior secured, one-stop, second lien or mezzanine loans typically have a term of three-to-ten years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments may fluctuate significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments provide for deferred interest payments or payment-in-kind, or PIK, interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. In addition, we may generate revenue in the form of commitment,

44

origination, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as interest income. Dividend income, if any, is recognized on an accrual basis to the extent that we expect to collect such amounts.

Expenses.  Our primary operating expenses include the payment of management fees to GC Advisors, our allocable portion of overhead expenses under the Administration Agreement and other operating costs described below. Additionally, we pay interest expense on outstanding debt under the Existing Credit Facility and expect to pay interest on any outstanding debt under the New Credit Facility. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

• the cost of calculating our net asset value, including the cost of any third-party valuation services;

• the cost of effecting sales and repurchases of shares of our common stock and other securities;

• fees payable to third parties relating to making investments, including out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments;

• transfer agent and custodial fees;

• out-of-pocket fees and expenses associated with marketing efforts;

• federal and state registration fees and any stock exchange listing fees;

• U.S. federal, state and local taxes;

• independent directors’ fees and expenses;

• brokerage commissions;

• fidelity bond, directors’ and officers’ liability insurance and other insurance premiums;

• direct costs, such as printing, mailing, long distance telephone and staff;

• fees and expenses associated with independent audits and outside legal costs;

• costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws; and

• other expenses incurred by either GC Service or us in connection with administering our business, including payments under the Administration Agreement that will be based upon our allocable portion (subject to the review and approval of our board of directors) of overhead.

Recent Developments and Estimates

BDC Conversion.  Golub Capital BDC LLC was formed in November 2009 to continue and expand the business of our predecessor, GCMF, which commenced operations in July 2007. All of the outstanding limited liability company interests in GCMF were held initially by three Delaware limited liability companies, Golub Capital Company IV, LLC, Golub Capital Company V, LLC and Golub Capital Company VI, LLC, or the GCMF Owners. In November 2009, the GCMF Owners formed Golub Capital BDC LLC, into which they contributed 100% of the membership interests of GCMF and from which they received a proportionate number of units representing limited liability company interests in Golub Capital BDC LLC. Immediately prior to the completion of this offering, Golub Capital BDC LLC intends to convert into a Delaware corporation, Golub Capital BDC, Inc., and all of the outstanding limited liability company interests will be converted into shares of common stock. In this prospectus, we refer to this conversion as the “BDC Conversion.” See “BDC Conversion.”

GC Private Placement.  In       , GEMS, a limited partnership affiliated with GC Advisors, purchased    limited liability company interests in Golub Capital BDC LLC for gross proceeds of $   million (before deducting related expenses, which were not significant). Investors in GEMS include employees and management of Golub Capital and its affiliates as well as a small number of long-time investors in funds sponsored by Golub Capital. The limited liability company interests in Golub Capital BDC LLC and, after

45

giving effect to the BDC Conversion, the shares of common stock of Golub Capital BDC, Inc., purchased by GEMS have not been registered under the Securities Act and are, accordingly, subject to restrictions on transfer and to a   -day lock-up agreement with the underwriters of this offering. See “Capitalization,” “Certain Transactions — Registration Rights” and “Underwriting.”

GCMF Asset Sales.  In   , our wholly owned subsidiary and predecessor, GCMF, sold portfolio assets with a fair value of $      million as of September 30, 2009 for gross proceeds of $      million. We refer to this sale as the GCMF Asset Sales and to the assets sold as the “Assets Sold.” We decided to undertake the GCMF Asset Sales to remove from our portfolio certain widely syndicated senior secured loans and other assets that were not consistent with the investment strategy that we intend to pursue after the completion of this offering. The GCMF Asset sales were completed with unaffiliated third-party buyers in market transactions and, in a limited number of cases, through negotiated sales with the GCMF Owners, which held all of our limited liability interest prior to the completion of the GC Private Placement. All of the proceeds of the GCMF Asset Sales were used to repay outstanding borrowings under the Existing Credit Facility.

	Company		Industry		Principal Amount		Cost		Fair Value
					(Dollars in Thousands)
1		Aramark Corporation		Personal, Food and Miscellaneous Services	$	2,910	$	2,375	$	2,722
2		Casedhole Solutions, Inc.		Oil and Gas		3,291		3,291		2,304
3		Celanese Holdings LLC.		Chemicals, Plastics and Rubber		992		822		941
4		Cellular South, Inc.		Telecommunications		1,247		1,247		1,202
5		CHS/Community Health Systems		Healthcare, Education and Childcare		773		761		727
6		Covanta Energy Corporation		Utilities		2,980		2,473		2,852
7		DaVita, Inc.		Healthcare, Education and Childcare		5,000		4,471		4,846
8		Gray Wireline Service, Inc.		Oil and Gas		8,000		8,000		6,400
9		GXS Worldwide, Inc.		Electronics		4,197		3,632		4,119
10		Hanesbrands Inc.		Textiles and Leather		2,185		1,792		2,197
11		Itron, Inc.		Utilities		1,198		1,053		1,197
12		JRD Holdings, Inc.		Grocery		1,291		1,102		1,248
13		Levtran Enterprises, Inc.		Retail Stores		731		731		631
14		McBride Electric Inc.		Electronics		1,558		1,558		1,168
15		Metavante Corporation		Finance		2,977		2,461		2,974
16		MetroPCS Wireless, Inc.		Telecommunications		2,969		2,398		2,850
17		Neptco Incorporated		M-Diversified/Conglomerate Manufacturing		4,591		4,367		4,086
18		NRG Energy, Inc.		Utilities		2,741		2,452		2,603
19		Open Text Corporation		S-Diversified/Conglomerate Service		1,324		1,102		1,274
20		Prommis Solutions		Banking		1,660		1,660		1,527
21		PSI Services LLC		S-Diversified/Conglomerate Service		6,333		5,929		3,166
22		RedPrairie Corporation		Cargo Transport		1,721		1,456		1,670

46

	Company		Industry		Principal Amount		Cost		Fair Value
					(Dollars in Thousands)
23		Regal Cinemas Corporation		Leisure, Amusement, Motion Pictures, Entertainment		1,523		1,298		1,520
24		TAC Materials, Inc.		Chemicals, Plastics and Rubber		2,771		2,771		1,124
25		Tecta America Corp.		Buildings and Real Estate		2,055		2,055		1,991
26		United Surgical Partners International, Inc.		Healthcare, Education and Childcare		1,545		1,545		1,439
27		West Corporation		Telecommunications		3,571		3,215		2,571
				Total Assets Sales	$	72,134	$	66,017	$	61,349

After giving effect to the GCMF Asset Sales, our investment portfolio had a net asset value of $     million, or $     per Golub Capital BDC LLC limited liability company interest, and a weighted average annualized yield as of September 30, 2009 of    %.

New Credit Facility.  We intend to enter into a commitment letter with a lender for the New Credit Facility. We intend to use borrowings under the New Credit Facility to supplement our equity capital, to refinance debt outstanding under the Existing Credit Facility, make additional investments and for other general corporate purposes.

SBIC License.  Golub Capital is an experienced manager of Small Business Investment Companies, or SBICs, licensed by the U.S. Small Business Administration, or SBA. Golub Capital currently operates two SBIC licensees and recently received a letter from the Investment Division of the SBA, inviting Golub Capital to complete an application to form a third SBIC. This step formally commences the licensing process. Shortly after the closing of the offering, we intend to amend Golub Capital’s pending application, or submit a new application, so that one of our subsidiaries will be the applicant for a new SBIC license. If this application is approved, our SBIC subsidiary will be a wholly owned subsidiary and will be able to rely on an exclusion from the definition of “investment company” under the 1940 Act. As such, this subsidiary will not elect to be treated as a business development company under the 1940 Act. Our SBIC subsidiary will have an investment objective similar to ours and will make similar types of investments in accordance with SBIC regulations.

To the extent that we receive an SBIC license, our SBIC subsidiary will be allowed to issue SBA-guaranteed debentures, subject to the required capitalization of the SBIC subsidiary. SBA guaranteed debentures carry long-term fixed rates that are generally lower than rates on comparable bank and other debt. Under the regulations applicable to SBICs, an SBIC may have outstanding debentures guaranteed by the SBA generally in an amount up to twice its regulatory capital, which generally equates to the amount of its equity capital. The SBIC regulations currently limit the amount that our SBIC subsidiary may borrow to a maximum of $150 million. This means that our SBIC subsidiary may access the full $150 million maximum available if it has $75 million, and we may decide to capitalize it with a lesser amount. In addition, if we are able to obtain financing under the SBIC program, our SBIC subsidiary will be subject to regulation and oversight by the SBA, including requirements with respect to maintaining certain minimum financial ratios and other covenants.

As an experienced SBIC operator in the SBA program and given Golub Capital’s receipt of an invitation to complete an application, we believe that Golub Capital and our subsidiary have excellent prospects of receiving SBIC license, although we cannot be certain of the timing of such approval or if they will be able to obtain such approval.

Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by one SBIC licensee is $150 million, and the maximum amount of such debentures that may be issued by multiple licensees under common management is $250 million. If we are approved for an SBIC license, it is possible that our SBIC subsidiary may be constrained in its ability to issue SBA-guaranteed debentures in the

47

future if other Golub Capital SBICs already have debentures outstanding. As of September 30, 2009, Golub Capital operated two SBIC licensees with an aggregate of $131.8 million of guaranteed SBA debentures outstanding. While we can offer no assurance that it will become law, the U.S. House of Representatives recently passed a bill that would increase the amount of SBA-guaranteed debentures that may be issued by a single licensee to $225 million and the total amount of such debentures that may be issued by multiple licensees under common management to $350 million.

Estimated Net Asset Value.  As of September 30, 2009, after giving effect to the GCMF Asset Sales, our net asset value was $     million, or $     per share. This estimate is based on several factors, including expected investment income earned on the portfolio, the GCMF Asset Sales and the estimated market value of our residual portfolio as of September 30, 2009. Our board of directors will retain one or more independent valuation firms to review the valuation of each portfolio investment at least once during each 12-month period. However, our board of directors is ultimately and solely responsible for determining the valuation of our assets using a documented valuation policy and consistently applied valuation process. See “Determination of Net Asset Value.”

Portfolio Composition, Investment Activity and Yield

The total value of our investments was approximately $376.3 million at September 30, 2009, $135.5 million at September 30, 2008 and $ 201.1 million at September 30, 2007. For the year ended September 30, 2009, we originated approximately $357.6 million of new investment commitments in 86 portfolio companies. For the year ended September 30, 2008, we originated approximately $345.2 million of new investment commitments in 42 portfolio companies. From July 27, 2007 (inception) through September 30, 2007, which we refer to in this prospectus as the 2007 Operating Period, we originated approximately $402.5 million of new investment in 72 portfolio companies. The analysis in this paragraph and the following paragraphs is as of September 30, 2009 and does not give effect to the GCMF Asset Sales. The structure of the Existing Credit Facility is a variable funding note indenture, dated as of July 27, 2007, between GCMF, as issuer, and U.S. Bank National Association, as indenture trustee. See “Recent Developments and Estimates — GCMF Asset Sales.”

For the year ended September 30, 2009, we had approximately $52.1 million in debt repayments in existing portfolio companies and sales of securities in 42 portfolio companies aggregating approximately $154.0 million. For the year ended September 30, 2008, we had approximately $18.6 million of debt repayments and sales of securities in 70 portfolio companies aggregating approximately $403.1 million. For the 2007 Operating Period, we had approximately $2.4 million of debt repayments and $0 sales of securities.

In addition, during the year ended September 30, 2009 we had unrealized appreciation on 63 portfolio company investments totaling approximately $13.2 million, which was offset by unrealized depreciation on 52 portfolio company investments totaling approximately $(14.7) million. During the year ended September 30, 2008, we had unrealized appreciation on 12 portfolio company investments totaling approximately $702,000, which was offset by unrealized depreciation on 43 portfolio company investments totaling approximately $(9.7) million. During the 2007 Operating Period, we had unrealized appreciation on four portfolio company investment totaling approximately $505,000, which was more than offset by unrealized depreciation on 15 portfolio company investments totaling approximately $(1.1) million.

As of September 30, 2009, we had investments in debt of 95 portfolio companies totaling approximately $376.3 million. As of September 30, 2008, we had investments in debt of 60 portfolio companies totaling approximately $135.5 million. As of September 30, 2007, we had investments in debt of 56 portfolio companies totaling approximately $ 201.1 million.

48

The following table shows the cost and fair value of our portfolio of investments by asset class as of September 30, 2009, September 30, 2008 and September 30, 2007:

	As of September 30,
	2009				2008				2007
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(Dollars in Thousands)
Senior secured	$	255,641	$	248,480	$	94,915	$	86,632	$	149,863	$	148,637
Senior secured One-Stop loans		121,070		117,357		47,206		46,036		42,342		43,050
Second lien		10,582		10,457		2,865		2,808		9,500		9,460
Total	$	387,293	$	376,294	$	144,986	$	135,476	$	201,705	$	201,147

As of September 30, 2009, 2008 and 2007, the weighted average yield on the fair value of investments in our portfolio was approximately 9.68%, 9.47% and 6.51%, respectively. Approximately 47.6% and     % of our portfolio at fair value and at cost, respectively, had interest rate floors that limit how low applicable LIBOR, and hence the interest rates on such loans, can fall.

Results of Operations

The historical financial information of our predecessor, GCMF, is not directly comparable to the financial information that we expect to report in future periods. Prior to the completion of this offering, we intend to complete several significant corporate transactions, including the GCMF Asset Sales, the GC Private Placement and the BDC Conversion, as a result of which Golub Capital BDC LLC will convert into Golub Capital BDC, Inc. and holders of our limited liability company interests will receive shares of common stock. Also, in future periods the management fee that we pay to GC Advisors under the Investment Management Agreement will be determined by reference to a formula that differs materially from the management fee paid by GCMF in prior periods. See “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments and Estimates” and “Management Agreements — Management Fee.” In addition, GCMF’s portfolio consisted primarily of senior secured and one-stop loans as of September 30, 2009, and we intend to pursue a strategy that is focused on one-stop, second lien and mezzanine loans and warrants and minority equity securities. As a business development company and a RIC, we will also be subject to certain constraints on our operations, including limitations imposed by the 1940 Act and the Code, to which GCMF was not subject. For the reasons described above, the results of operations described below are not directly comparable to, and may not be indicative of, the results we expect to report in future periods.

Comparison of the years ended September 30, 2009 and September 30, 2008 and the operating period from July 27, 2007 (Inception) through September 30, 2007 (the “2007 Operating Period”)

Revenue

	Year Ended September 30, 2009		Year Ended September 30, 2008		2007 Operating Period
	(Dollars in Thousands)
Investment income	$	33,338	$	20,686	$	1,868

Investment income increased by $12.7 million, or 61%, for the year ended September 30, 2009 as compared to the year ended September 30, 2008. The increase in investment income was primarily due to an increase in invested assets. This factor was partially offset by the lower average LIBOR during the year ended September 30, 2009, as 94.4% of our portfolio comprises loans have interest rates based on LIBOR plus a margin. However, some of our loans have interest rate floors that limit how low applicable LIBOR, and hence the interest rate on such loans, can fall. Average invested assets for the year ended September 30, 2009 were $369.6 million, an increase of 65% over the prior year. The average of one-month LIBOR for the year ended September 30, 2009 was 0.83%, a decrease of 253 basis points from the prior year’s average.

Investment income for the 2007 Operating Period was $1.9 million and was primarily attributable to senior loan investments.

49

Operating Expenses

	Year Ended September 30, 2009		Year Ended September 30, 2008		2007 Operating Period
	(Dollars in Thousands)
Management fees	$	2,849	$	1,726	$	134
Interest and other credit facility expenses		4,546		8,596		1,114
Other general and administrative expenses		464		320		3
Total operating expenses	$	7,860	$	10,642	$	1,25l

Total operating expenses decreased by $2.8 million, or 26%, for the year ended September 30, 2009 as compared to the prior year. Total management fees, which are calculated based on invested assets, were higher in the year ended September 30, 2009 than in the previous year due to an increase in invested assets. After this offering, we will pay management fees under the Investment Management Agreement, which provides a different basis for the calculation of such fees as compared to amounts paid by GCMF as a private company. Accordingly, the operating expense amounts for GCMF will not be comparable to our operating expenses after the completion of this offering. Interest and other credit facility expenses were lower in the year ended September 30, 2009 than the prior year primarily due to lower interest expense on the Existing Credit Facility, which is calculated as a spread over LIBOR, resulting from a decrease in LIBOR during the year ended September 30, 2009. Other general and administrative expenses increased during the year ended September 30, 2009 primarily due to higher legal costs related to the Existing Credit Facility.

Total operating expenses for the 2007 Operating Period were $1.3 million. Of the total operating expenses, $1.1 million, or 89%, was attributable to interest and other credit facility expenses.

Net Realized and Unrealized Gains and Losses

	Year Ended September 30,
	2009			2008			2007 Operating Period
	(Dollars in Thousands)
Net realized loss on investments	$	(3,972	)	$	(4,503	)	$	—
Net unrealized loss on investments		(1,489	)		(8,957	)		(558	)
Total net realized and unrealized loss before taxes	$	(5,461	)	$	(13,460	)	$	(558	)

Net realized loss for the year ended September 30, 2009 was primarily due to the sale of 20 assets that we sold at a loss in December of 2008. During the year ended September 30, 2009, we had unrealized appreciation on 63 portfolio company investments totaling approximately $13.2 million, which was more than offset by unrealized depreciation on 52 portfolio company investments totaling approximately $(14.7) million. Unrealized appreciation during the year ended September 30, 2009 resulted from an increase in fair value primarily due to the rise in market prices and a reversal of prior period unrealized depreciation. Unrealized depreciation on 49 of the 52 the portfolio companies during the year ended September 30, 2009 resulted from a reduction in fair value primarily due to market yield adjustments. Unrealized depreciation attributable to the three other portfolio companies during the year ended September 30, 2009 resulted from a reduction in fair value primarily due to credit deterioration. These three assets were on non-accrual status as of September 30, 2009.

Net realized loss for the year ended September 30, 2008 was primarily due to the sale of 34 assets that we sold at a loss in May of 2008. During the year ended September 30, 2008, we had unrealized appreciation on 12 portfolio company investments totaling approximately $702,000, which was more than offset by unrealized depreciation on 43 portfolio company investments totaling approximately $(9.7) million. Unrealized appreciation during the year ended September 30, 2008 resulted primarily from a reversal of prior period unrealized depreciation. Unrealized depreciation was a result of a reduction in fair value primarily due to market yield adjustments.

50

During the 2007 Operating Period, we had no realized depreciation or appreciation, but we had unrealized appreciation on four portfolio company investments totaling approximately $505,000, which was more than offset by unrealized depreciation on 15 portfolio company investments totaling approximately $(1.1) million. Unrealized depreciation result from a reduction in fair value primarily due to market yield adjustments.

Income Tax

As a limited liability company, GCMF did not pay U.S. federal income taxes, and our limited liability company interest holders are not required to pay income taxes on our income.

After the completion of this offering, we intend to elect to be treated for income tax purposes as a RIC. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on ordinary income or capital gains that we distribute to our stockholders as dividends. See “Material U.S. Federal Income Tax Considerations.”

Liquidity and Capital Resources

Our predecessor, GCMF, was formed in June 2007 and commenced operations in July 2007. Prior to December of 2008, the primary business activity of GCMF was to acquire and transfer investments, in whole or in part, to its affiliates. After December 2008, GCMF initiated a buy and hold investment strategy, which significantly changed its financial position and cash flows.

As of September 30, 2009, 2008 and 2007, we had cash and cash equivalents of $30.6 million, $4.3 million and $4.2 million, respectively. Cash provided by (used by) operating activities for the years ended September 30, 2009 and September 30, 2008 was $(221.4) million and $64.2 million, respectively. Cash provided by operations resulted primarily from income items described in “— Results of Operations” above.

As a business development company, we will have an ongoing need to raise additional capital for investment purposes. In the future, we expect to increase our liquidity and raise additional capital through offerings of debt or equity securities, sales of investments as well as borrowings under the New Credit Facility. Since the middle of 2007, global credit and other financial markets have suffered substantial stress, volatility, illiquidity and disruption. These events have significantly diminished overall confidence in the debt and equity markets and caused increasing economic uncertainty. A further deterioration in the financial markets or a prolonged period of illiquidity without improvement could materially impair our ability to raise equity capital or debt capital on commercially reasonable terms.

Credit Facilities.  On July 27, 2007, GCMF entered into the Existing Credit Facility with Citigroup Global Markets Realty Corp., or Citigroup. The structure of the Existing Credit Facility is a variable funding note indenture, dated as of July 27, 2007, between GCMF, as issuer, and U.S. Bank National Association, as indenture trustee. As a result of a series of amendments, the Existing Credit Facility provides for potential borrowings of up to $500.0 million. Under the terms of the Existing Credit Facility, we are permitted to borrow up to 85% of the balances outstanding of pledged loans and investments, depending on the mix of assets and the rating and diversification of such assets. For advances under $300.0 million, our borrowings generally bear interest at an annual rate of LIBOR plus a margin ranging from 0.65% to 0.80%, depending on the diversity of the portfolio and type of collateral then in the portfolio. For borrowings above $300.0 million, our annual interest rate equals LIBOR plus a margin of between 1.15% and 1.45%, also depending on the diversity of the portfolio and the type of collateral then in the portfolio. As of September 30, 2009, the effective interest rate payable on amounts outstanding under the Existing Credit Facility was 1.5%.

The Existing Credit Facility had a facility commitment termination date of December 29, 2008. As a result, we are no longer able to borrow any additional funds under the Existing Credit Facility, which matures December 29, 2010.

On     , GCMF entered into an amendment under the Existing Credit Facility pursuant to which it was permitted to sell at their respective fair values the assets sold in the GCMF Asset Sales, free and clear of liens under the Existing Credit Facility. All of the proceeds from the GCMF Asset Sales were used by GCMF to repay amounts outstanding under the Existing Credit Facility. See “Business — Subsequent Events and Estimates — GCMF Asset Sales” for a list of assets sold. As of September 30, 2009, we had $315.3 million outstanding under the Existing Credit Facility.

51

We intend to enter into a commitment letter with a lender for a $ New Credit Facility. For a discussion of the anticipated material terms of the New Credit Facility, see “— Recent Developments and Estimates — New Credit Facility.

GC Private Placement.  In     , GEMS, a limited partnership affiliated with GC Advisors, purchased      limited liability company interests in Golub Capital BDC LLC for gross proceeds of $     million (before deducting related expenses, which were not significant). Investors in GEMS include employees and management of Golub Capital and its affiliates as well as a small number of long-time investors in funds sponsored by Golub Capital. The limited liability company interests in Golub Capital BDC LLC and, after giving effect to the BDC Conversion, the shares of common stock of Golub Capital BDC, Inc., purchased by GEMS have not been registered under the Securities Act and are, accordingly, subject to restrictions on transfer and to a     -day lock-up agreement with the underwriters of this offering. See “Capitalization,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Recent Developments and Estimates,” “Certain Transactions — Registration Rights” and “Underwriting.”

GCMF Asset Sales.   In     , our wholly owned subsidiary and predecessor, GCMF, sold portfolio assets with a fair value of $       million as of September 30, 2009 for gross proceeds of $      million. We refer to this sale as the GCMF Asset Sales. We decided to undertake the GCMF Asset Sales to remove from our portfolio certain widely syndicated senior secured loans and other assets that were not consistent with the investment strategy that we intend to pursue after the completion of this offering. The GCMF Asset Sales were completed with unaffiliated third-party buyers in market transactions and, in a limited number of cases, through negotiated sales with the GCMF Owners, which held all of our limited liability interest prior to the completion of the GC Private Placement. All of the proceeds of the GCMF Asset Sales were used to repay outstanding borrowings under the Existing Credit Facility (as defined in “— The Offering — Leverage”). After giving effect to the GCMF Asset Sales, our investment portfolio had a net asset value of $     million, or $     per Golub Capital BDC LLC limited liability company interest, and a weighted average annualized yield as of September 30, 2009 of    %. See “— Recent Developments and Estimates.”

Borrowings

We had borrowings of $315.3 million, $123.1 million and $173.5 million as of September 30, 2009, September 30, 2008, and September 30, 2007, respectively, under the Existing Credit Facility. See “— Liquidity and Capital Resources — Credit Facilities” for a description of the Existing Credit Facility. After giving effect to the GCMF Asset Sales and the use of such sale proceeds to repay amounts outstanding under the Existing Credit Facility, we would have had borrowings of $     under the Existing Credit Facility as of September 30, 2009.

Inflation

Inflation has not had a significant effect on our results of operations in any of the reporting periods presented in our financial statements. However, our portfolio companies have and may continue to experience the impact of inflation on their operating results.

Off-Balance Sheet Arrangements

We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of September 30, 2009 and September 30, 2008, we had outstanding commitments to fund investments totaling approximately $18.6 million and $120.4 million, respectively, under various undrawn revolvers and other credit facilities. As a result of the GCMF Asset Sales, we will have sold substantially all of the assets that were subject to such off-balance sheet commitments as of September 30, 2009.

52

Contractual Obligations

	Payments Due by Period (Millions)
	Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More Than 5 Years
Existing Credit Facility(1)	$	315.3	$	0	$	315.3	$	0	$	0

(1) Under the terms of the Existing Credit Facility, all outstanding borrowings under that facility ($315.3 million as of September 30, 2009) must be repaid on or before December 29, 2010.

We have certain contracts under which we have material future commitments. On       20  , we entered into the Investment Management Agreement with GC Advisors in accordance with the 1940 Act. The Investment Management Agreement will become effective upon the closing of this offering. Under the Investment Management Agreement, GC Advisors has agreed to provide us with investment advisory and management services. We have agreed to pay for these services (1) a management fee equal to a percentage of the average adjusted value of our gross assets and (2) an incentive fee based on our performance. See “Management — Investment Management Agreement.”

We have also entered into the Administration Agreement with GC Service as our administrator. The Administration Agreement will become effective upon the closing of this offering. Under the Administration Agreement, dated as of       , 2010, GC Service has agreed to furnish us with office facilities and equipment, provide us clerical, bookkeeping and record keeping services at such facilities and provide us with other administrative services necessary to conduct our day-to-day operations. See “Administration Agreement.”

If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our Investment Management Agreement and our Administration Agreement. Any new investment management agreement would also be subject to approval by our stockholders.

Upon the completion of this offering, the existing management agreement of GCMF will terminate with no continuing payment or other obligations on the part of either party.

Distributions

In order to qualify as a RIC and to avoid corporate level tax on the income we distribute to our stockholders, we are required, under the Code, to distribute at least 90% of our net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, to our net stockholders on an annual basis. Additionally, we must distribute at least 98% of our net income (both ordinary income and capital gains) to avoid a U.S. federal excise tax. We intend to distribute quarterly dividends to our stockholders. Our quarterly dividends will be determined by our board of directors.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of our distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage requirements applicable to us as a business development company under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including the possible loss of our RIC status. We cannot assure stockholders that they will receive any distributions.

To the extent our taxable earnings fall below the total amount of our distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a dividend payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

53

We intend to maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a dividend, then stockholders’ cash dividends will be automatically reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our dividend reinvestment plan and elects to receive cash dividends.

Distributions to Unitholders for the years ended September 30, 2009 and September 30, 2008 and for the 2007 Operating Period totaled $3.4 million, $44.5 million and $0, respectively.

Related Parties

We have entered into a number of business relationships with affiliated or related parties, including the following:

• We have entered into an Investment Management Agreement with GC Advisors. Mr. Lawrence Golub, our chairman, is the managing member of a limited liability company which controls GC Advisors, and David Golub, our chief executive officer, is a managing member of a limited liability company which also controls GC Advisors, and each of Messrs. Lawrence Golub and David Golub owns an indirect pecuniary interest in GC Advisors. See “Management Agreements.”

• GC Service provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement. We reimburse GC Service for the allocable portion (subject to the review and approval of our board of directors) of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions, and the compensation of our chief compliance officer and our chief financial officer and any administrative support staff.

• We have entered into a license agreement with Golub Capital Management LLC, pursuant to which Golub Capital Management LLC has granted us a non-exclusive, royalty-free license to use the name “Golub Capital.”

• In     , GEMS, a limited partnership affiliated with GC Advisors, purchased      limited liability company interests in Golub Capital BDC LLC for gross proceeds of $     million (before deducting related expenses, which were not significant). Investors in GEMS include employees and management of Golub Capital and its affiliates as well as a small number of long-time investors in funds sponsored by Golub Capital.

• Under a Staffing Agreement between Golub Capital Incorporated and Golub Capital Management LLC and GC Advisors, Golub Capital has agreed to provide GC Advisors with the resources necessary to fulfill its obligations under the Investment Management Agreement. The Staffing Agreement provides that Golub Capital will make available to GC Advisors experienced investment professionals and access to the senior investment personnel of Golub Capital for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of our investment committee will serve in such capacity. Services under the Staffing Agreement will be provided on a direct cost reimbursement basis. See “Certain Relationships.”

GC Advisors also manages, and may in the future manage, other accounts that have investment mandates that are similar, in whole and in part, with ours. GC Advisors and its affiliates may determine that an investment is appropriate for us and for one or more of those other accounts. In such event, depending on the availability of such investment and other appropriate factors, and pursuant to GC Advisors’ allocation policy, GC Advisors or its affiliates may determine that we should invest side-by-side with one or more other accounts. Such investments will not be made when impermissible by applicable law and interpretive positions of the SEC and its staff, or inconsistent with GC Advisors’ allocation procedures.

In addition, we have adopted a formal code of ethics that governs the conduct of our officers and directors. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the Delaware General Corporation Law.

54

Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. During the period covered by our predecessor’s financial statements, many of the loans in our portfolio had floating interest rates, and we expect that our loans in the future will also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate re-set provisions that adjust applicable interest rates under such loans to current market rates on a quarterly basis. In addition, the Existing Credit Facility has a floating interest rate provision based on LIBOR which resets monthly, and we expect that the New Credit Facility and any other credit facilities into which we enter in the future may have floating interest rate provisions.

Assuming that the balance sheet as of the periods covered by this analysis were to remain constant and that Management took no actions to alter our existing interest rate sensitivity, a hypothetical immediate 1% change in interest rates may affect net income by more than 1% over a one-year horizon. Although Management believes that this analysis is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowing under the Existing Credit Facility or other borrowing, that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the statement above.

We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

Valuation of Portfolio Investments.

Investments for which market quotations are readily available are valued at such market quotations. We may also obtain indicative prices with respect to certain of our investments from pricing services or brokers or dealers in order to value such investments. We expect that there will not be a readily available market value for many of the investments; those debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the board of directors. We expect to value such investments at fair value as determined in good faith by our board of directors using a documented valuation policy and a consistently applied valuation process. We will employ independent third party valuation firms for all material unquoted assets.

Valuation methods may include comparisons of financial ratios of the portfolio companies that issued such private equity securities to peer companies that are public, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the company will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

Our board of directors is ultimately and solely responsible for determining the fair value of the portfolio investments that are not publicly traded or whose market prices are not readily available on a quarterly basis in good faith.

55

With respect to investments for which market quotations are not readily available or for which no indicative prices from pricing services or brokers or dealers have been received, our board of directors undertakes a multi-step valuation process each quarter, as described below:

• The quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals responsible for the credit monitoring.

• Preliminary valuation conclusions are then documented and discussed with our senior management.

• Third-party valuation firms engaged by, or on behalf of, our board of directors conduct independent appraisals and review management’s preliminary valuations and make their own independent assessment, for all material assets.

• Our board of directors discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of the investment adviser and, where appropriate, the respective independent valuation firms.

The types of factors that we may take into account in fair value pricing our investments include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors.

Determination of fair value involves subjective judgments and estimates. Accordingly, these notes to our financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.

Revenue Recognition.  Our revenue recognition policies are as follows:

Investments and Related Investment Income:  We account for investment transactions on a trade-date basis. Our management values the portfolio of investments at fair value. Interest is recognized on the accrual basis. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in our statement of operations.

Non-accrual.  We place loans on non-accrual status when principal and interest payments are past due 90 days or more or when there is reasonable doubt that we will collect principal or interest. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. The total fair value of our non-accrual loans were $8.4 million and $0 as of September 30, 2009 and 2008, respectively.

Recent Accounting Pronouncements.

In September 2006, the Financial Accounting Standards Board, or FASB, issued Statement No. 157, Fair Value Measurements (Accounting Standards Codification, or ASC, Topic 820). This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. In conjunction with the affiliated entities which hold its membership equity interests, GCMF adopted this statement on a prospective basis on January 1, 2008. This accounting statement requires us to assume that the portfolio investment is assumed to be sold in the principal market to market participants, or in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with SFAS 157 (ASC Topic 820), the market in which we can exit portfolio investments with the greatest volume and level activity is considered our principal market.

56

In February 2007, the FASB issued statement No. 159, The Fair Value Option for Financial Assets and Liabilities — Including an Amendment of FASB Statement No. 115, or SFAS 159 (ASC Topic 825). The statement permits an entity to choose to measure many financial instruments and certain other items at fair value, with unrealized gains and losses in earnings at each reporting period. SFAS 159 (ASC Topic 825) applies to all reporting entities, and contains financial statement presentation and disclosure requirements for assets and liabilities reported at fair value as a consequence of the election. SFAS 159 (ASC Topic 825) is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We did not elect any new fair value measurements.

In October 2008, the FASB issued Staff Positions No. 157-3, Determining the Fair Value of a Financial Asset When the Market is Not Active, or FSP 157-3 (ASC Topic 820). FSP 157-3 (ASC Topic 820) provides an illustrative example of how to determine the fair value of financial instruments in an inactive market. FSP 157-3 (ASC Topic 820) does not change the fair value measurement principles set forth in SFAS 157 (ASC Topic 820). Since adopting SFAS 157 (ASC Topic 820) in January 2008, our process for determining the fair value of our investments has been, and continues to be, consistent with the guidance provided in FSP 157-3 (ASC Topic 820). As a result, the application of FSP 157-3 (ASC Topic 820) did not affect our process for determining the fair value of our investments and did not have a material impact on our financial position, results of operations or cash flows.

On April 9, 2009, the FASB issued FASB Staff Position No. FAS 157-4 (ASC Topic 820), Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, or FSP No. 157-4 (ASC Topic 820). FSP No. 157-4 (ASC Topic 820) requires entities to consider whether events and circumstances indicate whether the transaction is or is not orderly as opposed to a forced or distressed transaction. Entities would place more weight on observable transactions determined to be orderly and less weight on transactions for which there is insufficient information to determine whether the transaction is orderly. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities. FSP No. 157-4 (ASC Topic 820) provides additional guidance for making fair value measurements more consistent with the principles presented in SFAS No. 157 (ASC Topic 820). SFAS 157-4 (ASC Topic 820) is effective for interim and annual periods ending after June 15, 2009. We have applied the provisions of this FSP in determining the fair value of our portfolio investments as of September 30, 2009. The application of this pronouncement did not have a material impact on our financial position, results of operations or cash flows.

Senior Securities

Information about our predecessor’s senior securities is shown in the following table as of September 30 for the years indicated in the table. The information for the years indicated in the table covers the total amount of senior securities outstanding as of September 30, 2009 and has been derived from our financial statements, which have been audited by our independent registered public accounting firm and are included elsewhere in this prospectus.

Class and Year	Total Amount Outstanding Exclusive of Treasury Securities(1)		Asset Coverage per Unit(2)		Involuntary Liquidating Preference per Unit(3)		Average Market Value per Unit(4)
Credit Facility with U.S. Bank National Association, as Indenture Trustee
2007(5)	$	173,540	$	1,157		—		N/A
2008	$	123,083	$	1,093		—		N/A
2009	$	315,306	$	1,190		—		N/A

(1) Total amount of each class of senior securities outstanding at the end of the period presented.

57

(2) Asset coverage per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.

(3) The amount to which such class of senior security would be entitled upon the voluntary liquidation of the issuer in preference to any security junior to it. The “—” in this column indicates that the Securities and Exchange Commission expressly does not require this information to be disclosed for certain types of senior securities.

(4) Not applicable because senior securities are not registered for public trading.

(5) 2007 data are unaudited.

58

THE COMPANY

General

We are an externally managed, closed-end, non-diversified management investment company that intends to file an election to be regulated as a business development company under the 1940 Act. We were formed to continue and expand the business of our predecessor, GCMF, which commenced operations in July 2007, in making investments in senior secured, one-stop, second lien, mezzanine loans and warrants and minority equity securities of middle-market companies that are, in most cases, sponsored by private equity investors.

Our investment objective is to maximize the total return to our stockholders through both current income and capital appreciation through debt and minority equity investments. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced sponsors, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital, a leading lender to middle-market companies with more than $3.5 billion of investments and loan commitments as of October 31, 2009.

As of September 30, 2009, our portfolio primarily consisted of investments in senior secured loans ($248.5 million) and, to a lesser extent, one-stop loans ($117.4 million) and second-lien loans ($10.5 million), to middle-market companies organized and located primarily in the United States. While our portfolio on the date of this prospectus comprises primarily senior secured loans, going forward we intend to pursue a strategy focused on investing in one-stop, second lien and mezzanine loans and warrants and minority equity securities in U.S. middle-market companies. Accordingly, over time we expect that senior secured loans will represent a smaller percentage of our investment portfolio as these investments are repaid and we shift to a different mix of assets. We expect that our investments in loans will initially range between $10 million and $25 million each. In many cases, we anticipate that we will have opportunities to make equity co-investments or receive warrants to purchase equity securities of portfolio companies. We may also selectively invest more than $25 million in the securities of some portfolio companies, and we expect that the size of our individual investments will vary proportionally with the size of our capital base.

We believe one-stop, second lien and mezzanine loans represent particularly attractive investments when compared to similar loans originated in the 2006 – 2008 period due to what we expect to be more attractive pricing in connection with more conservative borrowing terms and deal structures.

Our Advisor

Our investment activities are managed by our external manager, GC Advisors. GC Advisors is responsible for sourcing potential investments, conducting research on prospective investments, analyzing investment opportunities, structuring our investments and monitoring our investments and portfolio companies on an ongoing basis. GC Advisors was organized in September 2008 and is a registered investment adviser under the Investment Advisers Act of 1940.

GC Advisors is an affiliate of Golub Capital and has entered into the Staffing Agreement with two Golub Capital affiliates, Golub Capital Incorporated and Golub Capital Management LLC, under which these companies will make experienced investment professionals available to GC Advisors and provide access to the senior investment personnel and other resources of Golub Capital and its affiliates. The Staffing Agreement should provide GC Advisors with access to deal flow generated by Golub Capital and its affiliates and commits the members of our investment committee to serve in that capacity. GC Advisors intends to capitalize on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of Golub Capital’s investment professionals.

An affiliate of GC Advisors, GC Service, will provide the administrative services necessary for us to operate.

GC Service

GC Service, an affiliate of GC Advisors, will provide the administrative services necessary for us to operate. GC Service will furnish us with office facilities and equipment and clerical, bookkeeping and record-keeping services. GC Service will oversee our financial reporting as well as prepare our reports to

59

stockholders and reports required to be filed with the SEC. GC Service will also manage the determination and publication of our net asset value and the preparation and filing of our tax returns and will generally monitor the payment of our expenses and the performance of administrative and professional services rendered to us by others. GC Service may retain third parties to assist in providing administrative services to us. To the extent that GC Service outsources any of its functions, we will pay the fees associated with such functions on a direct basis without incremental profit to GC Service.

About Golub Capital

Golub Capital, founded in 1994, is a top-ranked lender to middle-market companies. Reuters Loan Pricing Corporation ranked Golub Capital as the leading senior lender for middle-market leveraged buyouts (defined as total debt financing of under $100 million) for the first three calendar quarters of 2009 and as the third-leading senior lender for the same category in 2008, based both on deal value and number of deals. In 2008, Golub Capital was presented with three major middle-market lender awards from leading industry publications, including: Buyouts Magazine’s “Middle-market Lender of the Year,” M&A Advisor’s “Financing Firm of the Year” and ACG Mergers & Acquisitions’ “M&A Lender of the Year.” In addition, M&A Advisor named Golub Capital the “Mezzanine Financing Agent of the Year” in 2009. As of October 31, 2009, Golub Capital managed more than $3.5 billion of investments and outstanding loan commitments, with a team of 39 investment professionals dedicated to U.S. middle-market lending in New York, Chicago and Atlanta.

Since its founding, Golub Capital has completed debt financings with more than 110 middle-market sponsors and closed multiple debt financings with more than 40 sponsors. We believe that Golub Capital enjoys robust deal flow. Golub Capital received notice of over 1,300 and 650 potential investments in 2008 and the first nine months of 2009, respectively, many of which we believe were proprietary or relationship-based opportunities.

We believe Golub Capital has a long track record of investing in one-stop and junior capital financings, which will be our long-term investment focus, and invested more than $1.8 billion in one-stop and mezzanine transactions across a variety of market environments and industries between 2001 and September 30, 2009. From 2004 through September 30, 2009, Golub Capital invested in more than 240 middle-market companies and as of September 30, 2009, it held debt investments in more than 180 middle-market companies. Golub Capital has developed expertise in industries such as business and consumer services, consumer products, defense, value-added distribution, healthcare services, manufacturing, media and restaurants.

Golub Capital’s middle-market lending group is managed by a four member senior management team consisting of Lawrence E. Golub, David B. Golub, Gregory W. Cashman and Andrew H. Steuerman. As of September 30, 2009, Golub Capital’s 39 investment professionals had an average of over 12 years of combined investment experience and were supported by 47 administrative and back office personnel that focus on operations, finance, legal and compliance, accounting and reporting, marketing, information technology and office management.

Market Opportunity

We intend to pursue a strategy focused on investing in one-stop, second lien and mezzanine loans and warrants and minority equity securities in middle-market companies in the United States. We believe the economic recession and the recent dislocation in U.S. credit markets have provided excellent conditions for middle-market lending. We find the middle-market attractive for the following reasons:

Large Target Market.  According to the U.S. Census Bureau in its 2002 economic census, there were approximately 153,000 small and middle-market companies in the United States with annual revenues between $10 million and $2.5 billion, compared with 900 companies with revenues greater than $2.5 billion. We believe that these middle-market companies represent a significant growth segment of the U.S. economy and often require substantial capital investments to grow. Middle-market companies have generated a significant number of investment opportunities for investment funds managed or advised by Golub Capital, including more than 650 lending opportunities in the first nine months of 2009, and we believe that this market segment will continue to produce significant investment opportunities for us.

Specialized Lending Requirements.  We believe that several factors render many U.S. financial institutions ill-suited to lend to U.S. middle-market companies. For example, we believe that lending to private

60

middle-market companies in the United States (1) is generally more labor intensive than lending to larger companies due in part to the smaller size of each investment and the fragmented nature of information for such companies; (2) requires due diligence and underwriting practices consistent with the demands and economic limitations of the middle-market; and (3) may also require more extensive ongoing monitoring by the lender. As a result, middle-market companies historically have been served by a limited segment of the lending community.

We also believe that the dislocation in the markets over the last 18 to 24 months has further reduced the amount of credit available to middle-market companies. Many participants in the second lien and mezzanine debt market over the past five years, such as hedge funds and managers of collateralized loan obligations, or CLOs, have contracted or eliminated their origination activities as investors’ credit concerns have reduced available funding. In addition, we believe several existing business development corporations are less active in the lending markets due to a lack of access to debt and equity financing. Moreover, many commercial banks face significant balance sheet constraints and increased regulatory scrutiny, which we believe restrict their ability to provide loans to middle-market companies.

Robust Demand for Debt Capital.  Private equity firms raised record amounts of equity commitments in 2006-2008, far in excess of the amount of equity they invested. As of September 30, 2009, there was approximately $735 billion of private equity capital available and uninvested in the United States. We believe the large amount of unfunded buyout commitments will drive demand for leveraged buyouts over the next several years, which we believe will, in turn, create leveraged lending opportunities for us.

Significant Refinancing Requirements.  We believe the debt associated with a large number of middle-market leveraged merger and acquisition transactions completed from 2005 to 2008 should start to come due in the 2010 – 2013 time period. In many cases, this debt will need to be refinanced as the existing debt facilities mature. When combined with the decreased availability of debt financing for middle-market companies, we believe these factors should increase lending opportunities for us.

Attractive Pricing.  We believe that reduced access to, and availability of, debt capital has improved available loan pricing for middle-market lenders. For example, we believe that interest rates charged on mezzanine credit facilities have been at or above 16% per annum in many instances, versus typical rates of 11% to 13% in 2007. Recent mezzanine deals typically have included meaningful upfront fees, prepayment protections and, in some cases, warrants, all of which should enhance the profitability to lenders.

Conservative Deal Structures.  As a result of the credit crisis, we believe lenders are requiring less leverage, more equity and more comprehensive loan covenants than was customary in the years leading up to the credit crisis. Lower debt multiples on purchase prices suggest that the cash flow of borrowing companies should enable them to service their debt more easily, creating a greater buffer against a downturn. Based on our review of a number of middle-market debt transactions completed in the first three quarters of 2009, we believe total leverage multiples declined significantly in the first half of 2009, and we expect leverage levels to remain at these levels through 2011.

Increased Equity Cushions.  As leverage has decreased, equity contributions to buyouts of middle-market companies have increased, as illustrated by the chart below. Based on our review of a number of middle-market debt transactions completed in the first half of 2009, we believe the equity component of the purchase price of buyouts of middle-market companies increased substantially in the first half of 2009. We believe this de-leveraging, as denoted in the table below by the sharp increase in the percentage equity contribution to LBO in 2008, reduces risk to providers of debt financing.

61

U.S. Industry Middle-Market Average Equity Contribution to LBOs

Source: Standard and Poor’s Leverage Buyout Review LBOs: $250 million – $499 million.

Competitive Strengths

Deep, Experienced Management Team.  We are managed by GC Advisors, which will have access through a staffing agreement with Golub Capital to the resources and expertise of Golub Capital’s 86 employees, led by our chairman, Lawrence E. Golub, and our chief executive officer, David B. Golub. As of September 30, 2009, the 39 investment professionals of Golub Capital had an average of over 12 years of investment experience and were supported by 47 administrative and back office personnel that focus on operations, finance, legal and compliance, accounting and reporting, marketing, information technology, and office management. Golub Capital seeks to hire and retain high-quality investment professionals and reward those personnel based on investor returns. In 2008, Golub Capital’s expertise and leading position in the market was evidenced by its receipt of three major middle-market lender awards from leading industry publications, including: Buyouts Magazine’s “Middle-market Lender of the Year,” M&A Advisor’s “Financing Firm of the Year” and ACG Mergers & Acquisitions’ “M&A Lender of the Year.” In addition, M&A Advisor named Golub Capital the “Mezzanine Financing Agent of the Year” in 2009.

Leading U.S. Debt Platform Provides Access to Proprietary Relationship-Based Deal Flow.  GC Advisors gives us access to the deal flow of Golub Capital, which we believe to be one of the leading middle-market lenders in the United States. Reuters Loan Pricing Corporation ranked Golub Capital as the leading senior lender for middle-market leveraged buyouts (total debt financing of under $100 million) for the first three calendar quarters of 2009 and third-leading senior lender for the same category in 2008, based both on deal volume and number of deals. We believe this market position makes Golub Capital the first choice lender to many sponsors, especially in the weak lending environment of 2009. Since its inception, Golub Capital has completed at least one debt financing with over 110 sponsors and multiple debt financings with over 40 sponsors. We believe that Golub Capital receives relationship-based “early looks” and “last looks” at many investment opportunities in the U.S. middle-market market, allowing it to be highly selective in the transactions it pursues.

Disciplined Investment and Underwriting Process.  GC Advisors intends to utilize the time-tested, efficient and reliable investment process of Golub Capital for reviewing lending opportunities, structuring transactions and monitoring investments. Under its disciplined approach to lending, GC Advisors will seek to minimize credit losses through effective underwriting, comprehensive due diligence investigations, structuring and the implementation of restrictive debt covenants. We expect that GC Advisors will select borrowers whose businesses will retain significant value, even in a depressed market or a distressed sale. We intend to reduce

62

risk further by focusing on proven, successful sponsors. While emphasizing thorough credit analysis, we intend to maintain strong relationships with sponsors by offering rapid initial feedback from senior investment professionals to each investment opportunity shown to us.

Regimented Credit Monitoring.  Following each investment, GC Advisors implements a regimented credit monitoring system. We believe this careful approach, which involves ongoing review and analysis by teams of professionals, enables us to identify problems early and to assist borrowers before they face difficult liquidity constraints. If necessary, GC Advisors can assume the role of deal sponsor in a work-out situation and has extensive restructuring experience, both in and out of bankruptcy. We believe in the need to prepare for possible negative contingencies in order to address them promptly should they arise.

Concentrated Middle-Market Focus:  We believe there are significant advantages to our focus on the middle-market:

• Middle-market companies are generally less leveraged than large companies and, we believe, offer more attractive investment returns in the form of upfront fees, prepayment penalties and higher interest rates;

• Middle-market issuers are more likely to have simple capital structures;

• Carefully structured covenant packages enable middle-market lenders to take early action to remediate poor financial performance; and

• Middle-market lenders can undertake thorough due diligence investigations prior to investment.

Investment Criteria/Guidelines

Our investment objective is to generate current income and capital appreciation, by investing primarily in one-stop loans, second lien and mezzanine debt, warrants and minority equity co-investments in U.S. middle-market companies. We intend to generate strong risk-adjusted net returns by assembling a diversified portfolio of investments across a broad range of industries and private equity investors.

We plan to target U.S. middle-market companies controlled by private equity investors that require capital for growth, acquisitions, recapitalizations, refinancings and leveraged buyouts. We may also make opportunistic loans to independently owned and publicly held middle-market companies. We seek to partner with strong management teams executing long-term growth strategies. Target businesses will typically exhibit some or all of the following characteristics:

• Annual EBITDA of $5 million to $40 million;

• Sustainable leading positions in their respective markets;

• Scalable revenues and operating cash flow;

• Experienced management teams with successful track records;

• Stable, predicable cash flows with low technology and market risks;

• A substantial equity cushion in the form of capital ranking junior to our investment;

• Low capital expenditures requirements;

• A North American base of operations;

• Strong customer relationships;

• Products, services or distribution channels having distinctive competitive advantages;

• Defensible niche strategy or other barriers to entry; and

• Demonstrated growth strategies.

While we believe that the criteria listed above are important in identifying and investing in prospective portfolio companies, not all of these criteria will be met by each prospective portfolio company.

63

Investment Process Overview

We view our investment process as consisting of four distinct phases described below:

Origination.  GC Advisors sources investment opportunities through access to a network of over 10,000 individual contacts developed by Golub Capital in the financial services and related industries. Among these contacts is an extensive network of private equity firms and relationships with leading middle-market senior lenders. The senior deal professionals of Golub Capital supplement these leads through personal visits and marketing campaigns. It is their responsibility to identify specific opportunities, to refine opportunities through candid exploration of the underlying facts and circumstances and to apply creative and flexible thinking to solve clients’ financing needs. Golub Capital’s origination personnel are located in three offices across the United States. Each originator maintains long-standing customer relationships and is responsible for covering a specified target market. We believe those originators’ strength and breadth of relationships across a wide range of markets generate numerous financing opportunities, which should enable GC Advisors to be highly selective in recommending investments to us.

Credit Evaluation.  We intend to utilize the systematic, consistent approach to credit evaluation developed by Golub Capital, with a particular focus on determining the value of a business in a downside scenario. The key criteria that we intend to consider include (1) strong and resilient underlying business fundamentals, (2) a substantial equity cushion in the form of capital ranking junior in right of payment to our investment and (3) a conclusion that overall “downside” risk is manageable. While the size of this equity cushion will vary over time and among industries, the cushion generally sought by GC Advisors today is between 45% and 60% of total portfolio capitalization. We expect to focus on the time-tested criteria developed by Golub Capital for evaluating prospective portfolio companies discussed above under “— Competitive Strengths.” In evaluating a particular company, we intend to put more emphasis on credit considerations (i.e., (1) loan-to-value ratio (which is the amount of our loan divided by the enterprise value of the company we are investing in), (2) the ability of the company to maintain a liquidity cushion through economic cycles and in downside scenarios, (3) the ability of the company to service its fixed charge obligations under a variety of scenarios and (4) its anticipated strategic value in a downturn) than on profit potential and loan pricing. Our due diligence process for middle-market credits will typically entail:

• a thorough review of historical and pro forma financial information,

• on-site visits,

• interviews with management, employees, customers and vendors,

• a review of loan documents and material contracts,

• third-party “quality of earnings” accounting due diligence,

• when appropriate, background checks on key managers and research relating to the company’s business, industry, markets, products and services and competitors, and

• the commission of a third-party market studies when appropriate.

The following chart illustrates the stages of Golub Capital’s evaluation and underwriting process:

64

ILLUSTRATIVE DEAL EVALUATION PROCESS

FUND INVESTMENTS

Execution.  In executing transactions for us, GC Advisors will utilize the due diligence process developed by Golub Capital. Through a consistent approach to credit evaluation and careful attention to the details of execution, it seeks to close deals as fast or faster than competitive financing providers while maintaining discipline with respect to credit, pricing and structure to ensure the ultimate success of the financing. Upon completion of due diligence, the investment team working on an investment delivers a memorandum to our investment committee. Once an investment has been approved by the investment committee on a consensus basis, it moves through a series of steps, including initial documentation using standard document templates and the establishment of negotiating boundaries, final documentation, including resolution of business points and the execution of original documents held in escrow. Upon completion of final documentation, a loan is funded upon the execution of an investment committee memorandum by members of our investment committee.

Monitoring.  We view active portfolio monitoring as a vital part of our investment process. We consider board observation rights, where appropriate, regular dialogue with company management and sponsors and detailed, internally generated monitoring reports to be critical to our performance. Golub Capital has developed a monitoring template that is designed to reasonably ensure compliance with these standards. This template is used as a tool by GC Advisors to assess investment performance relative to plan. In addition, our portfolio companies may rely on us to provide them with financial and capital markets expertise.

As part of the monitoring process, GC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on the following categories, which we refer to as GC Advisors’ investment performance rating:

65

Risk Ratings Definition
Rating	Definition
Grade 5	Involves the least amount of risk in the Company’s portfolio. The borrower is performing above expectations and the trends and risk factors are generally favorable.
Grade 4	Involves an acceptable level of risk that is similar to the risk at the time of origination. The borrower is generally performing as expected and the risk factors are neutral to favorable.
Grade 3	Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination. The borrower may be out of compliance with debt covenants; however; loan payments are generally not past due.
Grade 2	Involves a borrower performing materially below and indicates that the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due). For loans graded 2, we will implement a plan to increase monitoring of the borrower.
Grade 1	Indicates that the borrower is performing substantially below expectations and the loan risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans graded 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount it anticipates will be recovered.

For any investment rated in categories one, two or three, GC Advisors will increase its monitoring intensity and prepare regular updates for our investment committee, summarizing current operating results and material impending events and suggesting recommended actions.

GC Advisors monitors and, when appropriate, changes the investment ratings assigned to each investment in our portfolio. In connection with our valuation process, GC Advisors reviews these investment ratings on a quarterly basis, and our board of directors reviews and affirms such ratings.

Investment Committee

The purpose of our investment committee, which is comprised of officers of GC Advisors and is provided under the Investment Management Agreement, is to evaluate and approve all of our investments, subject at all times to the oversight and approval of our board of directors. The investment committee process is intended to bring the diverse experience and perspectives of the committee’s members to the analysis and consideration of each investment. The investment committee currently consists of Lawrence E. Golub, David B. Golub, Andrew H. Steuerman and Gregory W. Cashman. The investment committee serves to provide investment consistency and adherence to our core investment philosophy and policies. The investment committee also determines appropriate investment sizing and suggests ongoing monitoring requirements.

In addition to reviewing investments, investment committee meetings serve as a forum to discuss credit views and outlooks. Potential transactions and deal flow are reviewed on a regular basis. Members of the investment team are encouraged to share information and views on credits with the investment committee early in their analysis. We believe this process improves the quality of the analysis and assists the deal team members to work more efficiently.

Each transaction is presented to the investment committee in a formal written report. All of our new investments must be approved by a consensus of the investment committee. Each member of our investment committee performs a similar role for other accounts managed by Golub Capital and its affiliates. In certain instances, our board of directors may also determine that its approval is required prior to the making of an investment.

66

Investment Structure

Once we have determined that a prospective portfolio company is suitable for investment, we work with the management of that company and its other capital providers to structure an investment. We negotiate among these parties to agree on how our investment is expected to perform relative to the other capital in the portfolio company’s capital structure.

We anticipate structuring our investments which will typically have maturities of five years, as follows:

Senior Secured Loans.  We anticipate structuring these investments as senior secured loans. We intend to obtain security interests in the assets of the portfolio company borrowers that will serve as collateral in support of the repayment of such loans. This collateral will take the form of first-priority liens on the assets of the portfolio company borrower. Our senior secured loans may provide for moderate loan amortization in the early years of the loan, with the majority of the amortization deferred until loan maturity. Under market conditions as of the date of this prospectus, we expect that the interest rate on senior secured loans will range between     % and     % over applicable LIBOR.

One-Stop Loans.  We anticipate structuring our one-stop loans as senior secured loans. We will obtain security interests in the assets of these portfolio companies that will serve as collateral in support of the repayment of these loans. This collateral may take the form of first-priority liens on the assets of a portfolio company. One-stop loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity. In many cases, we will be the sole lender, or we together with our affiliates will be the sole lender, of one-stop loans, which can afford us additional influence with a borrower in terms of monitoring and, if necessary, remediation in the event of underperformance. Under market conditions as of the date of this prospectus, we expect that the interest rate on one-stop loans will range between      percent and      percent (reflecting a blending of rates appropriate for the senior and junior debt exposures inherent in a one-stop loan) over applicable LIBOR.

Second Lien Loans.  We anticipate structuring these investments as junior, secured loans. We intend to obtain security interests in the assets of these portfolio companies that will serve as collateral in support of the repayment of such loans. This collateral may take the form of second priority liens on the assets of a portfolio company. These loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity. Under market conditions as of the date of this prospectus, we expect that the interest rate on second lien loans will generally range between     % and   % over applicable LIBOR.

Mezzanine Loans.  We anticipate structuring these investments as unsecured, subordinated loans that provide for relatively high, fixed interest rates that provide us with significant current interest income. These loans typically will have interest-only payments (often representing a combination of cash pay and PIK interest) in the early years, with amortization of principal deferred to maturity. Under market conditions as of the date of this prospectus, we expect the interest rate on mezzanine loans will generally range between      percent and      percent over applicable LIBOR.

Warrants and Minority Equity Securities.  In some cases, we will also receive nominally priced warrants or options to buy a minority equity interest in the portfolio company in connection with such a loan. As a result, as a portfolio company appreciates in value, we may achieve additional investment return from this equity interest. We may structure such warrants to include provisions protecting our rights as a minority-interest holder, as well as a “put,” or right to sell such securities back to the issuer, upon the occurrence of specified events. In many cases, we may also seek to obtain registration rights in connection with these equity interests, which may include demand and “piggyback” registration rights. With respect to preferred equity and common equity investments, which will normally occur as a co-investment along with a debt investment, we target an investment return of     % and     %, respectively. However, we can offer no assurance that we can achieve such a return with respect to any investment in our portfolio.

We intend to tailor the terms of each investment to the facts and circumstances of the transaction and the prospective portfolio company, negotiating a structure that protects our rights and manages our risk while creating incentives for the portfolio company to achieve its business plan and improve its operating results. We will seek to limit the downside potential of our investments by:

67

• requiring a total return on our investments (including both interest and potential equity appreciation) that we believe will compensate us appropriately for credit risk;

• negotiating covenants in connection with our investments that afford our portfolio companies as much flexibility in managing their businesses as possible, consistent with the preservation of our capital. Such restrictions may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and board rights, including either observation or rights to a seat on the board of directors under some circumstances; and

• selecting investments that we believe have a very low probability of loss.

We expect to hold most of our investments to maturity or repayment, but we may sell some of our investments earlier if a liquidity event occurs, such as a sale, recapitalization or worsening of the credit quality of the portfolio company.

Investments

We seek to create a diverse portfolio that includes senior secured, one-stop, second lien and mezzanine loans and warrants and minority equity securities by investing approximately $10 to $25 million of capital, on average, in the securities of middle-market companies. Set forth below is a list of our ten largest portfolio company investments as of September 30, 2009, as well as the top ten industries in which we were invested as of September 30, 2009, in each case calculated as a percentage of our total assets as of such date.

Portfolio Company	Investment Amounts (000’s)		Percentage of Total Investments*
AGData, L.P.	$	16,010		4.3	%
DDC Center Inc.		14,112		3.8
Pillar Processing LLC		9,947		2.6
Tangent Rail Services, Inc.		9,295		2.5
Benetech, Inc.		8,965		2.4
eVestment Alliance Holdings, LLC		8,786		2.3
ITEL Laboratories, Inc.		8,545		2.3
Wall Street Systems Holdings, Inc.		8,327		2.2
Vintage Parts, Inc.		7,804		2.1
Davis Inotek Instruments, LLC		7,452		2.0

Industry	Investment Amounts (000’s)		Percentage of Total Investments*
Healthcare, education and childcare	$	53,025		14.0	%
Finance		34,226		9.0
Buildings and real estate		31,441		8.4
Diversified conglomerate service		31,048		8.3
Cargo transport		19,237		5.1
Retail stores		18,352		4.8
Diversified conglomerate manufacturing		16,662		4.4
Farming and agriculture		16,010		4.3
Leisure, amusement, motion pictures and entertainment		15,697		4.2
Beverage, food and tobacco		14,107		3.7

* At fair value as of September 30, 2009 after giving effect to the GCMF Asset Sales.

Managerial Assistance

As a business development company, we will offer, and must provide upon request, managerial assistance to our portfolio companies. This assistance could involve monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. GC Service or an affiliate of GC Service will provide such managerial assistance on our behalf to portfolio companies that request this assistance. We

68

may receive fees for these services and will reimburse GC Service or an affiliate of GC Service for its allocated costs in providing such assistance, subject to the review and approval by our board of directors, including our independent directors.

Competition

Our primary competitors in providing financing to middle-market companies include public and private funds, other business development companies, commercial and investment banks, commercial financing companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, we believe some competitors may have access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a business development company or to the distribution and other requirements we must satisfy to maintain our RIC status.

We expect to use the expertise of the investment professionals of Golub Capital and its affiliates to which we will have access to assess investment risks and determine appropriate pricing for our investments in portfolio companies. In addition, we expect that the relationships of the senior members of Golub Capital and its affiliates will enable us to learn about, and compete effectively for, financing opportunities with attractive middle-market companies in the industries in which we seek to invest. For additional information concerning the competitive risks we face, see “Risk factors — Risks Relating to our Business and Structure — We operate in a highly competitive market for investment opportunities, which could reduce returns and result in losses.”

Staffing

We will not have any direct employees, and our day-to-day investment operations will be managed by GC Advisors. We have a chief executive officer, chief financial officer and chief compliance officer and, to the extent necessary, our board of directors may elect to hire additional personnel going forward. Our officers will be employees of GC Service, an affiliate of GC Advisors, and a portion of the compensation paid to our chief financial officer and chief compliance officer will be paid by us pursuant to the Administration Agreement. Some of our executive officers described under “Management” are also officers of GC Advisors. See “— Administration Agreement.”

Properties

We do not own any real estate or other physical properties materially important to our operation. Our headquarters are located at 150 South Wacker Drive, Suite 800, Chicago, IL 60606 and are provided by GC Service pursuant to the Administration Agreement. We believe that our office facilities are suitable and adequate to our business as we contemplate conducting it.

Legal Proceedings

Golub Capital BDC, GC Advisors and GC Service are not currently subject to any material legal proceedings.

69

PORTFOLIO COMPANIES

The following table sets forth certain information as of September 30, 2009 for each portfolio company in which we had an investment. GCMF Asset Sales are denoted by footnote (3). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments and Estimates — GCMF Assets Sales.” The general terms of our equity investments are described in “Business — Investment Structure.” Other than these investments, our only formal relationships with our portfolio companies are the managerial assistance that we may provide upon request and the board observer or participation rights we may receive in connection with our investment. We do not “control” and are not an “affiliate” of any of our portfolio companies, each as defined in the 1940 Act. In general, under the 1940 Act, we would “control” a portfolio company if we owned more than 25% of its voting securities and would be an “affiliate” of a portfolio company if we owned 5% or more of its voting securities.

Name and Address of Portfolio Company

Industry

Type of Investment

Interest(1)

Maturity

Fair Value (Dollars in Thousands)

Percentage of Class Held*

ABP Corporation 19 Fid Kennedy Ave Boston, MA 02210

Beverage, Food and Tobacco

Senior Secured Term Loan B

8.50% (LIBOR+4.50%)

2/28/2013

$

2,347

AGData, L.P. 2100 Rexford Rd. Suite 300 Charlotte, NC 28211

Farming and Agriculture

One Stop Revolver

11.25%

7/14/2012

1,840

One Stop Delayed Draw Term Loan

11.25%

7/14/2012

14,170

American Fire Protection Group   8426 E. Shea Blvd.   Suite 16   Scottsdale, AZ 85260

Buildings and Real Estate

Senior Secured Term Loan C

9.00% (LIBOR+6.75%)

6/21/2011

4,656

Aramark Corporation 1101 Market Street Philadelphia, PA 19107

Personal, Food and Miscellaneous Services

Senior Secured LC Facility Deposits

2.03% (LIBOR)

1/26/2014

168

(3)

Senior Secured US Term Loan

2.16% (LIBOR+1.88%)

1/26/2014

2,554

(3)

Architectural Testing, Inc 130 Derry Ct York, PA 17406

Buildings and Real Estate

One Stop Term Loan A

9.50% (LIBOR+6.50%)

5/22/2013

6,961

ASP PDM Acquisition Co. LLC 2800 Melby Street Eau Claire, WI 54703

Buildings and Real Estate

Senior Secured Term Loan

3.39% (LIBOR+2.75%)

12/31/2013

605

ATI Holdings 1408 Joliet Road Suite 101 Romeoville, IL 60446

Healthcare, Education and Childcare

Senior Secured Term Loan B

4.31% (LIBOR+4.00%)

9/19/2012

983

Senior Secured Term Loan A

3.80% (LIBOR+3.50%)

9/19/2011

1,571

Benetech, Inc. 1851 Albright Road Montgomery, IL 60538

Diversified Services/ Conglomerate Service

One Stop Term Loan

5.25% (LIBOR+5.00%)

12/28/2013

8,965

Bertucci’s Corporation 155 Otis Street Northoborough, MA 01532

Beverage, Food and Tobacco

Senior Secured First Lien Last Out Term Loan

12.00% (LIBOR+9.00%)

7/17/2012

1,985

Best Lighting Products, Inc. 1213 Etna Parkway Pataskala, OH 43062

Buildings and Real Estate

One Stop Term Loan A

10.00% (LIBOR+6.25%)

8/14/2012

2,545

Bonddesk Group LLC One Lovell Avenue Mill Valley, CA 94941

Banking

Senior Secured Term Loan

3.27% (LIBOR+3.00%)

8/16/2012

2,478

C&M Conveyor 4598 State Road 37 P.O. Box 379 Mitchell, IN 47446

Machinery (Non-Agriculture, Non-Construction, Non-Electronic)

One Stop Term Loan

9.25% (LIBOR+6.50%)

10/15/2012

619

70

Name and Address of Portfolio Company

Industry

Type of Investment

Interest(1)

Maturity

Fair Value (Dollars in Thousands)

Percentage of Class Held*

Cape Electrical Supply LLC P.O. Box 677 489 Kell Farm Drive Cape Girardeau, MO 63702

Electronics

Senior Secured Term Loan A

4.00% (LIBOR+3.75%)

11/6/2013

2,572

Casedhole Solutions, Inc. P.O. Box 267 Weatherford, OK 73096

Oil and Gas

Senior Secured Term Loan A

8.25% (LIBOR+5.25%)

6/25/2013

2,304

(3)

Celanese Holdings LLC(4) 1601 West LBJ Freeway P.O. Box 819005 Dallas, TX 75234

Chemicals, Plastics and Rubber

Senior Secured Dollar Term Loan

2.35% (LIBOR+1.75%)

4/2/2014

941

(3)

Cellular South, Inc. 125 South Congress Street, Suite 1000 Jackson, MS 39201

Telecommuni- cations

Senior Secured Delayed Draw Term Loan

2.00% (LIBOR+1.75%)

5/29/2014

1,202

(3)

CHS/Community Health Systems(4) 1400 Meridian Boulevard Franklin, TN 37067

Healthcare, Education and Childcare

Senior Secured Delay Draw Term Loan

2.50% (LIBOR+2.25%)

7/25/2014

727

(3)

CLP Auto Interior Corporation 6868 Acco Street Montebello, CA 90640

Automobile

Senior Secured Term Loan A

5.04% (LIBOR+4.75%)

6/26/2013

3,042

Collect America, Ltd. 370 17th Street, 50th Floor Denver, CO 80202

Finance

Senior Secured Term Loan B

8.38% (LIBOR+6.00%)

3/31/2012

1,773

Senior Secured Term Loan A

7.64% (LIBOR+5.25%)

12/31/2011

2,419

Community Hospices of America, Inc.   Creekside Crossing III   Suite 130   Brentwood, TN 37027

Healthcare, Education and Childcare

Senior Secured 1st Lien Term Loan

8.00% (LIBOR+5.00%)

1/13/2011

1,110

Second Lien 2nd Lien Term Loan

12.50% (LIBOR+9.50%)

4/14/2011

4,768

Compass Group Diversified Holdings, LLC(4)   61 Wilton Road   Second Floor   Westport, CT 06880

Diversified Conglomerate Service

Senior Secured Term Loan

4.50% (LIBOR+4.00%)

12/7/2013

4,689

Container Store, Inc 500 Freeport Parkway Coppell, TX 75019

Retail Stores

Senior Secured Term Loan

3.37% (LIBOR+3.00%)

8/16/2014

5,712

Cortz, Inc. 320 Industrial Drive West Chicago, IL 60185

Diversified Conglomerate Service

Senior Secured Term Loan A

8.51% (LIBOR+5.50%)

3/31/2014

7,069

Covanta Energy Corporation(4) 40 Lane Road Fairfield, NJ 07004

Utilities

Senior Secured Term Loan B

1.75% (LIBOR+1.50%)

2/9/2014

957

(3)

Senior Secured Credit Linked Deposit

0.19% (LIBOR+0.00%)

2/9/2014

1,895

(3)

Davis Inotek Instruments, LLC 1946-A Greenspring Drive Timonium, MD 21093

Machinery (Non-Agriculture, Non-Construction, Non-Electronic)

One Stop Term Loan

8.00% (LIBOR+5.00%)

9/22/2013

7,452

DaVita, Inc.(4) Casa DaVita 601 Hawaii Street El Segundo, CA 90245

Healthcare, Education and Childcare

Senior Secured Tranche B-1 Term Loan

1.81% (LIBOR+1.50%)

10/5/2012

4,846

(3)

DDC Center Inc. 1001 DDC Way Fairfield, OH 45014

Healthcare, Education and Childcare

One Stop Term Loan

9.50% (LIBOR+6.50%)

10/16/2014

14,112

Delta Educational Systems 144 Business Park Drive, Suite 201 Virginia Beach, VA

Healthcare, Education and Childcare

Senior Secured Term Loan

6.00% (LIBOR+2.50%)

6/30/2012

4,579

Den-Mat Holdings, LLC 2727 Skyway Drive Santa Maria, CA 93455

Healthcare, Education and Childcare

Senior Secured Term Loan

8.50% (cash: LIBOR+3.25%) (PIK: 4.25%)

12/31/2012

2,771

(2)

71

Name and Address of Portfolio Company

Industry

Type of Investment

Interest(1)

Maturity

Fair Value (Dollars in Thousands)

Percentage of Class Held*

Dr. Miracles, Inc. 183 Madison Ave Suite 405 New York, NY 10016

Personal and Non Durable Consumer Products

Senior Secured Term Loan A

4.28% (LIBOR+4.00%)

3/20/2014

4,082

Driven Brands, Inc. 128 South Tyron Street Suite 900 Charlotte, NC 28202

Automobile

Senior Secured Term Loan B

10.25% (LIBOR+5.75%)

10/20/2014

6,648

eVestment Alliance Holdings, LLC 4994 Lower Roswell Road Suite 1 Marietta, GA 30068

Finance

One Stop Term Loan A

9.50% (LIBOR+6.50%)

5/12/2014

8,786

Excelligence Learning Corporation 2 Lower Ragsdale Drive Monterey, CA 93940

Healthcare, Education and Childcare

Second Lien Term Loan C

7.25% (LIBOR+7.00%)

11/29/2013

1,504

Extreme Fitness(6) 8281 Yonge Street Thornhill, Ontario L3T 2C7 Canada

Leisure, Amusement, Motion Pictures, and Entertainment

One Stop Term Loan B

11.50% (LIBOR+7.50%)

3/15/2012

4,649

Fasteners for Retail, Inc. 28900 Fountain Parkway Cleveland, OH 44139

Retail Stores

Senior Secured Term Loan A

5.00% (LIBOR+4.50%)

12/31/2012

2,223

Focus Brands Inc. 200 Glenridge Point Parkway Suite 200 Atlanta, GA 30342

Personal, Food and Miscellaneous Services

Senior Secured Term Loan

5.92% (LIBOR+5.00%)

3/31/2011

6,056

Gammill, Inc. 1452 W. Gibson Street West Plains, MO 65775

Textiles and Leather

Senior Secured Term Loan A

9.50% (LIBOR+7.50%)

9/30/2011

4,459

Senior Secured Term Loan B

10.00% (LIBOR+8.00%)

9/30/2012

703

Gray Wireline Service, Inc. 1400 Everman Parkway Suite 149 Fort Worth, TX 76140

Oil and Gas

Senior Secured Term Loan

3.53% (LIBOR+3.25%)

2/28/2013

6,400

(3)

GXS Worldwide, Inc. 100 Edison Park Drive Gaithersburg, MD 20878

Electronics

Senior Secured Term B 1st Lien

9.25% (LIBOR+5.75%)

3/31/2013

2,971

(3)

Second Lien Term 2nd Lien

13.75% (LIBOR+10.25%)

9/30/2013

1,148

Hanesbrands Inc.(4) 1000 East Hanes Mill Road Winston-Salem, NC 27105

Textiles and Leather

Senior Secured Term Loan B

5.25% (LIBOR+4.75%)

9/5/2013

2,197

(3)

Heat Transfer Parent, Inc. 2777 Walden Avenue Buffalo, NY 14225

Diversified Conglomerate Manufacturing

Senior Secured Term Loan B

3.25% (LIBOR+3.00%)

6/30/2013

1,454

The Hygenic Corporation 1245 Home Avenue Akron, OH 44310

Healthcare, Education and Childcare

Senior Secured Term Loan

2.98% (LIBOR+2.50%)

4/30/2013

2,489

IL Fornaio (America) Corporation 770 Tamalpais Drive, Suite 400 Corte Madera, CA 94925

Retail Stores

Senior Secured Term Loan

3.25% (LIBOR+3.00%)

3/29/2013

4,568

Industrial Container Services, LLC 1540 South Greenwood Avenue P.O. Box 2067 Montebello, CA 90640

Containers, Packaging and Glass

One Stop Term Loan B

4.28% (LIBOR+4.00%)

9/30/2011

1,638

Infiltrator Systems, Inc. 6 Business Park Road P.O. Box 768 Old Saybrook, CT 06475

Buildings and Real Estate

Senior Secured Term Loan

8.50% (LIBOR+5.50%)

9/30/2012

3,457

Inovis International, Inc 11720 Amber Park Dr. Alpharetta, GA 30004

Electronics

Senior Secured Term Loan

9.50% (LIBOR+5.50%)

11/15/2009

2,134

72

Name and Address of Portfolio Company

Industry

Type of Investment

Interest(1)

Maturity

Fair Value (Dollars in Thousands)

Percentage of Class Held*

ITEL Laboratories, Inc. 6745 Phillips Industrial Blvd. Jacksonville, FL 32256

Buildings and Real Estate

One Stop Term Loan A

9.75% (LIBOR+6.75%)

3/1/2014

8,545

Itron, Inc.(4) 2111 N Molter Road Liberty Lake, WA 99019

Utilities

Senior Secured Dollar Term Loan

4.00% (LIBOR+3.75%)

4/18/2014

1,197

(3)

JRD Holdings, Inc. 15-06 132nd Street College Point, NY 11356

Grocery

Senior Secured Term Loan

2.49% (LIBOR+2.25%)

7/2/2014

1,248

(3)

KHKI Acquisition, Inc. 506 S. Wapello St. Mediapolis, IA 52637

Buildings and Real Estate

Senior Secured Term Loan A

8.50% (LIBOR+6.00%)

3/12/2012

2,210

Senior Secured Term Loan B

8.50% (LIBOR+8.00%)

3/12/2013

471

LBAC, Inc. 700 North Pennsylvania Avenue Wilkes-Barre, PA 18705

Beverage, Food and Tobacco

Senior Secured Term Loan A

7.00% (LIBOR+5.00%)

11/1/2012

6,149

Levtran Enterprises, Inc. 7455-N New Ridge Road Hanover, MD 21076

Retail Stores

One Stop Revolver

8.25% (LIBOR+4.00%)

10/20/2010

631

(3)

Lone Star Beef Processors, L.P. 2150 East 37th Street San Angelo, TX 76903

Beverage, Food and Tobacco

Senior Secured Term Loan

5.08% (LIBOR+4.00%)

5/6/2013

3,626

Marquette Transportation Company, LLC   2308 S. 4th Street   Paducah, KY 42003

Cargo Transport

Senior Secured Term Loan B

3.75% (LIBOR+3.50%)

3/21/2012

4,095

The Marshall Retail Group, LLC 5385 Wynn Road Las Vegas, NV 89118

Retail Stores

Senior Secured Term Loan A

7.25% (LIBOR+4.50%)

4/16/2013

1,995

Second Lien Term Loan B

9.25% (LIBOR+6.50%)

4/16/2013

3,223

McBride Electric Inc. 6480 Weathers Place Suite 340 San Diego, CA 92121

Electronics

One Stop Revolver

10.75% (LIBOR+6.50%)

9/1/2010

1,168

(3)

Metal Spinners, Inc. 800 Growth Parkway Angola, IN 46703

Diversified Natural Resources, Precious Metals and Minerals

Senior Secured Term Loan B

6.00% (LIBOR+4.00%)

1/23/2014

5,133

Senior Secured Term Loan C

9.00% (LIBOR+7.00%)

4/23/2014

683

Metavante Corporation(4) 4900 West Brown Deer Rd. Milwaukee, WI 53223

Finance

Senior Secured Term Loan B

2.23% (LIBOR+1.75%)

11/1/2014

2,974

(3)

MetroPCS Wireless, Inc.(4) 8144 Walnut Hill Lane Suite 800 Dallas, TX 75231

Telecommuni- cations

Senior Secured Term Loan B

2.66% (LIBOR+2.25%)

11/3/2013

2,850

(3)

Monotype Imaging, Inc.(4) 3600 Clipper Mill Road Suite 310 Baltimore, MD 21211

Printing and Publishing

Senior Secured Term Loan

3.01% (LIBOR+2.75%)

7/30/2012

1,603

Neptco Inc. P.O. Box 2323 30 Hamlet Street Pawtucket, RI 02861

Diversified Conglomerate Manufacturing

Senior Secured Term Loan

7.25% (LIBOR+5.25%)

3/31/2013

4,086

(3)

NRG Energy, Inc.(4) 211 Carnegie Center Princeton, NJ 08540

Utilities

Senior Secured Term Loan

2.02% (LIBOR+1.75%)

2/1/2013

2,603

(3)

Octane Fitness, LLC 9200 Wyoming Avenue North Suite 380 Brooklyn Park, MN 55445

Leisure, Amusement, Motion Pictures, and Entertainment

One Stop Term Loan

4.85% (LIBOR+4.60%)

3/14/2013

4,421

73

Name and Address of Portfolio Company

Industry

Type of Investment

Interest(1)

Maturity

Fair Value (Dollars in Thousands)

Percentage of Class Held*

Oncure Medical Corp. 610 Newport Center Drive Suite 350 Newport Beach, CA 92660

Healthcare, Education and Childcare

Senior Secured Term Loan A

3.75% (LIBOR+3.50%)

6/30/2012

5,592

Open Text Corporation(4)(6) 38 Leek Crescent Richmond Hill, ON L4B 4N8 CANADA

Diversified Conglomerate Service

Senior Secured Term Loan

2.50% (LIBOR+2.25%)

10/2/2013

1,274

(3)

Optronics Product Company, Inc. 4150 South 100th E. Ave., Suite 210 Tulsa, OK 74146

Leisure, Amusement, Motion Pictures, and Entertainment

Senior Secured Term Loan A

3.75% (LIBOR+3.75%)

12/14/2012

2,489

Second Lien Term Loan B

7.50% (LIBOR+7.25%)

12/14/2013

295

Pasternack Enterprises, Inc. 1851 Kettering Street Irvine, CA 92614

Diversified Conglomerate Manufacturing

Senior Secured Term Loan B

4.29% (LIBOR+4.00%)

2/14/2014

3,318

Peco Pallet, Inc. 29 Wells Avenue Building 4 Penthouse Yonkers, NY 10701

Cargo Transport

One Stop Term Loan A

4.00% (LIBOR+3.75%)

6/20/2013

4,177

Pelican Products, Inc. 23215 Early Avenue Torrance, CA 90505

Containers, Packaging and Glass

Senior Secured Term Loan A

7.70% (LIBOR+5.00%)

1/30/2013

1,638

Senior Secured Term Loan B

7.75% (LIBOR+5.00%)

1/30/2014

2,948

Pillar Processing LLC 220 Northpointe Parkway Suite G Buffalo, NY 14228

Finance

Senior Secured Term Loan

5.80% (LIBOR+5.50%)

11/20/2013

6,822

Senior Secured Term Loan B

14.50%

5/20/2014

3,125

Premier Yachts, Inc. 401 East Illinois Street Suite 425 Chicago, IL 60611

Leisure, Amusement, Motion Pictures, Entertainment

Senior Secured Term Loan A

4.00% (LIBOR+3.75%)

8/22/2012

1,141

Senior Secured Term Loan B

7.25% (LIBOR+7.00%)

8/22/2013

1,182

Prommis Solutions, Inc. 1544 Old Alabama Road Roswell, GA 30076

Banking

Senior Secured Delayed Draw Term Loan

3.43% (LIBOR+3.00%)

2/9/2013

1,527

(3)

PSI Services LLC 2950 N. Hollywood Way, Suite 200 Burbank, CA 91505

Diversified Conglomerate Service

Senior Secured Term Loan

5.50% (LIBOR+3.50%)

11/30/2012

3,166

(3)

Qualitor Acquisition Corp. 24800 Denso Drive, Ste 255 Southfield, MI 48034

Automobile

Senior Secured Term Loan B

6.00% (LIBOR+4.00%)

12/31/2011

1,344

Second Lien Term Loan C

9.00% (LIBOR+7.00%)

6/30/2013

680

ReachOut Healthcare America Ltd 1904 W. Parkside Ln. Suite 201 Phoenix, AZ 85027

Healthcare, Education and Childcare

Senior Secured Term A

9.25% (LIBOR+5.00%)

8/22/2013

6,534

RedPrairie Corporation 20700 Swenson Drive Waukesha, WI 53186

Cargo Transport

Senior Secured Term Loan B

3.45% (LIBOR+3.00%)

7/20/2012

1,670

(3)

Regal Cinemas Corporation(4) 7132 Regal Lane Knoxville, Tennessee 37918

Leisure, Amusement, Motion Pictures, and Entertainment

Senior Secured Term Loan

4.03% (LIBOR+3.75%)

10/27/2013

1,520

(3)

The Service Companies, Inc. 660 Northwest 125 Street North Miami, FL 33168

Diversified Conglomerate Service

Senior Secured Term Loan A

10.00% (LIBOR+6.25%)

3/31/2014

5,885

74

Name and Address of Portfolio Company

Industry

Type of Investment

Interest(1)

Maturity

Fair Value (Dollars in Thousands)

Percentage of Class Held*

The Sloan Company, Inc. 4445 Willard Avenue; 12th Floor Chevy Chase, MD 20815

Electronics

Second Lien Term Loan B

7.25% (Cash: LIBOR+5.50%) (PIK: 1.50%)

10/23/2012

2,358

(2)

Syrgis Holdings LLC 1025 Mary Laidley Drive Covington, KY 41017

Chemicals, Plastics and Rubber

Senior Secured Term A Loan

7.75% (LIBOR+5.50%)

8/31/2012

420

Senior Secured Term B1 Loan

8.25% (LIBOR+6.00%)

8/30/2013

816

Senior Secured Term C Loan

10.75% (LIBOR+8.50%)

2/28/2014

448

TAC Materials, Inc. 1700 Highland Road Twinsburg, OH 44087 USA

Chemicals, Plastics and Rubber

One Stop Term Loan A

9.00% (LIBOR+6.50%)

7/10/2013

1,124

(3)

Tangent Rail Services, Inc. 101 West Station Square Drive Pittsburgh, PA 15219-1122

Cargo Transport

Senior Secured Term Loan A

7.73% (LIBOR+4.75%)

9/30/2014

6,134

Senior Secured Term Loan B

6.81% (LIBOR+4.75%)

9/30/2014

3,161

Tecta America Corp. 5215 Old Orchard Road Suite 880 Skokie, IL 60077

Buildings and Real Estate

Senior Secured Revolver

8.0% (LIBOR+5.75%)

12/11/2011

1,991

(3)

Thermal Solutions LLC 94 Tide Mill Road Hampton, New Hampshire 03842

Aerospace and Defense

Senior Secured Term Loan A

4.03% (LIBOR+3.75%)

3/21/2011

1,803

Senior Secured Term Loan B

4.53% (LIBOR+4.25%)

3/21/2012

235

Top Knobs USA, Inc. 170 Tonship Line Rd Hillsborough, NJ 08844

Home and Office Furnishings, Housewares, and Durable Consumer

Senior Secured Term Loan A

7.75% (LIBOR+5.75%)

2/20/2014

3,489

Trade Service Company, LLC 15445 Innovation Drive San Diego, CA 92128

Printing and Publishing

One Stop Term Loan B

14.00%

1/22/2013

2,085

Tri-County Petroleum, Inc. State Route 1036 P.O. Box 108 Defiance, PA 16633

Oil and Gas

Senior Secured Term Loan B

4.54% (LIBOR+4.25%)

8/28/2013

3,472

Tritex Corporation 1500 Meriden Road Waterbury, CT 06705

Machinery (Non-Agriculture, Non-Construction, Non-Electronic)

Senior Secured Term Loan B

5.03% (LIBOR+4.75%)

5/1/2014

2,702

United Surgical Partners International, Inc.   15305 Dallas Parkway,   Suite 1600 – LB 28   Addison, TX 75001

Healthcare, Education and Childcare

Senior Secured Delay Draw Term Loan

2.25% (LIBOR+2.00%)

4/19/2014

1,439

(3)

Ventyx Inc. 3301 Windy Ridge Parkway Suite 200 Atlanta, GA 30339

Utilities

Senior Secured First Lien

2.80% (LIBOR+2.50%)

6/8/2012

6,500

Vintage Parts, Inc. 120 Corporate Drive Beaver Dam, WI 53916

Diversified Conglomerate Manufacturing

One Stop Term Loan A

5.78% (LIBOR+5.50%)

12/21/2013

7,804

Virginia Explosives & Drilling Company, Inc.   P.O. Box 1198   Vansant, VA 24656

Diversified Natural Resources, Precious Metals and Minerals

Senior Secured Term Loan A

10.50% (LIBOR+7.00%)

5/5/2011

2,740

Senior Secured Term Loan B

10.50% (LIBOR+7.00%)

10/31/2011

1,054

Wall Street Systems Holdings, Inc. 1290 Avenue of the Americas 22nd Floor New York, NY 10104

Finance

Senior Secured Term Loan A

8.00% (LIBOR+5.00%)

5/28/2013

8,327

75

Name and Address of Portfolio Company

Industry

Type of Investment

Interest(1)

Maturity

Fair Value (Dollars in Thousands)

Percentage of Class Held*

West Corporation 11808 Miracle Hills Drive Omaha, NE 68154

Telecommuni- cations

Senior Secured Revolver

2.25% (LIBOR+2.00%)

10/24/2012

2,571

(3)

Zenith Products Corporation 400 Lukens Drive New Castle, DE 19720

Home and Office Furnishings, Housewares, and Durable Consumer

One Stop Term Loan A

5.38% (LIBOR+5.00%)

9/26/2013

5,430

Total

$

376,294

* Calculated on a fully diluted basis.

(1) All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to LIBOR or the Euro Interbank Offered Rate, or EURIBOR, and which reset daily, quarterly, monthly or semiannually. For each debt investment we have provided the current interest rate in effect as of September 30, 2009.

(2) Fair value includes accrual of PIK interest on debt investment.

(3) Assets sold on           , see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments.”

(4) Public Company

(5) Non-registered investment company

(6) Non-U.S. company or principal place of business outside of the United States

76

MANAGEMENT

Our business and affairs are managed under the direction of our board of directors. The board of directors currently consists of five members, three of whom are not “interested persons” of Golub Capital BDC, GC Advisors or their respective affiliates as defined in Section 2(a)(19) of the 1940 Act. We refer to these individuals as our “independent directors.” Our board of directors elects our officers, who will serve at the discretion of the board of directors. The responsibilities of our board of directors include, among other things, oversight of our investment activities, quarterly valuation of our assets, oversight of our financing arrangements and corporate governance activities. Our board of directors has an audit committee and a nominating and corporate governance committee and may establish additional committees from time to time as necessary.

Board of Directors

Under our certificate of incorporation and bylaws, our directors are divided into three classes. Directors are elected for staggered terms of three years each, with the term of office of only one of these three classes of directors expiring each year. Each director will hold office for the term to which he or she is elected and until his or her successor is duly elected and qualifies.

Directors

Information regarding the board of directors is as follows:

Name	Age	Position	Director Since	Term Expires
Interested Directors
Lawrence E. Golub	50	Chairman of the board of directors	2009
David B. Golub	47	Chief Executive Officer	2009
Independent Directors
		Director
		Director
		Director

The address for each of our directors is c/o Golub Capital BDC, 150 South Wacker Drive, Suite 800, Chicago, IL 60606.

Executive Officers Who Are Not Directors

Information regarding our executive officers who are not directors is as follows:

Name	Age	Position
		Chief Financial Officer, Treasurer and Secretary
		Chief Compliance Officer

The address for each of our executive officers is c/o Golub Capital, 150 South Wacker Drive, Suite 800, Chicago, IL 60606.

Biographical Information

For purposes of this presentation, our directors have been divided into two groups — independent directors and interested directors. Interested directors are “interested persons” as defined in the 1940 Act.

Independent Directors

Interested Directors

Lawrence E. Golub has served as Chairman of our board of directors since     . Mr. Golub is also the Chief Executive Officer of Golub Capital, a company he founded in 1994. Mr. Golub previously spent ten years as a principal investor and investment banker. As a Managing Director of the Risk Merchant Bank at

77

Bankers Trust Company, he applied derivative products to principal investing and merger and acquisitions transactions. As a Managing Director of Wasserstein Perella Co., Inc., he established that firm’s capital markets group and debt restructuring practice. As an officer of Allen & Company Incorporated, he engaged in principal investing, mergers and acquisitions advisory engagements and corporate finance transactions. Mr. Golub, a former White House Fellow, is active in charitable and civic organizations. He is one of three private Members of the Financial Control Board of the State of New York, Treasurer of the White House Fellows Foundation, President of the Harvard University J.D. — M.B.A. Alumni Association and a member of the Harvard University Committee on Science. He served for over 15 years as a trustee of Montefiore Medical Center, the university hospital of the Albert Einstein Medical School. He was also chairman of Mosholu Preservation Corporation, a developer and manager of low income housing in the Bronx. He also served for six years as a trustee of Horace Mann School. Mr. Golub earned his A.B. degree in Economics from Harvard College. He received an M.B.A. from Harvard Business School, where he was selected as a Baker Scholar, and a J.D. from Harvard Law School, where he served as an editor of the Harvard Law Review. Mr. Golub is the brother of David B. Golub, our Chief Executive Officer.

David B. Golub has served as our Chief Executive Officer since     . Mr. Golub joined Golub Capital as Vice Chairman in January 2004, after having served as a director of affiliates of the Firm since 1995. From 1995 through October 2003, Mr. Golub was a Managing Director of Centre Partners Management LLC, a leading private equity firm. He founded and served until 2004 as Chairman of Centre Pacific, LLC, a manager of leveraged loans and high yield bonds with over $3.0 billion under management. From 1995 through 2000, Mr. Golub also served as a Managing Director of Corporate Partners, a private equity fund affiliated with Lazard Fréres & Co. formed to acquire significant minority stakes in established companies. Mr. Golub was the first Chairman of the Board and is now Vice Chairman of the Michael J. Fox Foundation for Parkinson’s Research. He also serves on the board of directors of The Burton Corporation and has served on the board of numerous public and private companies. Mr. Golub earned his A.B. degree in Government from Harvard College. He received an M.Phil. in International Relations from Oxford University, where he was a Marshall Scholar, and an M.B.A. from Stanford Graduate School of Business, where he was named an Arjay Miller Scholar. Mr. Golub is the brother of Lawrence E. Golub, Chairman of our board of directors.

Executive Officers Who Are Not Directors

Audit Committee

The members of the audit committee are   , each of whom meets the independence standards established by the SEC and Nasdaq for audit committees and is independent for purposes of the 1940 Act.      serves as chairman of the audit committee. Our board of directors has determined that            is an “audit committee financial expert” as that term is defined under Item 407 of Regulation S-K of the Exchange Act. The audit committee is responsible for approving our independent accountants, reviewing with our independent accountants the plans and results of the audit engagement, approving professional services provided by our independent accountants, reviewing the independence of our independent accountants and reviewing the adequacy of our internal accounting controls. The audit committee is also responsible for aiding our board of directors in fair value pricing debt and equity securities that are not publicly traded or for which current market values are not readily available. The board of directors and audit committee will utilize the services of an independent valuation firm to help them determine the fair value of these securities.

Nominating and Corporate Governance Committee

The members of the nominating and corporate governance committee are   , each of whom is independent for purposes of the 1940 Act and the Nasdaq corporate governance regulations.    serves as chairman of the nominating and corporate governance committee. The nominating and corporate governance committee is responsible for selecting, researching and nominating directors for election by our stockholders, selecting nominees to fill vacancies on the board or a committee of the board, developing and recommending to the board a set of corporate governance principles and overseeing the evaluation of the board and our management.

78

The nominating and corporate governance committee will consider nominees to the board of directors recommended by a stockholder, if such stockholder complies with the advance notice provisions of our bylaws. Our bylaws provide that a stockholder who wishes to nominate a person for election as a director at a meeting of stockholders must deliver written notice to our corporate secretary. This notice must contain, as to each nominee, all of the information relating to such person as would be required to be disclosed in a proxy statement meeting the requirements of Regulation 14A under the Exchange Act, and certain other information set forth in the bylaws. In order to be eligible to be a nominee for election as a director by a stockholder, such potential nominee must deliver to our corporate secretary a written questionnaire providing the requested information about the background and qualifications of such person and a written representation and agreement that such person is not and will not become a party to any voting agreements, any agreement or understanding with any person with respect to any compensation or indemnification in connection with service on the board of directors, and would be in compliance with all of our publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines.

Compensation Committee

We do not have a compensation committee because our executive officers do not receive any direct compensation from us. Decisions regarding executive compensation are made by the independent directors on our board.

Compensation of Directors

The following table shows information regarding the compensation expected to be received by the independent directors for the calendar year ending December 31, 2010. No compensation is paid to directors who are “interested persons.”

Name	Aggregate Compensation from Golub Capital BDC(1)		Pension or Retirement Benefits Accrued as Part of Our Expenses(2)		Total Compensation from Golub Capital BDC Paid to Director
Independent Directors
				None
				None
				None
Interested Director
Lawrence E. Golub		None		None		None
David B. Golub		None		None		None

(1) We are newly organized, and the amounts listed are estimated for the calendar year ending December 31, 2010. For a discussion of the independent directors’ compensation, see below.

(2) We do not have a profit-sharing or retirement plan, and directors do not receive any pension or retirement benefits.

The independent directors will receive an annual fee of $  . They will also receive $   plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each board of directors meeting and will receive $   plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each committee meeting. The Chairman of the Audit Committee will receive an annual fee of $  , and each chairman of any other committee will receive an annual fee of $   for their additional services in these capacities. We have obtained directors’ and officers’ liability insurance on behalf of our directors and officers. Independent directors will have the option of having their directors’ fees paid in shares of our common stock issued at a price per share equal to the greater of net asset value or the market price at the time of payment. No compensation is paid to directors who are “interested persons.”

79

Investment Committee

The investment committee meets regularly to consider our investments, direct our strategic initiatives and supervise the actions taken by GC Advisors on our behalf. In addition, the investment committee reviews and determines whether to make prospective investments identified by GC Advisors and monitors the performance of our investment portfolio.

Information regarding members of the investment committee is as follows:

Name(1)	Age	Position
Lawrence E. Golub	50	Chairman of our board of directors, Member of our investment committee
David B. Golub	47	Chief Executive Officer, Director, Member of our investment committee
Gregory W. Cashman	44	Member of our investment committee, Senior Managing Director of Golub Capital
Andrew H. Steuerman	41	Member of our investment committee, Senior Managing Director of Golub Capital

(1) The address for each member of the investment committee is c/o Golub Capital BDC, Inc., 150 South Wacker Drive, Suite 800, Chicago, IL 60606.

Members of the Investment Committee Who Are Not Our Directors or Officers

Gregory W. Cashman has served on our investment committee since   . Mr. Cashman is a Senior Managing Director of Golub Capital. Mr. Cashman co-heads Golub Capital’s Direct Lending Group, overseeing Underwriting, Deal Execution and Portfolio Management and is a member of the firm’s investment and watch list committees. Mr. Cashman also oversees Golub Capital’s Middle-market Club Investments business. Prior to joining Golub Capital in 1996, Mr. Cashman worked in various finance positions at Bristol-Myers Squibb Co. from 1993 to 1996, and was named Manager of Business Development for the venture capital arm of Bristol-Myers Squibb’s Consumer Medicines Division. In that position, he was responsible for analyzing and negotiating investment and acquisition opportunities. Previously, Mr. Cashman spent four years as a senior accountant with Arthur Andersen & Co., serving emerging growth companies. He is a director or advisory director of a number of Golub Capital’s portfolio companies. Mr. Cashman graduated from the McIntire School of University of Virginia with a B.S. in Commerce and received an M.B.A. from the Darden School of Business.

Andrew H. Steuerman has served on our investment committee since   . Mr. Steuerman is a Senior Managing Director of Golub Capital. Mr. Steuerman co-heads Golub Capital’s Direct Lending group, overseeing Origination, Deal Execution and Capital Markets and is a member of the firm’s investment and watch list committees. Prior to joining Golub Capital in 2004, Mr. Steuerman was a Managing Director at Albion Alliance from April 1998 to January 2004, where he originated, executed and supervised subordinated debt and equity investments for two private partnerships. Prior to Albion, Mr. Steuerman was a Vice President at Bankers Trust Alex Brown from 1997 to 1998 and an investment manager with New York Life Insurance Company from 1989 to 1997 in the Private Equity and Mezzanine Group. At New York Life, Mr. Steuerman was a senior member of the Private Equity Group managing leveraged senior loans, mezzanine investments, private equity securities and limited partnership assets. Mr. Steuerman graduated from Pace University with a B.B.A. in Finance and holds an M.B.A. in Finance from St. John’s University.

Portfolio Management

Each investment opportunity requires the consensus and generally receives the unanimous approval of the investment committee. Follow-on investments in existing portfolio companies may require the investment committee’s approval beyond that obtained when the initial investment in the company was made. In addition, temporary investments, such as those in cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less, may require approval by the investment committee.

80

Investments approved by the investment committee will be managed and overseen on a day-to-day basis by names. Biographical information with respect to names is set out under “— Biographical Information.”

Each of          has ownership and financial interests in, and may receive compensation and/or profit distributions from, GC Advisors. Neither name nor name receives any direct compensation from us. As of   , 2009,    beneficially owned    and    beneficially owned    of our common stock.    is also primarily responsible for the day-to-day management of    other pooled investment vehicles and    other accounts in which he receives an incentive fee, with a total amount of $   assets under management and    is also primarily responsible for the day-to-day management of    other pooled investment vehicles and    other accounts in which he receives an incentive fee, with a total amount of $   assets under management.

81

MANAGEMENT AGREEMENTS

GC Advisors is located at 150 South Wacker Drive, Suite 800, Chicago, IL 60606. GC Advisors is registered as an investment adviser under the Advisers Act. All of the beneficial interests in GC Advisers are owned, indirectly, by two trusts. The trustee of those trusts is Stephen A. Kepniss, an individual who is not otherwise affiliated with GC Advisors or Golub Capital. Subject to the overall supervision of our board of directors and in accordance with the 1940 Act, GC Advisors will manage our day-to-day operations and provide investment management services to us. Under the terms of the Investment Management Agreement, GC Advisors will:

• determine the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;

• assist us in determining what securities we purchase, retain or sell;

• identify, evaluate and negotiate the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and

• execute, close, service and monitor the investments we make.

Certain personnel of Golub Capital will conduct activities on our behalf directly through, and under the supervision of, GC Advisors. GC Advisors’ services under the Investment Management Agreement are not exclusive. Pursuant to a Staffing Agreement between Golub Capital and GC Advisors, Golub Capital has agreed to provide GC Advisors with the resources to fulfill its obligations under the Investment Management Agreement, including staffing by experienced investment professionals and access to the senior investment personnel of Golub Capital, including a commitment by each member of our investment committee to serve in such capacity. These personnel services will be provided under the Staffing Agreement on a direct cost reimbursement basis to GC Advisors.

Management Fee

Pursuant to the Investment Management Agreement, we have agreed to pay GC Advisors a fee for investment advisory and management services consisting of two components — a base management fee and an incentive fee. The cost of both the base management fee and the incentive fee will ultimately be borne by our stockholders.

The base management fee is calculated at an annual rate of 1.375% of our average adjusted gross assets (excluding cash and cash equivalents and including assets purchased with borrowed funds). For services rendered under the Investment Management Agreement, the base management fee is payable quarterly in arrears. The base management fee is calculated based on the average value of our gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. Base management fees for any partial month or quarter will be appropriately pro-rated.

We will pay our external manager an incentive fee based on the lower of (a) the “Income and Capital Gains Incentive Fee Calculation” and (b) the “Cumulative Income Incentive Fee Calculation,” as each is described below. Incentive fees are calculated as below and payable quarterly in arrears (or, upon termination of the Investment Management Agreement, as of the termination date) (a “Performance Period”). The external manager is not under any obligation to reimburse us for any part of the incentive fee it received that was based on accrued interest that we never actually receive.

Income and Capital Gains Incentive Fee Calculation

The income and capital gains incentive fee calculation (the “Income and Capital Gains Incentive Fee Calculation”) has two parts. The income component is calculated quarterly in arrears based on our pre-incentive fee net investment income (“Pre-Incentive Fee Net Investment Income”) for the immediately preceding calendar quarter. Pre-Incentive Fee Net Investment Income means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter

82

(including the base management fee, any expenses payable under the administration agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with payment-in-kind interest, preferred stock with payment-in-kind dividends and zero coupon securities, accrued income that we have not yet received in cash.

Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the income component, it is possible that we may pay an incentive fee with respect to a period in which we have incurred a loss. For example, if we receive Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the income component will result in a positive value and we may pay an incentive fee if the Cumulative Incentive Fee Calculation, described below, also results in a positive value for that quarter, even if we have incurred a loss in that calendar quarter due to realized and unrealized capital losses.

Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of our net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 2.0% quarterly. If market interest rates rise, we may be able to invest our funds in debt instruments that provide for a higher return, which would increase our Pre-Incentive Fee Net Investment Income and make it easier for our external manager to surpass the fixed hurdle rate and receive an incentive fee based on such net investment income. Our Pre-Incentive Fee Net Investment Income used to calculate this part of the incentive fee is also included in the amount of our total assets (other than cash and cash equivalents but including assets purchased with borrowed funds) used to calculate the 1.375% base management fee.

We calculate the income component of the Income and Capital Gains Incentive Fee Calculation with respect to our Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

• zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;

• 100% of our Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.5% in any calendar quarter. We refer to this portion of our Pre-Incentive Fee Net Investment Income (which exceeds the hurdle rate but is less than 2.5%) as the “catch- up” provision. The catch- up is meant to provide our external manager with 20% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply if this net investment income exceeds 2.5% in any calendar quarter; and

• 20% of the amount of our Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any calendar quarter.

These calculations are adjusted for any share issuances or repurchases during the quarter.

The following is a graphical representation of the calculation of the income-related portion of the incentive fee:

Quarterly Income Component of Income and Capital Gains Incentive Fee Calculation Based on Net Income

Pre-Incentive Fee Net Investment Income
(Expressed as a Percentage of the Value of Net Assets)

83

Percentage of Pre-Incentive Fee Net Investment Income Allocated to Income Component of Income and Capital Gains Incentive Fee Calculation

The second part of the Income and Capital Gains Incentive Fee Calculation (the “capital gain component”) and equals 20% of our “Incentive Fee Capital Gains,” if any, calculated in arrears as of the end of each fiscal year (or upon termination of the Investment Management Agreement, as of the termination date), commencing with the year ending December 31, 2010. Incentive Fee Capital Gains equal (a) the sum of (1) our realized capital gains on a cumulative basis from the date of our election to become a BDC through the end of each calendar year, (2) all realized capital losses on a cumulative basis, and (3) all unrealized capital depreciation on a cumulative basis, less (b) the aggregate amount of any previously paid capital gain incentive fees.

• The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in our portfolio when sold and (b) the accreted or amortized cost basis of such investment.

• The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company’s portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.

• The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable Capital Gains Fee calculation date and (b) the accreted or amortized cost basis of such investment.

• We defer cash payment of any incentive fee otherwise earned by the external manager if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (a) the aggregate distributions to the stockholders of the Company and (b) the change in net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 8.0% of our net assets at the beginning of such period. These calculations will be appropriately pro rated during the first    calendar quarters following the inception date and are adjusted for any share issuances or repurchases.

Cumulative Income Incentive Fee Calculation

The “Cumulative Income Incentive Fee Calculation” is calculated quarterly, in arrears, based on our cumulative pre-incentive fee net income (“Cumulative Pre-Incentive Fee Net Income”) which represents our cumulative Pre-Incentive Fee Net Investment Income (as defined above under Income and Capital Gains Incentive Fee Calculation) since the effective date of our election to become a BDC, after taking into account cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation since the effective date of our election to become a BDC. The Cumulative Income Incentive Fee will be 20.0% of the amount of our Cumulative Pre-Incentive Fee Net Income since the effective date of our election to become a BDC, less any incentive fees previously paid. Unlike the Income and Capital Gains Incentive Fee Calculation, the Cumulative Income Incentive Fee Calculation combines investment income and net capital gains (or losses) and looks back to the effective date of our election to become a BDC. As noted above, if market interest rates rise, we may be able to invest our funds in debt instruments that provide for a higher return, which would increase our Cumulative Pre-Incentive Fee Net Income and, therefore, the result of the Cumulative Income Incentive Fee Calculation.

If at the end of any fiscal quarter the result of the Income and Capital Gains Incentive Fee Calculation described above exceeds the result of the Cumulative Income Incentive Fee Calculation, the difference will be carried over to subsequent fiscal quarters. GC Advisors may “recapture” a portion of such carried over amount as part of the incentive fee payable to it at the end of any future fiscal quarter in which the result of the Cumulative Income Incentive Fee Calculation exceeds the result of the Income and Capital Gains Incentive Fee Calculation. The amount “recaptured” by GC Advisors at the end of such future period will equal the difference between the two calculations; provided that it cannot at any time exceed the aggregate amounts “carried over” from prior periods.

84

Cap on Fees

The incentive fee will not be paid at any time where after such payment the cumulative incentives fees paid to date would be greater than 20% of the cumulative pre-incentive net income since our election to be treated as a business development company.

Examples of Quarterly Incentive Fee Calculation

Example 1 — Income Related Portion of Incentive Fee⁽¹⁾:

Assumptions

Hurdle rate⁽²⁾ = 2.00%

Management fee⁽³⁾ = 0.344%

Other expenses (legal, accounting, custodian, transfer agent, etc.)⁽⁴⁾ = 0.35%

(1) The hypothetical amount of pre-incentive fee net investment income shown is based on a percentage of total net assets. In addition, the example assumes that during the most recent four full calendar quarter period ending on or prior to the date the payment set forth in the example is to be made, the sum of (a) our aggregate distributions to our stockholders and (b) our change in net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) is at least 8.0% of our net assets at the beginning of such period (as adjusted for any share issuances or repurchases).

(2) Represents a quarter of the 8.0% annualized hurdle rate.

(3) Represents a quarter of the 1.375% annualized management fee.

(4) Excludes offering expenses.

Alternative 1

Additional Assumptions

Investment income (including interest, dividends, fees, etc.) = 1.25%

Pre-incentive fee net investment income (investment income - (management fee + other expenses)) = 0.556%

Pre-incentive fee net investment income does not exceed the hurdle rate, therefore there is no incentive fee.

Alternative 2

Additional Assumptions

Investment income (including interest, dividends, fees, etc.) = 2.80%

Pre-incentive fee net investment income (investment income - (management fee + other expenses)) = 2.106%

Pre-incentive fee net investment income exceeds hurdle rate, therefore there is an incentive fee.

Incentive Fee	= 100% × “Catch- Up” + the greater of 0% AND (20% × (pre- incentive fee net investment income - 2.50%)
	= (100% × (2.106% - 2.00%)) + 0%
	= 100% × 0.106%
	= 0.106%

85

Alternative 3

Additional Assumptions

Investment income (including interest, dividends, fees, etc.) = 3.50%

Pre-incentive fee net investment income (investment income - (management fee + other expenses)) = 2.806%

Pre-incentive fee net investment income exceeds hurdle rate, therefore there is an incentive fee.

Incentive Fee	=100% × “Catch- Up” + the greater of 0% AND (20% × (pre-incentive fee net investment income - 2.50%)
	= (100% × (2.50% - 2.00%)) + (20% × (2.806% - 2.50%))
	= 0.50%+ (20% × 0.306%)
	= 0.50%+ 0.061%
	= 0.561%

Example 2 — Capital Gains Portion of Incentive Fee:

Alternative 1:

Assumptions

Year 1:	$20 million investment made in Company A (“Investment A”), and $30 million investment made in Company B (“Investment B”)
Year 2:	Investment A is sold for $15 million and fair market value (“FMV”) of Investment B determined to be $29 million
Year 3:	FMV of Investment B determined to be $27 million
Year 4:	Investment B sold for $25 million

The capital gains portion of the incentive fee, if any, would be:

Year 1:	None (No sales transactions)
Year 2:	None (Sales transaction resulted in a realized capital loss on Investment A)
Year 3:	None (No sales transactions)
Year 4:	None (Sales transaction resulted in a realized capital loss on Investment B)

Alternative 2

Assumptions

Year 1:	$20 million investment made in Company A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made in Company C (“Investment C”)
Year 2:	FMV of Investment A determined to be $18 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million
Year 3:	Investment A sold for $18 million. FMV of Investment B determined to be $24 million and FMV of Investment C determined to be $25 million
Year 4:	FMV of Investment B determined to be $22 million. Investment C sold for $24 million.
Year 5:	Investment B sold for $20 million

86

The capital gains portion of the incentive fee, if any, would be:

Year 1:	None (No sales transactions)
Year 2:	None (No Sales transactions)
Year 3:	None (Sales transaction resulted in a realized capital loss on Investment A)
Year 4:	None (Sales transaction resulted in a realized capital loss on Investment C)
Year 5:	None (Sales transaction resulted in a realized capital loss on Investment B)

Alternative 3

Assumptions

Year 1:	$25 million investment made in Company A (“Investment A”), and $20 million investment made in Company B (“Investment B”)
Year 2:	Investment A is sold for $30 million and fair market value (“FMV”) of Investment B determined to be $22 million
Year 3:	FMV of Investment B determined to be $23 million
Year 4:	Investment B sold for $23 million

The capital gains portion of the incentive fee, if any, would be:

Year 1:	None (No sales transactions)
Year 2:	$1 million (20% multiplied by $5 million realized capital gains on sale of Investment A)
Year 3:	None (No sales transactions)
Year 4:	$600,000 (20% multiplied by $8 million realized capital gains on sale of Investment A and Investment B) less $1 million (Capital Gains Fee paid in year 2).

Method 2 — Cumulative Income Incentive Fee Calculations

Cumulative Income Incentive Fee Calculation is based on our cumulative pre-incentive fee net income. This amount represents the sum of:

• our cumulative pre-incentive fee net investment income since our election to be treated as a business development company;

• cumulative aggregate realized capital gains since our election to be treated as a business development company;

• cumulative aggregate realized capital losses since our election to be treated as a business development company;

• cumulative aggregate unrealized capital depreciation since our election to be treated as a business development company; and

• cumulative aggregate unrealized capital appreciation since our election to be treated as a business development company.

Please note we will not pay an incentive fee at any time when, after giving effect to such payment, the cumulative incentive fees paid to date would exceed 20% of our cumulative pre-incentive net income since our election to be treated as a business development company.

Therefore, because unrealized capital depreciation and realized losses occurred in Alternative 1 and Alternative 2 shown above, it will be necessary to make adjustments to revise downward the amount of incentive fees payable to us.

87

Adjustments to Alternative 1

Year 1:	No adjustment; no realized capital losses or unrealized capital depreciation
Year 2:	Investment A sold at a $5 million loss. Investment B has unrealized capital depreciation of $1 million. Therefore, we would not be paid on the $6 million realized/unrealized loss which would result in a lower incentive fee by $1.2 million.
Year 3:	Investment B has unrealized capital depreciation of $2 million. Therefore, we would not be paid on the $2 million unrealized capital depreciation which would result in a lower incentive fee by $0.4 million.
Year 4:	Investment B sold at a $5 million loss. Investment B was previously marked down by $3 million; therefore, we would realize a $5 million loss on Investment B and reverse the previous $3 million in unrealized capital depreciation. The net effect would be a loss of $2 million. We would not be paid on the $2 million loss which would result in a lower incentive fee by $0.4 million.

Adjustments to Alternative 2

Year 1:	No adjustment; no realized capital losses or unrealized capital depreciation.
Year 2:	Investment A has unrealized capital depreciation of $2 million. Investment B has unrealized capital depreciation of $5 million. Therefore, we would not be paid on the $7 million unrealized capital depreciation which would result in a lower incentive fee by $1.4 million.
Year 3:	Investment B has additional unrealized capital depreciation of $1 million. Therefore, we would not be paid on the $1 million unrealized capital depreciation which would result in a lower incentive fee by $0.4 million.
Year 4:	Investment B has additional unrealized capital depreciation of $2 million. Investment C sold at a $1 million realized loss. Therefore, we would not be paid on the $3 million realized/unrealized loss which would result in a lower incentive fee by $0.6 million.
Year 5:	Investment B sold at a $10 million loss. Investment B was previously marked down by $8 million; therefore, we would realize a $10 million loss on Investment B and reverse the previous $8 million in unrealized capital depreciation. The net effect would be a loss of $2 million. We would not be paid on the $2 million loss which would result in a lower incentive fee by $0.4 million.

Adjustments to Alternative 3

Year 1:	No adjustment necessary.
Year 2:	No adjustment necessary. Please note we would not be paid on the $2 million unrealized gain on Investment B.
Year 3:	No adjustment necessary. Please note we would not be paid on the $1 million unrealized gain on Investment B.
Year 4:	No adjustment necessary.

Payment of Our Expenses

All investment professionals of GC Advisors and/or its affiliates, when and to the extent engaged in providing investment advisory and management services to us, and the compensation and routine overhead expenses of personnel allocable to these services to us, will be provided and paid for by GC Advisors and not by us. We will bear all other out-of-pocket costs and expenses of our operations and transactions, including, without limitation, those relating to:

• organization and offering;

• calculating our net asset value (including the cost and expenses of any independent valuation firm);

• fees and expenses incurred by GC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments;

• interest payable on debt, if any, incurred to finance our investments;

88

• offerings of our common stock and other securities;

• investment advisory fees;

• administration fees and expenses, if any, payable under the Administration Agreement (including payments under the Administration Agreement between us and GC Service based upon our allocable portion of GC Service’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our officers, including a chief compliance officer, chief financial officer, if any, and their respective staffs);

• transfer agent, dividend agent and custodial fees and expenses;

• federal and state registration fees;

• all costs of registration and listing our shares on any securities exchange;

• federal, state and local taxes;

• independent directors’ fees and expenses;

• costs of preparing and filing reports or other documents required by the SEC or other regulators;

• costs of any reports, proxy statements or other notices to stockholders, including printing costs;

• our allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;

• direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;

• proxy voting expenses; and

• all other expenses incurred by us or GC Service in connection with administering our business.

Duration and Termination

The Investment Management Agreement is expected to be approved by our board of directors, and by a majority of our independent directors, at a meeting to be held on   , 2010. Unless terminated earlier as described below, the Investment Management Agreement will continue in effect for a period of two years from its effective date. It will remain in effect from year to year thereafter if approved annually by our board of directors or by the affirmative vote of the holders of a majority of our outstanding voting securities, and, in either case, if also approved by a majority of our directors who are not “interested persons.” The Investment Management Agreement automatically terminates in the event of its assignment, as defined in the 1940 Act, by GC Advisors and may be terminated by either party without penalty upon not less than 60 days’ written notice to the other. See “Risk Factors — Risks Relating to our Business and Structure — We are dependent upon key personnel of GC Advisors for our future success and upon its access to the investment professionals and partners of Golub Capital.”

Indemnification

The Investment Management Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, GC Advisors and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of GC Advisors’ services under the Investment Management Agreement or otherwise as our external manager.

Board Approval of the Investment Management Agreement

We expect that our board will approve the Investment Management Agreement at its first meeting. A discussion regarding the basis for our board of directors’ approval of our Investment Management Agreement will be included in our first quarterly report on Form 10-Q filed subsequent to completion of this offering.

89

Administration Agreement

Pursuant to an Administration Agreement, GC Service will furnish us with office facilities and equipment and clerical, bookkeeping and record keeping services at such facilities. Under the Administration Agreement, GC Service will perform, or oversee the performance of, our required administrative services, which include being responsible for the financial records that we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, GC Service will assist us in determining and publishing our net asset value, oversee the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders, and generally oversee the payment of our expenses and the performance of administrative and professional services rendered to us by others. Under the Administration Agreement, GC Service will also provide managerial assistance on our behalf to those portfolio companies that have accepted our offer to provide such assistance. Payments under the Administration Agreement will be equal to an amount based upon our allocable portion (subject to the review and approval of our board of directors) of GC Service’s overhead in performing its obligations under the Administration Agreement, including rent and our allocable portion of the cost of our officers, including our chief financial officer and chief compliance officer and their respective staffs. The Administration Agreement will have an initial term of two years and may be renewed with the approval of our board of directors. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party. To the extent that GC Service outsources any of its functions we will pay the fees associated with such functions on a direct basis without profit to GC Service.

Indemnification

The Administration Agreement provides that, absent willful misfeasance, bad faith or negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, GC Service and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of GC Service’s services under the Administration Agreement or otherwise as our administrator.

License Agreement

We have entered into a license agreement with Golub Capital Management LLC under which Golub Capital Management LLC has agreed to grant us a non-exclusive, royalty-free license to use the name “Golub Capital”. Under this agreement, we will have a right to use the “Golub Capital” name for so long as GC Advisors or one of its affiliates remains our external manager. Other than with respect to this limited license, we will have no legal right to the “Golub Capital” name. This license agreement will remain in effect for so long as the Investment Management Agreement with GC Advisors is in effect.

Staffing Agreement

We do not have any internal management capacity or employees. We will depend on the diligence, skill and network of business contacts of the senior professionals of GC Advisors to achieve our investment objective. GC Advisors is an affiliate of Golub Capital and will depend upon access to the investment professionals and other resources of Golub Capital and its affiliates to fulfill its obligations to us under the Investment Management Agreement. GC Advisors will also depend upon Golub Capital to obtain access to deal flow generated by the professionals of Golub Capital and its affiliates. Under a Staffing Agreement between Golub Capital and GC Advisors, Golub Capital has agreed to provide GC Advisors with the resources necessary to fulfill these obligations. The Staffing Agreement provides that Golub Capital will make available to GC Advisors experienced investment professionals and access to the senior investment personnel of Golub Capital for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of our investment committee will serve in such capacity. The Staffing Agreement will have an initial term of two years and will be renewable thereafter on an annual basis. Services under the Staffing Agreement will be provided to GC Advisors on a direct cost reimbursement basis, and such fees will not be our obligation.

90

CERTAIN RELATIONSHIPS

We have entered into agreements with GC Advisors, in which our senior management and members of the investment committee have ownership and financial interests. Members of our senior management and members of the investment committee also serve as principals of other investment managers affiliated with GC Advisors that do and may in the future manage investment funds, accounts or other investment vehicles with investment objectives similar to ours. In addition, our executive officers and directors and the members of GC Advisors and members of the investment committee serve or may serve as officers, directors or principals of entities that operate in the same, or related, line of business as we do or of investment funds, accounts or other investment vehicles managed by our affiliates. These investment funds, accounts or other investment vehicles may have investment objectives similar to our investment objective. For example, GC Advisors currently manages an entity that is continuing to seek capital commitments and will pursue an investment strategy similar to our strategy, and we may compete with this and other entities managed by GC Advisors and its affiliates for capital and investment opportunities. As a result, we may not be given the opportunity to participate in certain investments made by investment funds, accounts or other investment vehicles managed by GC Advisors or its affiliates or by members of the investment committee. However, in order to fulfill its fiduciary duties to each of its clients, GC Advisors intends to allocate investment opportunities in a manner that is fair and equitable over time and is consistent with GC Advisors’ allocation policy, investment objective and strategies so that we are not disadvantaged in relation to any other client. See “Risk Factors — Risks Relating to our Business and Structure — There are significant potential conflicts of interest that could affect our investment returns.” GC Advisors has agreed with our board of directors that allocations among us and other investment funds affiliated with GC Advisors will be made based on capital available for investment in the asset class being allocated, and that our board of directors will determine the amount of capital we have available for investment by asset class. We expect that our available capital for investments will be determined will be determined based on the amount of cash on-hand, existing commitments, reserves, if any, and the leverage level and targeted asset mix as determined by our board of directors.

GC Advisors and its affiliates have both subjective and objective procedures and policies in place and designed to manage the potential conflicts of interest between GC Advisors’ fiduciary obligations to us and its similar fiduciary obligations to other clients. For example, such policies and procedures are designed to ensure that investment opportunities are allocated in a fair and equitable manner among us and their other clients. An investment opportunity that is suitable for multiple clients of GC Advisors and its affiliates may not be capable of being shared among some or all of such clients and affiliates due to the limited scale of the opportunity or other factors, including regulatory restrictions imposed by the 1940 Act. There can be no assurance that GC Advisors’ or its affiliates’ efforts to allocate any particular investment opportunity fairly among all clients for whom such opportunity is appropriate will result in an allocation of all or part of such opportunity to us. Not all conflicts of interest can be expected to be resolved in our favor.

GC Advisors has historically managed, and currently manages investment vehicles with similar or overlapping investment strategies and has put in place a conflict-resolution policy that addresses the co-investment restrictions set forth under the 1940 Act and seeks to ensure the equitable allocation of investment opportunities when we are able to invest alongside other accounts managed by our adviser and its affiliates. When we invest alongside such other accounts as permitted, such investments are made consistent with GC Advisors’ allocation policy. Under this allocation policy, a fixed percentage of each opportunity, which may vary based on asset class and from time to time, will be offered to us and similar eligible accounts, as periodically determined by GC Advisors and approved by our board of directors, including our independent directors. The allocation policy further provides that allocations among us and these other accounts will generally be made pro rata based on each account’s capital available for investment, as determined, in our case, by our board of directors. It is our policy to base our determinations as to the amount of capital available for investment based on such factors as: the amount of cash on-hand, existing commitments and reserves, if any, the targeted leverage level, the targeted asset mix and diversification requirements and other investment restrictions set by our board of directors or imposed by applicable laws, rules, regulations or interpretations. We expect that these determinations will be made similarly for other accounts. In situations where co-investment with other funds managed by GC Advisors or its affiliates is not permitted or appropriate, such as when there is an opportunity to invest in different securities of the same issuer, GC Advisors will need to decide whether we or such other fund or funds will proceed with the

91

investment. GC Advisors will make these determinations based on its policies and procedures which generally require that such opportunities be offered to eligible accounts on a basis that will be fair and equitable over time, including, for example, through random or rotational methods.

Our senior management, members of the investment committee and other investment professionals from GC Advisors may serve as directors of, or in a similar capacity with, companies in which we invest or in which we are considering making an investment. Through these and other relationships with a company, these individuals may obtain material non-public information that might restrict our ability to buy or sell the securities of such company under the policies of the company or applicable law.

We have entered into an Investment Management Agreement with GC Advisors and will pay GC Advisors a management fee and incentive fee. The incentive fee will be computed and paid on income that we may not have yet received in cash. This fee structure may create an incentive for GC Advisors to invest in certain types of securities. Additionally, we rely on investment professionals from GC Advisors to assist our board of directors with the valuation of our portfolio investments. GC Advisors’ management fee and incentive fee are based on the value of our investments and there may be a conflict of interest when personnel of GC Advisors are involved in the valuation process for our portfolio investments.

We have entered into a license agreement with Golub Capital Management LLC under which Golub Capital Management LLC has agreed to grant us a non-exclusive, royalty-free license to use the name “Golub Capital.”

We have entered into an administration agreement, pursuant to which GC Service furnishes us with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities. Under our administration agreement, GC Service performs, or oversees the performance of, our required administrative services, which include, among other things, being responsible for the financial records which we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. GC Advisors is the sole member of and controls GC Service.

We have in the past and expect in the future to co-invest on a concurrent basis with other affiliates, unless doing so is impermissible with existing regulatory guidance, applicable regulations and our allocation procedures. Certain types of negotiated co-investments may be made only if we receive an order from the SEC permitting us to do so. There can be no assurance that we will seek or obtain any such order. See “Regulation.”

GC Advisors is an affiliate of Golub Capital, with whom it has entered into the Staffing Agreement. Under this agreement Golub Capital will make available to GC Advisors experienced investment professionals and access to the senior investment personnel and other resources of Golub Capital and its affiliates. The Staffing Agreement should provide GC Advisors with access to deal flow generated by the professionals of Golub Capital and its affiliates and commits the members of our investment committee to serve in that capacity. GC Advisors intends to capitalize on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of Golub Capital’s investment professionals

In      2009, our wholly owned subsidiary and predecessor, GCMF, sold    portfolio assets with a fair value of $   million as of September 30, 2009. We refer to this sale as the GCMF Asset Sales. We decided to undertake the GCMF Asset Sales to remove from our portfolio certain widely syndicated senior secured loans and other assets that were not consistent with the investment strategy that we intend to pursue after the completion of this offering. The GCMF Asset Sales were completed with unaffiliated third-party buyers in market transactions and, in a limited number of cases, through negotiated sales with the GCMF Owners, which held all of our limited liability interest prior to the completion of the GC Private Placement.

In         , GEMS, a limited partnership affiliated with GC Advisors, purchased      limited liability company interests in Golub Capital BDC LLC for gross proceeds of $     million (before deducting related expenses, which were not significant). Investors in GEMS include employees and management of Golub Capital and its affiliates as well as a small number of long-time investors in funds sponsored by Golub Capital.

92

In connection with the GC Private Placement, we entered into a registration rights agreement with respect to    million shares acquired by GEMS. Some holders of these shares through GEMS are or will be held by affiliates of GC Advisors upon completion of the BDC Conversion. Under this registration rights agreement, holders of shares acquired by GEMS were granted certain demand, piggy-back and shelf registration rights beginning    days after the consummation of an initial public offering.

93

CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS

Immediately prior to the completion of this offering, there will be    shares of common stock outstanding and    stockholders of record. The following table sets out certain ownership information with respect to our common stock for those persons who directly or indirectly own, control or hold with the power to vote 5% or more of our outstanding common stock and all officers and directors as a group.

			Percentage of Common Stock Outstanding
			Immediately Prior to This Offering			Immediately After This Offering(1)
Name and Address	Type of Ownership		Shares Owned	Percentage		Shares Owned	Percentage
Golub Capital Company IV LLC		Record and beneficial			%			%
Golub Capital Company V LLC		Record and beneficial			%			%
Golub Capital Company VI LLC		Record and beneficial			%			%
GEMS, L.P.(2)		Record and beneficial			%			%
Lawrence E. Golub(3)(4)		Record and beneficial			%			%
David B. Golub(3)(4)		Record and beneficial			%			%
All officers and directors as a group (   persons)(3)		Record and beneficial			%			%

* Represents less than 0.1%.

(1) Assumes issuance of        shares of common stock offered by this prospectus. Does not reflect shares of common stock reserved for issuance upon exercise of the underwriters’ overallotment option.

(2) The address of GEMS, L.P. is 150 South Wacker Drive, Suite 800, Chicago, IL 60606.

(3) The address for each of our directors is c/o Golub Capital BDC, Inc., 150 South Wacker Drive, Suite 800, Chicago, IL 60606.

(4)    of these shares are owned of record by GEMS. As of the date of this offering, Messrs. L. Golub and D. Golub own   % and   %, respectively, of         . The shares of our common stock shown in the above table as being owned by each named individual reflect the fact that, due to their ownership interest in        and GC Advisors, each may be viewed as having or sharing dispositive or voting power over all of these shares.

The following table sets out the dollar range of our equity securities beneficially owned by each of our directors. We are not part of a “family of investment companies,” as that term is defined in the 1940 Act.

Name of Director	Dollar Range of Equity Securities in Golub Capital BDC(1)
Independent Directors
Interested Directors
Lawrence E. Golub
David B. Golub

(1) Dollar ranges are as follows: none, $1 – $10,000, $10,001 – $50,000, $50,001 – $100,000, or over $100,000.

94

DETERMINATION OF NET ASSET VALUE

The net asset value per share of our outstanding shares of common stock will be determined quarterly by dividing the value of total assets minus liabilities by the total number of shares outstanding.

In calculating the value of our total assets, investment transactions are recorded on the trade date. Realized gains or losses are computed using the specific identification method. Investments for which market quotations are readily available are valued at such market quotations. Debt and equity securities that are not publicly traded or whose market price is not readily available are valued at fair value as determined in good faith by our board of directors based on the input of Management and the audit committee. In addition, the board of directors will retain one or more independent valuation firms to review the valuation of each portfolio investment for which a market quotation is not available at least once during each 12-month period. We also have adopted SFAS 157 (ASC Topic 820). This accounting statement requires us to assume that the portfolio investment is assumed to be sold in the principal market to market participants, or in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with SFAS 157 (ASC Topic 820), the market in which we can exit portfolio investments with the greatest volume and level activity is considered our principal market.

The valuation process will be conducted at the end of each fiscal quarter, with a portion of our valuations of portfolio companies without market quotations subject to review by one or more independent valuation firm each quarter. When an external event with respect to one of our portfolio companies, such as a purchase transaction, public offering or subsequent equity sale occurs, we expect to use the pricing indicated by the external event to corroborate our valuation.

A readily available market value is not expected to exist for many of the investments in our portfolio, and we will value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process. The types of factors that the board of directors may take into account in determining the fair value of our investments generally include, as appropriate, comparisons of financial ratios of the portfolio companies that issued such private equity securities to peer companies that are public, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the company will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different from the valuations currently assigned. See “Risk Factors — Risks Related to our Investments — Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.”

With respect to investments for which market quotations are not readily available, our board of directors will undertake a multi-step valuation process each quarter, as described below:

• Our quarterly valuation process will begin with each portfolio company or investment being initially valued by investment professionals of GC Advisors responsible for credit monitoring.

• Preliminary valuation conclusions will then be documented and discussed with GC Advisors.

• The audit committee of our board of directors will review these preliminary valuations.

• At least once annually, the valuation for each portfolio investment will be reviewed by an independent valuation firm.

• The board of directors will discuss valuations and determine the fair value of each investment in our portfolio in good faith.

95

In following these approaches, the types of factors that are taken into account in fair value pricing investments include as relevant, but are not limited to: available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; security covenants; call protection provisions; information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business; comparisons of financial ratios of peer companies that are public; M&A comparables; and the principal market and enterprise values.

Determination of fair values involves subjective judgments and estimates not susceptible to substantiation by auditing procedures. Under current auditing standards, the notes to our financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.

96

DIVIDEND REINVESTMENT PLAN

We have adopted a dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, unless a stockholder elects to receive cash as provided below. As a result, if our board of directors authorizes, and we declare, a cash dividend or other distribution, then our stockholders who have not “opted out” of our dividend reinvestment plan will have their cash distribution automatically reinvested in additional shares of our common stock, rather than receiving the cash distribution.

No action is required on the part of a registered stockholder to have their cash dividend or other distribution reinvested in shares of our common stock. A registered stockholder may elect to receive an entire distribution in cash by notifying   , the plan administrator and our transfer agent and registrar, in writing so that such notice is received by the plan administrator no later than the record date for distributions to stockholders. The plan administrator will set up an account for shares acquired through the plan for each stockholder who has not elected to receive dividends or other distributions in cash and hold such shares in non-certificated form. Upon request by a stockholder participating in the plan, received in writing not less than 10 days prior to the record date, the plan administrator will, instead of crediting shares to the participant’s account, issue a certificate registered in the participant’s name for the number of whole shares of our common stock and a check for any fractional share.

Those stockholders whose shares are held by a broker or other financial intermediary may receive dividends and other distributions in cash by notifying their broker or other financial intermediary of their election.

We intend to use primarily newly issued shares to implement the plan, whether our shares are trading at a premium or at a discount to net asset value. However, we reserve the right to purchase shares in the open market in connection with our implementation of the plan. The number of shares to be issued to a stockholder is determined by dividing the total dollar amount of the distribution payable to such stockholder by the market price per share of our common stock at the close of regular trading on The Nasdaq Global Market on the date for such distribution. Market price per share on that date will be the closing price for such shares on The Nasdaq Global Market or, if no sale is reported for such day, at the average of their reported bid and asked prices. The number of shares of our common stock to be outstanding after giving effect to payment of the dividend or other distribution cannot be established until the value per share at which additional shares will be issued has been determined and elections of our stockholders have been tabulated.

There will be no brokerage charges or other charges to stockholders who participate in the plan. The plan administrator’s fees will be paid by us. If a participant elects by written notice to the plan administrator to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a $   transaction fee plus a $   per share brokerage commissions from the proceeds.

Stockholders who receive dividends and other distributions in the form of stock are subject to the same U.S. federal, state and local tax consequences as are stockholders who elect to receive their distributions in cash; however, since their cash dividends will be reinvested, such stockholder will not receive cash with which to pay any applicable taxes on reinvested dividends. A stockholder’s basis for determining gain or loss upon the sale of stock received in a dividend or other distribution from us will be equal to the total dollar amount of the distribution payable to the stockholder. Any stock received in a dividend or other distribution will have a new holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S. stockholder’s account.

Participants may terminate their accounts under the plan by notifying the plan administrator via its website at   , by filling out the transaction request form located at bottom of their statement and sending it to the plan administrator.

The plan may be terminated by us upon notice in writing mailed to each participant at least 30 days prior to any record date for the payment of any dividend by us. All correspondence concerning the plan should be directed to the plan administrator by mail at   .

If you withdraw or the plan is terminated, you will receive a certificate for each whole share in your account under the plan and you will receive a cash payment for any fraction of a share in your account.

97

If you hold your common stock with a brokerage firm that does not participate in the plan, you will not be able to participate in the plan and any dividend reinvestment may be effected on different terms than those described above. Consult your financial advisor for more information.

98

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a general summary of the material U.S. federal income tax considerations applicable to us and to an investment in our shares of common stock. This summary does not purport to be a complete description of the income tax considerations applicable to such an investment. For example, we have not described tax consequences that we assume to be generally known by investors or certain considerations that may be relevant to certain types of holders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, insurance companies, dealers in securities, pension plans and trusts, and financial institutions. This summary assumes that investors hold our common stock as capital assets (within the meaning of the Code). The discussion is based upon the Code, Treasury regulations, and administrative and judicial interpretations, each as of the date of this prospectus and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion. We have not sought and will not seek any ruling from the Internal Revenue Service, or the IRS, regarding this offering. This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under U.S. federal income tax laws that could result if we invested in tax-exempt securities or certain other investment assets.

A “U.S. stockholder” is a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes:

• a citizen or individual resident of the United States;

• a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

• an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust if either a U.S. court can exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or the trust was in existence on August 20, 1996, was treated as a U.S. person prior to that date, and has made a valid election to be treated as a U.S. person.

A “Non-U.S. stockholder” is a beneficial owner of shares of our common stock that is not a U.S. stockholder.

If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A prospective investor that is a partner in a partnership that will hold shares of our common stock should consult its tax advisors with respect to the purchase, ownership and disposition of shares of our common stock.

Tax matters are very complicated and the tax consequences to an investor of an investment in our shares of common stock will depend on the facts of his, her or its particular situation. We encourage investors to consult their own tax advisors regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of federal, state, local and foreign tax laws, eligibility for the benefits of any applicable tax treaty, and the effect of any possible changes in the tax laws.

Election to Be Taxed as a RIC

As a business development company, we intend to elect to be treated as a RIC under Subchapter M of the Code. As a RIC, we generally will not have to pay corporate-level federal income taxes on any ordinary income or capital gains that we timely distribute to our stockholders as dividends. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, we must distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess of realized net short-term capital gains over realized net long-term capital losses (the “Annual Distribution Requirement”).

99

Taxation as a RIC

If we:

• qualify as a RIC; and

• satisfy the Annual Distribution Requirement;

then we will not be subject to U.S. federal income tax on the portion of our investment company taxable income and net capital gain (i.e., net long-term capital gains in excess of net short-term capital losses) we distribute to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any net income or net capital gain not distributed (or deemed distributed) to our stockholders.

We will be subject to a 4% nondeductible federal excise tax on our undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (1) 98% of our ordinary income for each calendar year, (2) 98% of our capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year (the “Excise Tax Avoidance Requirement”). For this purpose, however, any ordinary income or capital gain net income retained by us that is subject to corporate income tax for the tax year ending in that calendar year will be considered to have been distributed by year end. We currently intend to make sufficient distributions each taxable year to satisfy the Excise Tax Avoidance Requirement.

In order to qualify as a RIC for federal income tax purposes, we must, among other things:

• qualify to be treated as a business development company under the 1940 Act at all times during each taxable year;

• derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities, or other income derived with respect to our business of investing in such stock or securities, and net income derived from interests in “qualified publicly traded partnerships” (i.e., partnerships that are traded on an established securities market or tradable on a secondary market, other than partnerships that derive 90% of their income from interest, dividends and other permitted RIC income) (the “90% Income Test”); and

• diversify our holdings so that at the end of each quarter of the taxable year:

• at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and

• no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer or of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or in the securities of one or more qualified publicly traded partnerships (the “Diversification Tests”).

We may invest in partnerships, including qualified publicly traded partnerships, which may result in our being subject to state, local or foreign income, franchise or withholding liabilities.

Any underwriting fees paid by us are not deductible. We may be required to recognize taxable income in circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with payment-in-kind interest or, in certain cases, with increasing interest rates or issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. Because any original issue discount accrued will be included in our investment company taxable income for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount.

100

Certain of our investment practices may be subject to special and complex federal income tax provisions that may, among other things, (1) treat dividends that would otherwise constitute qualified dividend income as non-qualified dividend income, (2) treat dividends that would otherwise be eligible for the corporate dividends received deduction as ineligible for such treatment, (3) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (4) convert lower-taxed long term capital gain into higher-taxed short-term capital gain or ordinary income, (5) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited), (6) cause us to recognize income or gain without a corresponding receipt of cash, (7) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (8) adversely alter the characterization of certain complex financial transactions and (9) produce income that will not be qualifying income for purposes of the 90% Income Test. We intend to monitor our transactions and may make certain tax elections to mitigate the effect of these provisions and prevent our disqualification as a RIC.

Gain or loss realized by us from warrants acquired by us as well as any loss attributable to the lapse of such warrants generally will be treated as capital gain or loss. Such gain or loss generally will be long term or short term, depending on how long we held a particular warrant.

Although we do not presently expect to do so, we are authorized to borrow funds and to sell assets in order to satisfy distribution requirements. However, under the 1940 Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. See “Regulation — Senior Securities.” Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make such dispositions at times that, from an investment standpoint, are not advantageous.

Some of the income and fees that we may recognize will not satisfy the 90% Income Test. In order to ensure that such income and fees do not disqualify us as a RIC for a failure to satisfy the 90% Income Test, we may be required to recognize such income and fees directly or indirectly through one or more entities treated as corporations for U.S. federal income tax purposes. Such corporations will be required to pay U.S. corporate income tax on their earnings, which ultimately will reduce our return on such income and fees.

Failure to Qualify as a RIC

If we were unable to qualify for treatment as a RIC, we would be subject to tax on all of our taxable income at regular corporate rates. We would not be able to deduct distributions to stockholders, nor would they be required to be made. Distributions, including distributions of net long-term capital gain, would generally be taxable to our stockholders as ordinary dividend income (currently eligible for the 15% maximum rate (through 2010) in the case of U.S. individual stockholders) to the extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate distributees would be eligible for the dividends received deduction. Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain. If we fail to qualify as a RIC for a period greater than two taxable years, to qualify as a RIC in a subsequent year we may be subject to regular corporate tax on any net built-in gains with respect to certain of our assets (i.e., the excess of the aggregate gains, including items of income, over aggregate losses that would have been realized with respect to such assets if we had been liquidated) that we elect to recognize on requalification or when recognized over the next ten years.

The remainder of this discussion assumes that we qualify as a RIC and have satisfied the Annual Distribution Requirement.

Taxation of U.S. Stockholders

Distributions by us generally are taxable to U.S. stockholders as ordinary income or capital gains. Distributions of our “investment company taxable income” (which is, generally, our net ordinary income plus net short-term capital gains in excess of net long-term capital losses) will be taxable as ordinary income to U.S. stockholders to the extent of our current or accumulated earnings and profits, whether paid in cash or reinvested in additional shares of our common stock. For the tax years beginning on or before December 31,

101

2010, to the extent such distributions paid by us to non-corporate stockholders (including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations, such distributions generally will be eligible for a maximum federal tax rate of 15%. In this regard, it is anticipated that distributions paid by us will generally not be attributable to dividends and, therefore, generally will not qualify for the 15% maximum federal tax rate. Distributions of our net capital gains (which is generally our realized net long-term capital gains in excess of realized net short-term capital losses) properly designated by us as “capital gain dividends” will be taxable to a U.S. stockholder as long-term capital gains (currently at a maximum federal tax rate of 15% through 2010) in the case of individuals, trusts or estates, regardless of the U.S. stockholder’s holding period for his, her or its common stock and regardless of whether paid in cash or reinvested in additional common stock. Distributions in excess of our earnings and profits first will reduce a U.S. stockholder’s adjusted tax basis in such stockholder’s common stock and, after the adjusted basis is reduced to zero, will constitute capital gains to such U.S. stockholder. Stockholders receiving dividends or distributions in the form of additional shares of our common stock purchased in the market should be treated for U.S. federal income tax purposes as receiving a distribution in an amount equal to the amount of money that the stockholders receiving cash dividends or distributions will receive, and should have a cost basis in the shares received equal to such amount. Stockholders receiving dividends in newly issued shares of our common stock will be treated as receiving a distribution equal to the value of the shares received, and should have a cost basis of such amount.

Although we currently intend to distribute any net long-term capital gains at least annually, we may in the future decide to retain some or all of our net long-term capital gains but designate the retained amount as a “deemed distribution.” In that case, among other consequences, we will pay tax on the retained amount, each U.S. stockholder will be required to include their share of the deemed distribution in income as if it had been distributed to the U.S. stockholder, and the U.S. stockholder will be entitled to claim a credit equal their allocable share of the tax paid on the deemed distribution by us. The amount of the deemed distribution net of such tax will be added to the U.S. stockholder’s tax basis for their common stock. Since we expect to pay tax on any retained capital gains at our regular corporate tax rate, and since that rate is in excess of the maximum rate currently payable by individuals on long-term capital gains, the amount of tax that individual stockholders will be treated as having paid and for which they will receive a credit will exceed the tax they owe on the retained net capital gain. Such excess generally may be claimed as a credit against the U.S. stockholder’s other federal income tax obligations or may be refunded to the extent it exceeds a stockholder’s liability for federal income tax. A stockholder that is not subject to federal income tax or otherwise required to file a federal income tax return would be required to file a federal income tax return on the appropriate form in order to claim a refund for the taxes we paid. In order to utilize the deemed distribution approach, we must provide written notice to our stockholders prior to the expiration of 60 days after the close of the relevant taxable year. We cannot treat any of our investment company taxable income as a “deemed distribution.”

For purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of capital gain dividends paid for that year, we may, under certain circumstances, elect to treat a dividend that is paid during the following taxable year as if it had been paid during the taxable year in question. If we make such an election, the U.S. stockholder will still be treated as receiving the dividend in the taxable year in which the distribution is made. However, any dividend declared by us in October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following year, will be treated as if it had been received by our U.S. stockholders on December 31 of the year in which the dividend was declared.

If an investor purchases shares of our common stock shortly before the record date of a distribution, the price of the shares of our common stock will include the value of the distribution and the investor will be subject to tax on the distribution even though it represents a return of their investment.

A stockholder generally will recognize taxable gain or loss if the stockholder sells or otherwise disposes of their shares of our common stock. Any gain arising from such sale or disposition generally will be treated as long-term capital gain or loss if the stockholder has held their shares of common stock for more than one year. Otherwise, it would be classified as short-term capital gain or loss. However, any capital loss arising from the sale or disposition of shares of our common stock held for six months or less will be treated as long-term capital loss to the extent of the amount of capital gain dividends received, or undistributed capital gain

102

deemed received, with respect to such shares. In addition, all or a portion of any loss recognized upon a disposition of shares of our common stock may be disallowed if other shares of our common stock are purchased (whether through reinvestment of distributions or otherwise) within 30 days before or after the disposition. In such a case, the basis of the common stock acquired will be increased to reflect the disallowed loss.

In general, individual U.S. stockholders currently (through 2010) are subject to a maximum federal income tax rate of 15% on their net capital gain, i.e., the excess of realized net long-term capital gain over realized net short-term capital loss for a taxable year, including a long-term capital gain derived from an investment in our shares of common stock. Such rate is lower than the maximum rate on ordinary income currently payable by individuals. Corporate U.S. stockholders currently are subject to federal income tax on net capital gain at the maximum 35% rate also applied to ordinary income. Non-corporate stockholders with net capital losses for a year (i.e., net capital losses in excess of net capital gains) generally may deduct up to $3,000 of such losses against their ordinary income each year; any net capital losses of a non-corporate stockholder in excess of $3,000 generally may be carried forward and used in subsequent years as provided in the Code. Corporate stockholders generally may not deduct any net capital losses for a year, but may carryback such losses for three years or carry forward such losses for five years.

We will send to each of our U.S. stockholders, as promptly as possible after the end of each calendar year, a notice detailing, on a per share and per distribution basis, the amounts includible in such U.S. stockholder’s taxable income for such year as ordinary income and as long-term capital gain. In addition, the federal tax status of each year’s distributions generally will be reported to the IRS. Distributions may also be subject to additional state, local and foreign taxes depending on a U.S. stockholder’s particular situation. Dividends distributed by us generally will not be eligible for the dividends-received deduction or the lower tax rates applicable to certain qualified dividends.

We may be required to withhold federal income tax (“backup withholding”) currently at a rate of 28% from all taxable distributions to any non-corporate U.S. stockholder (1) who fails to furnish us with a correct taxpayer identification number or a certificate that such stockholder is exempt from backup withholding or (2) with respect to whom the IRS notifies us that such stockholder has failed to properly report certain interest and dividend income to the IRS and to respond to notices to that effect. An individual’s taxpayer identification number is his or her social security number. Any amount withheld under backup withholding is allowed as a credit against the U.S. stockholder’s federal income tax liability and may entitle such stockholder to a refund, provided that proper information is timely provided to the IRS.

If a U.S. stockholder recognizes a loss with respect to shares of our common stock of $2 million or more for an individual stockholder or $10 million or more for a corporate stockholder, the stockholder must file with the IRS a disclosure statement on Form 8886. Direct stockholders of portfolio securities are in many cases exempted from this reporting requirement, but under current guidance, stockholders of a RIC are not exempted. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. U.S. stockholders should consult their tax advisors to determine the applicability of these regulations in light of their specific circumstances.

There are current legislative proposals that would, if adopted, increase tax rates on income classified as dividends or capital gains. It is unclear whether, or in what form, these proposals may be enacted, however, any change to the tax rates may have an effect on a stockholder’s net gain.

Taxation of Non-U.S. Stockholders

Whether an investment in the shares of our common stock is appropriate for a Non-U.S. stockholder will depend upon that person’s particular circumstances. An investment in the shares of our common stock by a Non-U.S. stockholder may have adverse tax consequences. Non-U.S. stockholders should consult their tax advisors before investing in our common stock.

Distributions of our “investment company taxable income” to Non-U.S. stockholders (including interest income, net short-term capital gain or foreign-source dividend and interest income, which generally would be free of withholding if paid to Non-U.S. stockholders directly) will be subject to withholding of federal tax at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current and accumulated

103

earnings and profits unless the distributions are effectively connected with a U.S. trade or business of the Non-U.S. stockholder, and, if an income tax treaty applies, attributable to a permanent establishment in the United States, in which case the distributions will be subject to federal income tax at the rates applicable to U.S. persons. In that case, we will not be required to withhold federal tax if the Non-U.S. stockholder complies with applicable certification and disclosure requirements. Special certification requirements apply to a Non-U.S. stockholder that is a foreign partnership or a foreign trust, and such entities are urged to consult their own tax advisors.

Under a provision currently scheduled to expire in taxable years beginning after December 31, 2009, properly designated dividends received by a Non-U.S. stockholder are generally exempt from U.S. federal withholding tax when they (1) are paid in respect of our “qualified net interest income” (generally, our U.S. source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we are at least a 10% stockholder, reduced by expenses that are allocable to such income), or (2) were paid in connection with our “qualified short-term capital gains” (generally, the excess of our net short-term capital gain over our long-term capital loss for such taxable year). If such provision is extended, depending on the circumstances, we may designate all, some or none of our potentially eligible dividends as such qualified net interest income or as qualified short-term capital gains, or treat such dividends, in whole or in part, as ineligible for this exemption from withholding. In order to qualify for this exemption from withholding, a Non-U.S. stockholder must comply with applicable certification requirements relating to its non-U.S. status (including, in general, furnishing an IRS Form W-8BEN or an acceptable substitute or successor form). In the case of shares held through an intermediary, the intermediary could withhold even if we designate the payment as qualified net interest income or qualified short-term capital gain. Non-U.S. stockholders should contact their intermediaries with respect to the application of these rules to their accounts. As discussed above, this exemption from withholding for interest-related and short term capital gain dividends is set to expire for tax years beginning after December 31, 2009 and it is unclear whether such exemption will be extended. In the event this exemption is extended, it may again be subject to expiration.

Actual or deemed distributions of our net capital gains to a Non-U.S. stockholder, and gains realized by a Non-U.S. stockholder upon the sale of our common stock, will not be subject to federal withholding tax and generally will not be subject to federal income tax unless the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business of the Non-U.S. stockholder and, if an income tax treaty applies, are attributable to a permanent establishment maintained by the Non-U.S. stockholder in the United States or, in the case of an individual Non-U.S. stockholder, the stockholder is present in the United States for 183 days or more during the year of the sale or capital gain dividend and certain other conditions are met.

If we distribute our net capital gains in the form of deemed rather than actual distributions (which we may do in the future), a Non-U.S. stockholder will be entitled to a federal income tax credit or tax refund equal to the stockholder’s allocable share of the tax we pay on the capital gains deemed to have been distributed. In order to obtain the refund, the Non-U.S. stockholder must obtain a U.S. taxpayer identification number and file a federal income tax return even if the Non-U.S. stockholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a federal income tax return. For a corporate Non-U.S. stockholder, distributions (both actual and deemed), and gains realized upon the sale of our common stock that are effectively connected with a U.S. trade or business may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate (or at a lower rate if provided for by an applicable treaty). Accordingly, investment in the shares of our common stock may not be appropriate for a Non-U.S. stockholder.

A Non-U.S. stockholder who is a non-resident alien individual, and who is otherwise subject to withholding of federal income tax, may be subject to information reporting and backup withholding of federal income tax on dividends unless the Non-U.S. stockholder provides us or the dividend paying agent with an IRS Form W-8BEN (or an acceptable substitute form) or otherwise meets documentary evidence requirements for establishing that it is a Non-U.S. stockholder or otherwise establishes an exemption from backup withholding.

104

Non-U.S. persons should consult their own tax advisors with respect to the U.S. federal income tax and withholding tax, and state, local and foreign tax consequences of an investment in the shares of our common stock.

The current presidential administration (the “Administration”) has recently proposed legislation that would limit the ability of non-U.S. investors to claim relief from U.S. withholding tax with respect to dividends paid on the shares, if such investors hold the shares through a non-U.S. intermediary that is not a “qualified intermediary.” The Administration’s proposals also would limit the ability of certain non-U.S. entities to claim relief from U.S. withholding tax in respect of dividends paid to such non-U.S. entities unless those entities have provided documentation of their beneficial owners to the withholding agent. A third proposal would impose a 20% withholding tax on the gross proceeds of the sale of shares effected through a non-U.S. intermediary that is not a qualified intermediary and that is not located in a jurisdiction with which the United States has a comprehensive income tax treaty having a satisfactory exchange of information provision. A non-U.S. investor generally would be permitted to claim a refund to the extent any tax withheld exceeded the investor’s actual tax liability. The full details of these proposals have not yet been made public, although the Administration’s summary of these proposals generally indicates that they are not intended to disrupt ordinary and customary market transactions. It is unclear whether, or in what form, these proposals may be enacted. Non-U.S. holders are encouraged to consult with their tax advisors regarding the possible implications of the Administration’s proposals on their investment in respect of the shares of our common stock.

105

DESCRIPTION OF OUR CAPITAL STOCK

The following description is based on relevant portions of the DGCL and on our certificate of incorporation and bylaws. This summary is not necessarily complete, and we refer you to the DGCL and our certificate of incorporation and bylaws for a more detailed description of the provisions summarized below.

Capital Stock

Our authorized stock consists of         shares of stock, par value        per share, all of which is initially designated as common stock. There is currently no market for our common stock, and we can offer no assurances that a market for our Shares will develop in the future. We have applied to have our common stock listed on the Nasdaq Global Market under the ticker symbol “GBDC.” There are no outstanding options or warrants to purchase our stock. No stock has been authorized for issuance under any equity compensation plans. Under Delaware law, our stockholders generally are not personally liable for our debts or obligations.

The following are our outstanding classes of securities as of       , 2010:

(1) Title of Class	(2) Amount Authorized	(3) Amount Held by us or for Our Account		(4) Amount Outstanding Exclusive of Amounts Shown Under (3)
Common Stock			—

Under our certificate of incorporation, our board of directors is authorized to classify and reclassify any unissued shares of stock into other classes or series of stock and authorize the issuance of shares of stock without obtaining stockholder approval.

Common Stock

All shares of our common stock have equal rights as to earnings, assets, dividends and voting and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. Distributions may be paid to the holders of our common stock if, as and when authorized by our board of directors and declared by us out of funds legally available therefor. Shares of our common stock have no preemptive, exchange, conversion or redemption rights and are freely transferable, except when their transfer is restricted by federal and state securities laws or by contract. In the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time. Each share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of our common stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our directors, and holders of less than a majority of such shares will not be able to elect any directors.

Preferred Stock

Our certificate of incorporation authorizes our board of directors to classify and reclassify any unissued shares of stock into other classes or series of stock, including preferred stock. Prior to issuance of shares of each class or series, the board of directors is required by Delaware law and by our certificate of incorporation to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the board of directors could authorize the issuance of shares of preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. You should note, however, that any issuance of preferred stock must comply with the requirements of the 1940 Act. The 1940 Act requires that (1) immediately after issuance and before any dividend or other distribution is made with respect to our common stock and before any purchase of common stock is made, such preferred stock together with all other senior securities must not exceed an amount equal to 50% of our total assets after deducting the amount of such dividend, distribution or purchase price, as the case may be, and (2) the holders of shares of preferred stock, if any are issued, must be entitled as a class to elect two directors at all times

106

and to elect a majority of the directors if dividends on such preferred stock are in arrears by two years or more. Some matters under the 1940 Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a business development company. We believe that the availability for issuance of preferred stock will provide us with increased flexibility in structuring future financings and acquisitions.

Provisions of the DGCL and Our Certificate of Incorporation and Bylaws

Limitation on Liability of Directors and Officers; Indemnification and Advance of Expenses

The indemnification of our officers and directors is governed by Section 145 of the DGCL, our certificate of incorporation and bylaws. Subsection (a) of DGCL Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if (1) such person acted in good faith, (2) in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and (3) with respect to any criminal action or proceeding, such person had no reasonable cause to believe the person’s conduct was unlawful.

Subsection (b) of DGCL Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of the corporation, and except that no indemnification may be made in respect of any claim, issue or matter as to which such person has been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court deems proper.

DGCL Section 145 further provides that to the extent that a present or former director or officer is successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter therein, such person will be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with such action, suit or proceeding. In all cases in which indemnification is permitted under subsections (a) and (b) of Section 145 (unless ordered by a court), it will be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the applicable standard of conduct has been met by the party to be indemnified. Such determination must be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (4) by the stockholders. The statute authorizes the corporation to pay expenses incurred by an officer or director in advance of the final disposition of a proceeding upon receipt of an undertaking by or on behalf of the person to whom the advance will be made, to repay the advances if it is ultimately determined that he or she was not entitled to indemnification. DGCL Section 145 also provides that indemnification and advancement of expenses permitted under such Section are not to be exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders

107

or disinterested directors, or otherwise. DGCL Section 145 also authorizes the corporation to purchase and maintain liability insurance on behalf of its directors, officers, employees and agents regardless of whether the corporation would have the statutory power to indemnify such persons against the liabilities insured.

Our certificate of incorporation provides that our directors will not be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the current DGCL or as the DGCL may hereafter be amended. DGCL Section 102(b)(7) provides that the personal liability of a director to a corporation or its stockholders for breach of fiduciary duty as a director may be eliminated except for liability (1) for any breach of the director’s duty of loyalty to the registrant or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the DGCL, relating to unlawful payment of dividends or unlawful stock purchases or redemption of stock or (4) for any transaction from which the director derives an improper personal benefit.

Our bylaws provide for the indemnification of any person to the full extent permitted, and in the manner provided, by the current DGCL or as the DGCL may hereafter be amended. In addition, we have entered into indemnification agreements with each of our directors and officers in order to effect the foregoing.

Delaware Anti-Takeover Law

The DGCL and our certificate of incorporation and bylaws contain provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy contest or otherwise. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of these provisions outweigh the potential disadvantages of discouraging any such acquisition proposals because the negotiation of such proposals may improve their terms.

We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. In general, these provisions prohibit a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:

• prior to such time, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

• upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or

• on or after the date the business combination is approved by the board of directors and authorized at a meeting of stockholders, by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 defines “business combination” to include the following:

• any merger or consolidation involving the corporation and the interested stockholder;

• any sale, transfer, pledge or other disposition (in one transaction or a series of transactions) of 10% or more of either the aggregate market value of all the assets of the corporation or the aggregate market value of all the outstanding stock of the corporation involving the interested stockholder;

• subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

• any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation owned by the interested stockholder; or

• the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

108

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any of these entities or persons.

The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us.

Election of Directors

Our certificate of incorporation and bylaws provide that the affirmative vote of the holders of a majority of the outstanding shares of stock entitled to vote in the election of directors will be required to elect a director. Under our certificate of incorporation, our board of directors may amend the bylaws to alter the vote required to elect directors.

Classified Board of Directors

Our board of directors is divided into three classes of directors serving staggered three-year terms, with the term of office of only one of the three classes expiring each year. A classified board may render a change in control of us or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of a classified board of directors helps to ensure the continuity and stability of our management and policies.

Number of Directors; Removal; Vacancies

Our certificate of incorporation provides that the number of directors will be set only by the board of directors in accordance with our bylaws. Our bylaws provide that a majority of our entire board of directors may at any time increase or decrease the number of directors. However, unless our bylaws are amended, the number of directors may never be less than four nor more than eight. Under the DGCL, unless the certificate of incorporation provides otherwise (which our certificate of incorporation does not), directors on an unclassified board such as our board of directors may be removed, with our without cause, by the affirmative vote of stockholders entitled to cast a majority of all the votes entitled to be cast generally for the election of directors. Under our certificate of incorporation and bylaws, any vacancy on the board of directors, including a vacancy resulting from an enlargement of the board of directors, may be filled only by vote of a majority of the directors then in office. The limitations on the ability of our stockholders to remove directors and fill vacancies could make it more difficult for a third-party to acquire, or discourage a third-party from seeking to acquire, control of us.

Action by Stockholders

Under the DGCL, stockholder action can be taken only at an annual or special meeting of stockholders or by unanimous written consent in lieu of a meeting, unless the certificate of incorporation provides for stockholder action by less than unanimous written consent (which our certificate of incorporation does not). These provisions, combined with the requirements of our bylaws regarding the calling of a stockholder-requested special meeting of stockholders discussed below, may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.

Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals

Our bylaws provide that with respect to an annual meeting of stockholders, nominations of persons for election to the board of directors and the proposal of business to be considered by stockholders may be made only (1) by or at the direction of the board of directors, (2) pursuant to our notice of meeting or (3) by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice procedures of the bylaws. Nominations of persons for election to the board of directors at a special meeting may be made only (1) by or at the direction of the board of directors, (2) provided that the board of directors has determined that directors will be elected at the meeting, by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice provisions of the bylaws.

The purpose of requiring stockholders to give us advance notice of nominations and other business is to afford our board of directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our

109

board of directors, to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of stockholders. Although our bylaws do not give our board of directors any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.

Stockholder Meetings

Our certificate of incorporation and bylaws provide that any action required or permitted to be taken by stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting. Our certificate of incorporation and bylaws also provide that, except as otherwise required by law, special meetings of the stockholders can only be called by the chairman of the board, the chief executive officer or the board of directors. In addition, our bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to the board of directors. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors, or by a stockholder of record on the record date for the meeting who is entitled to vote at the meeting and who has delivered timely written notice in proper form to the secretary of the stockholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities.

Calling of Special Meetings of Stockholders

Our bylaws provide that special meetings of stockholders may be called by our board of directors, the chairman of the board and certain of our officers. Additionally, our bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the stockholders requesting the meeting, a special meeting of stockholders will be called by the secretary of the corporation upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting.

No Appraisal Rights

Our certificate of incorporation provides that stockholders will not be entitled to exercise appraisal rights.

Conflict with 1940 Act

Our bylaws provide that, if and to the extent that any provision of the DGCL or any provision of our certificate of incorporation or bylaws conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will control.

110

REGULATION

We are a business development company under the 1940 Act and intend to elect to be treated as a RIC under the Code. The 1940 Act contains prohibitions and restrictions relating to transactions between business development companies and their affiliates (including any external managers), principal underwriters and affiliates of those affiliates or underwriters and requires that a majority of the directors be persons other than “interested persons,” as that term is defined in the 1940 Act. In addition, the 1940 Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a business development company unless approved by a majority of our outstanding voting securities.

We may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such securities, we may, for the purpose of public resale, be deemed an “underwriter” as that term is defined in the Securities Act. Our intention is to not write (sell) or buy put or call options to manage risks associated with the publicly traded securities of our portfolio companies, except that we may enter into hedging transactions to manage the risks associated with interest rate fluctuations. However, we may purchase or otherwise receive warrants to purchase the common stock of our portfolio companies in connection with acquisition financing or other investments. Similarly, in connection with an acquisition, we may acquire rights to require the issuers of acquired securities or their affiliates to repurchase them under certain circumstances. We also do not intend to acquire securities issued by any investment company that exceed the limits imposed by the 1940 Act. Under these limits, we generally cannot acquire more than 3% of the voting stock of any registered investment company, invest more than 5% of the value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of more than one investment company. With regard to that portion of our portfolio invested in securities issued by investment companies, it should be noted that such investments might subject our stockholders to additional expenses. None of these policies is fundamental and may be changed without stockholder approval.

Qualifying Assets

Under the 1940 Act, a business development company may not acquire any asset other than assets of the type listed in section 55(a) of the 1940 Act, which are referred to as “qualifying assets,” unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. The principal categories of qualifying assets relevant to our proposed business are the following:

(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940 Act as any issuer that:

• is organized under the laws of, and has its principal place of business in, the United States;

• is not an investment company (other than a small business investment company wholly owned by the business development company) or a company that would be an investment company but for certain exclusions under the 1940 Act; and

• satisfies either of the following:

• does not have any class of securities listed on a national securities exchange or has any class of securities listed on a national securities exchange subject to a $250 million market capitalization maximum; or

• is controlled by a business development company or a group of companies including a business development company, the business development company actually exercises a controlling influence over the management or policies of the eligible portfolio company, and, as a result, the business development company has an affiliated person who is a director of the eligible portfolio company.

(2) Securities of any eligible portfolio company which we control.

111

(3) Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident to such a private transaction, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities, was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.

(4) Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.

(5) Securities received in exchange for or distributed on or with respect to securities described above, or pursuant to the exercise of warrants or rights relating to such securities.

(6) Cash, cash equivalents, U.S. government securities or high-quality debt securities that mature in one year or less from the date of investment.

The regulations defining qualifying assets may change over time. We may adjust our investment focus as needed to comply with and/or take advantage of any regulatory, legislative, administrative or judicial actions in this area.

Managerial Assistance to Portfolio Companies

A business development company must have been organized and have its principal place of business in the United States and must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above. However, in order to count portfolio securities as qualifying assets for the purpose of the 70% test, the business development company must either control the issuer of the securities or must offer to make available to the issuer of the securities significant managerial assistance; except that, when the business development company purchases such securities in conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available managerial assistance means, among other things, any arrangement whereby the business development company, through its directors, officers or employees, offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company. GC Service will provide such managerial assistance on our behalf to portfolio companies that request this assistance.

Temporary Investments

Pending investment in other types of qualifying assets, as described above, our investments may consist of cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt investments that mature in one year or less from the date of investment, which we refer to, collectively, as temporary investments, so that 70% of our assets are qualifying assets or temporary investments. Typically, we will invest in U.S. Treasury bills or in repurchase agreements, so long as the agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price that is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our total assets constitute repurchase agreements from a single counterparty, we would not meet the Diversification Tests in order to qualify as a RIC for federal income tax purposes. Accordingly, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. GC Advisors will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.

Senior Securities

We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 200% immediately after each such issuance. In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also

112

borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see “Risk Factors — Risks Relating to our Business and Structure — Regulations governing our operation as a business development company will affect our ability to, and the way in which we, raise additional capital.”

Codes of Ethics

We and GC Advisors have each adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act that establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to each code may invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in accordance with the code’s requirements. You may read and copy the code of ethics at the SEC’s Public Reference Room in Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at (202) 551-8090. In addition, each code of ethics is attached as an exhibit to the registration statement of which this prospectus is a part, and is available on the EDGAR Database on the SEC’s website at www.sec.gov. You may also obtain copies of each code of ethics, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549.

Proxy Voting Policies and Procedures

We have delegated our proxy voting responsibility to GC Advisors. The Proxy Voting Policies and Procedures of GC Advisors are set out below. The guidelines are reviewed periodically by GC Advisors and our directors who are not “interested persons,” and, accordingly, are subject to change. For purposes of these Proxy Voting Policies and Procedures described below, “we,” “our” and “us” refer to GC Advisors.

Introduction

As an investment adviser registered under the Advisers Act, we have a fiduciary duty to act solely in the best interests of our clients. As part of this duty, we recognize that we must vote client securities in a timely manner free of conflicts of interest and in the best interests of our clients.

These policies and procedures for voting proxies for our investment advisory clients are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.

Proxy Policies

We vote proxies relating to our portfolio securities in what we perceive to be the best interest of our clients’ stockholders. We review on a case-by-case basis each proposal submitted to a stockholder vote to determine its effect on the portfolio securities held by our clients. In most cases we will vote in favor of proposals that we believe are likely to increase the value of the portfolio securities held by our clients. Although we will generally vote against proposals that may have a negative effect on our clients’ portfolio securities, we may vote for such a proposal if there exist compelling long-term reasons to do so.

Our proxy voting decisions are made by those senior officers who are responsible for monitoring each of our clients’ investments. To ensure that our vote is not the product of a conflict of interest, we require that (1) anyone involved in the decision-making process disclose to our Chief Compliance Officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision-making process or vote administration are prohibited from revealing how we intend to vote on a proposal in order to reduce any attempted influence from interested parties. Where conflicts of interest may be present, we will disclose such conflicts to our client, including with respect to Golub Capital BDC, those directors who are not interested persons and we may request guidance from such persons on how to vote such proxies for their account.

Proxy Voting Records

You may obtain information about how we voted proxies by making a written request for proxy voting information to: Golub Capital BDC, Inc., Attention: Investor Relations, 150 South Wacker Drive, Suite 800, Chicago, IL 60606, or by calling Golub collect at (312) 205-5050. The SEC also maintains a website at www.sec.gov that contains such information.

113

Privacy Principles

We are committed to maintaining the privacy of our stockholders and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information we collect, how we protect that information and why, in certain cases, we may share information with select other parties.

Generally, we do not receive any nonpublic personal information relating to our stockholders, although certain nonpublic personal information of our stockholders may become available to us. We do not disclose any nonpublic personal information about our stockholders or former stockholders to anyone, except as permitted by law or as is necessary in order to service stockholder accounts (for example, to a transfer agent or third-party administrator).

We restrict access to nonpublic personal information about our stockholders to employees of GC Advisors and its affiliates with a legitimate business need for the information. We will maintain physical, electronic and procedural safeguards designed to protect the nonpublic personal information of our stockholders.

Other

We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore, as a business development company, we are prohibited from protecting any director or officer against any liability to Golub Capital BDC or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.

We and GC Advisors will each be required to adopt and implement written policies and procedures reasonably designed to prevent violation of relevant federal securities laws, review these policies and procedures annually for their adequacy and the effectiveness of their implementation, and designate a chief compliance officer to be responsible for administering the policies and procedures.

We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our board of directors who are not interested persons and, in some cases, prior approval by the SEC. The SEC has interpreted the business development company prohibition on transactions with affiliates to prohibit all “joint transactions” between entities that share a common investment adviser. The staff of the SEC has granted no-action relief permitting purchases of a single class of privately placed securities provided that the adviser negotiates no term other than price and certain other conditions are met. As a result, we only expect to co-invest on a concurrent basis with other funds advised by GC Advisors when each of us will own the same securities of the issuer and when no term is negotiated other than price. Any such investment would be made, subject to compliance with existing regulatory guidance, applicable regulations and our allocation procedures. If opportunities arise that would otherwise be appropriate for us and for another fund advised by GC Advisors to invest in different securities of the same issuer, GC Advisors will need to decide which fund will proceed with the investment. Moreover, except in certain circumstances, we will be unable to invest in any issuer in which another fund advised by GC Advisors has previously invested.

We and GC Advisors may in the future submit an exemptive application to the SEC to permit greater flexibility to negotiate the terms of co-investments because we believe that it will be advantageous for us to co-invest with funds managed by GC Advisors where such investment is consistent with our investment objectives, investment positions, investment policies, investment strategies, investment restrictions, regulatory requirements and other pertinent factors. We believe that co-investment by us and funds managed by GC Advisors may afford us additional investment opportunities and the ability to achieve greater diversification. Accordingly, any application would seek an exemptive order permitting us to negotiate more than price terms when investing with funds managed by GC Advisors in the same portfolio companies.

Moreover, if we elect to seek exemptive relieve, it is expected that we would undertake that, in connection with any commitment to a co-investment, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors would make certain conclusions, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned and (2) the transaction is consistent with the interests

114

of our stockholders and is consistent with our investment strategies and policies. There is no assurance that an application for exemptive relief, if sought by us, would be granted by the SEC or that, if granted, it will be on the terms set forth above.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 imposes a wide variety of regulatory requirements on publicly held companies and their insiders. Many of these requirements affect us. For example:

• pursuant to Rule 13a-14 under the Exchange Act, our principal executive officer and principal financial officer must certify the accuracy of the financial statements contained in our periodic reports;

• pursuant to Item 307 under Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;

• pursuant to Rule 13a-15 under the Exchange Act, our management must prepare an annual report regarding its assessment of our internal control over financial reporting, which must be audited by our independent registered public accounting firm; and

• pursuant to Item 308 of Regulation S-K and Rule 13a-15 under the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated under such act. We will continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance with that act.

Small Business Investment Company Regulations

Golub Capital is an experienced manager of SBICs. Golub Capital currently operates two SBIC licensees and recently received a letter from the Investment Division of the SBA inviting Golub Capital to complete an application to form a third SBIC. This step formally commences the licensing process. Shortly after the closing of the offering, we intend to amend Golub Capital’s pending application, or submit a new application, so that one of our subsidiaries will be the applicant for a new SBIC license.

SBICs are designed to stimulate the flow of private equity capital to eligible small businesses. Under SBIC regulations, SBICs may make loans to eligible small businesses, invest in the equity securities of such businesses and provide them with consulting and advisory services.

Under present SBIC regulations, eligible small businesses generally include businesses that (together with their affiliates) have a tangible net worth not exceeding $18 million and have average annual net income after U.S. federal income taxes not exceeding $6 million (average net income to be computed without benefit of any carryover loss) for the two most recent fiscal years. In addition, an SBIC must devote 20% of its investment activity to “smaller” concerns as defined by the SBA. A smaller concern generally includes businesses that have a tangible net worth not exceeding $6 million and have average annual net income after U.S. federal income taxes not exceeding $2 million (average net income to be computed without benefit of any net carryover loss) for the two most recent fiscal years. SBIC regulations also provide alternative size standard criteria to determine eligibility for designation as an eligible small business or smaller concern, which criteria depend on the primary industry in which the business is engaged and are based on such factors as the number of employees and gross revenue. However, once a SBIC has invested in a company, it may continue to make follow on investments in the company, regardless of the size of the company at the time of the follow on investment, up to the time of the company’s initial public offering, if any.

115

The SBA prohibits a SBIC from providing funds to small businesses for certain purposes, such as relending or investing outside the United States, to businesses engaged in a few prohibited industries and to certain “passive” (i.e., non-operating) companies. In addition, without prior SBA approval, a SBIC may not invest an amount equal to more than approximately 30% of the SBIC’s regulatory capital in any one company and its affiliates.

The SBA places certain limitations on the financing terms of investments by SBICs in portfolio companies (such as limiting the permissible interest rate on debt securities held by a SBIC in a portfolio company). Although prior regulations prohibited an SBIC from controlling a small business concern except in limited circumstances, regulations adopted by the SBA in 2002 now allow a SBIC to exercise control over a small business for a period of up to seven years from the date on which the SBIC initially acquires its control position. This control period may be extended for an additional period of time with the SBA’s prior written approval.

The SBA restricts the ability of a SBIC to lend money to any of its officers, directors and employees or to invest in affiliates thereof. The SBA also prohibits, without prior SBA approval, a “change of control” of a SBIC or transfers that would result in any person (or a group of persons acting in concert) owning 10% or more of a class of capital stock of a licensed SBIC. A “change of control” is any event which would result in the transfer of the power, direct or indirect, to direct the management and policies of a SBIC, whether through ownership, contractual arrangements or otherwise.

A SBIC (or group of SBICs under common control) may generally have outstanding debentures guaranteed by the SBA in amounts up to twice the amount of the privately raised funds of the SBIC(s). Debentures guaranteed by the SBA have a maturity of ten years, require semi-annual payments of interest and do not require any principal payments prior to maturity.

The recently enacted American Recovery and Reinvestment Act of 2009, or the 2009 Stimulus Bill, contains several provisions applicable to SBIC funds. One of the key SBIC-related provisions included in the 2009 Stimulus Bill increased the maximum amount of combined SBIC leverage, or the SBIC leverage cap, to $225 million for affiliated SBIC funds. The prior maximum amount of SBIC leverage available to affiliated SBIC funds was approximately $137 million, as adjusted annually based upon changes in the Consumer Price Index. Due to the increase in the maximum amount of SBIC leverage available to affiliated SBIC funds, we, through our SBIC subsidiary, would have access to incremental SBIC leverage to support our future investment activities.

SBICs must invest idle funds that are not being used to make loans in investments permitted under SBIC regulations in the following limited types of securities: (1) direct obligations of, or obligations guaranteed as to principal and interest by, the U.S. government, which mature within 15 months from the date of the investment; (2) repurchase agreements with federally insured institutions with a maturity of seven days or less (and the securities underlying the repurchase obligations must be direct obligations of or guaranteed by the federal government); (3) certificates of deposit with a maturity of one year or less, issued by a federally insured institution; (4) a deposit account in a federally insured institution that is subject to a withdrawal restriction of one year or less; (5) a checking account in a federally insured institution; or (6) a reasonable petty cash fund.

SBICs are periodically examined and audited by the SBA’s staff to determine their compliance with SBIC regulations and are periodically required to file certain forms with the SBA.

Neither the SBA nor the U.S. government or any of its agencies or officers has approved any ownership interest to be issued by us or any obligation that we or any of our subsidiaries may incur.

116

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering      shares of our common stock will be outstanding, based on the number of shares outstanding on         , 2010 and assuming no exercise of the underwriters’ overallotment option. Of these    shares, approximately    shares, less any shares purchased by our affiliates, will be freely tradeable without restriction or limitation under the Securities Act. Any shares purchased in this offering by our affiliates, as defined in the Securities Act, will be subject to the public information, manner of sale and volume limitations of Rule 144 under the Securities Act.

In general, under Rule 144 as currently in effect, if six months have elapsed since the date of acquisition of restricted securities from us or any of our affiliates, the holder of such restricted securities can sell such securities and we are subject to the Exchange Act periodic reporting requirements for at least three months prior to the sale. However, the number of securities sold by such person within any three-month period cannot exceed the greater of:

• 1% of the total number of securities then outstanding; or

• the average weekly trading volume of our securities during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC.

Sales under Rule 144 also are subject to certain manners of sale provisions, notice requirements and the availability of current public information about us. No assurance can be given as to (1) the likelihood that an active market for our common stock will develop, (2) the liquidity of any such market, (3) the ability of our stockholders to sell our securities or (4) the prices that stockholders may obtain for any of our securities. No prediction can be made as to the effect, if any, that future sales of securities, or the availability of securities for future sales, will have on the market price prevailing from time to time. Sales of substantial amounts of our securities, or the perception that such sales could occur, may affect adversely prevailing market prices of our common stock. See “Risk Factors — Risks Relating to this Offering.”

Registration Rights

As a result of agreements with our existing investors, we are contractually obligated to register for resale an aggregate of approximately    million of these shares that will be held by such persons upon completion of the BDC Conversion. Upon expiration of any applicable lock-up periods, such shares will generally be freely tradable in the public market, subject to the provisions of Rule 144 under the Securities Act. In connection with the GC Private Placement, we entered into a registration rights agreement with respect to    million shares acquired by GEMS. Some holders of these shares through GEMS are or will be held by affiliates of GC Advisors upon completion of the BDC Conversion. Under this registration rights agreement, holders of shares acquired by GEMS were granted certain demand, piggy-back and shelf registration rights beginning    days after the consummation of an initial public offering.

Lock-Up Agreements

During the period from the date of this prospectus continuing through the date    days after the date of this prospectus, we, GC Advisors, the Administrators, GCMF, GEMS, our officers and directors and our other stockholders have agreed with the representatives of the underwriters, subject to certain exceptions, not to:

(1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for capital stock, whether now owned or hereafter acquired, or

(2) enter into any swap or other agreement, arrangement or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of any capital stock or any securities convertible into or exercisable or exchangeable for any capital stock.

Moreover, if (1) during the last 17 days of such    day restricted period, we issue an earnings release or material news or a material event relating to us occurs or (2) prior to the expiration of such    day restricted period, we announce that we will release earnings results or become aware that material news or a material event will occur during the 16-day period beginning on the last day of such    day restricted period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the date of issuance of the earnings release or the occurrence of the material news or material event, as the case may be, unless the representatives of the underwriters waive, in writing, such extension.

117

CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR

Our securities are held by    pursuant to a custody agreement. The principal business address of    is   , telephone:   .    will serve as our transfer agent, distribution paying agent and registrar. The principal business address of    is   , telephone:   .

BROKERAGE ALLOCATION AND OTHER PRACTICES

Since we will acquire and dispose of many of our investments in privately negotiated transactions, many of the transactions that we engage in will not require the use of brokers or the payment of brokerage commissions. Subject to policies established by our board of directors, GC Advisors will be primarily responsible for selecting brokers and dealers to execute transactions with respect to the publicly traded securities portion of our portfolio transactions and the allocation of brokerage commissions. GC Advisors does not expect to execute transactions through any particular broker or dealer but will seek to obtain the best net results for us under the circumstances, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution and operational facilities of the firm and the firm’s risk and skill in positioning blocks of securities. GC Advisors generally will seek reasonably competitive trade execution costs but will not necessarily pay the lowest spread or commission available. Subject to applicable legal requirements and consistent with Section 28(e) of the Exchange Act, GC Advisors may select a broker based upon brokerage or research services provided to GC Advisors and us and any other clients. In return for such services, we may pay a higher commission than other brokers would charge if GC Advisors determines in good faith that such commission is reasonable in relation to the services provided.

118

UNDERWRITING

We are offering the shares of common stock described in this prospectus through a number of underwriters. Wells Fargo Securities, LLC and UBS Securities LLC are acting as joint book-running managers of the offering and as representatives of the underwriters. We have entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following table:

Underwriter	Number of Shares
Wells Fargo Securities, LLC
UBS Securities LLC
Stifel, Nicolaus & Company, Incorporated
BMO Capital Markets Corp.
Total

The underwriters are committed to purchase all the shares of common stock offered by us if they purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.

Over-Allotment Option

The underwriters have an option to buy up to    additional shares of common stock from us to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters have 30 days from the date of this prospectus to exercise this overallotment option. If any shares are purchased with this overallotment option, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

The underwriters propose to offer the shares of common stock directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $   per share. Any such dealers may resell shares to certain other brokers or dealers at a discount of up to $   per share from the initial public offering price. After the initial public offering of the shares, the offering price and other selling terms may be changed by the underwriters. Sales of shares made outside of the United States may be made by affiliates of the underwriters. The representatives have advised us that the underwriters do not intend to confirm discretionary sales in excess of 5% of the shares of common stock offered in this offering.

Commissions and Discounts

The underwriting fee is equal to the public offering price per share of common stock less the amount paid by the underwriters to us per share of common stock. The underwriting fee is $   per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

	Per share		Total
	Without Over-Allotment	With Over-Allotment	Without Over-Allotment	With Over-Allotment
Public offering price	$	$	$	$
Sales load (underwriting discounts and commissions)	$	$	$	$
Proceeds before expenses	$	$	$	$

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $  .

119

Lock-Up Agreements

During the period from the date of this prospectus continuing through the date    days after the date of this prospectus, we, GC Advisors, GCMF, GEMS, our officers and directors and our other stockholders have agreed with the representatives of the underwriters, subject to certain exceptions, not to:

(1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of our common stock or any securities convertible into or exercisable or exchangeable for common stock, whether now owned or hereafter acquired, or

(2) enter into any swap or other agreement, arrangement or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of any common stock or any securities convertible into or exercisable or exchangeable for any common stock.

Moreover, if (1) during the last 17 days of such    day restricted period, we issue an earnings release or material news or a material event relating to us occurs or (2) prior to the expiration of such    day restricted period, we announce that we will release earnings results or become aware that material news or a material event will occur during the 16-day period beginning on the last day of such    day restricted period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the date of issuance of the earnings release or the occurrence of the material news or material event, as the case may be, unless the representatives of the underwriters waive, in writing, such extension.

Price Stabilizations and Short Positions

In connection with the offering, Wells Fargo Securities, LLC, on behalf of the underwriters, may purchase and sell shares of common stock in the open market. These transactions may include short sales, syndicate covering transactions and stabilizing transactions. Short sales involve sales by the underwriters of common stock in excess of the number of shares required to be purchased by the underwriters in the offering, which creates a syndicate short position. “Covered” short sales are sales of shares made in an amount up to the number of shares represented by the underwriters’ over-allotment option. Transactions to close out the covered syndicate short involve either purchases of the common stock in the open market after the distribution has been completed or the exercise of the over-allotment option. In determining the source of shares to close out the covered syndicate short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. The underwriters may also make “naked” short sales, or sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares of common stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of bids for or purchases of shares in the open market while the offering is in progress for the purpose of fixing or maintaining the price of the shares of common stock.

The underwriters also may impose a penalty bid. Penalty bids permit the underwriters to reclaim a selling concession from an underwriter or syndicate member when the underwriters repurchase shares originally sold by that underwriter or syndicate member in order to cover syndicate short positions or make stabilizing purchases.

Any of these activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of the common stock may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the Nasdaq Global Market or otherwise. Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any of the underwriters makes any representation that the underwriters will engage in these transactions. If the underwriters commence any of these transactions, they may discontinue them at any time.

120

In connection with this offering, the underwriters may engage in passive market making transactions in our common stock on the Nasdaq Global Market in accordance with Rule 103 of Regulation M under the Exchange Act during a period before the commencement of offers or sales of common stock and extending through the completion of distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, that bid must then be lowered when specified purchase limits are exceeded.

Certain of the underwriters and their respective affiliates have from time to time performed and may in the future perform various commercial banking, financial advisory and investment banking services for us for which they have received or will receive customary compensation.

Sales Outside the United States

No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of our common stock, or the possession, circulation or distribution of this prospectus or any other material relating to us or the common stock in any jurisdiction where action for that purpose is required. Accordingly, our common stock may not be offered or sold, directly or indirectly, and none of this prospectus or any other offering material or advertisements in connection with our common stock may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction.

Each of the underwriters may arrange to sell our common stock offered hereby in certain jurisdictions outside the United States, either directly or through affiliates, where it is permitted to do so. In that regard, Wells Fargo Securities, LLC may arrange to sell shares of our common stock in certain jurisdictions through an affiliate, Wachovia Securities International Limited, or WSIL. WSIL is a wholly owned indirect subsidiary of Wells Fargo & Company and an affiliate of Wells Fargo Securities, LLC. WSIL is a U.K. incorporated investment firm regulated by the Financial Services Authority. Wells Fargo Securities is the trade name for certain corporate and investment banking services of Wells Fargo & Company and its affiliates, including Wells Fargo Securities, LLC and WSIL.

121

NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of shares of our common stock to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares of our common stock which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43 million and (3) an annual net turnover of more than €50 million, as shown in its last annual or consolidated accounts;

(c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or

(d) in any other circumstances which do not require the publication by the issuer of a prospectus supplement and accompanying prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

Each underwriter has represented and agreed that:

• it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act of 2000, or the FSMA) received by it in connection with the issue or sale of the shares of our common stock in circumstances in which Section 21(1) of the FSMA does not apply to us; and

• it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to our common stock in, from or otherwise involving the United Kingdom.

United Kingdom

In addition, each underwriter: (a) has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of shares of our common stock in circumstances in which Section 21(1) of the FSMA does not apply to us, and (b) has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to our common stock in, from or otherwise involving the United Kingdom.

Without limitation to the other restrictions referred to in this prospectus, this prospectus is directed only at (1) persons outside the United Kingdom; (2) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; or (3) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. Without limitation to the other restrictions referred to herein, any investment or investment activity to which this prospectus relates is

122

available only to, and will be engaged in only with, such persons, and persons within the United Kingdom who receive this communication (other than persons who fall within (2) or (3) above) should not rely or act upon this communication.

France

The prospectus (including any amendment, supplement or replacement thereto) has not been prepared in connection with the offering of our securities that has been approved by the Autorité des marchés financiers or by the competent authority of another State that is a contracting party to the Agreement on the European Economic Area and notified to the Autorité des marchés financiers; no security has been offered or sold and will be offered or sold, directly or indirectly, to the public in France except to permitted investors, or Permitted Investors, consisting of persons licensed to provide the investment service of portfolio management for the account of third parties, qualified investors (investisseurs qualifiés) acting for their own account and/or corporate investors meeting one of the four criteria provided in article D. 341-1 of the French Code Monétaire et Financier and belonging to a limited circle of investors (cercle restreint d’investisseurs) acting for their own account, with “qualified investors” and “limited circle of investors” having the meaning ascribed to them in Article L. 411-2, D. 411-1, D. 411-2, D. 734-1, D. 744-1, D. 754-1 and D. 764-1 of the French Code Monétaire et Financier; none of this prospectus or any other materials related to the offer or information contained in this prospectus relating to our common stock has been released, issued or distributed to the public in France except to permitted investors; and the direct or indirect resale to the public in France of any securities acquired by any permitted investors may be made only as provided by articles L. 411-1, L. 411-2, L. 412-1 and L. 621-8 to L. 621-8-3 of the French Code Monétaire et Financier and applicable regulations thereunder.

Italy

The offering of our common stock has not been registered pursuant to the Italian securities legislation and, accordingly, we have not offered or sold, and will not offer or sell, any shares of our common stock in the Republic of Italy in a solicitation to the public, and that sales of shares of our common stock in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulations. In any case, our common stock cannot be offered or sold to any individuals in the Republic of Italy either in the primary market or the secondary market.

We will not offer, sell or deliver any shares of our common stock or distribute copies of this prospectus or any other document relating to our common stock in the Republic of Italy except to “Professional Investors”, as defined in Article 31.2 of CONSOB Regulation No. 11522 of 2 July 1998 as amended, or Regulation No. 11522, pursuant to Article 30.2 and 100 of Legislative Decree No. 58 of 24 February 1998 as amended, or Decree No. 58, or in any other circumstances where an expressed exemption to comply with the solicitation restrictions provided by Decree No. 58 or Regulation No. 11971 of 14 May 1999 as amended applies, provided, however, that any such offer, sale or delivery of the securities or distribution of copies of the prospectus or any other document relating to the securities in the Republic of Italy must be:

• made by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative Decree No. 385 of 1 September 1993, as amended, or Decree No. 385 Decree No. 58, CONSOB Regulation No. 11522 and any other applicable laws and regulations;

• in compliance with Article 129 of Decree No. 385 and the implementing instructions of the Bank of Italy, pursuant to which the issue, trading or placement of securities in Italy is subject to a prior notification to the Bank of Italy, unless an exemption, depending, inter alia, on the aggregate amount and the characteristics of the securities issued or offered in the Republic of Italy, applies; and

• in compliance with any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy.

123

Hong Kong

Shares of our common stock may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of shares of our common stock may not be circulated or distributed, nor may shares of our common stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where shares of our common stock are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares of our common stock under Section 275 of the SFA except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

Japan

Our common stock has not been and will not be registered under the Securities and Exchange Law of Japan, or the Securities and Exchange Law, and each underwriter has agreed that it will not offer or sell any shares of our common stock, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

124

NOTICE TO PROSPECTIVE INVESTORS IN SWITZERLAND

This document as well as any other material relating to the shares of our common stock which are the subject of the offering contemplated by this prospectus do not constitute an issue prospectus pursuant to Article 652a of the Swiss Code of Obligations. Our common stock will not be listed on the SWX Swiss Exchange and, therefore, the documents relating to our common stock, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of SWX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SWX Swiss Exchange.

Our common stock is being offered in Switzerland by way of a private placement, i.e. to a small number of selected investors only, without any public offer and only to investors who do not purchase shares of our common stock with the intention to distribute them to the public. The investors will be individually approached by us from time to time.

This document as well as any other material relating to our common stock is personal and confidential and does not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available to other persons without our express consent. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.

NOTICE TO PROSPECTIVE INVESTORS IN
THE DUBAI INTERNATIONAL FINANCIAL CENTRE

This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This document is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this document nor taken steps to verify the information set out in it, and has no responsibility for it. The shares of our common stock which are the subject of the offering contemplated by this prospectus may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares of our common stock offered should conduct their own due diligence on our common stock. If you do not understand the contents of this document you should consult an authorised financial adviser.

Electronic Delivery

The underwriters may make prospectuses available in an electronic format. A prospectus in electronic format may be made available on a website maintained by any of the underwriters, and the underwriters may distribute such prospectuses electronically. The underwriters may agree with us to allocate a limited number of shares for sale to their online brokerage customers. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations.

We estimate that our share of the total expenses of the offering, excluding underwriting discounts, will be approximately $  .

We and GC Advisors have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

The addresses of the underwriters are: Wells Fargo Securities, LLC, 375 Park Avenue, 4th Floor, New York, New York 10152; UBS Securities LLC, 299 Park Ave., New York, New York 10171; Stifel, Nicolaus & Company, Incorporated, 501 N. Broadway, St. Louis, MO 63102; and BMO Capital Markets Corp., 115 South LaSalle Street 19W, Chicago, IL 60603.

125

LEGAL MATTERS

Certain legal matters regarding the securities offered by this prospectus will be passed upon for us by Dechert LLP, Washington, D.C. Dechert LLP also represents GC Advisors. Certain legal matters in connection with the offering will be passed upon for the underwriters by Clifford Chance US LLP.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The financial statements of Golub Capital Master Funding LLC, as of September 30, 2009, 2008 and 2007 and for the period from July 27, 2007 (inception) to September 30, 2009 included and appearing in this Prospectus and Registration Statement have been audited by McGladrey & Pullen, LLP, an independent registered public accounting firm, as stated in their report appearing elsewhere herein, which report expresses an unqualified opinion, and are included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.

AVAILABLE INFORMATION

We have filed with the SEC a registration statement on Form N-2, together with all amendments and related exhibits, under the Securities Act, with respect to our shares of common stock offered by this prospectus. The registration statement contains additional information about us and our shares of common stock being offered by this prospectus.

Upon completion of this offering, we will file with or submit to the SEC annual, quarterly and current reports, proxy statements and other information meeting the informational requirements of the Exchange Act. You may inspect and copy these reports, proxy statements and other information, as well as the registration statement and related exhibits and schedules, at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549-0102. You may obtain information on the operation of the Public Reference Room by calling the SEC at (202) 551-8090. We maintain a website at                and intend to make all of our annual, quarterly and current reports, proxy statements and other publicly filed information available, free of charge, on or through our website. Information contained on our website is not incorporated into this prospectus, and you should not consider information on our website to be part of this prospectus. You may also obtain such information by contacting us in writing at 150 South Wacker Drive, Suite 800, Chicago, IL 60606, Attention: Investor Relations. The SEC maintains a website that contains reports, proxy and information statements and other information we file with the SEC at www.sec.gov. Copies of these reports, proxy and information statements and other information may also be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549-0102.

126

GOLUB CAPITAL MASTER FUNDING LLC
  
Financial Report
September 30, 2009

CONTENTS

	Page
Report of Independent Registered Public Accounting Firm		F-2
Financial Statements
Statements of Financial Condition		F-3
Condensed Schedules of Investments		F-4 – F-14
Statements of Operations		F-15
Statements of Changes in Members’ Equity		F-16
Statements of Cash Flows		F-17
Notes to Financial Statements		F-18 – F-25

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Investment Manager
Golub Capital Master Funding LLC
New York, New York

We have audited the accompanying statements of financial condition, including the condensed schedules of investments, of Golub Capital Master Funding LLC (the Company) as of September 30, 2009 and 2008, and the related statements of operations, changes in members’ equity and cash flows for each of the two years in the period ended September 30, 2009, and for the period July 27, 2007 (inception) through September 30, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Golub Capital Master Funding LLC as of September 30, 2009 and 2008, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2009, and for the period July 27, 2007 (inception) through September 30, 2007, in conformity with U.S. generally accepted accounting principles.

As explained in Note 5, the financial statements include investments valued at approximately $376,294,000 (405.7% of members’ equity) and approximately $135,476,000 (803.9% of members’ equity) as of September 30, 2009 and 2008, respectively, whose fair values have been estimated by management in the absence of readily ascertainable fair values.

Chicago, Illinois
November 10, 2009

F-2

GOLUB CAPITAL MASTER FUNDING LLC
  
STATEMENTS OF FINANCIAL CONDITION
September 30, 2009 and 2008
(In Thousands)

	September 30,
	2009		2008
ASSETS
Investments in securities, at fair value (cost 2009 $387,293; 2008 $144,986)	$	376,294	$	135,476
Restricted cash and cash equivalents		30,614		4,252
Interest receivable		2,198		783
Deferred financing fees, net of accumulated amortization		—		410
Other assets		16		20
Total Assets	$	409,122	$	140,941
LIABILITIES AND MEMBERS’ EQUITY
Liabilities
Facility advances	$	315,306	$	123,083
Due to affiliates		934		793
Interest payable		130		212
Total Liabilities		316,370		124,088
Members’ Equity		92,752		16,853
Total Liabilities and Members’ Equity	$	409,122	$	140,941

 
 
See Notes to Financial Statements.

F-3

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS
September 30, 2009
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1)
Canada
Debt securities
Diversified Conglomerate Service
Open Text Corporation Senior loan (2.50%, due 10/2013)	$	1,324	$	1,102		1.4	%	$	1,274
Leisure, Amusement, Motion Pictures, Entertainment
Extreme Fitness, Inc. Senior loan (11.50%, due 3/2012)		4,649		4,649		5.0			4,649
Total Canada (cost $5,751)						6.4	%	$	5,923
United States
Debt securities
Aerospace and Defense
Thermal Solutions LLC Senior loan (4.47%, due 3/2011)	$	2,142	$	2,122		2.2	%	$	2,038
Automobile
CLP Auto Interior Corporation Senior loan (5.04%, due 6/2013)		3,418		3,418		3.3			3,042
Driven Brands, Inc. Senior loan (10.25%, due 10/2014)		6,648		6,648		7.2			6,648
Qualitor Acquisition Corporation Senior loan (7.00%, due 6/2013 )		1,691		1,666		1.4			1,344
Other(2)				824		0.8			680
						12.7			11,714
Banking
Bonddesk Group, LLC Senior loan (3.27%, due 8/2012)		2,609		2,486		2.7			2,478
Prommis Solutions, Inc. Senior loan (3.43%, due 2/2013)		1,660		1,660		1.6			1,527
						4.3			4,005
Beverage, Food and Tobacco
ABP Corporation Senior loan (8.50%, due 2/2013)		2,347		2,290		2.5			2,347
Bertucci’s Corporation Senior loan (12.00%, due 7/2012)		1,985		1,908		2.1			1,985
LBAC, Inc. Senior loan (7.00%, due 11/2012)		6,405		6,002		6.6			6,149
Lone Star Beef Processors, L.P. Senior loan (5.08%, due 5/2013)		3,700		3,670		3.9			3,626
						15.1			14,107

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2009.

(2) No individual investment (or single investment) is greater than 1% of members’ equity.

 
 
See Notes to Financial Statements.

F-4

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2009
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Building and Real Estate
American Fire Protection Group, Inc. Senior loan (9.00%, due 6/2011)	$	4,800	$	4,604		5.0	%	$	4,656
Architectural Testing, Inc. Senior loan (9.50%, due 5/2013)		6,961		6,961		7.5			6,961
Best Lighting Products, Inc. Senior loan (10.00%, due 8/2012)		2,545		2,446		2.7			2,545
Infiltrator Systems, Inc. Senior loan (8.50%, due 9/2012)		3,841		3,537		3.7			3,457
ITEL Laboratories, Inc. Senior loan (9.75%, due 3/2014)		8,901		8,811		9.2			8,545
KHKI Acquisition, Inc. Senior loans (8.50%, due 3/2012 – 3/2013)		3,123		3,117		2.9			2,681
Tecta America Corporation Senior loan (8.00%, due 12/2011)		2,055		2,055		2.1			1,991
Other(2)				672		0.7			605
						33.8			31,441
Cargo Transport
Marquette Transportation Company, LLC Senior loan (3.75%, due 3/2012)		4,550		4,378		4.4			4,095
Peco Pallet, Inc. Senior loan (4.00%, due 6/2013)		4,492		4,270		4.5			4,177
RedPrairie Corporation Senior loan (3.45%, due 7/2012)		1,721		1,456		1.8			1,670
Tangent Rail Services, Inc. Senior loans (7.41%, due 9/2014)		9,484		9,484		10.0			9,295
						20.7			19,237
Chemicals, Plastics and Rubber
Celanese Holdings LLC Senior loan (2.35%, due 4/2014)		992		822		1.0			941
Syrgis Holdings LLC Senior loans (8.80%, due 8/2012 – 2/2014)		1,836		1,716		1.8			1,684
TAC Materials, Inc. Senior loan (9.00%, due 7/2013)		2,771		2,771		1.2			1,124
						4.0			3,749

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2009.

(2) No individual investment (or single investment) is greater than 1% of members’ equity.

 
 
See Notes to Financial Statements.

F-5

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2009
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Containers, Packaging and Glass
Industrial Container Services, LLC Senior loan (4.28%, due 9/2011)	$	1,707	$	1,658		1.8	%	$	1,638
Pelican Products, Inc. Senior loans (7.73%, due 1/2013 – 1/2014)		4,843		4,378		4.9			4,586
						6.7			6,224
Diversified Conglomerate Manufacturing
Heat Transfer Parent, Inc. Senior loan (3.25%, due 6/2013)		1,877		1,784		1.6			1,454
Neptco Inc. Senior loan (7.25%, due 3/2013)		4,591		4,367		4.4			4,086
Pasternack Enterprises, Inc. Senior loan (4.29%, due 2/2014)		3,687		3,531		3.6			3,318
Vintage Parts, Inc. Senior loan (5.78%, due 12/2013)		8,214		8,098		8.4			7,804
						18.0			16,662
Diversified Conglomerate Service
Benetech, Inc. Senior loan (5.25%, due 12/2013)		9,537		9,138		9.7			8,965
Compass Group Diversified Holdings, LLC Senior loan (4.50%, due 12/2013)		4,689		4,689		5.1			4,689
Cortz, Inc. Senior loan (8.51%, due 3/2014)		7,213		7,146		7.6			7,069
The Service Companies, Inc. Senior loan (10.00%, due 3/2014)		6,005		5,850		6.3			5,885
PSI Services LLC Senior loan (5.50%, due 11/2012)		6,333		5,929		3.4			3,166
						32.1			29,774
Diversified Natural Resources, Precious Metals and Minerals
Metal Spinners, Inc. Senior loans (6.37%, due 1/2014 – 4/2014)		6,685		6,385		6.3			5,816
Virginia Explosives & Drilling Company, Inc. Senior loans (10.50%, due 5/2011 – 10/2011)		3,900		3,678		4.1			3,794
						10.4			9,610

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2009.

 
 
See Notes to Financial Statements.

F-6

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2009
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Electronics
Cape Electrical Supply LLC Senior loan (4.00%, due 11/2013)	$	2,795	$	2,630		2.8	%	$	2,572
GXS Worldwide, Inc. Senior loan (9.25%, due 3/2013)		2,997		2,592		3.2			2,971
Second lien (13.75%, due 9/2013)		1,200		1,040		1.2			1,148
Inovis International, Inc. Senior loan (9.50%, due 11/2009)		2,134		2,127		2.3			2,134
McBride Electric Inc. Senior loan (10.75%, due 9/2010)		1,558		1,558		1.3			1,168
The Sloan Company, Inc Senior loan (7.25%, due 10/2012)		2,405		2,387		2.5			2,358
						13.3			12,351
Farming and Agriculture
AGData, L.P. Senior loans (11.25%, due 7/2012)		16,010		16,013		17.3			16,010
Finance
Collect America, Ltd. Senior loans (8.07%, due 12/2011 – 3/2012)		4,460		4,126		4.5			4,192
eVestment Alliance Holdings, LLC Senior loan (9.50%, due 5/2014)		8,786		8,605		9.5			8,786
Metavante Corporation Senior loan (2.23%, due 11/2014)		2,977		2,461		3.2			2,974
Pillar Processing LLC Senior loans (8.52%, due 11/2013 – 5/2014)		10,158		10,129		10.7			9,947
Wall Street Systems Holdings, Inc. Senior loan (8.00%, due 5/2013)		8,327		8,327		9.0			8,327
						36.9			34,226
Grocery
JRD Holdings, Inc. Senior loan (2.49%, due 7/2014)		1,291		1,102		1.3			1,248
Healthcare, Education and Childcare
ATI Holdings, Inc. Senior loans (4.11%, due 9/2011 – 9/2012)		2,706		2,541		2.8			2,554
Community Hospices of America, Inc. Senior loan (8.00%, due 1/2011)		1,133		1,104		1.2			1,110
Second lien (12.50%, due 4/2011)		4,865		4,812		5.1			4,768

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2009.

 
 
See Notes to Financial Statements.

F-7

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2009
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Healthcare, Education and Childcare (continued)
DaVita, Inc. Senior loan (1.81%, due 10/2012)	$	5,000	$	4,471		5.2	%	$	4,846
DDC Center Inc. Senior loan (9.50%, due 10/2014)		14,400		14,400		15.2			14,112
Delta Educational Systems, Inc. Senior loan (6.00%, due 6/2012)		4,770		4,511		4.9			4,579
Den-Mat Holdings, LLC Senior loan (8.50%, due 12/2012)		3,044		3,045		3.0			2,771
Excelligence Learning Corporation Second lien (7.25%, due 11/2013)		1,600		1,519		1.6			1,504
The Hygenic Corporation Senior loan (2.98%, due 4/2013)		2,766		2,675		2.7			2,489
Oncure Medical Corporation Senior loan (3.75%, due 6/2012)		6,078		5,701		6.0			5,592
ReachOut Healthcare America Ltd Senior loan (9.25%, due 8/2013)		6,534		6,510		7.0			6,534
United Surgical Partners International, Inc. Senior loan (2.25%, due 4/2014)		1,545		1,545		1.6			1,439
Other(2)				761		0.9			727
						57.2			53,025
Home and Office Furnishings, Housewares, and Durable Consumer
Top Knobs USA, Inc. Senior loan (7.75%, due 2/2014)		3,634		3,493		3.8			3,489
Zenith Products Corporation Senior loan (5.38%, due 9/2013)		6,034		5,883		5.9			5,430
						9.7			8,919
Leisure, Amusement, Motion Pictures and Entertainment
Octane Fitness, LLC Senior loan (4.85%, due 3/2013)		4,805		4,611		4.8			4,421
Optronics Product Company, Inc. Senior loans (7.08%, due 12/2012 – 12/2013)		2,800		2,637		3.0			2,784
Premier Yachts, Inc. Senior loans (5.59%, due 8/2012 – 8/2013)		2,499		2,358		2.5			2,323
Regal Cinemas Corporation Senior loan (4.03%, due 10/2013)		1,523		1,298		1.6			1,520
						11.9			11,048

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2009.

(2) No individual investment (or single investment) is greater than 1% of members’ equity.

 
 
See Notes to Financial Statements.

F-8

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2009
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Machinery (Non-Agriculture, Construction, or Electric)
Davis Inotek Instruments, LLC Senior loan (8.00%, due 9/2013)	$	7,604	$	7,604		8.0	%	$	7,452
Tritex Corporation Senior loan (5.03%, due 5/2014)		2,969		2,868		2.9			2,702
Other(2)				704		0.7			619
						11.6			10,773
Oil and Gas
Casedhole Solutions, Inc. Senior loan (8.25%, due 6/2013)		3,291		3,291		2.5			2,304
Gray Wireline Service, Inc Senior loan (3.53%, due 2/2013)		8,000		8,000		6.9			6,400
Tri-County Petroleum, Inc. Senior loan (4.54%, due 8/2013)		3,694		3,572		3.7			3,472
						13.1			12,176
Personal and Non-Durable Consumer Products
Dr. Miracles, Inc. Senior loan (4.28%, due 3/2014)		4,208		4,157		4.4			4,082
Personal, Food and Miscellaneous Services
Aramark Corporation Senior loan (2.15%, due 1/2014)		2,910		2,375		2.9			2,722
Focus Brands, Inc. Senior loan (5.92%, due 3/2011)		6,375		6,195		6.5			6,056
						9.4			8,778
Printing and Publishing
Monotype Imaging, Inc. Senior loan (3.01%, due 7/2012)		1,742		1,633		1.7			1,603
Trade Service Company, LLC Senior loan (14.00%, due 1/2013)		2,085		2,001		2.2			2,085
						3.9			3,688
Retail Stores
Container Store, Inc. Senior loan (3.37%, due 8/2014)		6,882		6,288		6.2			5,712
Fasteners for Retail, Inc. Senior loan (5.00%, due 12/2012)		2,443		2,227		2.4			2,223

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2009.

(2) No individual investment (or single investment) is greater than 1% of members’ equity.

 
 
See Notes to Financial Statements.

F-9

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2009
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Retail Stores (continued)
IL Fornaio (America) Corporation Senior loan (3.25%, due 3/2013)	$	5,133	$	4,714		4.9	%	$	4,568
The Marshall Retail Group, LLC Senior loans (8.02%, due 4/2013)		5,529		5,266		5.6			5,218
Other(2)				731		0.8			631
						19.9			18,352
Telecommunications
Cellular South, Inc. Senior loan (2.00%, due 5/2014)		1,247		1,247		1.3			1,202
MetroPCS Wireless, Inc. Senior loan (2.66%, due 11/2013)		2,969		2,398		3.1			2,850
West Corporation Senior loan (2.25%, due 10/2012)		3,571		3,215		2.8			2,571
						7.2			6,623
Textiles and Leather
Gammill, Inc. Senior loans (9.93%, due 9/2011 – 9/2012)		5,411		5,241		5.6			5,162
Hanesbrands Inc. Senior loan (5.25%, due 9/2013)		2,185		1,792		2.4			2,197
						8.0			7,359
Utilities
Covanta Energy Corporation Senior loans (1.23%, due 2/2014 – 4/2014)		2,980		2,473		3.1			2,852
Itron, Inc. Senior loan (4.00%, due 4/2014)		1,198		1,053		1.3			1,197
NRG Energy, Inc. Senior loan (2.02%, due 2/2013)		2,741		2,452		2.8			2,603
Ventyx Inc. Senior loan (2.80%, due 6/2012)		6,915		6,648		7.0			6,500
						14.2			13,152
Total United States ($381,542)						399.3	%	$	370,371
Total investments in debt securities (cost $387,293)						405.7	%	$	376,294

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2009.

(2) No individual investment (or single investment) is greater than 1% of members’ equity.

 
 
See Notes to Financial Statements.

F-10

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS
September 30, 2008
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1)
United States
Debt securities
Aerospace and Defense
Thermal Solutions LLC Senior loan (7.75%, due 3/2011)	$	1,463	$	1,463		8.5	%	$	1,425
Whitcraft LLC Senior loan (6.25%, due 5/2011)		3,500		3,500		20.8			3,500
						29.3			4,925
Automobile
Autotronic Controls Corporation Senior loan (10.75%, due 3/2012)		2,000		2,000		7.1			1,200
CLP Auto Interior Corporation Senior loans (5.93%, due 6/2013)		3,823		3,823		20.2			3,392
						27.3			4,592
Banking
Prommis Solutions, Inc. Senior loans (5.81%, due 2/2011 – 2/2013)		1,777		1,777		8.7			1,468
Building and Real Estate
Architectural Testing, Inc. Senior loan (9.50%, due 5/2013)		2,370		2,370		14.1			2,370
ITEL Laboratories, Inc. Senior loan (9.75%, due 3/2014)		4,375		4,361		26.0			4,375
KHKI Acquisition, Inc. Senior loan (8.00%, due 3/2012)		706		706		4.1			683
Tecta America Corporation Senior loan (7.00%, due 12/2011)		1,451		1,451		5.6			939
						49.8			8,367
Cargo Transport
Peco Pallet, Inc. Senior loan (6.68%, due 11/2013)		8,500		8,500		48.7			8,200
Tangent Rail Services, Inc. Senior loans (8.52%, due 9/2014)		9,176		9,176		54.4			9,176
						103.1			17,376
Chemicals, Plastics and Rubber
Syrgis Holdings LLC Senior loan (6.39%, due 8/2012)		2,533		2,533		14.2			2,385
TAC Materials, Inc. Senior loans (8.20%, due 7/2013)		3,674		3,674		20.1			3,380
						34.3			5,765

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2008.

(2) No individual investment (or single investment) is greater than 1% of members’ equity.

 
 
See Notes to Financial Statements.

F-11

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2008
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Containers, Packaging and Glass
CV Holdings, LLC Senior loan (6.59%, due 9/2011)	$	2,000	$	2,000		10.9	%	$	1,829
Pelican Products, Inc. Senior loan (6.25%, due 9/2011)		400		400		2.1			350
Other(2)				172		0.2			42
						13.2			2,221
Diversified Conglomerate Manufacturing
Vintage Parts, Inc. Senior loan (9.26%, due 12/2013)		3,832		3,832		22.5			3,793
Other(2),(3)				—		(0.3	)		(35	)
						22.2			3,758
Diversified Conglomerate Service
Andrews International, Inc. Senior loan (7.12%, due 12/2010)		2,806		2,806		16.4			2,759
Compass Group Diversified Holdings, LLC Senior loans (6.88%, due 12/2012 – 12/2013)		2,461		2,461		14.6			2,461
Cortz, Inc. Senior loan (8.09%, due 3/2014)		2,970		2,970		17.3			2,918
The Service Companies, Inc. Senior loans (8.00%, due 3/2014)		3,151		3,151		18.7			3,151
PSI Services LLC Senior loan (6.71%, due 11/2012)		360		360		1.5			260
						68.5			11,549
Diversified Natural Resources, Precious Metals and Minerals
Metal Spinners, Inc. Senior loans (8.39%, due 1/2014 – 4/2014)		3,406		3,406		19.6			3,311
Electronics
Cape Electrical Supply LLC Senior loans (7.47%, due 11/2013)		1,733		1,733		9.7			1,629
Other(2),(3)				—		(0.1	)		(22	)
						9.6			1,607

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2008.

(2) No individual investment (or single investment) is greater than 1% of members’ equity.

(3) A negative value is due to the unfunded commitment being valued below par.

 
 
See Notes to Financial Statements.

F-12

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2008
(In Thousands)

	Principal Amount		Cost			Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Finance
eVestment Alliance Holdings, LLC Senior loan (9.5%, due 5/2014)	$	3,900	$	3,900			23.1	%	$	3,900
Pillar Processing LLC Senior loan (14.5%, due 5/2014)		3,125		3,125			18.4			3,109
Wall Street Systems Holdings, Inc. Senior loan (8.25%, due 5/2013)		4,489		4,489			26.6			4,489
							68.1			11,498
Grocery
Fairway Group Holdings Corporation Senior loan (8.68%, due 1/2013)		528		528			2.8		$	478
Healthcare, Education and Childcare
ATI Holdings, Inc. Senior loan (6.55%, due 9/2011)		1,350		1,350			7.4			1,256
Community Hospices of America, Inc. Senior loan (LIBOR + 5.00%, due 1/2011)(3)							(0.2	)		(32	)
Second lien (12.50%, due 4/2011)		2,865		2,865			16.7			2,808
Den-Mat Holdings, LLC Senior loans (7.69%, due 12/2012)		4,456		4,456			26.4			4,456
Excelligence Learning Corporation Senior loan (5.88%, due 11/2011)		3,300		3,300			14.2			2,400
Extrumed, LLC Senior loan (9.76%, due 3/2013)		2,985		2,985			17.7			2,985
ReachOut Healthcare America Ltd Senior loan (9.25%, due 8/2013)		3,825		3,825			22.7			3,825
United Surgical Partners International, Inc. Senior loan (5.12%, due 4/2014)		1,532		1,532			7.8			1,306
Other(2),(3)				(15	)		(2.9	)		(492	)
							109.8			18,512
Home and Office Furnishings, Housewares, and Durable Consumer(3)				331			(0.4	)		(68	)
Leisure, Amusement, Motion Pictures and Entertainment
Optronics Product Company, Inc. Senior loan (7.52%, due 12/2012)		3,936		3,936			22.0			3,703
Machinery (Non-Agriculture, Construction, or Electric)
Davis Inotek Instruments, LLC Senior loan (8.77%, due 9/2013)		8,000		8,000			47.5			8,000

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2008.

(2) No individual investment (or single investment) is greater than 1% of members’ equity.

(3) A negative value is due to the unfunded commitment being valued below par.

 
 
See Notes to Financial Statements.

F-13

GOLUB CAPITAL MASTER FUNDING LLC
  
CONDENSED SCHEDULE OF INVESTMENTS – (continued)
September 30, 2008
(In Thousands)

	Principal Amount		Cost		Percentage of Members’ Equity			Fair Value
Investments in securities, at fair value(1) (continued)
United States (continued)
Debt securities (continued)
Oil and Gas
Casedhole Solutions, Inc. Senior loans (9.01%, due 6/2013)	$	3,513	$	3,513		20.8 %		$	3,513
Gray Wireline Service, Inc Senior loan (6.98%, due 2/2013)		1,000		1,000		5.9			1,000
Total Safety US, Inc. Senior loan (5.56%, due 12/2011)		1,500		1,500		6.8			1,144
						33.5			5,657
Personal and Non-Durable Consumer Products
Dr. Miracles, Inc. Senior loan (7.76%, due 3/2014)		2,885		2,885		16.8			2,828
Personal Transportation
Rotorcraft Leasing Company, LLC Senior loans (7.50%, due 3/2012)		2,943		2,943		16.7			2,812
Personal, Food and Miscellaneous Services
Focus Brands, Inc Senior loan (6.84%, due 8/2012)		965		965		5.6			936
Garden Fresh Restaurant Corporation Senior loan (6.30%, due 12/2010)		3,900		3,900		19.7			3,328
NVA Acquisition Company, Inc. Senior loan (6.69%, due 3/2013)		887		887		4.8			812
						30.1			5,076
Printing and Publishing
Trade Service Company, LLC Senior loan (10.73%, due 1/2013)		400		400		2.0			340
Retail Stores
Levtran Enterprise, Inc. Senior loan (8.25%, due 10/2010)		2,625		2,625		14.7			2,475
The Marshall Retail Group, LLC Senior loan (7.25%, due 12/2011)		1,749		1,607		10.2			1,713
						24.9			4,188
Telecommunications
West Corporation Senior loan (6.25%, due 10/2012)		10,000		9,529		45.1			7,600
Other(2),(3)				—		(0.6	)		(88	)
						44.5			7,512
Total investments in debt securities (cost $144,986)						803.9 %		$	135,476

(1) The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or semi-annually. For each debt security we have provided the weighted average current interest rate in effect at September 30, 2008.

(2) No individual investment (or single investment) is greater than 1% of members' equity.

(3) A negative value is due to the unfunded commitment being valued below par.

 
 
See Notes to Financial Statements.

F-14

GOLUB CAPITAL MASTER FUNDING LLC
  
STATEMENTS OF OPERATIONS
For the Two Years in the Period Ended September 30, 2009, and for the
Period July 27, 2007 (Inception) Through September 30, 2007
(In Thousands)

	Years Ended September 30,						Period July 27, 2007 (Inception) Through September 30, 2007
	2009			2008
Investment income
Interest	$	33,338		$	20,686		$	1,868
Total investment income		33,338			20,686			1,868
Expenses
Interest		4,547			8,599			1,114
Management fee		2,849			1,726			134
Professional fees		131			120			3
Other expenses		333			197			—
Total expenses		7,860			10,642			1,251
Net investment income		25,478			10,044			617
Net gain (loss) on investments
Net realized loss on investments		(3,972	)		(4,503	)		—
Net change in unrealized depreciation on investments		(1,489	)		(8,957	)		(558	)
Net loss on investments		(5,461	)		(13,460	)		(558	)
Net income (loss)	$	20,017		$	(3,416	)	$	59

 
 
See Notes to Financial Statements.

F-15

GOLUB CAPITAL MASTER FUNDING, LLC
  
STATEMENTS OF CHANGES IN MEMBERS’ EQUITY
For the Two Years in the Period Ended September 30, 2009, and for the
Period July 27, 2007 (Inception) Through September 30, 2007
(In Thousands)

Members’ equity, July 27, 2007 (inception)	$	—
Capital contributions		33,422
Net income		59
Members’ equity, September 30, 2007	$	33,481
Capital contributions		31,238
Capital distributions		(44,450	)
Net loss		(3,416	)
Members’ equity, September 30, 2008	$	16,853
Capital contributions		59,250
Capital distributions		(3,368	)
Net income		20,017
Members’ equity, September 30, 2009	$	92,752

 
 
See Notes to Financial Statements.

F-16

GOLUB CAPITAL MASTER FUNDING, LLC
  
STATEMENTS OF CASH FLOWS
For the Two Years in the Period Ended September 30, 2009, and for the
Period July 27, 2007 (Inception) Through September 30, 2007
(In thousands)

	Years Ended September 30,						Period July 27, 2007 (Inception) Through September 30, 2007
	2009			2008
Cash flows from operating activities
Net income (loss)	$	20,017		$	(3,416	)	$	59
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization of deferred financing fees		410			493			82
Amortization of discount/premium		(5,598	)		(315	)		(29	)
Net realized loss on investments		3,972			4,503			—
Net change in unrealized depreciation on investments		1,489			8,957			558
Purchases of portfolio investments		(414,129	)		(480,210	)		(217,247	)
Proceeds from principal payments and sale of portfolio investments		173,444			532,736			15,571
Changes in operating assets and liabilities:
Interest receivable		(1,411	)		285			(1,068	)
Other assets		4			190			(211	)
Interest payable		(82	)		(819	)		1,032
Due to affiliates		485			1,896			(689	)
Other payables		—			(150	)		150
Net cash provided by (used in) operating activities		(221,399	)		64,150			(201,792	)
Cash flows from investing activities
Net change in restricted cash and cash equivalents		(26,362	)		(223	)		(4,029	)
Net cash used in investing activities		(26,362	)		(223	)		(4,029	)
Cash flows from financing activities
Borrowings on credit facility		263,754			217,760			173,540
Repayments on credit facility		(71,531	)		(268,217	)		—
Payments of deferred financing costs		—			—			(985	)
Proceeds from capital contributions		58,906			30,980			33,266
Payments of capital distributions		(3,368	)		(44,450	)		—
Net cash provided by (used in) financing activities		247,761			(63,927	)		205,821
Net change in cash and cash equivalents		—			—			—
Cash and cash equivalents, beginning of period		—			—			—
Cash and cash equivalents, end of period	$	—		$	—		$	—
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	4,219		$	8,926		$	—
Supplemental disclosure of noncash activity
Contributions for direct expenses paid on behalf of the Fund by the Investment Manager	$	344		$	258		$	156

 
 
See Notes to Financial Statements.

F-17

GOLUB CAPITAL MASTER FUNDING, LLC
  
NOTES TO FINANCIAL STATEMENTS
(In Thousands)

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Golub Capital Master Funding LLC (the “Company” or “GCMF”) was organized in the State of Delaware on June 6, 2007, as a limited liability company for the purpose of investing in a leveraged portfolio of senior secured loans. The Company commenced operations on July 27, 2007. Since inception, the Company’s membership interests have been held by affiliates of the Company. Golub Capital Incorporated (“GCI”) serves as the Investment Manager (“Investment Manager”) for the Company.

Use of Estimates:  The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segments:  The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis. Accordingly, in accordance with segment guidance set by Financial Accounting Standards Board (“FASB”), the Company has determined that it has a single reporting segment and operating unit structure.

Restricted Cash and Cash Equivalents:  Restricted cash and cash equivalents represent amounts that are collected and are held by trustees who have been appointed as custodians of the assets securing certain of the Company’s financing transactions. Restricted cash is held by the trustees for payment of interest expense and principal on the outstanding borrowings. Cash equivalents are highly liquid investments with an original maturity of three months or less at the date of acquisition.

Revenue Recognition

Investments and Related Investment Income:  Investment transactions are accounted for on a trade-date basis. The portfolio of investments is valued by management at fair value. Interest is recognized on the accrual basis. For investments with contractual payment-in-kind interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, the Company will not accrue payment-in-kind interest if the portfolio company valuation indicates that the payment-in-kind interest is not collectible. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the statement of operations.

Non-Accrual loans:  Loans are placed on non-accrual status when principal and interest payments are past due 90 days or more or when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. Total fair value of non-accrual loans were $8,376 and $0 as of September 30, 2009 and 2008, respectively.

Income Taxes:  The Company follows the guidance in FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”) (ASC Topic 740). FIN 48 (ASC Topic 740) clarifies the accounting for uncertainty in income taxes recognized in companies’ financial statements in accordance with tax accounting standards. FIN 48 (ASC Topic 740) prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The evaluation of a tax position in accordance with FIN 48 is a two-step process. The first step is recognition: the Company determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical

F-18

GOLUB CAPITAL MASTER FUNDING, LLC
  
NOTES TO FINANCIAL STATEMENTS
(In Thousands)

Note 1. Nature of Operations and Summary of Significant Accounting Policies  – (continued)

merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company should presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. FIN 48 (ASC Topic 740) also provides guidance on derecognition of recognized tax benefits, classification, interest and penalties, accounting in interim periods, disclosure and transition. In May 2007, the FASB issued FASB Staff Position No. FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 (“FSP FIN 48-1”), which provides guidance on how a company should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The Company adopted FIN 48 (ASC Topic 740) at inception and has applied the provisions of FSP FIN 48-1. The application of FIN 48 (ASC Topic 740) did not have a significant effect on the Company’s financial position or its results of operations and there are no uncertain tax positions at September 30, 2009 and 2008 and the period July 27, 2007 (inception) to September 30, 2007.

Deferred Financing Costs:  Deferred financing costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. These amounts are amortized and included in interest expense in the statements of operations over the estimated average life of the borrowings. Unamortized deferred financing costs were $0 and $410 at September 30, 2009 and 2008, respectively. Amortization expense for the years ended September 30, 2009 and 2008 was $410 and $493, respectively. Amortization expense for the period July 27, 2007 through September 30, 2007, was $82.

Recent Accounting Pronouncements:  In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (ASC Topic 820). This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. In conjunction with the affiliated entities which hold the Company’s membership equity interests, the Company adopted this statement on a prospective basis on January 1, 2008.

In February 2007, the FASB issued statement No. 159, The Fair Value Option for Financial Assets and Liabilities — Including an Amendment of FASB Statement No. 115 (“SFAS 159”) (ASC Topic 825). SFAS 159 permits an entity to choose to measure many financial instruments and certain other items at fair value, with unrealized gains and losses in earnings at each reporting period. SFAS 159 applies to all reporting entities, and contains financial statement presentation and disclosure requirements for assets and liabilities reported at fair value as a consequence of the election. SFAS 159 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company did not elect any new fair value measurements.

In October 2008, the FASB issued Staff Positions No. 157-3, Determining the Fair Value of a Financial Asset When the Market is Not Active (“FSP 157-3”) (ASC Topic 820). FSP 157-3 provides an illustrative example of how to determine the fair value of financial instruments in an inactive market. FSP 157-3 does not change the fair value measurement principles set forth in SFAS 157 (ASC Topic 820). Since adopting SFAS 157 in January 2008, the Company’s process for determining the fair value of its investments has been, and continues to be, consistent with the guidance provided in FSP 157-3. As a result, the application of FSP 157-3 did not affect the Company’s process for determining the fair value of its investments and did not have a material impact on the Company’s financial position, results of operations or cash flows.

On April 9, 2009, the FASB issued FASB Staff Position No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP No. 157-4”). FSP No. 157-4 requires entities to consider whether events and circumstances indicate whether the transaction is or is not orderly as opposed to a forced or

F-19

GOLUB CAPITAL MASTER FUNDING, LLC
  
NOTES TO FINANCIAL STATEMENTS
(In Thousands)

Note 1. Nature of Operations and Summary of Significant Accounting Policies  – (continued)

distressed transaction. Entities would place more weight on observable transactions determined to be orderly and less weight on transactions for which there is insufficient information to determine whether the transaction is orderly. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities. FSP No. 157-4 provides additional guidance for making fair value measurements more consistent with the principles presented in SFAS No. 157. SFAS 157-4 is effective for interim and annual periods ending after June 15, 2009. The Company has applied the provisions of this FSP in determining the fair value of its portfolio investments at September 30, 2009. The application of this pronouncement did not have a material impact on the Company’s financial position, results of operations or cash flows.

In May 2009, the FASB issued Statement of Financial Accounting Standards No. 165, Subsequent Events (“SFAS 165”) (ASC Topic 855), which addresses accounting and disclosure requirements related to subsequent events. SFAS 165 requires management to evaluate subsequent events through the date the financial statements are either issued or available to be issued, depending on the company’s expectation of whether it will widely distribute its financial statements to its shareholders and other financial statement users. Companies are required to disclose the date through which subsequent events have been evaluated. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009 and should be applied prospectively. The adoption of SFAS 165 did not have a material effect on the Company’s financial condition, results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 168, FASB Accounting Standards Codification^TM and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162 (“SFAS 168”) (ASC Topic 105). The FASB Accounting Standards Codification^TM (“Codification”) will be the single source of authoritative nongovernmental generally accepted accounting principles (“U.S. GAAP”). The Codification launched on July 1, 2009 and is effective for interim and annual periods ending after September 15, 2009. The Codification does not change U.S. GAAP, but combines all authoritative standards into a comprehensive, topically organized online database. One level of authoritative U.S. GAAP exists, other than guidance issued by the SEC. All other accounting literature excluded from the Codification is considered non-authoritative. The Company adopted the Codification for the year ended September 30, 2009.

Note 2. Related Party Transactions

GCI serves as the Investment Manager for the Company. The Company’s Sale and Servicing Agreement provides for management fees payable each month to the Investment Manager, or an affiliate of the Investment Manager, at a rate of .75% per annum of the value of the Company’s investments. Accrued and unpaid management fees are $249 and $89 as of September 30, 2009 and 2008, respectively, and are included in due to affiliates in the statements of financial condition.

At September 30, 2009 and 2008, the Company had payables of $13 and $32, respectively, to the Investment Manager for expenses paid on behalf of the Company. Total expenses reimbursed to the Investment Manager via a members’ equity contribution for the years ended September 30, 2009 and 2008 were $344 and $258, respectively. Total expenses reimbursed via a members’ equity contribution for the period July 27, 2007 (inception) through September 30, 2007 were $156. At September 30, 2009 and 2008, the Company has a payable of $672 to an affiliated entity for cash received from an investment owned by the affiliate.

Note 3. Members’ Equity

The Company’s membership equity interests are held by investment partnerships managed by affiliates of the Company. As of September 30, 2009, the investment partnerships which held a membership equity interest in the Company were Golub Capital Partners IV L.P. (“GCP 4”), Golub Capital Partners V L.P. (“GCP 5”) and Golub Capital Partners VI L.P. (“GCP 6”).

F-20

GOLUB CAPITAL MASTER FUNDING, LLC
  
NOTES TO FINANCIAL STATEMENTS
(In Thousands)

Note 4. Investments

The Company’s investments primarily consist of senior secured corporate loans. The industry and geographic compositions of the portfolio at September 30, 2009 and 2008, respectively, were as follows:

Industry	September 30, 2009			September 30, 2008
Aerospace and Defense		0.5	%		3.6	%
Automobile		3.1			3.4
Banking		1.1			1.1
Beverage, Food and Tobacco		3.7			—
Buildings and Real Estate		8.4			6.2
Cargo Transport		5.1			12.8
Chemicals, Plastics and Rubber		1.0			4.3
Containers, Packaging and Glass		1.7			1.6
Diversified Conglomerate Manufacturing		4.4			2.8
Diversified Conglomerate Service		8.3			8.5
Diversified Natural Resources, Precious Metals and Minerals		2.6			2.4
Electronics		3.3			1.2
Farming and Agriculture		4.3			—
Finance		9.0			8.5
Grocery		0.3			0.4
Healthcare, Education and Childcare		14.0			13.7
Home and Office Furnishings, Housewares, and Durable Consumer		2.4			—
Leisure, Amusement, Motion Pictures and Entertainment		4.2			2.7
Machinery (Non-Agriculture, Construction or Electric)		2.9			5.9
Oil and Gas		3.2			4.2
Personal and Non-Durable Consumer Products		1.1			2.0
Personal Food and Miscellaneous Services		2.3			3.7
Personal Transportation		—			2.1
Printing and Publishing		1.0			0.3
Retail Stores		4.8			3.1
Telecommunications		1.8			5.5
Textiles and Leather		2.0			—
Utilities		3.5			—
Total		100.0	%		100.0	%

Geographic Region	September 30, 2009			September 30, 2008
United States
Mid-Atlantic		24.9	%		37.3	%
Midwest		22.4			18.7
West		13.2			16.8
Southeast		20.4			15.8
Southwest		8.0			6.2
Northeast		9.5			5.2
Canada		1.6			—
Total		100.0	%		100.0	%

F-21

GOLUB CAPITAL MASTER FUNDING, LLC
  
NOTES TO FINANCIAL STATEMENTS
(In Thousands)

Note 5. Fair Value Measurements

The Company follows fair value standards for measuring the fair value of portfolio investments. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity for disclosure purposes. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Beginning in January 2008, financial assets recorded at fair value in the statements of financial condition are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels are directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets are as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets at the measurement date.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset, either directly or indirectly.

Level 3: Inputs are unobservable for the asset and include situations where there is little, if any, market activity for the asset. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. The following section describes the valuation techniques used by the Company to measure different financial instruments at fair value and includes the level within the fair value hierarchy in which the financial instrument is categorized.

With the exception of money market funds held at large financial institutions (Level 1 assets), all of the assets that are recorded at fair value as of September 30, 2009 and 2008 were valued using Level 3 inputs of the fair value hierarchy. Assets that are recorded at Level 3 fair value are the Company’s corporate debt securities. Level 3 assets are valued at fair value as determined in good faith by the Company’s management under a valuation policy and a consistently applied valuation process. When valuing Level 3 corporate debt securities, management may take into account the following type of factors, where relevant, in determining the fair value of the investments: the enterprise value of a portfolio company, the nature and realizable valuable of any collateral, the portfolio company’s ability to make payments and its earnings, discounted cash flows, comparison to publicly traded securities, changes in the interest rate environment and the credit markets that generally may affect the price at which similar investments may be made and other relevant factors. In addition, for certain debt securities, the Company may base its valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that the Company and others are may be willing to pay. Ask prices represent the lowest price that the Company and others are may be willing to accept for an asset. The Company generally uses the midpoint of the bid/ask as the best estimate of fair value.

Due to the inherent uncertainty of determining the fair value of Level 3 assets that do not have a readily available market value, the fair value of the assets may differ significantly from the values that would have been used had a ready market existed for such assets and may differ materially from the values that may ultimately be received or settled. Further, such assets are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a

F-22

GOLUB CAPITAL MASTER FUNDING, LLC
  
NOTES TO FINANCIAL STATEMENTS
(In Thousands)

Note 5. Fair Value Measurements  – (continued)

portfolio investment in a forced or liquidation sale, the Company may realize significantly less than the value at which such investment had previously been recorded.

The Company’s investments are subject to market risk. Market risk is the potential for changes in the value of investments due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the assets are traded.

The following tables present information about the Company’s assets measured at fair value on a recurring basis as of September 30, 2009 and 2008, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

	As of September 30, 2009 Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Total
Assets:
Debt securities	$	—	$	—	$	376,294	$	376,294
Money market funds(1)		25,475		—		—		25,475

	As of September 30, 2008 Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Total
Assets:
Debt securities	$	—	$	—	$	135,476	$	135,476
Money market funds(1)		1,567		—		—		1,567

(1) Included in restricted cash and cash equivalents on the statements of financial condition.

The following table presents the approximate changes in investments measured at fair value using Level 3 inputs:

	Fair Value Measurements Using Significant Unobservable Inputs Level (3)
	Debt Securities
Balance at January 1, 2008	$	424,973
Realized and unrealized gains/losses on investments:
Net realized losses on investments		(4,266	)
Net change in unrealized depreciation on investments		(6,657	)
Net purchases, sales, redemptions and amortization		(278,574	)
Balance at September 30, 2008	$	135,476
Realized and unrealized gains/losses on investments:
Net realized losses on investments in securities		(3,972	)
Net change in unrealized depreciation on investments		(1,489	)
Net purchases, sales, redemptions and amortization		246,279
Balance at September 30, 2009	$	376,294

F-23

GOLUB CAPITAL MASTER FUNDING, LLC
  
NOTES TO FINANCIAL STATEMENTS
(In Thousands)

Note 6. Borrowings

Facility Advances:  On July 27, 2007, the Company entered into a credit facility agreement (“Credit Facility”) under which the lender agreed to provide advances up to $300,000. The Credit Facility included an “accordion” feature which allowed the Company to increase the size of the Credit Facility up to $500,000 under certain circumstances. The amount outstanding under the credit facility may range up to 85% of the balances outstanding of the pledged loans and investments depending on the mix of assets and the rating and diversification of assets.

For the period July 27, 2007 through December 31, 2007, advances generally bear an interest rate of LIBOR plus 0.65% up to LIBOR plus 1.25% depending on the diversity of the portfolio and type of collateral. Pursuant to an amendment on December 31, 2007, a second tier of pricing was established for advances over $300,000. For advances over $300,000 pricing was increased to LIBOR plus 1.15% up to LIBOR plus 2.25%, which is also dependent on the diversity of the portfolio and type of collateral. Pricing remained unchanged for advances below $300,000.

The facility commitment termination date was December 29, 2008, and as such, no additional funds may be borrowed under the facility. The facility matures on December 29, 2010. Subsequent to the commitment termination date, pricing for advances below $300,000 ranges from 0.65% to 0.80% depending on the diversity. For advances over $300,000, pricing ranges from 1.15% to 1.45% depending on the diversity of the portfolio. The weighted average annual interest cost for the years ended September 30, 2009 and 2008 were 1.5% and 4.5%, respectively. The weighted average annual interest cost for the period July, 27, 2007 through September 30, 2007 was 4.2%.

As of September 30, 2009 and 2008, $376,294 and $135,476 of investments in securities and $30,614 and $4,252 of restricted cash and cash equivalents were pledged as collateral against $315,306 and $123,083 of advances under the credit facility, respectively.

Note 7. Commitments and Contingencies

Commitments:  The Company had outstanding commitments to fund investments totaling approximately $18,642 and $120,357 under various undrawn revolvers and other credit facilities as of September 30, 2009 and 2008, respectively.

Indemnifications:  In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not occurred. The Company expects the risk of any future obligation under these indemnifications to be remote.

F-24

GOLUB CAPITAL MASTER FUNDING, LLC
  
NOTES TO FINANCIAL STATEMENTS
(In Thousands)

Note 8. Financial Highlights

The financial highlights for the Company are as follows:

	Years Ended September 30,						For the Period July 27, 2008 (Inception) Through September 30, 2007
	2009			2008
Ratios to average members’ equity:
Expenses (including interest)		11.6	%		30.6	%		43.7%*
Net investment income(1)		37.6	%		28.9	%		21.6%*
Total return(2)		29.6	%		(9.8	)%		2.1%*

* Annualized

(1) Net investment income includes interest income and excludes realized and unrealized gains (losses) on investments on the statements of operations

(2) The total return is computed based on annual net income (loss) divided by weighted average members’ equity

Financial highlights are calculated for each member class taken as a whole. An individual members’ return and ratios may vary based on the timing of capital transactions.

Note 9. Subsequent Events

The Investment Manager has evaluated subsequent events through November 10, 2009, the dates these financial statements were issued. There are no subsequent events to disclose.

F-25

            Shares

  
GOLUB CAPITAL BDC, INC.

Common Stock

 

PRELIMINARY PROSPECTUS

      , 2010

 

Joint Book-Running Managers

Wells Fargo Securities	UBS Investment Bank

Co-Managers

Stifel Nicolaus	BMO Capital Markets

Until          , 2010, all dealers that effect transactions in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

GOLUB CAPITAL BDC, INC.
PART C
Other Information

Item 25. Financial Statements and Exhibits

(1) Financial Statements

The following financial statements of Golub Capital BDC, Inc. (the “Company” or the “Registrant”) are included in Part A of this Registration Statement.

GOLUB CAPITAL BDC, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		F-2
Statements of Financial Condition		F-3
Condensed Schedules of Investments		F-4 – F-14
Statements of Operations		F-15
Statements of Changes in Members’ Equity		F-16
Statements of Cash Flows		F-17
Notes to Financial Statements		F-18 – F-25

(2) Exhibits

(a)(1)	Certificate of Formation(2)
(a)(2)	Articles of Incorporation(1)
(b)(1)	Limited Liability Company Agreement(1)
(b)(2)	Bylaws(1)
(c)	Not applicable
(d)	Form of Stock Certificate(1)
(e)	Dividend Reinvestment Plan(1)
(f)	Not applicable
(g)	Investment Management Agreement between Registrant and GC Advisors LLC(1)
(h)	Form of Underwriting Agreement(1)
(i)	Not applicable
(j)	Form of Custodian Agreement(1)
(k)(1)	Transfer Agency and Service Agreement(1)
(k)(2)	Administration Agreement between Registrant and GL Services Company LLC(1)
(k)(3)	License Agreement between the Registrant and Golub Capital Management LLC(1)
(l)	Opinion and Consent of Dechert LLP, special counsel for Registrant(1)
(m)	Not applicable
(n)	Independent Registered Public Accounting Firm Consent(2)
(o)	Not applicable
(p)	Not applicable
(q)	Not applicable
(r)(1)	Code of Ethics of Golub Capital BDC, Inc.(1)
(r)(2)	Code of Ethics of GC Advisors(1)
(r)(3)	Code of Ethics of GC Advisors(1)

(1) To be filed by amendment.

(2) Filed herewith.

C-1

Item 26. Marketing Arrangements

The information contained under the heading “Underwriting” on this Registration Statement is incorporated herein by reference.

Item 27. Other Expenses of Issuance and Distribution

Securities and Exchange Commission registration fee	$	9,625.50
FINRA filing fee		17,750
Nasdaq Global Market listing fees		125,000
Printing expenses			(1)
Legal fees and expenses			(1)
Accounting fees and expenses			(1)
Miscellaneous			(1)
Total	$		(1)

(1) These amounts are estimates.

All of the expenses set forth above shall be borne by the Company.

Item 28. Persons Controlled by or Under Common Control

To be provided by amendment.

Item 29. Number of Holders of Securities

The following table sets forth the approximate number of record holders of the Company’s common stock as of        , 2009.

Title of Class	Number of Record Holders
Common Stock, $0.001 par value

Item 30. Indemnification

As permitted by Section 102 of the General Corporation Law of the State of Delaware, or the DGCL, we have adopted provisions in our certificate of incorporation, as amended, that limit or eliminate the personal liability of its directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages or breach of fiduciary duty as a director, except for liability for: any breach of the director’s duty of loyalty to us or our stockholders; any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or any transaction from which the director derived an improper personal benefit. These limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission.

Our certificate of incorporation and bylaws provide that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the fullest extent permitted by the DGCL, subject to the requirements of the 1940 Act. Under Section 145 of the DGCL, we are permitted to offer indemnification to our directors, officers, employees and agents.

Section 145(a) of the DGCL provides, in general, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), because the person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of any other enterprise. Such indemnity may be against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit

C-2

or proceeding, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and if, with respect to any criminal action or proceeding, the person did not have reasonable cause to believe the person’s conduct was unlawful.

Section 145(b) of the DGCL provides, in general, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of any other enterprise, against any expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 145(g) of the DGCL provides, in general, that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of any other enterprise, against any liability asserted against the person in any such capacity, or arising out of the person’s status as such, regardless of whether the corporation would have the power to indemnify the person against such liability under the provisions of the law. We have obtained liability insurance for the benefit of our directors and officers.

The Investment Management Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, GC Advisors LLC (the “Adviser”) and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of the Adviser’s services under the Investment Management Agreement or otherwise as an investment adviser of the Company.

The Administration Agreement provides that, absent willful misfeasance, bad faith or negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, GC Service Company, LLC and its officers, manager, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of GC Service Company, LLC’s services under the Administration Agreement or otherwise as administrator for the Company.

The Underwriting Agreement provides that each Underwriter severally agrees to indemnify, defend and hold harmless the Company, its directors and officers, and any person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, the Company or any such person may incur under the Act, the Exchange Act, the 1940 Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in and in conformity with information concerning such Underwriter furnished in writing by or on behalf of such Underwriter through the managing Underwriter to the Company expressly for use in this Registration Statement (or in the Registration Statement as amended by any post-effective amendment hereof by the Company) or in the Prospectus contained in this Registration Statement, or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in this Registration Statement or such Prospectus or necessary to make such information not misleading.

C-3

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 31. Business and Other Connections of Investment Adviser.

A description of any other business, profession, vocation or employment of a substantial nature in which the Adviser, and each managing director, director or executive officer of the Adviser, is or has been during the past two fiscal years, engaged in for his or her own account or in the capacity of director, officer, employee, partner or trustee, is set forth in Part A of this Registration Statement in the sections entitled “Management.” Additional information regarding the Adviser and its officers and directors is set forth in its Form ADV, as filed with the Securities and Exchange Commission (SEC File No. 801-70448), and is incorporated herein by reference.

Item 32. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, and the rules thereunder are maintained at the offices of:

(1) the Registrant, Golub Capital BDC, Inc., 150 South Wacker Drive, Suite 800, Chicago, IL 60606;

(2) the Transfer Agent;

(3) the Custodian; and

(4) the Adviser, GC Advisors LLC, 150 South Wacker Drive, Suite 800, Chicago, IL 60606.

Item 33. Management Services

Not Applicable.

Item 34. Undertakings

(1) The Registrant undertakes to suspend the offering of shares until the prospectus is amended if (1) subsequent to the effective date of its registration statement, the net asset value declines more than ten % from its net asset value as of the effective date of the registration statement; or (2) the net asset value increases to an amount greater than the net proceeds as stated in the prospectus.

(2) Not applicable.

(3) Not applicable.

(4) Not applicable.

(5) The Registrant undertakes that:

(a) For the purpose of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.

(b) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(6) Not applicable.

C-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement on Form N-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of New York, in the State of New York, on the 20^th day of November 2009.

	GOLUB CAPITAL BDC LLC
	By: s/s David B. Golub Name: David B. Golub Title: Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
s/s David B. Golub David B. Golub	Chief Executive Officer and Director (Principal Executive, Financial and Accounting Officer)	November 20, 2009
s/s Lawrence E. Golub Lawrence E. Golub	Chairman of the Board	November 20, 2009