SecProbe.io

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 Document Simpson Thacher & Bartlett LLP 900 G STREET NW WASHINGTON, DC 20001 TELEPHONE: +1-202-636-5500 FACSIMILE: +1-202-636-5502 Direct Dial Number 202-440-2526 E-mail Address jonathan.corsico@stblaw.com May 6, 2025 VIA EDGAR Securities and Exchange Commission Division of Investment Management 100 F Street, N.E. Washington, D.C. 20549 Attn: David Manion and Soo Im-Tang Re: Portman Ridge Finance Corporation Registration Statement on Form N-14 (File No. 333-285230) Dear Mr. Manion and Ms. Im-Tang: On behalf of Portman Ridge Finance Corporation (the “Fund”), we hereby transmit to the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) the Pre-Effective Amendment No. 2 (“Amendment No. 2”) to the above referenced registration statement on Form N-14 initially filed by the Fund with the SEC on February 25, 2025 (the “Initial Filing”) and as amended by the Pre-Effective Amendment No. 1 filed with the SEC on April 18, 2025 (“Amendment No. 1” and, together with the Initial Filing and Amendment No. 2, the “Registration Statement”) and are providing the following responses to the comments received by telephone from the Staff on April 24, 2025. The responses and information described below are based upon information provided to us by the Fund. Please note that all page numbers in our responses are references to the page numbers of Amendment No. 2, and all capitalized terms used but not defined in this letter have the meanings given to them in Amendment No. 2. 1. Comment : Please ensure that an applicable hyperlink is included wherever the Registration Statement incorporates another filing by reference ( e.g. , the reference to PTMN’s Form 10-K for its fiscal year ended December 31, 2024 in the section entitled “ Financial Highlights of PTMN ”). Response : In response to the Staff’s comment, the Fund has included applicable hyperlinks wherever the Registration Statement incorporates another filing by reference, including on pages 26, 35, 62, 114, 132, 133, 134, 135, 150, 151, 152, 153, 172, 184, 188 and 189 of Amendment No. 2. 2. Comment : With respect to the sections entitled “ Financial Highlights of LRFC ” and “ Senior Securities of LRFC ”, please ensure that the filings incorporated by reference provide ten years of applicable data in respect of LRFC. Response : In response to the Staff’s comment, the Fund has now incorporated by reference LRFC’s Form 10-K for its fiscal year ended December 31, 2019 in these sections. Thus, these sections now incorporate by reference filings that, taken together, provide ten years of applicable data in respect Securities and Exchange Commission May 6, 2025 of LRFC, i.e. , (i) LRFC’s Form 10-K for its fiscal year ended December 31, 2024, which provides data in respect of LRFC’s fiscal years ended December 31, 2024, December 31, 2023, December 31, 2022, December 31, 2021 and December 31, 2020, and (ii) LRFC’s Form 10-K for its fiscal year ended December 31, 2019, which provides data in respect of LRFC’s fiscal years ended December 31, 2019, December 31, 2018, December 31, 2017, December 31, 2016 and December 31, 2015. 3. Comment : With respect to the Form 10-K hyperlink used in the section entitled “ Incorporation by Reference for PTMN ”, please update the hyperlink to direct readers to the Form 10-K filing for PTMN’s fiscal year ended December 31, 2024. Response : In response to the Staff’s comment, the Fund has inserted a revised hyperlink on page 188 of Amendment No. 2. 4. Comment : With respect to the Form 10-K hyperlink used in the section entitled “ Incorporation by Reference for LRFC ”, please update the hyperlink to direct readers to the Form 10-K filing for LRFC’s fiscal year ended December 31, 2024. Response : In response to the Staff’s comment, the Fund has inserted a revised hyperlink on page 189 of Amendment No. 2. 5. Comment : The Staff reminds the Fund that new consents will be required to be filed as Exhibits (14)(a) and (14)(b) to Amendment No. 2 if Amendment No. 2 is filed more than 30 days after the filing date of Amendment No. 1. Response : In response to the Staff’s comment, the Fund respectfully notes that, given Amendment No. 2 was filed on May 6, 2025, which is within 30 days after the filing date of Amendment No. 1 on April 18, 2025, new consents will not be required to be filed as Exhibits (14)(a) and (14)(b) to Amendment No. 2. Please call Rajib Chanda at 202-636-5543, Steven Grigoriou at 202-636-5592 or me at 202-440-2526 with any questions you may have regarding this filing or if you wish to discuss the above responses. Very truly yours, /s/ Jonathan L. Corsico Jonathan L. Corsico cc: Rajib Chanda, Simpson Thacher & Bartlett LLP Steven Grigoriou, Simpson Thacher & Bartlett LLP 2

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 Document Simpson Thacher & Bartlett LLP 900 G STREET NW WASHINGTON, DC 20001 __________ TELEPHONE: +1-202-636-5500 FACSIMILE: +1-202-636-5502 Direct Dial Number 202-440-2526 E-mail Address jonathan.corsico@stblaw.com April 18, 2025 VIA EDGAR Securities and Exchange Commission Division of Investment Management 100 F Street, N.E. Washington, D.C. 20549 Attn: David Manion and Soo Im-Tang Re: Portman Ridge Finance Corporation Registration Statement on Form N-14 (File No. 814-00735) Dear Mr. Manion and Ms. Im-Tang: On behalf of Portman Ridge Finance Corporation (the “Fund”), we hereby transmit to the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) the Pre-Effective Amendment No. 1 (“Amendment No. 1”) to the above referenced registration statement on Form N-14 initially filed by the Fund with the SEC on February 25, 2025 (the “Initial Filing” and, together with Amendment No. 1, the “Registration Statement”) and are providing the following responses to the accounting comments received by telephone from the Staff on March 12, 2025 and the legal comments received by telephone from the Staff on March 31, 2025. The responses and information described below are based upon information provided to us by the Fund. Please note that all page numbers in our responses are references to the page numbers of Amendment No. 1, and all capitalized terms used but not defined in this letter have the meanings given to them in Amendment No. 1. Accounting Comments 1.     Comment : With respect to the section entitled “ Summary of the Mergers – Reasons for the Mergers – LRFC ”, please include a bullet point addressing the consideration by the LRFC Special Committee and the LRFC Board of any differences in the expected expense ratios of LRFC and the post-Merger combined company. Response : In response to the Staff’s comment, the Fund has added disclosure on page 25 of Amendment No. 1 regarding these expected differences. 2.     Comment : Please confirm in correspondence whether any repositioning of LRFC’s investment portfolio is expected to take place prior to the Merger. If so, please include appropriate details, including estimates of any expected gains or losses and the utilization of any capital loss carryforwards. Response : In response to the Staff’s comment, the Fund respectfully confirms that no repositioning of LRFC’s investment portfolio is expected to take place prior to the Merger. Securities and Exchange Commission April 18, 2025 3.     Comment : With respect to the third paragraph in the section entitled “ The Mergers – Reasons for the Mergers – LRFC ”, please include disclosure addressing the consideration by the LRFC Special Committee of any differences in the expected expense ratios of LRFC and the post-Merger combined company. Response : In response to the Staff’s comment, the Fund has added disclosure on page 54 of Amendment No. 1 regarding these expected differences. 4.     Comment : With respect to the section entitled “ The Mergers – Reasons for the Mergers – LRFC ”, please specify whether the LRFC Special Committee considered the differences in the incentive fee calculations of LRFC and the post-Merger combined company (including, in particular, any changes to the hurdle rate). Response : In response to the Staff’s comment, the Fund has added disclosure on page 55 of Amendment No. 1 regarding these expected differences. 5.     Comment : With respect to the section entitled “ The Mergers – Reasons for the Mergers – LRFC – Expected Expense Savings ”, please modify this header in light of the differences in the expected expense ratios of LRFC and the post-Merger combined company. Response : In response to the Staff’s comment, the Fund has revised the header on page 55 of Amendment No. 1. 6.     Comment : With respect to the section entitled “ Accounting Treatment of the Mergers ”, please disclose whether there are any expected material differences in the accounting policies of PTMN and LRFC. Alternatively, please identify where such disclosure has already been included in the Initial Filing. Response : In response to the Staff’s comment, the Fund respectfully notes that disclosure regarding the absence of material differences in the accounting policies of PTMN and LRFC was included in the Initial Filing in the final paragraph of the section entitled “ About This Document ”. 7.     Comment : With respect to the section entitled “ Certain Material U.S. Federal Income Tax Considerations – Limitations on Utilization of Loss Carryforwards and Unrealized Losses ”, please include an estimate of the capital loss carryforward amounts of LRFC and PTMN as of December 31, 2024. Response : In response to the Staff’s comment, the Fund has added disclosure on page 110 of Amendment No. 1 regarding the estimated capital loss carryforward amounts of LRFC and PTMN as of December 31, 2024. 8.     Comment : Please (i) update all applicable financial numbers to reflect the numbers provided in LRFC’s and PTMN’s Forms 10-K for their fiscal years ended December 31, 2024 (the “2024 10-Ks”) and (ii) revise all applicable hyperlinks to instead refer to the 2024 10-Ks. Response : In response to the Staff’s comment, the Fund has (i) updated all applicable financial numbers to reflect the numbers provided in the 2024 10-Ks (including on pages 26, 35, 114, 132, 133, 134, 135, 150, 151, 152, 153, 172, 188 and 189 of Amendment No. 1) and (ii) revised all applicable hyperlinks to instead refer to the 2024 10-Ks (including on pages 188 and 189 of Amendment No. 1). 2 Securities and Exchange Commission April 18, 2025 9.     Comment : Please attach the consents of PTMN’s and LRFC’s auditors as exhibits to Amendment No. 1. Response : In response to the Staff’s comment, the Fund has attached the applicable auditor consents as Exhibits (14)(a) and (14)(b) to Amendment No. 1. Legal Comments 10.     Comment : Please provide a cover and a back page that conforms to, and provides information required under, Items 1 and 2 of the Form N-14. Response : In response to the Staff’s comment, the Fund has included additional disclosure on the second page of the PTMN Stockholder letter and the second page of the LRFC Stockholder letter of Amendment No. 1 in order to satisfy the requirements of Items 1 and 2 of the Form N-14. 11.     Comment : Please supply comments to disclosure in one section of the registration statement to similar disclosures throughout the Registration Statement Response : In response to the Staff’s comment, the Fund confirms that it has made conforming changes to similar disclosures throughout the Registration Statement. 12.     Comment : With respect to second paragraph of the LRFC Stockholder letter, for clarity, where the LRFC Stockholder is asked to approve the First Merger, please identify the specific item that the LRFC Stockholder is being asked to vote on, either by using a bullet point or setting apart the specific request from the remaining text in the paragraph. Response : In response to the Staff’s comment, the Fund has reformatted the disclosure with respect to the second paragraph of the LRFC Stockholder letter of Amendment No. 1 to clarify the specific item on which LRFC Stockholders are being asked to vote. 13.     Comment : With respect to the fourth paragraph of the answer to the question entitled “Why am I receiving these materials?” on page 3 of the Initial Filing, please disclose the relationship between Mount Logan and BCP as well. Response : In response to the Staff’s comment, the Fund has added disclosure on page 3 of Amendment No. 1 regarding the relationship between BCP and Mount Logan. 14.     Comment : Please provide a proxy card for the Staff’s review. Response : In response to the Staff’s comment, the Fund has attached the applicable proxy cards as Exhibits (17)(c) and (17)(d) to Amendment No. 1. 15.     Comment : With respect to the answer to the question entitled “What constitutes a ‘quorum’ for the PTMN Special Meeting?” starting on page 7 of the Initial Filing, please add disclosure stating that broker non-votes will not count for quorum purposes or for purposes of Section 2(a)(42) of the 1940 Act. Response : In response to the Staff’s comment, the Fund has added disclosure on page 8 of Amendment No. 1 regarding the effect of broker non-votes for PTMN quorum purposes. 3 Securities and Exchange Commission April 18, 2025 16.     Comment : With respect to the answer to the question entitled “What constitutes a ‘quorum’ for the LRFC Special Meeting?” on page 8 of the Initial Filing, please add disclosure stating that broker non-votes will not count for quorum purposes or for purposes of Section 2(a)(42) of the 1940 Act. Response : In response to the Staff’s comment, the Fund has added disclosure on page 8 of Amendment No. 1 regarding the effect of broker non-votes for LRFC quorum purposes. 17.     Comment : With respect to the answer to the question entitled “When will the final voting results be announced?” on page 9 of the Initial Filing, please specify whether the reference to “a current report on Form 8-K” refers to a filing to be made by PTMN, LRFC or both. Response : In response to the Staff’s comment, the Fund has revised its disclosure on page 9 of Amendment No. 1 to clarify that each of PTMN and LRFC would publish final voting results in a current report on Form 8-K. 18.     Comment : With respect to the answer to the question entitled “Are the proxy materials available electronically?” on page 9 of the Initial Filing, please insert the internet address referenced in the final line. Response : In response to the Staff’s comment, the Fund has inserted the applicable internet address on page 10 of Amendment No. 1. 19.     Comment : With respect to the answer to the question entitled “Is there anything else that PTMN Stockholders and LRFC Stockholders should be aware of prior to voting on the PTMN Proposals and the LRFC Merger Proposal?” on page 10 of the Initial Filing, please explain in correspondence if this potential acquisition will in any way impact the completion of the Mergers. Response : In response to the Staff’s comment, the Fund respectfully notes that the potential acquisition will not impact the completion of the Mergers. If the Fund continues to pursue this potential acquisition, the Fund expects that any applicable proxy solicitation process would not occur until after the Closing of the Mergers. Thus, former LRFC Stockholders would have the opportunity to consider and vote on the potential acquisition in their capacity as PTMN Stockholders. The Fund had added disclosure on page 10 of Amendment No. 1 clarifying that LRFC Stockholders would, following the Closing of the Mergers, be able to participate in the applicable solicitation process. 20.     Comment : With respect to the answer to the question entitled “What will happen in the Mergers?” on page 10 of the Initial Filing, please explain how much time will elapse between the Effective Time and the occurrence of the Second Merger. Response : In response to the Staff’s comment, the Fund has revised its disclosure on pages 11, 17, and 40 of Amendment No. 1 regarding the timing of the Second Merger. 21.     Comment : With respect to the answer to the question entitled “What are the pro forma costs and expenses estimated to be incurred by the combined company in the first year following completion of the Mergers?” starting on page 11 of the Initial Filing, the Staff notes that the figures in the table 4 Securities and Exchange Commission April 18, 2025 are as of September 30, 2024. Please confirm these amounts are the latest available, or update as appropriate. Response : In response to the Staff’s comment, the Fund has updated its disclosure on page 12 of Amendment No. 1 to reflect figures as of December 31, 2024. 22.     Comment : With respect to the answer to the questions entitled “Are the Mergers expected to be taxable to PTMN Stockholders for U.S. federal income tax purposes?” and “Are the Mergers expected to be taxable to LRFC Stockholders for U.S. federal income tax purposes?” on page 14 of the Initial Filing, please confirm in correspondence whether there any portfolio repositioning is anticipated to occur. If a portfolio reposition is, in fact, anticipated to occur, please include appropriate disclosure in the Registration Statement, including any intended cost or tax implications. Response : In response to the Staff’s comment, the Fund respectfully confirms that no repositioning is anticipated to occur in respect of PTMN’s and LRFC’s respective investment portfolios. 23.     Comment : With respect to the second chart on page 18 of the Initial Filing, where there is a description on the right-hand side of the chart regarding the Exchange Ratio, please consider adding “1.5” next to the description. Response : In response to the Staff’s comment, the Fund has modified the chart on page 18 of Amendment No. 1 accordingly. 24.     Comment : With respect to the data provided in the section entitled “ Market Price of Securities ” on page 20 of the Initial Filing, please update this information to be provided as of the latest practicable date. Response : In response to the Staff’s comment, the Fund has updated its disclosure on page 20 of Amendment No. 1 to reflect figures as of April 17, 2025. 25.     Comment : With respect to the third bullet point in the section entitled “ Risks Relating to the Mergers ” on page 20 of the Initial Filing, please briefly provide examples of the “circumstances” referenced here. As a reminder, PTMN and LRFC have an obligation to seek and provide timely opinions. Response : In response to the Staff’s comment, the Fund has added disclosure on page 20 of Amendment No. 1 that provides examples of the “circumstances” referenced in the bullet point. 26.     Comment : With respect to the penultimate bullet point in the section entitled “ Risks Relating to the Mergers ” on page 21 of the Initial Filing, please briefly provide examples of the different rights the LRFC Stockholders will have after the First Merger. Response : In response to the Staff’s comment, the Fund has added disclosure on page 21 of Amendment No. 1 providing an example of the different rights of the LRFC Stockholders and then cross-referencing the section of the Registration Statement entitled “ Comparison of PTMN and LRFC Stockholder Rights ” for a more detailed description of these different rights. 5 Securities and Exchange Commission April 18, 2025 27.     Comment : With respect to the second paragraph in the section entitled “ U.S. Federal Income Tax Consequences of the Mergers ” on page 21 of the Initial Filing, please also address the tax consequences of the Mergers for LRFC Stockholders. Response : In response to the Staff’s comment, the Fund respectfully notes that the tax consequences of the Mergers for LRFC Stockholders have already been described in the second paragraph of this section. The Fund has revised the formatting of its disclosure on page 21 of Amendment No. 1 to clarify that the tax consequences for LRFC Stockholders have been addressed. 28.     Comment : With respect to the section entitled “ The LRFC Merger Proposal ” on page 22 of the Initial Filing, for clarity and consistency, please consider revising the text here to be consistent with the wording under the section entitled “ The PTMN Adjournment Proposal ”. Response : In response to the Staff’s comment, the Fund respectfully notes that the PTMN Adjournment Proposal and the LRFC Merger Proposal are subject to different approval thresholds.  As a result, the disclosure regarding the treatment of abstentions in respect of each approval threshold will, by necessity, differ. Specifically, approval of the PTMN Adjournment Proposal requires the affirmative vote of holders of PTMN Common Stock representing a majority of all votes cast at the PTMN Special Meeting.  Because this approval threshold only references the to

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 1900 K Street, NW
Washington, DC 20006-1110

+1 202 261 3300 Main

 +1 202 261 3333 Fax

www.dechert.com

 ALEXANDER C. KARAMPATSOS

alexander.karampatsos@dechert.com

 +1 202 261 3402
Direct

 February 10, 2025

Ms. Soo Im-Tang

Division of Investment Management

 Securities and Exchange
Commission

 100 F Street, N.E.

 Washington, D.C. 20549-0504

Re:
 Portman Ridge Finance Corporation

Registration Statement of Form N-2 (File No. 333-283443)

 Dear Ms. Im-Tang:

On behalf of Portman Ridge Finance Corporation, a Delaware corporation (the “Company”), we hereby respond to the comment you
provided to me of Dechert LLP during a telephonic discussion on February 8, 2025 with respect to your review of the Company’s pre-effective amendment to its registration statement on Form N-2 (the “N-2 Registration Statement”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 5, 2025. The
Company has considered your comment and has authorized us, on its behalf, to make the response discussed below.

 Set forth below is the
comment of the SEC staff (the “Staff”) along with our response to, or any supplemental explanations of, such comment, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such
terms in the N-2 Registration Statement.

1.
 Comment: Please supplementally confirm that the Company will notify the Staff as soon as any prospectus
supplement under Rule 424 is filed for a takedown of either the Company’s convertible preferred or convertible debt securities.

 February 10, 2025

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2

 Response: The
Company confirms that it will notify the Staff as soon as any prospectus supplement under Rule 424 is filed for a takedown of either the Company’s convertible preferred or convertible debt securities.

*   *   *   *   *

Should you have any questions regarding this letter, please contact me at (202) 261-3402.

Sincerely,

 /s/ Alexander C. Karampatsos

Alexander C. Karampatsos

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 1900 K Street, NW
Washington, DC 20006-1110

+1 202 261 3300 Main

 +1 202 261 3333 Fax

www.dechert.com

 ALEXANDER C. KARAMPATSOS

 alexander.karampatsos@dechert.com

+1 202 261 3402 Direct

 February 5, 2025

Mr. David Manion

 Division of Investment Management

Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549-0504

Re:
 Portman Ridge Finance Corporation

Registration Statement of Form N-2 (File No. 333-283443)

 Dear Mr. Manion:

 On behalf of Portman
Ridge Finance Corporation, a Delaware corporation (the “Company”), we hereby respond to the comments you provided to me and Brendan Powell of Dechert LLP during a telephonic discussion on December 13, 2024 with respect to your
review of the Company’s registration statement of Form N-2 (the “N-2 Registration Statement”), filed with the U.S. Securities and Exchange
Commission (the “SEC”) on November 25, 2024. The Company has considered your comments and has authorized us, on its behalf, to make the responses discussed below.

Set forth below are the comments of the SEC staff (the “Staff”) along with our responses to, or any supplemental explanations
of, such comments, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such terms in the N-2 Registration Statement.

1.
 Comment: In “Prospectus Summary” section of the N-2
Registration Statement, the disclosure indicates that the Company is “non-diversified.” Pursuant to comments by the Staff and acknowledged by the Fund in a response letter dated October 21,
2024, please revise to indicate that the Company is operating as a diversified fund.

 Response: The Company
confirms that it has received approval to operate as a non-diversified company, as defined by the 1940 Act. Accordingly, the Company respectfully declines to make any changes in response to this comment.

 February 5, 2025

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2.
 Comment: For any information that is incorporated by reference into the
N-2 Registration Statement from another filing on EDGAR, please include an active hyperlink to the EDGAR filing in accordance with Rule 411 under the Securities Act of 1933.

Response: The Company will revise the disclosure accordingly.

3.
 Comment: In fee table in the “Fees and Expenses” section of the
N-2 Registration Statement, the interest expense ratio Fee Table (11.5%) is higher than the expense in the Form 10-Q for the quarter ended September 30, 2024
(10.71%). Please supplementally explain this difference and confirm that the difference is not material or include an updated fee table.

Response: The Company has revised the disclosure to include an updated fee table.

4.
 Comment: On Page 29 of the N-2 Registration Statement, Footnote
4 under “Portfolio Companies” states the following: “The aggregate cost of investments for federal income tax purposes is approximately $514.2 million. The aggregate gross unrealized appreciation is approximately
$32.2 million, the aggregate gross unrealized depreciation is approximately $2.8 million, and the net unrealized depreciation is approximately $29.4 million.” Please revise disclose to indicate there is a net unrealized
appreciation.

 Response: The Company will revise the disclosure accordingly.

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Should you have any questions regarding this letter, please contact me at (202) 261-3402.

Sincerely,

 /s/ Alexander
C. Karampatsos

 Alexander C. Karampatsos

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 1900 K Street, NW
Washington, DC 20006-1110

+1 202 261 3300 Main

 +1 202 261 3333 Fax

www.dechert.com

 ALEXANDER C. KARAMPATSOS

 alexander.karampatsos@dechert.com

+1 202 261 3402 Direct

 February 5, 2025

Ms. Soo Im-Tang

Division of Investment Management

 Securities and Exchange
Commission

 100 F Street, N.E.

 Washington, D.C. 20549-0504

Re:
 Portman Ridge Finance Corporation

Registration Statement of Form N-2 (File No. 333-283443)

 Dear Ms. Im-Tang:

On behalf of Portman Ridge Finance Corporation, a Delaware corporation (the “Company”), we hereby respond to the comments you
provided to me and Jessica Warshaw of Dechert LLP during a telephonic discussion on December 23, 2024 with respect to your review of the Company’s registration statement on Form N-2 (the “N-2 Registration Statement”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 25, 2024. The Company has considered your comments and has
authorized us, on its behalf, to make the responses discussed below.

 Set forth below are the comments of the SEC staff (the
“Staff”) along with our responses to, or any supplemental explanations of, such comments, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such terms in the N-2 Registration Statement.

1.
 Comment: Please note that when a takedown from the Company’s
N-2 Registration Statement occurs, the Company must file a legality opinion as an exhibit. Accordingly, please confirm supplementally that the Company will file an unqualified opinion with each takedown of the
Company’s securities.

 February 5, 2025

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2

 Response: The Company undertakes to file an unqualified opinion in accordance with
Staff Legal Bulletin No. 19 issued by the SEC’s Division of Corporation Finance when a takedown of the Company’s securities occurs.

2.
 Comment: Please supplementally confirm that the Company will notify the Staff as soon as any prospectus
supplement under Rule 424 is filed for a takedown of either the Company’s convertible preferred or convertible debt securities.

Response: The Company respectfully submits that advance notification of any prospectus supplement relating to any convertible preferred
or convertible debt offering by the Company prior to the commencement of any such offering is not required under rules of the SEC or existing Staff guidance and would strip away any benefit from reliance on Rule 415.

3.
 Comment: Under “Our Adviser” in the “Prospectus Summary” of the N-2 Registration Statement, please restate “€40bn in assets under management” in U.S. dollars.

Response: The Company will revise the disclosure accordingly.

4.
 Comment: Please update the information under footnote 2 of the dollar range of equity securities table
on Page 38 of the N-2 Registration Statement to the extent as practicable as possible.

Response: The Company will revise the disclosure accordingly.

5.
 Comment: Please advise whether the Company intends to offer preferred shares within 12 months of
effectiveness of the N-2 Registration Statement. If yes, please include disclosure about the consequences to a common stockholder and provide appropriate fee disclosures.

Response: The Company confirms that it does not intend to offer preferred shares within 12 months of effectiveness of the N-2 Registration Statement.

6.
 Comment: Please provide us with a pro forma copy of a supplement that will be used in connection with
the Company’s offerings of “debt securities” or provide us with a

 February 5, 2025

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3

representation that the Company will not file a prospectus supplement for a takedown of “debt securities” unless the specific terms of the offering are first disclosed in a
post-effective amendment or a new registration statement that has been accelerated by the Staff. In this regard, please note that the prospectus supplement should, as applicable:

(A) Disclose that none of the Company’s indebtedness is currently subordinated to the debt securities. It should also be disclosed whether
there is a current intention to issue indebtedness that expressly provides that it is subordinated to the debt securities.

 (B) Disclose
that the debt securities are “structurally subordinated” and are “effectively subordinated” to all existing and future indebtedness of the Company and other obligations of its subsidiaries, financing vehicles, and similar
facilities. The significance of the debt securities being structurally subordinated and effectively subordinated should be explained in plain English, specifically highlighting how such subordination affects the rights and priorities of the holders
of the debt securities. Also, disclose the approximate total dollar amount of all liabilities and obligations to which the debt securities being offered obligations are structurally subordinated and effectively subordinated.

(C) Refrain from using the word “senior” in the title of any debt securities issued by the Company or when describing/identifying
their ranking, if the debt securities are not contractually senior in right of repayment to the other outstanding obligations of the Company. Even where the Company’s debt securities are contractually senior in right of repayment to the other
outstanding obligations of the Company, consider the appropriateness of referring to the debt securities as “senior” when they are also structurally subordinated to the obligations of the Company’s subsidiaries, financing vehicles and
similar facilities.

 (D) Disclose that the debt securities will not be subject to any sinking fund and explain the significance thereof.
For example, state that no amounts will be set aside for the express purpose of repayment of principal and any unpaid interest on the debt securities, and that repayment of the debt securities will depend on the financial condition of the Company
and its subsidiaries as they exist as of the maturity date of the debt securities.

 February 5, 2025

 Page
4

 Response: The Company respectfully submits that advance notification and/or further
Staff review of any preliminary prospectus supplement relating to any debt offering by the Company prior to the commencement of any such debt offering is not required under rules of the SEC or existing Staff guidance and would strip away any benefit
from reliance on Rule 415. Furthermore, given the potential need to access the capital markets in a timely manner (in the manner contemplated by Rule 415) as and when market conditions permit, it would be impracticable for the Company to provide
advance notice to the Staff regarding an offering of debt securities under the N-2 Registration Statement. In addition, the Company undertakes to include the applicable requested disclosure in any debt
offering undertaken by the Company pursuant to the N-2 Registration Statement.

7.
 Comment: Within the “Plan of Distribution” section of the
N-2 Registration Statement, please explain any difference in price between the price available to individual and group investors and that available to officers, employees, directors, adviser, and the
underwriter. Please disclose how the Company’s price is determined or include a cross-reference to the section in the prospectus that explains how net asset value is calculated.

Response: The Company confirms that the price available to individual and group investors is the same as that available to officers,
employees, directors, adviser, and the underwriter, and respectfully declines to make any changes in response to this comment. The Company has revised the disclose to include a cross-reference to the section in the prospectus that explains how net
asset value is calculated.

8.
 Comment: Please confirm to the Staff that the legality opinion will be consistent with Staff Legal
Bulletin No. 19.

 Response: The Company confirms to the Staff that the legality opinion will be consistent
with Staff Legal Bulletin No. 19.

9.
 Comment: In part 3 of “Item 34. Undertakings”, please update the sub-parts so that they correspond appropriately to Form N-2.

Response: The Company will revise the disclosure accordingly.

 February 5, 2025

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5

10.
 Comment: In part 6 of “Item 34. Undertakings”, please disclose the items that are required
under Item 34.6 sub-parts a and b, if applicable.

 Response: The Company
respectfully confirms that the required disclosure was included in part 6 of “Item 34. Undertakings” of its N-2 Registration Statement.

*  *  *  *  *

Should you have any questions regarding this letter, please contact me at (202) 261-3402.

Sincerely,

 /s/ Alexander
C. Karampatsos

 Alexander C. Karampatsos

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CORRESP

 1900 K Street, NW
Washington, DC 20006-1110

+1 202 261 3300 Main

 +1 202 261 3333 Fax

www.dechert.com

 ALEXANDER C. KARAMPATSOS

 alexander.karampatsos@dechert.com

+1 202 261 3402 Direct

 +1 617 275 8365 Fax

 November 25, 2024

 VIA
EDGAR

 U.S. Securities and Exchange Commission

Division of Investment Management

 100 F Street, NE

Washington, D.C. 20549-4720

Re:
 Portman Ridge Finance Corporation

 
 Registration Statement on Form N-2 (the “Registration
Statement”)

 Ladies and Gentlemen:

On behalf of Portman Ridge Finance Corporation (the “Company”), a closed-end management investment company
that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, transmitted herewith for filing via EDGAR is the Company’s Registration Statement on Form
N-2 under the Securities Act of 1933, as amended.

 This filing is for the registration and issuance of shares of
common and preferred stock, $0.01 par value per share, of the Company, subscription rights to purchase shares of the Company’s common stock, debt securities, and warrants representing rights to purchase shares of the Company’s common
stock, preferred stock or debt securities. The approximate date of the proposed public offering will be as soon as practicable after the effective date of the Registration Statement.

If you have any questions, please feel free to contact the undersigned by telephone at 202.261.3402 (or by email at alexander.karampatsos@dechert.com). Thank
you for your cooperation and attention to this matter.

 Sincerely,

/s/ Alexander C. Karampatsos

Alexander C. Karampatsos

cc:
 Harry Pangas, Dechert LLP

 
 Brandon Satoren, BC Partners

CORRESP
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CORRESP

  

 1900 K Street, NW

 Washington, DC 20006-1110

+1 202 261 3300 Main

+1 202 261 3333 Fax

 www.dechert.com

 ALEXANDER C. KARAMPATSOS

alexander.karampatsos@dechert.com

 +1 202 261 3402
Direct

 October 21, 2024

Mr. David Manion

 Division of Investment Management

Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549-0504

Re:
 Portman Ridge Finance Corporation (File No. 814-00735)

 Dear Mr. Manion:

 We
are writing in response to your comments with respect to your review, pursuant to the Sarbanes-Oxley Act of 2002, of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the
“Annual Report”) of Portman Ridge Finance Corporation (the “Company”). Unless explicitly provided, we understand that your comments are intended to apply to disclosure in the Company’s future filings. The Company has
considered your comments and has authorized us, on its behalf, to make the responses discussed below.

 Set forth below are the SEC
staff’s comments along with our responses to, or any supplemental explanations of, such comments, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such terms in the Annual Report.

1.
 Comment: The Staff notes that the Company held unitranche loans during the reporting period. In future
filings, please provide disclosure that explains the risks associated with investments in unitranche loans.

Response: The Company will include risk disclosure relating to unitranche loans in future annual report filings on Form 10-K.

 October 21, 2024

  Page
 2

2.
 Comment: The Staff notes that the Company had unfunded commitments during the reporting period. In the
response letter, please discuss the accounting for unfunded commitments.

 Response: The Company recognizes
unfunded loan commitments on the effective date of such commitments, which will remain on the Company’s Consolidated Balance Sheet and Consolidated Schedule of Investments until such unfunded loan commitment expires or is drawn by the borrower.
Specifically, unfunded loan commitments are reported on the Schedule of Investments and specifically identified as such in footnote 20 to the Schedule of Investments as well as in Note 8 to the Consolidated Financial Statements titled Commitments
and Contingencies. Further, the Company’s unfunded loan commitments are carried at fair value in accordance with ASC 820, which is included in the Company’s Consolidate Balance Sheet in the financial statement line item “Investments
at fair value”, with changes in fair value reflected in the Company’s Consolidated Statement of Operations in the financial statement line items “Net changes in unrealized appreciation (depreciation) on investments”. As disclosed
in Note 8 to the Consolidated Financial Statements and footnoted on the Consolidated Schedule of Investments, the Company had unfunded loan commitments of $28.6 million as of December 31, 2023 with net unrealized depreciation as of
December 31, 2023 of $0.4 million recognized on such unfunded loan commitments in the Company’s Consolidated Balance Sheet, with changes in fair value reflected in the Company’s Consolidated Statement of Operations.

3.
 Comment: Please discuss whether the Company has considered the provisions of Accounting Standards Update
No. 2022-03 (“ASU 2022-03”) and its impact on the Company’s financial statements. Further, please consider including references to SAB 74 or ASU 2022-03 in future financial statements.

 Response: The Company has considered
the provisions of the Accounting Standards Update No. 2022-03 and its impact on the Company’s financial statements and determined that it would not have a material impact on the Company’s
financial statements. As stated in Note 1 of the Company’s Consolidated Financial Statements, the Company’s primary investment objective is to generate current income and capital appreciation by lending directly to privately-held middle
market companies. The amendments in ASU 2022-03 are limited and specific to measuring the fair value of an equity security subject to a separate contractual sale restriction, such as an underwriter’s lock-up. The ASU 2022-03 does not impact the Company’s investments in loans or other debt securities. The Company held no such equity securities since ASU 2022-03 was adopted, given its primary investment objective is affected through make loans to portfolio companies.

 October 21, 2024

  Page
 3

 The Company confirms that it will include references to recent accounting pronouncements that
will or could reasonably have a material impact on the Company’s financial statements as required by Staff Accounting Bulletin No. 74.

4.
 Comment: Please confirm if the Company continues to maintain its
non-diversified status.

 Response: The Company confirms that it has been
operating as a diversified company, as defined by the Investment Company Act of 1940, as amended (the “1940 Act”), for an uninterrupted three-year period. The Company confirms that it will undertake to operate as a diversified company,
unless and until it becomes a non-diversified company, as defined by the 1940 Act. The Company plans to seek approval to become a non-diversified company in the near
future.

5.
 Comment: Under the “Derivatives” rows in the Consolidated Statements of Operations,
please include additional rows reflecting the net realized or unrealized gain (loss) on investments by instrument type.

Response: The Company will include the requested rows in future filings.

6.
 Comment: In the Notes to Consolidated Financial Statements, the Company has a description of a
reimbursement from the Adviser to the Company of approximately $5.3 million for expenses relating to certain administrative transition services. The disclosure states that “[t]he Adviser reimbursed the Company approximately
$1.1 million, $2.1 million, $1.6 million, and $0.5 million for such expenses paid by the Company during the years ended 2023, 2022, 2021 and 2020, respectively, inclusive of interest. Beginning on October 1, 2023, the
Adviser bore and will continue to bear on a go-forward basis the expenses associated with these administrative transition services.” The Staff would like a better understanding of the
reimbursement. Please discuss the circumstances surrounding this reimbursement. Was this considered a correction of an error? Please include whether there was any analysis on prior year net processes and shareholder impact and any shares issued or
redeemed.

 October 21, 2024

  Page
 4

 Response: Please see below for a description of the circumstances surrounding this
reimbursement, which was provided by the Adviser to the Company in an abundance of conservatism following further internal review by the Adviser, and which the Company has determined was not in connection with an error.

In December 2019, December 2020 and June 2021, the Company completed acquisitions of OHAI, GARS and HCAP (the “Acquired BDCs”).
Pursuant to the terms of each acquisition, the Adviser entered into a Transition Services Agreement (“TSA”) with the former investment adviser of each such Acquired BDC. Based on the Adviser’s review of the services to be provided by
each such former investment adviser under the TSAs, the Adviser determined that a portion of such services constituted administrative services in respect of the portfolios of the Acquired BDCs, and were therefore consistent with the services to be
provided to the Company under its Administration Agreement with BC Partners Management, LLC (the “Administrator”). Accordingly, the Adviser charged a portion of the cost of the TSAs back to the Administrator, which in turn invoiced the
Company for reimbursement consistent with the terms of the Administration Agreement (“TSA Expenses”).

 In connection with a
review of the TSA Expenses, the Adviser affirmatively determined to reimburse the Company for the TSA Expenses paid by it to the Administrator under the Administration Agreement. Specifically, the Adviser reimbursed the Company approximately
$1.1 million, $2.1 million, $1.6 million, and $0.5 million for the TSA Expenses paid by the Company during the years ended 2023, 2022, 2021 and 2020, respectively, inclusive of interest. Beginning on October 1, 2023, the
Adviser bore and will continue to bear on a go-forward basis the expenses associated with the provision of administrative support under the TSAs.

The TSA Expenses charged to the Company during the relevant period were appropriately incorporated in the Company’s financial statements
issued during this period and thus the Company’s financial statements are not determined to be in error. As a result, the Company did not recalculate its net asset value or reprocess any prior transactions and no adjustment to any of the
Company’s previously reported financial statements is considered necessary in connection with such reimbursement.

 October 21, 2024

  Page
 5

7.
 Comment: The total annual expense ratio in the Financial Highlights, after adjusting for the
expense reimbursement discussed in Comment #6 and applicable acquired fund fees and expenses, differs by approximately 1.0% of the Company’s average net assets from the total annual expense ratio disclosed in the Fee Table (the
“Difference”). Please supplementally explain the reasons for this Difference.

 Response: The Difference
is primarily a result of the Company calculating its expenses in the Fee Table based on the then-current net assets of the Company, consistent with Instructions 6 and 7 to Item 3.1 of Form N-2. Specifically,
the Company used its net assets as of December 31, 2023 in the calculation of Annual Expenses included in the Fees Table whereas the Company’s expense ratio reported in the Consolidated Financial Highlights based on the Company’s
average net assets for year ended December 31, 2023. This caused the expense ratio in the Fee Table to be higher than if it used the Company’s average net asset for the year ended December 31, 2023. In addition, the Company’s
total expense ratio in footnote 8 to the Financial Highlights excludes the impact of the $5.3 million expense reimbursement. The expense reimbursement also had the effect of increasing the amount of the incentive fee paid by the Company. As
such, the exclusion of the expense reimbursement resulted in a reduction in the incentive fees paid by the Company as reflected in that footnote. Out of an abundance of conservatism, the Company did not reduce the amount of the incentive fees in the
Fee Table. This decision accounts for the remainder of the Difference.

8.
 Comment: The Staff notes that disclosure in the Company’s Annual Report appears to indicate that
the Company’s investment in Great Lakes Funding II LLC (the “Great Lakes II Joint Venture”) is not being consolidated because an affiliate of the Adviser controls a 50% voting interest in the Great Lakes II Joint Venture. Please
explain in correspondence why Great Lakes II Joint Venture is not consolidated with the Company’s financial statements. Please cite specifically to the provisions of the 1940 Act and/or US GAAP that were utilized to reach this conclusion.

 October 21, 2024

  Page
 6

 Response: Like other BDC joint ventures, the Great Lakes II Joint Venture’s
governing documents require that the non-affiliated third-party financial institution joint venture equity partner approve all investment and other substantive decisions made by the Great Lakes II Joint
Venture. With this fact in mind, the Company first determined that Great Lakes II Joint Venture is an investment company under Accounting Standards Codification Topic 946, Financial Services-Investment Companies (“ASC
946”). It then determined that in accordance with ASC 946, the Company will generally not consolidate its investment in a company other than a wholly owned investment company subsidiary. Furthermore, Accounting Standards
Codification Topic 810, Consolidation (“ASC 810”) concludes that in a joint venture where both members have equal decision-making authority, it is not appropriate for one member
to consolidate the joint venture since neither has control. Accordingly, the Company does not consolidate Great Lakes Funding II LLC.

9.
 Comment: The Staff notes that the KCAP Freedom 3 LLC joint venture appears to be a three-tier structure.
Please advise the Staff how this structure complies with Section 12(d)(1) and Section 57(a) of the 1940 Act. Please include a discussion of why this joint venture should not be consolidated with the Company’s financial statements
given the holdings of KCAP and the affiliated relationships noted in the disclosure. Please cite specifically to the provisions of the 1940 Act and/or US GAAP that were utilized to reach this conclusion.

Response: The Company respectfully notes that KCAP Freedom 3 LLC is not a registered investment company or a business development
company and, as a result, the Company’s investment in KCAP Freedom 3 LLC is not subject to Section 12(d)(1) of the 1940 Act. The Company also respectfully notes that KCAP Freedom 3 LLC is a downstream affiliate of the Company pursuant to
Rule 57b-1 under the 1940 Act and, as result, the prohibitions contained in Section 57(a) of the 1940 Act do not apply to the Company’s investment in, or transactions with, KCAP Freedom 3 LLC.

Similar to the analysis in the response to Comment 8 above, the Company confirms that it is not able to make decisions on behalf of KCAP
Freedom 3 LLC without unanimous consent from the non-affiliated third-party joint venture equity partner. As such and for the same reasons noted in the response to Comment 8 above, the Company does not
consolidate KCAP Freedom 3 LLC for financial reporting purposes.

*    *    *    *    *

 October 21, 2024

  Page
 7

 Should you have any questions regarding this letter, please contact me at (202) 261-3402.

Sincerely,

 /s/ Alexander C. Karampatsos

Alexander C. Karampatsos

CORRESP
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filename1.htm

CORRESP

 1900 K Street, NW

 Washington, DC 20006-1110

+1 202 261 3300 Main

 +1 202 261 3333 Fax

www.dechert.com

 ALEXANDER C. KARAMPATSOS

 alexander.karampatsos@dechert.com

+1 202 261 3402 Direct

 +1 617 275 8365 Fax

 January 18, 2022

Mr. David Orlic

 Mr. David Manion

Division of Investment Management

 Securities and Exchange
Commission

 100 F Street, N.E.

 Washington, D.C. 20549-0504

Re:
 Portman Ridge Finance Corporation

Registration Statement of Form N-2 (File No. 333-261314)

 Dear Messrs. Orlic & Manion:

 On
behalf of Portman Ridge Finance Corporation, a Delaware corporation (the “Company”), we hereby respond to the comments you provided to me during telephonic discussions on December 8, 2021 with respect to your review of the
Company’s registration statement of Form N-2 (the “N-2 Registration Statement”), filed with the U.S. Securities and Exchange Commission (the
“SEC”) on November 23, 2021. The Company has considered your comments and has authorized us, on its behalf, to make the responses discussed below.

Set forth below are the comments of the SEC staff (the “Staff”) along with our responses to, or any supplemental explanations
of, such comments, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such terms in the N-2 Registration Statement.

1.
 Comment: The following disclosure was omitted from the cover page of the prospectus:

 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 will likely increase the risk of loss for purchasers in an offering made pursuant to this prospectus or any related
prospectus supplement.

 January 18, 2022

  Page
 2

 Please insert the omitted disclosure.

Response: The Company has revised the disclosure accordingly.

2.
 Comment: In the fee table in the “Fees and Expenses” section of the N-2 Registration Statement, please include rows related to the “Stockholder Transaction Expenses.”

Response: The Company has revised the disclosure accordingly.

3.
 Comment: Please confirm that JMP Group Inc. and JMP Capital LLC are not affiliated with the Company or
the Adviser.

 Response: The Company so confirms.

4.
 Comment: Please confirm that LibreMax Capital, LLC (“LibreMax”) is not an affiliate of the
Company or the Adviser.

 Response: The Company so confirms.

5.
 Comment: Please supplementally explain why David Moffitt was previously characterized as an interested
director in other filings by the Company and clarify the timeline with respect to the Company’s grant of registration rights and issuance of shares to LibreMax.

Response: David Moffitt was previously characterized as an interested director in other filings by the Company because of David
Moffitt’s affiliation with LibreMax where he served as Head of Tactical Investment Opportunities and a member of LibreMax’s investment committee. While David Moffitt served on the Company’s Board of Directors, an affiliate of
LibreMax, LibreMax Intermediate Holdings, LP, held a minority stake in the Adviser. LibreMax Intermediate Holdings, LP’s stake in the Adviser was sold during the fourth quarter of 2020, and LibreMax is no longer an affiliate of the Adviser or
the Company.

 January 18, 2022

  Page
 3

 On December 14, 2018, the Company entered into a stock purchase and transaction
agreement (the “Externalization Agreement”) with BC Partners Advisors L.P., an affiliate of the Adviser, through which the Adviser agreed to become the Company’s investment adviser, subject to stockholders’ approval of the
advisory agreement between the Company and the Adviser. At a special meeting of the Company’s stockholders held on February 19, 2019, the Company’s stockholders approved the advisory agreement. The Externalization Agreement closed on
April 1, 2019 (the “Closing”), and the Company commenced operations as an externally managed BDC managed by the Adviser. Upon the closing of the Externalization Agreement, David Moffitt and LibreMax became affiliates of the Company
because of LibreMax Intermediate Holdings, LP’s stake in the Adviser.

 Pursuant to the Externalization Agreement, the Adviser and its
affiliates were required to use up to $10 million of the incentive fee actually paid to the Adviser prior to the second anniversary of the Closing to buy newly issued shares of the Company’s common stock at the most recently determined net
asset value per share of the Company’s common stock at the time of such purchase. Pursuant to the Externalization Agreement (which was executed when LibreMax was not an affiliate of the Company), LibreMax purchased shares of the Company’s
common stock based on LibreMax’s ownership of the Adviser and the amount of incentive fees paid to the Adviser. The Company is seeking to register those shares under the N-2 Registration Statement in
accordance with Section 2.3 of the Externalization Agreement (which requires that such purchases “be on terms and conditions (including with registration rights) customary for transactions of their nature”).

6.
 Comment: Please delete “(approximately $8.9 million)” from footnote 4 to the fee table in the
“Fees and Expenses” section of the N-2 Registration Statement.

Response: The Company has revised the disclosure accordingly.

*                *
         *                *                *

 January 18, 2022

  Page
 4

 Should you have any questions regarding this letter, please contact me at (202) 261-3402.

Sincerely,

 /s/ Alexander C. Karampatsos

Alexander C. Karampatsos

CORRESP
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CORRESP

 Portman Ridge Finance Corporation

650 Madison Avenue, 23rd Floor

New York, New York 10022

 December 1, 2021

 VIA EDGAR CORRESPONDENCE

 U.S. Securities and
Exchange Commission

 Division of Investment Management

 100 F
Street, NE

 Washington, DC 20549-4644

Attention:

David Orlic

David Manion

Re:
 Portman Ridge Finance Corporation (the “Company”)

File No. 333-260074

Request for Acceleration of Effectiveness of Pre-Effective Amendment No. 1 (the
“Amendment”) to the Company’s Registration Statement on Form N-14 as filed on November 23, 2021

Dear Messrs. Orlic and Manion:

 Pursuant to Rule 461 under the
Securities Act of 1933, as amended, we hereby respectfully request that the effectiveness of the above-captioned Amendment be accelerated so that the same will become effective immediately or as soon as practicable thereafter.

Please contact Harry S. Pangas at Dechert LLP at (202) 261-3466 with any comments or questions concerning this
correspondence.

 Very truly yours,

Portman Ridge Finance Corporation

By:

 /s/ Jason T. Roos

Name:

Jason T. Roos

Title:

Chief Financial Officer, Secretary and Treasurer

cc:
 Harry S. Pangas, Dechert LLP

Alexander C. Karampatsos, Dechert LLP

CORRESP
1
filename1.htm

CORRESP

 1900 K Street, NW
Washington, DC 20006-1110

+1 202 261 3300 Main

 +1 202 261 3333 Fax

www.dechert.com

 ALEXANDER C. KARAMPATSOS

 alexander.karampatsos@dechert.com

+1 202 261 3402 Direct

 +1 617 275 8365 Fax

 November 22, 2021

Mr. David Orlic

 Division of Investment Management

Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549-0504

Re:
 Portman Ridge Finance Corporation

Registration Statement of Form N-2 (File No. 333-260072)

 Registration Statement of Form N-14 (File
No. 333-260074)

 Dear Mr. Orlic:

On behalf of Portman Ridge Finance Corporation, a Delaware corporation (the “Company”), we hereby respond to the comments you
provided to me and Harry Pangas of Dechert LLP during a telephonic discussion on November 3, 2021 with respect to your review of the Company’s registration statement of Form N-2 (the “N-2 Registration Statement”) and the Company’s registration statement of Form N-14 (the “N-14 Registration
Statement”), each filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 5, 2021. The Company has considered your comments and has authorized us, on its behalf, to make the responses discussed
below.

 Set forth below are the comments of the SEC staff (the “Staff”) along with our responses to, or any supplemental
explanations of, such comments, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such terms in the N-2 Registration Statement or the N-14 Registration Statement as the case may be.

 N-2 Registration
Statement Comments

1.
 Comment: On the cover page of the N-2 Registration Statement,
the Company indicated that it is qualified to register securities pursuant to General Instruction A.2 of Form N-2. Please provided the basis for the Company’s qualification as it relates to the public
float requirement.

 November 22, 2021

  Page
 2

 Response: As of October 5, 2021, the Company had 9,123,275 shares of common stock
outstanding, and the market price per share of such shares was $24.16. Accordingly, the aggregate market value of the Company’s shares of common stock was $220,418,324 as of October 5, 2021. As of such date, 528,141 shares of the
Company’s common stock were held by affiliates of the Company. Accordingly, the Company satisfies the $75 million public float requirement.

2.
 Comment: In the expense example in the “Fees and Expenses” section of the N-2 Registration Statement, $116 is disclosed as the 1 Year expense example figure. Please confirm that this figure is correct or revise the disclosure accordingly.

Response: The Company has revised the disclosure accordingly.

3.
 Comment: In the “Portfolio Companies” section of the
N-2 Registration Statement, please disclose the percentage of the class of each portfolio company’s equity securities held by the Company in accordance with Item 8.6(a) of Form N-2.

 Response: The Company has revised the disclosure accordingly.

4.
 Comment: On page 78 of the N-2 Registration Statement, certain
items that are incorporated by reference link to incorrect filings. Please revise the hyperlinks so that they link to the appropriate filings.

Response: The Company has revised the hyperlinks accordingly.

5.
 Comment: The power of attorney that was filed is not dated. Please refile a power of attorney that is
dated.

 Response: The Company has refiled a dated power of attorney.

6.
 Comment: In the Part C of the N-2 Registration Statement, the
Company indicates that Undertaking 34.7 of Form N-2 is not applicable. Please provide the basis for this response or include Undertaking 34.7

 November 22, 2021

  Page
 3

 Response: The Company has included Undertaking 34.7.

N-14 Registration Statement Comments

7.
 Comment: In the “Portfolio Companies” section of the
N-14 Registration Statement, please disclose the percentage of the class of each portfolio company’s equity securities held by the Company in accordance with Item 5(b) of Form N-14 and Item 8.6(a) of Form N-2.

Response: The Company has revised the disclosure accordingly.

8.
 Comment: Please revise the disclosure in the N-14 to indicate
that:

 The Company has not entered into any arrangement or understanding with any person who will receive Exchange
Notes in the exchange offer to distribute those notes following completion of the offer. The Company is not aware of any person that will participate in the exchange offer with a view to distribute the Exchange Notes.

Response: The Company has revised the disclosure in the N-14 Registration Statement
accordingly.

*        *        *
 *        *

 Should you have any questions regarding this letter, please contact me at (202) 261-3402.

Sincerely,

 /s/ Alexander C. Karampatsos

Alexander C. Karampatsos

CORRESP
1
filename1.htm

CORRESP

 1900 K Street, NW
Washington, DC 20006-1110

+1 202 261 3300 Main

 +1 202 261 3333 Fax

www.dechert.com

 ALEXANDER C. KARAMPATSOS

 alexander.karampatsos@dechert.com

+1 202 261 3402 Direct

 +1 617 275 8365 Fax

 November 22, 2021

Mr. David Manion

 Division of Investment Management

Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549-0504

Re:
 Portman Ridge Finance Corporation

Registration Statement of Form N-2 (File No. 333-260072)

 Registration Statement of Form N-14 (File
No. 333-260074)

 Dear Mr. Manion:

On behalf of Portman Ridge Finance Corporation, a Delaware corporation (the “Company”), we hereby respond to the comments you
provided to me and Harry Pangas of Dechert LLP during a telephonic discussion on October 29, 2021 with respect to your review of the Company’s registration statement of Form N-2 (the “N-2 Registration Statement”) and the Company’s registration statement of Form N-14 (the “N-14 Registration
Statement”), each filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 5, 2021. The Company has considered your comments and has authorized us, on its behalf, to make the responses discussed
below.

 Set forth below are the comments of the SEC staff (the “Staff”) along with our responses to, or any supplemental
explanations of, such comments, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such terms in the N-2 Registration Statement or the N-14 Registration Statement as the case may be.

 N-2 Registration
Statement Comments

1.
 Comment: In the fee table in the “Fees and Expenses” section of the N-2 Registration Statement, the disclosure indicates that the Company’s incentive fee is “20% of net investment income and realized capital gains”; however, footnote 5 to the fee table indicates that
this figure is 17.5%. Please revise the disclosure to identify the correct figure.

 November 22, 2021

  Page
 2

 Response: The 17.5% figure is correct. The Company will revise the disclosure
accordingly.

2.
 Comment: In the fee table in the “Fees and Expenses” section of the N-2 Registration Statement, the disclosure indicates that the Company’s Other Expenses were 3.7% of the Company’s NAV or approximately $9.8 million. The Company’s most recently filed Form 10-Q indicates that “Other Expenses” were higher than what was disclosed in this section. Please confirm the figures disclosed in this section are correct or revise the disclosure accordingly.

 Response: The Company will revise the disclosure accordingly.

Comments Applicable to the N-2 Registration Statement and the N-14
Registration Statement

3.
 Comment: In the “Financial Highlights” section of the
N-2 Registration Statement and the N-14 Registration Statement, the disclosure indicates that the consolidated financial highlights appearing in the Company’s most
recent Annual Report on Form 10-K are incorporated by reference. Form N-2 and Form N-14 require ten years of financial highlights
to be disclosed, yet the Annual Report only includes five years of financial highlights. Please revise the disclosure to incorporate ten years of financial highlights.

Response: The Company will revise the disclosure accordingly.

4.
 Comment: For any information that is incorporated by reference into the
N-2 Registration Statement and the N-14 Registration Statement from another filing on EDGAR, please include an active hyperlink to the EDGAR filing in accordance with
Rule 411 under the Securities Act of 1933.

 Response: The Company will revise the disclosure accordingly.

 November 22, 2021

  Page
 3

5.
 Comment: Please confirm that the Company will file all required consents in pre-effective amendments to the Company’s N-2 Registration Statement and the N-14 Registration Statement.

Response: The Company so confirms.

6.
 Comment: If the Company’s next Form 10-Q is filed prior to
the expected effective date(s) of the Company’s N-2 Registration Statement and N-14 Registration Statement, please confirm that the Company will incorporate the
financial statements from the Form 10-Q into the N-2 Registration Statement and the N-14 Registration Statement.

 Response: The Company so confirms.

*        *        *
 *        *

 Should you have any questions regarding this letter, please contact me at (202) 261-3402.

Sincerely,

 /s/ Alexander C. Karampatsos

Alexander C. Karampatsos

CORRESP
1
filename1.htm

CORRESP

 1900 K Street, NW
Washington, DC 20006-1110

+1 202 261 3300 Main

 +1 202 261 3333 Fax

www.dechert.com

ALEXANDER C. KARAMPATSOS

alexander.karampatsos@dechert.com

 +1 202 261 3402 Direct

+1 617 275 8365 Fax

 April 22, 2021

Ms. Deborah O’Neal

 Division of Investment Management

 Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549-0504

Re:
 Portman Ridge Finance Corporation (File No. 814-00735)

 Dear Ms. O’Neal:

On behalf of Portman Ridge Finance Corporation, a Delaware corporation (the “Company”), we hereby respond to the comments you
provided to me during a telephonic discussion on April 15, 2021 with respect to your review of the Company’s Preliminary Proxy Statement on Schedule 14A (the “Preliminary Proxy Statement”). The Company has considered your
comments and have authorized us, on its behalf, to make the responses discussed below.

 Set forth below are the SEC staff’s comments
along with our responses to, or any supplemental explanations of, such comments, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such terms in the Preliminary Proxy Statement.

1.
 Comment: On page 30 of the Preliminary Proxy Statement, the last sentence of the first paragraph under
“Authorized Shares” states the following: “Please see Proposal 4 below for a discussion on the Authorized Shares Decrease Proposal, which is conditioned upon the effectiveness of the Reverse Stock Split and would reduce the
number of our authorized shares of common stock in the manner described therein.” Please revise this sentence to add the underlined language: “Please see Proposal 4 below for a discussion on the Authorized Shares Decrease Proposal, which
is conditioned upon the effectiveness of the Reverse Stock Split and would reduce the number of our authorized shares of common stock that are issued or outstanding in the manner described therein.”

 April 22, 2021

  Page
 2

Response: The Company respectfully notes that while the Authorized Shares Decrease Proposal would reduce the number of authorized shares
of common stock, the proposal by itself, would not affect the number of issued and outstanding shares of common stock. The Reverse Stock Split Proposal would reduce the number of shares of common stock issued and outstanding as discussed under
“PROPOSAL 3 — APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO EFFECT THE REVERSE STOCK SPLIT”. Accordingly, the Company believes that the current disclosure adequately and clearly describes the proposals and
respectfully declines to make any changes in response to this comment.

2.
 Comment: Please revise the disclosure on page 38 consistent with Comment #1.

Response: For the reasons set forth in the Company’s response to Comment #1, the Company believes that the current disclosure
adequately and clearly describes the proposals and respectfully declines to make any changes in response to this comment.

3.
 Comment: The Staff notes that if Proposal 3 is approved, the number of authorized shares of the
Company’s common stock that are not issued or outstanding would increase (“Additional Shares”). Please confirm supplementally that the Company has no immediate plans to use any Additional Shares for acquisitions.

 Response: The Company has no immediate plans to use any Additional Shares for acquisitions.

4.
 Comment: Please add disclosure to the Proxy Statement to indicate that Additional Shares could be used
by the Company for anti-takeover purposes.

 Response: The Company will revise the disclosure accordingly.

*        *        *
 *        *

 April 22, 2021

  Page
 3

 Should you have any
questions regarding this letter, please contact me at (202) 261-3402.

Sincerely,

 /s/ Alexander C. Karampatsos

Alexander C. Karampatsos

CORRESP
1
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    April 16, 2021

    VIA EDGAR

    Securities and Exchange Commission

    Division of Investment Management

    100 F Street, N.E.

    Washington, D.C. 20549

    Attn: David Manion and Deborah O’Neal-Johnson

            Re:

            Portman Ridge Finance Corporation;

            N-14 8C/A, File No. 333-252442

    Dear Mr. Manion and Ms. O’Neal-Johnson:

    On behalf of Portman Ridge Finance Corporation (“PTMN”), we are providing the following responses to comments received by telephone from the staff of the Division of Investment Management (the “Staff”) of the Securities
      and Exchange Commission (the “Commission”) on April 8, 2021, relating to PTMN’s Registration Statement on Form N-14 filed with the Commission on March 30, 2021 (the “Registration Statement”). Please note that all page numbers in our responses are
      references to the page numbers of the Registration Statement.  All capitalized terms used but not defined in this letter have the meanings given to them in the Registration Statement.

          1.

            On the proxy card, please clarify the identity of “the Company.”

    PTMN has included a revised form of HCAP’s proxy card in Pre-Effective Amendment No. 2 to PTMN’s Registration Statement on Form N-14, filed with the Commission on the date of this letter (the “Amendment”).

          2.

            Please hyperlink each document incorporated by reference, including Form 10-K, 10-Q and 8-K filings. Please include the following as exhibits in the next amendment to PTMN’s Registration Statement on Form N-14
              for both PTMN and HCAP, as applicable: auditor consents and the auditor reports on the senior securities tables.

    PTMN has hyperlinked each such reference in the Amendment.  PTMN confirms that the necessary auditor consents for both PTMN and HCAP and the auditor reports on the senior securities tables for both PTMN and HCAP have
      been filed as exhibits to the Amendment.

          3.

            Please name the auditors in the next amendment to PTMN’s Registration Statement on Form N-14.

    The auditors have been named in the Amendment.

          4.

            Please supplementally confirm whether there is any anticipated material portfolio repositioning.  If there is, please include appropriate disclosure in the Registration Statement.

    PTMN confirms that there is no anticipated material portfolio repositioning.

      2

          5.

            For the “Additional Cash Consideration” section on page 15, please supplementally confirm if the Additional Cash Consideration paid by Sierra Crest is necessary to eliminate day-one gain/loss or an additional
              incentive for HCAP Stockholders to approve the Merger Proposal.

    The Additional Cash Consideration paid by Sierra Crest is intended to be an additional incentive for HCAP Stockholders to approve the Merger Proposal, but from an accounting perspective will have an effect on the day-one
      gain as described below.

    The Mergers will be accounted for as an asset acquisition of HCAP by PTMN in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations
        — Related Issues. In applying the asset acquisition method of accounting, PTMN will use a cost approach to allocate the cost of the assets purchased against the assets being acquired. The cost of the acquisition is determined to be the fair
      value of the consideration given or the fair value of the assets acquired, whichever is more clearly evident. PTMN has determined that the price of its common stock is most evident of fair value. The fair value of the Merger Consideration paid by
      PTMN is allocated to assets acquired and liabilities assumed based on their relative fair values as of the date of acquisition other than certain ”non-qualifying” assets (for example cash) and will not give rise to goodwill.

    Pursuant to the application of ASC 805-50, Business Combinations — Related Issues, since the cost of the net assets acquired is expected to be less than their fair value, there
      is a day-one unrealized gain as a result of the Mergers. Sierra Crest’s contribution of $2.15 million will be recognized as a deemed capital contribution to PTMN for financial accounting purposes and will become a part of the accounting cost of the
      assets acquired. Therefore, the Additional Cash Consideration is expected to decrease the day-one gain. However, the Additional Cash Consideration is not expected to fully eliminate the day-one gain.

          6.

            Please supplementally discuss the disposition of historical cost basis, both on a GAAP and tax basis, of HCAP’s investments if the merger does not qualify as reorganization under Section 368(a) under Internal
              Revenue Code (i.e., if more than 60% of consideration is cash).

    PTMN expects the transaction will qualify as a reorganization under Section 368(a) under the Internal Revenue Code. To not qualify as a reorganization, PTMN’s NAV will have to fall by at least 42% relative to HCAP’s NAV
      (based on December 31, 2020 respective NAVs, excluding transaction costs), which is highly unlikely. Because the transaction has been structured as first a merger of Acquisition Sub with and into HCAP, with HCAP surviving, followed by a second merger
      of HCAP with and into PTMN, with PTMN surviving, if the transaction does not qualify as reorganization under Section 368(a) under Internal Revenue Code it would be treated as a taxable purchase of HCAP stock by PTMN. As such, the historic basis of
      the assets for tax purposes would not change. Similarly, if the transaction qualifies as a reorganization under Section 368(a) under Internal Revenue Code, the historic basis of the assets for tax purposes would not change.

    Further, from a GAAP perspective, whether the transaction qualifies or does not qualify as a reorganization under Section 368(a) under the Internal Revenue Code, the GAAP cost basis of the assets will be the same in both
      cases.

      3

          7.

            In the 10-year Comparative Fees and Expenses table examples (both with and without capital gains fees) for HCAP, please confirm the calculations as they seem to be overstated.

    The above-referenced examples have been updated in the Amendment in accordance with the Staff’s comment.

          8.

            For the illustrations in the “Allocation of Merger Consideration and Illustrative Elections and Calculations” section, please use the same date for NAV and market price.

    PTMN respectfully advises the Staff that the Merger Agreement requires the PTMN Per Share Price to be calculated based on the average of the volume weighted average price per share of PTMN Common Stock on Nasdaq on each
      of the ten consecutive trading days ending with the Determination Date, which is two days prior to the closing date of the Mergers.

          9.

            Please confirm if the allocation of fair value will create a day-one gain or loss. If the allocation creates a day-one gain, please provide representations that PTMN will not factor in such day-one gain into any
              future incentive fee calculations. If there is a day-one gain, please be sure to break-out separately in PTMN’s Statement of Operations in future financial statements.

    As discussed above in response to Comment 5, the Mergers are expected to create a day-one gain, which will be decreased, but not fully eliminated, by the Additional Cash Consideration contribution by Sierra Crest. Such
      day-one gain will factor into future incentive fee calculations in accordance with the PTMN Investment Advisory Agreement. PTMN intends to adjust the cost basis for the acquired assets as a result of the transaction. This purchase discount adjustment
      is not expected to result in any immediate impact on the capital gains incentive fees that are contractually payable by PTMN, since it will be reflected as an unrealized gain at closing. At closing, PTMN would accrue a liability for incentive fees
      which may be earned related to the unrealized gain. Within the Statement of Operations, the amount of day-one gain will be included in the caption “Total net change in unrealized appreciation on investments” and the amount of day-one gain that is
      included will be separately disclosed in the footnotes. PTMN will begin to accrete such purchase discount into income following the closing of the transaction over the remaining lives of the acquired investments. Currently, PTMN does not expect to
      acquire any equity positions that would require adjustment as such positions are not amortizing. To the extent PTMN holds these investments to maturity, the purchase discount would accrete as investment income over time, and would factor into whether
      PTMN reaches the applicable income hurdle that would trigger an incentive fee on income. This would be the same for any other investment that PTMN may acquire at a discount. Any future capital gains incentive fee payments by PTMN will be based on the
      amortized acquisition costs based on the merger transaction. To the extent PTMN sells one or more of the acquired assets prior to maturity, it is possible that PTMN could realize capital gains that impact the capital gains portion of the incentive
      fee. In this respect, the impact on the capital gains realized by PTMN could be more significant if PTMN disposes of an acquired asset shortly after the closing of the transaction. Accordingly, PTMN has added disclosure to the Amendment indicating
      that if PTMN disposes of a significant amount of the acquired assets shortly after the closing of the transaction, it is possible that such sales could materially increase the incentive fee on any capital gains paid by PTMN to Sierra Crest.

      4

    Please call me (202-636-5592) or Rajib Chanda (202-636-5543) with any questions you may have regarding this filing or if you wish to discuss the above responses.

            Very truly yours,

            /s/ STEVEN GRIGORIOU

    cc: Rajib Chanda, Simpson Thacher & Bartlett LLP

    Jonathan L. Corsico, Simpson Thacher & Bartlett LLP

    Christopher P. Healey, Simpson Thacher & Bartlett LLP

    Thomas J. Friedmann, Dechert LLP

    Harry S. Pangas, Dechert LLP

    Bernardo L. Piereck, Dechert LLP

CORRESP
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    March 29, 2021

    VIA EDGAR

    Securities and Exchange Commission

    Division of Investment Management

    100 F Street, N.E.

    Washington, D.C. 20549

    Attn: Deborah O’Neal-Johnson

          Re:

            Portman Ridge Finance Corporation;

              N-14 8C, File No. 333-252442

    Dear Ms. O’Neal-Johnson:

    On behalf of Portman Ridge Finance Corporation (“PTMN”), we are providing the following responses to comments received by telephone from the staff of the Division of Investment Management (the “Staff”) of the Securities
      and Exchange Commission (the “Commission”) on February 24, 2021, relating to PTMN’s Registration Statement on Form N-14 filed with the Commission on January 27, 2021 (the “Registration Statement”). Please note that all page numbers in our responses
      are references to the page numbers of the Registration Statement.  All capitalized terms used but not defined in this letter have the meanings given to them in the Registration Statement.

          1.

            Please include a proxy card in the next filing for review by the Staff.

    PTMN has included a form of HCAP’s proxy card in Pre-Effective Amendment No. 1 to the Registration Statement, filed with the Commission on the date of this letter (the “Amendment”).

          2.

            For the question, “How do HCAP Stockholders select the type of Merger Consideration that such stockholder prefers to receive?” on page 5 of the Registration Statement, please bold the following sentence in the
              response: “HCAP Stockholders who wish to elect to receive cash for any or all shares of HCAP Common Stock held by such holder may indicate so on the Form of Election.”

    PTMN has bolded the sentence in the Amendment in accordance with the Staff’s comment.

          3.

            Please briefly state several examples of the “different rights” HCAP Stockholders will have in respect of the combined company as a result of the Mergers, as discussed in a bullet on page 16 of the Registration
              Statement, as follows: “The shares of PTMN Common Stock to be received by HCAP Stockholders as a result of the Mergers will have different rights associated with them than shares of HCAP Common Stock currently held by them.”

    The following sentences have been added to the bullet on page 16 of the Registration Statement in accordance with the Staff’s comment: For example, stockholder voting thresholds required for (i) charter amendments, (ii)
      bylaw amendments and (iii) removal of directors are different. See the section captioned “Comparison of PTMN and HCAP Stockholder Rights” below for a more detailed discussion of these and other differences.

    _______________________

    Please call me (202-636-5592) or Rajib Chanda (202-636-5543) with any questions you may have regarding this filing or if you wish to discuss the above responses.

            Very truly yours,

            /s/ STEVEN GRIGORIOU

    cc: Rajib Chanda, Simpson Thacher & Bartlett LLP

    Jonathan L. Corsico, Simpson Thacher & Bartlett LLP

    Christopher P. Healey, Simpson Thacher & Bartlett LLP

    Thomas J. Friedmann, Dechert LLP

    Harry S. Pangas, Dechert LLP

    Bernardo L. Piereck, Dechert LLP

CORRESP
1
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CORRESP

 August 28, 2020

VIA EDGAR

 Securities and Exchange Commission

 Division of Investment Management

 100 F Street, N.E.

Washington, D.C. 20549

 Attn.: David Orlic and David Manion

Re:
 Portman Ridge Finance Corporation

 Amendment to Form N-14, File No. 333-239920

 Dear Messrs. Orlic and Manion:

In accordance with Rule 461 of the General Rules and Regulations under the Securities Act of 1933, as amended, Portman Ridge Finance
Corporation (“PTMN”) hereby respectfully requests acceleration of the effective date of the above captioned Amended Form N-14 (the “Registration Statement”) so that it will become effective
by 4:30 p.m., Eastern Time, on September 1, 2020 or as soon as practicable thereafter.

 Very truly yours,

 Portman Ridge Finance Corporation

 By:

 /s/ Edward U. Gilpin

Name: Edward U. Gilpin

 Title: Chief Financial Officer

CORRESP
1
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CORRESP

 August 28, 2020

VIA EDGAR

 Securities and Exchange Commission

 Division of Investment Management

 100 F Street, N.E.

Washington, D.C. 20549

 Attn: David Orlic and David Manion

Re:
 Portman Ridge Finance Corporation

Form N-14, File No. 333-239920

Dear Messrs. Orlic and Manion:

 On behalf of
Portman Ridge Finance Corporation (“PTMN”), we are providing the following responses to comments received by telephone from the staff of the Securities and Exchange Commission (the “Commission”) on August 18, 2020 relating
to PTMN’s Registration Statement on Form N-14 filed with the Commission on July 17, 2020 (the “Registration Statement”). Please note that all page numbers in our responses are references to
the page numbers of the Registration Statement. All capitalized terms used but not defined in this letter have the meanings given to them in the Registration Statement.

General

1.
 Please confirm that the joint proxy statement/prospectus will be sent to stockholders at least 20 business
days prior to the date of the Special Meetings.

 PTMN confirms that the joint proxy statement/prospectus will be sent to
stockholders at least 20 business days prior to the date of the Special Meetings.

2.
 With respect to the online-only meeting, please disclose clear directions as to the logistical details of
the online meeting, including how stockholders can remotely access, participate and vote.

 PTMN has revised the applicable
disclosure in the amended Registration Statement to incorporate the Staff’s comment.

3.
 The means of delivery for the Notice of Internet Availability of Proxy Materials is specifically unavailable
for mergers per Rule 14a-16(m) under the Exchange Act. Please ensure appropriate delivery of the joint proxy statement/prospectus.

PTMN has revised the applicable disclosure in the amended Registration Statement in accordance with the Staff’s comment and confirms that the joint proxy
statement/prospectus will be appropriately delivered to stockholders.

4.
 Please include disclosure discussing the early adoption of new disclosure rules under SEC release No. 33-10786, the Amendments to Financial Disclosures about Acquired and Disposed Businesses and the impact on the Registration Statement, such as no inclusion of pro forma financial statements.

 PTMN has included the requested disclosure in the amended Registration Statement in accordance with the Staff’s comment.

5.
 The Staff notes that auditor consents will be necessary for both PTMN and GARS.

PTMN confirms that the necessary auditor consents for both PTMN and GARS have been filed as exhibits to the amended Registration Statement.

6.
 The Staff notes that auditor reports on the senior securities tables for both PTMN and GARS will be
necessary.

 PTMN confirms that the auditor reports on the senior securities tables for both PTMN and GARS have been filed as
exhibits to the amended Registration Statement.

7.
 As the Registration Statement does not include pro forma financial statements, the Staff notes the following
items:

 (i) Please hyperlink each reference regarding incorporation by reference to
10-K, 10-Q and 8-K filings.

PTMN has hyperlinked each such reference in the amended Registration Statement.

(ii) Please include a narrative discussion of any differences in accounting policies between PTMN and GARS. If there are no material
differences in accounting policies, please include an affirmative statement stating no material differences.

 PTMN has determined that there are no
material differences in accounting policies and has included an affirmative statement stating such in the amended Registration Statement.

(iii) Please include disclosure regarding securities that are being sold off by GARS to pay down its debt.

PTMN respectfully submits that GARS is presently restricted from voluntarily prepaying its debt as the notes issued under its CLO cannot be prepaid until
November 20, 2020. As such, as of the date of this letter, GARS has not identified any specific investments to be sold in advance of the closing of the Mergers, which is expected to occur prior to November 20, 2020. GARS currently intends
to retain any amounts of cash that GARS may have from repayments and prepayments by portfolio companies until the notes issued under the CLO can be prepaid in late November 2020.

Although no specific investments have been identified to be disposed, PTMN will generally preserve cash received from voluntary paydowns of investments until
closing, and will analyze the pro forma combined portfolio to identify the most likely candidates for disposal, with an eye towards identifying the more liquid candidates, their relative value, and the desired composition of the portfolio post
disposal (e.g., risk concentrations, etc.). PTMN has disclosed that it has yet to determine which assets will be sold.

 PTMN supplementally notes
that, as the result of a breach of a coverage test under the CLO and in accordance with the requirements of the indenture governing the CLO, on August 20, 2020, GARS paid down $15.0 million in principal amount of senior notes issued under
the CLO to cause such coverage test to be satisfied on a pro forma basis after giving effect to such payment. The cash used to pay down the senior notes was cash on hand due to the repayment of certain investments at the discretion of the applicable
portfolio company in accordance with the terms of the underlying credit agreement.

 (iv) Please include a discussion related to
differences in expenses.

 PTMN has included the requested disclosure in the amended Registration Statement in accordance with the Staff’s
comment.

 (v) Based on the timing of filing, please update applicable information to June 30, 2020
10-Q information (e.g., fee table and capitalization table).

 PTMN has updated the Registration Statement for
June 30, 2020 information, as applicable, in accordance with the Staff’s comment.

 Shareholder Letters

8.
 The Staff notes that Mergers consist of two separate mergers. Please supplementally explain the reason for
the Merger.

 The Mergers, taken together, are intended to qualify as a reorganization within the meaning of Section 368(a) of
the Code. Structuring the transaction as two mergers back to back rather than one merger is a common structuring mechanism which is intended to mitigate adverse corporate tax consequences that could arise if the Mergers, despite all expectations to
the contrary, did not qualify as a reorganization.

 2

 Questions and Answers About the Special Meetings and the Mergers (p.1)

9.
 For the “Questions and Answers about the Special Meetings—Q: What will happen if the Merger Stock
Issuance Proposal being considered at the PTMN Special Meeting and/or the Merger Proposal being considered at the GARS Special Meeting is not approved by the required vote?” on page 5, please cross-reference the disclosure regarding the maximum
reimbursement payment of $550,000 to the section in the prospectus that discusses it further in detail.

 PTMN has included the
requested cross-reference in the amended Registration Statement in accordance with the Staff’s comment.

10.
 Based on the disclosure in the “Questions and Answers about the Mergers— Q: How does PTMN’s
investment objective and strategy differ from GARS’? on page 8, please also briefly compare the risks of PTMN and GARS.

 PTMN
has included the requested disclosure in the amended Registration Statement in accordance with the Staff’s comment.

 Summary of the Mergers
(p.11)

11.
 For “The Parties to the Mergers—Sierra Crest Investment Management LLC” section on page 13,
please disclose the ultimate control persons of Sierra Crest as required by Item 12 of Form N-14, which cross references Item 20 of Form N-2.

PTMN has included the requested disclosure in the amended Registration Statement in accordance with the Staff’s comment.

12.
 Please update the second paragraph of the “Structure of the Mergers” section on page 14 using
information as of June 30, 2020.

 PTMN has updated the Registration Statement to include the requested disclosure in accordance
with the Staff’s comment.

13.
 For the “Additional Cash Consideration” section on page 14, please supplementally confirm if the
Additional Cash Consideration paid by Sierra Crest is necessary to eliminate day-one gain/loss or an additional incentive for GARS Stockholders to approve the Merger Proposal.

The Additional Cash Consideration paid by Sierra Crest is intended to be an additional incentive for GARS Stockholders to approve the Merger Proposal, but
from an accounting perspective will have an effect on the day-one gain as described below.

 The Merger will be
accounted for as an asset acquisition of GARS by PTMN in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business
Combinations — Related Issues. In applying the asset acquisition method of accounting, PTMN will use a cost approach to allocate the cost of the assets purchased against the assets being acquired. The
cost of the acquisition is determined to be the fair value of the consideration given or the fair value of the assets acquired, whichever is more clearly evident. PTMN has determined that the price of its common stock is most evident of fair value.
The fair value of the Merger Consideration paid by PTMN is allocated to assets acquired and liabilities assumed based on their relative fair values as of the date of acquisition other than certain
“non-qualifying” assets (for example cash) and will not give rise to goodwill.

 Pursuant to the
application of ASC 805-50, Business Combinations — Related Issues, since the cost of the net assets acquired is expected to be less than their fair value, there is a
day-one unrealized gain as a result of the Merger. Sierra Crest’s contribution of $5 million will be recognized as a deemed capital contribution to PTMN for financial accounting purposes and
will become a part of the accounting cost of the assets acquired. Therefore, the Additional Cash Consideration is expected to decrease the day-one gain. However, the Additional Cash Consideration is not
expected to fully eliminate the day-one gain.

 Comparative Fees and Expenses (p.28)

14.
 The fee table under the “Comparative Fees and Expenses Relating to the Mergers” section on page 28
discloses the “Interest payments on borrowed funds” amount for GARS as 10.0%. Based on a review of the March 31, 2020 financial statements, the Staff notes that this should be 11.4%. Please supplementally explain the calculation that
led to the 10.0% disclosure.

 3

 As disclosed in footnote 6, the GARS calculation as of March 31, 2020 was based on borrowing costs under
GARS’ CLO for the three months ended March 31, 2020; certain interest expense related to GARS’ SBA debentures was excluded as non-recurring (as the debentures were repaid and are not eligible
for re-borrowing). As requested, in response to comment 7, the relevant disclosures have been updated in the amended Registration Statement to reference June 30, 2020 financial statements.

15.
 The Staff notes that PTMN recorded waiver of approximately 30 basis points of incentive fee at
March 31, 2020. Please discuss the impact of incentive fee waiver in the footnote of the fee table related to the “Incentive fees” line item.

PTMN has disclosed in a footnote the impact of the fee waiver during the six months ended June 30, 2020, which was approximately $557,000.

16.
 Please supplementally discuss the inputs used for incentive fees as disclosed in the “Incentive
fees” line item for the Pro Forma section of the fee table.

 The “Incentive fees” line item for the Pro Forma section
of the fee table includes an estimate of the incentive fees expected to be earned by Sierra Crest post-merger, including increased investment income, as adjusted for asset sales, debt paydowns and purchase accounting adjustments, as well as lower
combined interest and operating expenses.

17.
 Please include in a footnote a discussion of the decrease in other expenses as disclosed in the “Other
expenses” line item in the Pro Forma section of the fee table, such as a reduction in specific components of the incentive fee (e.g., duplication of certain fees).

PTMN has included in a footnote the requested disclosure in accordance with the Staff’s comment.

18.
 Please disclose the date of the fee table information in the introductory paragraph of the fee table under
the “Comparative Fees and Expenses Relating to the Mergers” section on page 28.

 PTMN has included the requested
disclosure in the amended Registration Statement in accordance with the Staff’s comment.

19.
 Please advise the Staff whether Garrison Capital Advisers will receive an incentive fee or other
compensation from GARS or PTMN as a result of the Mergers.

 Garrison Capital Advisers will not receive an incentive fee or other
compensation from GARS or PTMN as a result of the Mergers.

20.
 For footnote 5 of the fee table under the “Comparative Fees and Expenses Relating to the Mergers”
section on page 29, please confirm if PTMN’s calculation of incentive fees will change post-merger. If so, please include a discussion regarding the calculation methodology.

PTMN confirms that its calculation of incentive fees will not change post-merger.

21.
 Please bold the headers of the expense example under the “Example” section on page 30.

 PTMN has bolded the requested disclosure in the amended Registration Statement in accordance with the Staff’s comment.

22.
 Please confirm that the GARS expense disclosure for 5 years assuming no return from net realized capital
gains or net unrealized capital appreciation in the expense example under the “Example” section on page 30 is accurate. The Staff’s calculation reflects $684.

As requested, in response to comment 7, the relevant disclosures have been updated in the amended Registration Statement to reference June 30, 2020
financial statements.

23.
 Please recalculate and update the GARS expense disclosure assuming return entirely from realized capital
gains and thus subject to the capital gain incentive fee in the expense example under the “Example” section on page 30. It does not appear that the expenses reflect the capital gain incentive fee.

 4

 Under the GARS Investment Advisory Agreement, the capital gains incentive fee is calculated on the basis of
aggregate realized gains since April 1, 2013 net of GARS’ aggregate cumulative realized capital losses and aggregate cumulative unrealized capital depreciation since such date. Given the realized losses incurred by GARS since April 1,
2013, no amounts would be payable as a capital gains incentive fee even assuming a 5% return entirely from realized capital gains over the time periods provided.

Capitalization (p.40)

24.
 Please update the table as of June 30, 2020 or as of September 30, 2020, based on the timing of
the Registration Statement being declared effective.

 PTMN has updated the capitalization table in the amended Registration
Statement for June 30, 2020 figures.

25.
 For the Pro Forma adjustments of the “Cash, cash equivalents and restricted cash” line item of the
table, please include a footnote discussion of the changes to such line item.

 PTMN has included the requested disclosure in the
amended Registration Statement in accordance with the Staff’s comment.

26.
 It seems there is a rounding error in the pro forma Total Capitalization line item. Please revise the pro
forma Total Capitalization line item of the table to $493,116.

 PTMN has updated the capitalization table in the amended
Registration Statement for June 30, 2020 information. PTMN has ensured that the appropriate figures are included in each line item.

27.
 Please disclose in a footnote the difference in NAV per common share between the Actual disclosure for PTMN
($2.69) and Pro Forma adjustments disclosure for PTMN ($2.67).

 PTMN has included a footnote d

CORRESP
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CORRESP

 March 4, 2020

VIA EDGAR

 Securities and Exchange Commission

Division of Investment Management

 100 F Street, N.W.

Washington, D.C. 20549

 Attn: Deborah O’Neal-Johnson and
Kathy Churko

Re:
 Portman Ridge Finance Corporation;

POS 8C, File No. 333-218596

Dear Ms. O’Neal-Johnson and Ms. Churko:

On behalf of Portman Ridge Finance Corporation (“PTMN”), we are providing the following responses to comments received by telephone
from the staff of the Securities and Exchange Commission (the “Commission”) on February 6, 2020 relating to PTMN’s POS 8C filed with the Commission on December 23, 2019 (the “Registration Statement”). Please note
that all page numbers in our responses are references to the page numbers of the Registration Statement. All capitalized terms used but not defined in this letter have the meanings given to them in the Registration Statement.

Accounting Comments

1.
 Please explain supplementally why the “base management fees,” “interest payments on borrowed
funds” and “other expenses” line items in the fee table on page 12 of the Registration Statement appear to be significantly different from the pro forma numbers presented in the Form N-14
recently filed by PTMN.

 PTMN has revised the fee table in the amended Registration Statement filed herewith (the
“Amendment”). The fee table in the Registration Statement contained incorrect numbers based on year-to-date information as of September 30, 2019, which
was not annualized. In the Amendment, these numbers have been annualized appropriately. There are some differences between the corrected fee table and the pro forma fee table numbers included in the Form N-14
filed by PTMN on November 4, 2019. The primary reasons for the differences are (i) the Form N-14 was based on annualized information as of June 30, 2019, which was updated for the filing of the
Registration Statement and (ii) a decrease in PTMN’s net assets between June 30 and September 30, 2019, which also impacted the fee table numbers as they are stated as a percentage of net assets.

2.
 Please consider deleting footnote 9 to the fee table, which appears on page 13 of the Registration
Statement, as it does not appear related to any information in the fee table.

 This comment has been incorporated in
the Amendment.

3.
 In the expense example on page 13 of the Registration statement please revise the introductory paragraph to
reflect that the Merger has been completed and it is no longer possible to make an investment in OHAI.

 This comment
has been incorporated in the Amendment.

4.
 With respect to page 53 of the Registration Statement, under “Portfolio and Investment Activity,”
please explain supplementally why there is a realized loss shown for Asset Manager Affiliates for 2019, when there were no apparent sales of Asset Manager Affiliates in 2019.

The reason for the realized loss with respect to the Asset Manager Affiliates in 2019 is explained on page 41 of PTMN’s Quarterly Report
on Form 10-Q for the quarter ended September 30, 2019 which is incorporated by reference into the Amendment:

In connection with the Externalization, during the first quarter of 2019, KCAP Management agreed to waive management fees it is otherwise
entitled to receive for managing the Fund. In addition, the Joint Venture was restructured such that we are now entitled to receive a preferred distribution in an amount equal to the fees waived by KCAP Management. The impact of these transactions
was a reduction in the fair value of the Asset Manager Affiliates (realized loss) and increase the fair value of our investment in the Joint Venture (unrealized gain) during the first quarter of 2019.

The realized loss with respect to the Asset Manager Affiliates was offset by a corresponding unrealized gain in the value of the Joint Venture.
PTMN has added similar disclosure where applicable in the Amendment to provide additional context regarding the value of the Asset Manager Affiliates and the fee waivers in place.

5.
 With respect to the Asset Manager Affiliates that are discussed on page 55 of the Registration Statement as
having no value as of September 30, 2019, please supplementally explain whether the Asset Manager Affiliates have waived all management fees in perpetuity, and whether they have any ability to recoup waived fees. Additionally, please explain
supplementally who is paying the operating expenses of KCAP Management.

 KCAP Management, a wholly owned subsidiary
of Katonah Management Holdings, LLC, is the only remaining Asset Manager Affiliate that serves as a collateral manager. KCAP Management has irrevocably waived its management fees and has no current intent to withdraw the standing instructions
implementing the waiver. As a result of the Externalization, all responsibilities previously performed by KCAP Management are being performed by Sierra Crest, who bears its own costs in fulfilling such responsibilities.

6.
 Page 57 of the Registration Statement states that KCAP Management has agreed to waive management fees it is
otherwise entitled to receive, and that the Joint Venture was restructured such that PTMN is now entitled to receive a preferred distribution in an amount equal to the fees waived by KCAP Management. Please explain supplementally the impact of this
change on the base management fees and incentive fees paid by PTMN.

 2

 The waiver of management fees by KCAP Management and receipt of a preferred distribution from the
Joint Venture has had no impact on the base management fees and incentive fees paid by PTMN to Sierra Crest. Under ordinary circumstances, the full amount of fees that would have been received by KCAP Management and distributed to PTMN (and recorded
as Dividends from Asset Manager Affiliates) is received by the Joint Venture in its capacity as an equity owner of KCAP F3C Senior Funding, L.L.C., a collateralized loan obligation fund. As a result of the restructuring of the Joint Venture
discussed in the Registration Statement, PTMN is entitled to receive the full amount received by the Joint Venture as a result of the fee waiver through the preferred distribution (investment income) that PTMN receives from the Joint Venture.

7.
 Please explain supplementally whether the BCP Great Lakes Fund LP, or BCP Great Lakes Holdings LP, is a
joint venture subsidiary of PTMN.

 PTMN invests in BCP Great Lakes Fund LP, which invests in BCP Great Lakes Holdings
LP, which is a co-investment vehicle that invests in BCP Great Lakes Funding, LLC (the “JV”). As a limited partner, PTMN does not own any direct or indirect voting interests in the JV through its
investment in BCP Great Lakes Fund LP, but treats this investment as an investment in a joint venture because an affiliate of PTMN’s investment adviser manages BCP Great Lakes Holdings LP and controls a 50% voting interest in the JV. In effect,
the JV is structured very similarly to a typical BDC joint venture, except the 50% voting interest is controlled by an affiliate of the BDC’s investment adviser instead of the BDC directly. In this regard, we note that PTMN made this investment
prior to the Externalization, and has changed its characterization of this investment from an equity investment prior to the Externalization to a joint venture investment once PTMN became an affiliate of Sierra Crest.

8.
 On page 59 of the Registration Statement there is disclosure that states that PTMN “generally may not
sell, exchange, assign, pledge or otherwise transfer its interest [in BCP Great Lakes Fund LP], in whole or in part, without the prior written consent of the General Partner which consent may be given or withheld in its sole and absolute discretion,
and may be conditioned upon repayment of its share of indebtedness incurred by the partnership.” Please confirm that PTMN is not obligated to repay any indebtedness of this vehicle. If PTMN is obligated to repay indebtedness of this vehicle,
please explain supplementally how this obligation is reflected in the senior securities table.

 BCP Great Lakes Fund
LP currently has no indebtedness. Further, PTMN would not be obligated to repay any indebtedness of BCP Great Lakes Fund LP, were it to incur indebtedness. PTMN’s obligations to BCP Great Lakes Fund LP are limited to its capital commitment. In
the event that BCP Great Lakes Fund LP were to incur indebtedness for which PTMN was obligated to repay, PTMN’s share of such indebtedness would be reflected in its senior securities table.

 3

9.
 On page 60 of the Registration Statement there is disclosure stating that the fair value of PTMN’s
investment in the Asset Manager Affiliates was “de minimis” at September 30, 2019. Earlier in the Registration Statement, on page 55, it states that the investment in Asset Manager Affiliates has “no value.” Please explain
supplementally the discrepancy between these two statements or clarify the disclosure to be consistent.

 PTMN
acknowledges this comment and will revise the applicable disclosure in its upcoming Form 10-K filing to clarify that its investment in Asset Manager Affiliates has been written down and has been deemed to have
no value.

10.
 On page 66 of the Registration Statement there is disclosure that PTMN acts as servicer for the Revolving
Credit Facility. Please confirm whether PTMN receives fees for acting as servicer and, if so, whether those fees are disclosed.

PTMN is entitled to certain fees for services it provides under the Revolving Credit Facility, which may be waived or deferred by PTMN in its
sole discretion. The Loan and Security Agreement filed by PTMN as an exhibit to Form 8-K on December 23, 2019 includes these fees. To date, no fees have been paid to PTMN as the first potential payment is
not scheduled to be made until April 2020. PTMN has not yet determined whether it will waive or defer these fees. In the event PTMN receives such fees, there would be no impact, as Great Lakes Portman Ridge Funding LLC is a consolidated wholly-owned
subsidiary of PTMN and any fees would eliminate in consolidation.

11.
 In the senior securities table on page 98 of the Registration Statement, please add a footnote to the
“Fiscal 2019 (as of September 30, 2019)” line item stating that this line does not reflect the senior securities of the combined entity following the Merger.

PTMN has added a footnote stating that the senior securities table information presented for fiscal year 2019 (as of September 30, 2019)
does not give effect to the merger with OHAI, which closed on December 18, 2019. This new footnote notes that, in connection with the Merger, PTMN paid off the outstanding principal and accrued interest under OHAI’s credit facility and
entered into a senior secured revolving credit facility through Great Lakes Portman Ridge Funding LLC, a wholly-owned subsidiary. The new footnote also directs investors to the section of the amended Registration Statement that discusses the new
revolving credit facility (which was added in the amended Registration Statement).

12.
 On page F-2 of the Registration Statement, the consolidated balance
sheets of PTMN show line items “due from affiliates” and “due to affiliates.” Please supplementally explain the nature of these line items and the anticipated timeline for settling such receivables/payables. Additionally, please
confirm supplementally that the receivables/payables from affiliates shown for 2018 have been settled.

 4

 Amounts due to or from affiliates generally consist of ordinary course of business transactions
between the Company and its affiliates. Amounts due from affiliates are typically comprised of payments made by Portman on behalf of its affiliates (e.g. the Asset Manager Affiliates) or distributions receivable from affiliates. Amounts due to
affiliates are typically comprised of management and administrative fees payable to affiliates and payments made by affiliates on behalf of PTMN (e.g. direct expenses paid by the manager on behalf of PTMN). These receivable/payable balances are
settled in the normal course (e.g. on a quarterly basis). PMTN confirms that all receivables/payables from affiliates shown as of December 31, 2018 were settled prior to the end of the 2019 fiscal year.

13.
 Please conform the presentation of the “Derivatives” section of PTMN’s consolidated schedule
of investments on page F-16 of the Registration Statement to meet the requirements of Rule 12-13 under Regulation S-X.

 PTMN acknowledges this comment and will revise the presentation of the “Derivatives” section in its
upcoming Form 10-K filing.

14.
 Please conform the presentation of the “Affiliate Investments” section of the notes to
consolidated financial statements on page F-47 of the Registration Statement to meet the requirements of Rule 12-13 under Regulation
S-X. Specifically, please disclose the number of shares and principal amount of each investment at the end of the period.

PTMN acknowledges this comment and will revise the presentation of the “Affiliate Investments” section in its upcoming Form 10-K filing.

15.
 Please confirm supplementally that PTMN reasonably believes it has the ability to satisfy all of its
unfunded commitments and provide a general explanation of how PTMN believes it can cover such commitments.

 PTMN
confirms that it has a reasonable belief that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment, in each case as they come due. The Company intends to use its cash on hand or
liquidate a cash equivalent in order to satisfy any such unfunded commitments.

 Legal Comments

1.
 Throughout the Registration Statement please clarify the references and defined terms related to “CLO
Funds” and “CLO Fund Securities” to account for the fact that some collateralized loan obligation funds are managed by the Disposed Manager Affiliates and some are managed by other asset managers.

This comment has been incorporated in the Amendment.

2.
 In the italicized paragraph on page 1 of the Prospectus Summary please consider including disclosure
regarding the transaction with LibreMax regarding the Disposed Manager Affiliates similar to language included elsewhere in the Registration Statement.

 5

 This comment has been incorporated in the Amendment.

3.
 On page 3 of the Prospectus Summary please clarify whether the emphasized language in the following sentence
should refer to all outstanding debt of an issuer: “Our investment due diligence and selection generally focuses on an underlying issuer’s net cash flow after capital expenditures to service our debt rather than
on multiples of net income, valuations or other broad benchmarks which frequently miss the nuances of an issuer’s business and prospective financial performance.”

The relevant language has been revised to refer to an issuers ability to services “its debt.”

4.
 On page 3 of the Prospectus Summary please clarify the emphasized language in the following sentence:
“When we extend senior and junior secured term loans, we will generally take a security interest in the available assets of the portfolio company, including the equity interests of our subsidiaries, which we expect to help mitigate
the risk that it will not be repaid.

 The requested clarification been incorporated in the Amendment.

5.
 On page 4 of the Prospectus Summary, and throughout the Registration Statement, please confirm that the
names of PTMN’s joint venture or other subsidiaries have been updated to reflect any recent name changes.

 The
Registration Statement has been revised to incorporate this comment.

6.
 On page 4 of the Prospectus Summary please clarify the following sentence or conform it to the disclosure on
page 56 of the Registration Statement: “In addition, we used cash on hand and borrowings under a credit facility to purchase approximately $184 million of primarily middle-market loans from us and we used the proceeds from such sale to
redeem approxim

CORRESP
1
filename1.htm

    November 5, 2019

    VIA EDGAR

    Securities and Exchange Commission

    Division of Investment Management

    100 F Street, N.W.

    Washington, D.C. 20549

    Attn: Deborah O’Neal-Johnson and Kathy Churko

            Re:

            Portman Ridge Finance Corporation;

            Amendment to Form N-14, File No. 333-233664

    Dear Ms. O’Neal-Johnson and Ms. Churko:

    On behalf of Portman Ridge Finance Corporation (“PTMN” or the “Company”), we are providing the following response to a comment received by telephone from the staff of the Securities and Exchange Commission (the
      “Commission”) on October 22, 2019 and subsequent telephone calls relating to PTMN’s Form N-14 filed with the Commission on September 6, 2019, as amended on October 15, 2019 (the “Registration Statement”). Please note that all capitalized terms used
      but not defined in this letter have the meanings given to them in the Registration Statement.

    Accounting Comment

              1.

                Following up on the response to accounting comment #4 in the prior response letter, please explain the impact, if any, of the day-one unrealized gain on the income portion of the incentive fee for PTMN after closing of the transaction.
                  Depending on your response, please consider whether additional disclosure revisions are necessary.

      PTMN will adjust the cost basis for the acquired assets as a result of the transaction. This purchase discount adjustment is not expected to result in any immediate impact on the capital gains incentive fees that are contractually payable by
        PTMN, since it will be reflected as an unrealized gain at closing. PTMN will begin to accrete such purchase discount into income following the closing of the transaction over the remaining lives of the acquired investments. At closing, PTMN would
        also accrue a liability for incentive fees which may be earned related to the unrealized gain. Currently, PTMN does not expect to acquire any equity positions that would require adjustment, but this would apply to debt investments. To the extent
        PTMN holds these investments to maturity, the purchase discount would accrete as investment income over time, and would factor into whether PTMN reaches the applicable income hurdle that would trigger an incentive fee on income. This would be the
        same for any other asset that PTMN may acquire at a discount, and therefore PTMN does not believe it is necessary to add any additional disclosure regarding the impact of the transaction on the income portion of the incentive fee. However, to the
        extent PTMN sells one or more of the acquired assets prior to maturity, it is possible that PTMN could realize capital gains that impact the capital gains portion of the incentive fee. In this respect, the impact on the capital gains realized by
        PTMN could be more significant if PTMN disposes of an acquired asset shortly after the closing of the transaction. Accordingly, PTMN has added disclosure to the amended Registration Statement indicating that if PTMN disposes of a significant amount
        of the acquired assets shortly after the closing of the transaction, it is possible that such sales could materially increase the incentive fee on any capital gains paid by PTMN to Sierra Crest.

       2

            2.
            Please supplementally explain how you have analyzed the $3 million payment from Sierra Crest to OHAI Stockholders from an accounting perspective, and discuss whether you intend to treat the payment
              as part of the merger consideration from an accounting perspective.

      The PTMN/OHAI merger is structured to be a “NAV for NAV” transaction, with both net asset values (“NAVs”) representing the fair value of the net assets of each BDC at closing. In all cases, the aggregate cash and stock that PTMN will pay to OHAI
        will equal the value of OHAI’s net assets, and any shares issued by PTMN will be issued at the then-current net asset value per share.

      It should be noted that since both PTMN and OHAI trade at significant discounts to NAV, the merger was structured to be a NAV for NAV transaction.  If viewed on a relative market value basis, on June 30th 2019 PTMN would have been paying approximately a $2.5 million premium.

        The separate $3 million payment from Sierra Crest to OHAI stockholders is a fixed amount not related to the NAV for NAV consideration to be paid by PTMN. Rather, the $3 million to be paid by Sierra Crest is a payment by a non-stockholder
          manager out if its own resources for a benefit that will accrue to the manager (i.e., the opportunity to earn additional management and incentive fees on the acquired assets in the future).

        From a legal perspective, the merger and the $3 million payment are intended to be viewed as separate. Pursuant to the PTMN/OHAI Merger Agreement, the $3 million payment from Sierra Crest was structured as a separate and direct payment to OHAI
          stockholders in recognition of Sierra Crest’s ability to earn additional management and incentive fees on the acquired assets.  Consistent with that approach, the PTMN/OHAI Merger Agreement did not include the $3 million payment in Article II
          (Effect of the Merger on Capital Stock; Exchange of Certificates) of the Merger Agreement where the term “Merger Consideration” is defined, but the additional payment was rather included in Article VI (Covenants and Agreements) of the Merger
          Agreement as an additional covenant amongst the parties.

         3

        In evaluating the accounting for the Merger, the Company evaluated the $3 million payment from Sierra Crest by referencing Staff Accounting Bulletin No. 107 (“SAB 107”) Topic 5: Miscellaneous Accounting, paragraph T, Accounting for Expenses or
          Liabilities Paid by Principal Stockholder(s). In analyzing this guidance, the Company does not intend to treat the $3 million payment as part of the merger consideration since:

                  1.

                  The merger is structured as a NAV for NAV transaction, in which PTMN is purchasing the assets of an externally managed BDC.

                      2.

                      The $3 million is payable directly to OHAI shareholders, is a fixed amount and is not related to the NAV for NAV consideration to be paid by PTMN.

                      3.

                      Sierra Crest is not a stockholder of PTMN. ASC Topic 718 relates to the accounting and disclosure requirements of stock compensation, and thus substantively is not applicable to this transaction. ASC
                        Topic 718 is referred to by Topic 5T in the context of a holder of an economic interest in a company making a payment on behalf of the company and discusses compensation that would be tied to that economic interest. While it may be
                        possible to take a different view, Sierra Crest is not making this payment or benefitting from the payment as a stockholder of PTMN, but instead Sierra Crest will be the beneficiary of the $3 million payment directly to OHAI
                        shareholders stemming from the opportunity for Sierra Crest to earn additional management and incentive fees in its role as investment adviser.

                      4.

                      Given these facts, recognition as a deemed capital contribution would not be the best reflection of the accounting outcome of the transaction. The Company intends to follow the disclosure guidance in
                        accordance with ASC Topic 850 – Related Party Disclosures, as that more appropriately reflects the accounting reality in this case.

          To date, the Company’s auditor has not disagreed with PTMN’s conclusion but will continue to perform its analysis of the accounting treatment and consider this issue in connection with
            PTMN’s annual audit.

    4

    Please call me (202-636-5543) or Christopher Healey (202-636-5879) with any questions you may have regarding this filing or if you wish to discuss the above responses.

            Very truly yours,

            /s/ RAJIB CHANDA

            cc:

            Jacob Sandovall, Division of Investment Management

            Jenson Wayne, Division of Investment Management

            Jonathan L. Corsico, Simpson Thacher & Bartlett LLP

            Christopher P. Healey, Simpson Thacher & Bartlett LLP

            Harry S. Pangas, Dechert LLP

            Bernardo L. Piereck, Dechert LLP

            Kenneth E. Young, Dechert LLP

CORRESP
1
filename1.htm

    October 15, 2019

    VIA EDGAR

    Securities and Exchange Commission

    Division of Investment Management

    100 F Street, N.W.

    Washington, D.C. 20549

    Attn: Deborah O’Neal-Johnson and Kathy Churko

            Re:

            Portman Ridge Finance Corporation;

            Form N-14, File No. 333-233664

    Dear Ms. O’Neal-Johnson and Ms. Churko:

    On behalf of Portman Ridge Finance Corporation (“PTMN”), we are providing the following responses to comments received by telephone from the staff of the Securities and Exchange Commission (the “Commission”) on October
      3, 2019 relating to PTMN’s Form N-14 filed with the Commission on September 6, 2019 (the “Registration Statement”). Please note that all page numbers in our responses are references to the page numbers of the Registration Statement.  All capitalized
      terms used but not defined in this letter have the meanings given to them in the Registration Statement.

    Accounting Comments

              1.

                The first sentence in the second full paragraph on page 7 states that the Merger “will not qualify as a reorganization if the fair market value of the PTMN Common Stock received by OHAI Stockholders in the Merger does not equal or
                  exceed 40% of the aggregate consideration.”  Please supplementally advise us whether the Merger would have qualified as a reorganization had it occurred on June 30.

    PTMN confirms that, had the Merger occurred on June 30, 2019, more than 40% of the aggregate consideration received by OHAI Stockholders would have been comprised of PTMN Common Stock, and the Merger would have qualified as a reorganization.

              2.

                On page 9, the second full paragraph in the “Merger Structure” section indicates that “PTMN Stockholders will own approximately 83% of the outstanding PTMN Common Stock and former OHAI Stockholders will own approximately 17% of the
                  outstanding PTMN Common Stock.”  Please supplementally provide support for these calculations.

    As of June 30, 2019, PTMN had 37,356,061 shares outstanding and total net assets of $139,177,591. OHAI had net assets of $37,006,062. If the Merger had been consummated on June 30, 2019, PTMN would have issued 7,384,831 shares (after accounting
      for anticipated expenses of both parties related to the transaction). PTMN’s calculation of the pro forma ownership of the combined entity among existing PTMN Stockholders and OHAI Stockholders is below:

            A.          Shares of PTMN Prior to Merger

            37,356,061 shares

            (83.494% of Line C)

            B.          Shares issued to OHAI Stockholders

            (19.769% of Line A)

            7,384,831 shares

            (16.506% of Line C)

            C.          Pro forma outstanding shares of PTMN Common Stock

            (Line A + Line B)

            44,740,892 shares

      1

              3.

                On page 15, the Registration Statement states that “[b]ased on the number of outstanding shares of OHAI Common Stock as of June 30, 2019, the net asset value per share of PTMN Common Stock and the net asset value per share of OHAI
                  common stock on such date, PTMN would issue approximately 7,433,856 shares of PTMN Common Stock pursuant to the Merger Agreement.”  Please supplementally confirm whether this number means that PTMN would have issued common stock equal to
                  more or less than 19.9% of the number of issued and outstanding shares of PTMN Common Stock immediately prior to the Effective Time. If applicable, please clarify this in this disclosure that PTMN would have been required to increase the
                  cash consideration payable to OHAI Stockholders had the Merger been consummated on June 30, 2019.

    PTMN would have issued new shares of PTMN Common Stock equal to 19.769% of the number of issued and outstanding shares immediately prior to the Merger if it had occurred on June 30, 2019. Accordingly, PTMN would not have been required to increase
      the cash consideration payable to OHAI Stockholders above $8 million if the Merger had occurred on June 30, 2019. The relevant disclosure has been revised to reflect the correct number of shares that would have been issued on June 30, 2019.

              4.

                In the “Risks Relating to an Investment in OHAI’s Securities” section on page 60, the Registration Statement provides that OHAI’s shares currently trade at a substantial discount.  If this discount will be allocated to OHAI assets, or
                  result in a day-one gain or loss, please revise this disclosure accordingly.  Please refer to FASB ASC 805, Business Combinations, as the Staff believes the transaction may be deemed an asset acquisition under FASB ASC 805.

      PTMN agrees with the Staff’s position and has revised the pro forma financial statements to reflect a day-one unrealized gain, determined by comparing the
        fair value of consideration given (using the market value of Portman Ridge stock on June 30, 2019, plus cash consideration) to the fair value of the net assets acquired. The discount has been allocated to the investments acquired, which will
        accrete (to par) over the remaining lives of those investments. To the extent that one of those investments is sold in the future at price in excess of its then amortized cost (such amortized cost reflecting accumulated accretion from the date of
        acquisition), then such sale will result in a realized gain, which gain would be considered in the determination of the capital gain incentive fees payable by PTMN to Sierra Crest. Additional disclosure has been added to the pro forma financial
        statements regarding the day-one unrealized gain and the potential to impact future capital gain incentive fees.

              5.

                In the “Comparative Fees and Expenses” table on page 62:

              a.

                Please confirm that the amounts represent the current expenses of PTMN and OHAI.  In addition, please indicate that PTMN is the acquiring fund and that OHAI is the target fund in the table.

      2

    The annualized expenses shown for PTMN are based on actual expenses for the quarter ended June 30, 2019, to account for the fact that PTMN transitioned from an internal management structure to an external management structure effective April 1,
      2019. The actual expenses shown for PTMN exclude a non-recurring lease impairment charge, as disclosed in footnote 7 to the fees and expenses table. Similarly, the “actual” amounts presented in the table with respect to OHAI reflect the annualized
      actual amounts incurred by OHAI during the three months ended June 30, 2019, excluding costs related to the strategic alternative review process.  PTMN and OHAI excluded the non-recurring lease impairment charge and the costs related to the strategic
      alternative review process, respectively, because including these non-recurring charges would overstate their annualized expense estimates. Support for these calculations is attached hereto as Exhibit A. The table has been revised to indicate that
      PTMN is the acquiring fund and that OHAI is the target fund in connection with the proposed merger transaction.

              b.

                OHAI’s incentive fees are shown as 0.00%.  However, the Selected Consolidated Financial Data of OHAI on page 68 shows OHAI’s incentive fees as 0.4% for the six months ended June 30, 2019.  Please confirm that the incentive fees line
                  item on page 62 is accurate.

    OHAI’s incentive fee of 0.4% in the “Selected Consolidated Financial Data” table on page 68 represents the capital gains incentive fee accrual as of June 30, 2019, which OHAI is required under U.S. GAAP to accrue during the year but is
      determinable and payable in arrears as of the earlier of the end of each fiscal year or the termination of the investment advisory agreement. However, based on OHAI’s investment portfolio activity and preliminary portfolio valuations subsequent to
      June 30, 2019, OHAI estimates the capital gains incentive fee to be approximately $46,000, or 0.12% of net asset value.  As a result, we have revised the “Comparative Fees and Expenses” table in the Registration Statement to reflect the foregoing
      information.

              c.

                Please supplementally provide support for the pro forma “other expenses” calculation of 3.71%.

      Support for these calculations is attached hereto as Exhibit B.

              d.

                Please supplementally explain why the 16.32% total annual expenses shown for PTMN in the fees and expenses table is lower than the expenses shown in the PTMN Consolidated Financial Highlights (unaudited) in the Form 10-Q for the period
                  ended June 30, 2019.

    The 16.32% total annual expenses shown for PTMN reflects PTMN’s second quarter actual expenses included in the Form 10-Q, less a $1.4 million lease impairment charge, on an annualized basis. Disclosure has been added to footnote 8 to the fees and
      expenses table to account for the exclusion of the lease impairment, similar to the disclosure in footnote 7.

              e.

                Please clarify footnote 3 on page 62 to indicate that the pro forma column assumes combined asset as of June 30, 2019. If it does not, please supplementally explain why that is the case.

    PTMN has incorporated the requested revisions.

              f.

                Please supplementally state whether the Merger will result in a realization event for OHA for incentive fee purposes. If so, in footnote 5 on page 62, please provide an estimate of the capital gains incentive fee in both dollars and
                  basis points that will be payable upon termination of OHAI’s investment advisory agreement as a result of the Merger.

    The termination of OHAI’s investment advisory agreement in connection with the Merger will not impact the calculation of the capital gains incentive fee payable thereunder (i.e., it will not result in the realization of gains or losses on any of
      OHAI’s individual investments for purposes thereof). However, such termination would re-establish the date to calculate the capital gains incentive fee amount to be paid to its investment adviser. Under the investment advisory agreement, the capital
      gains incentive fee is determined/calculated on the earlier of (i) December 31 of each year (which is OHAI’s fiscal year end) and (ii) upon termination of the investment advisory agreement.  As noted above, OHAI estimates that a capital gains
      incentive fee in the amount of $46,000 would be currently payable to its investment adviser at the next trigger/determination date set forth in its investment advisory agreement.  Because the Merger is expected to close prior to December 31, 2019,
      the trigger/determination date for the calculation of the capital gains income incentive fee to be paid to its investment adviser will likely be the date of the closing of the Merger.  As a result, OHAI has revised footnote 5 to the table entitled
      “Comparative Fees and Expenses Relating to the Merger” in the “Comparative Fees and Expenses” section to disclose the foregoing information.

      3

              6.

                Please confirm the numbers in the “Example” on page 63 and supplementally provide support for those calculations.

    PTMN confirms that the numbers related to PTMN in the “Example” are accurate. OHAI has revised the numbers related to OHAI in the “Example” for the reasons noted elsewhere herein. Support for these calculations is attached hereto as Exhibit C.

              7.

                The “Selected Consolidated Financial Data of OHAI” table on page 68 is presented in thousands while the corresponding “Selected Consolidated Financial Data of PTMN” table on page 67 is not.  Please consider conforming the PTMN table to
                  thousands.

    PTMN has incorporated the requested revisions.

              8.

                Please supplementally explain why the amounts for “investments, at fair value” in the PTMN Pro Forma Condensed Consolidated Statement of Financial Condition on page 72 correspond to the capitalization table under “Portfolio and
                  Investment Activity” on page 168 table but do not correspond to the amounts in the PTMN Consolidated Schedule of Investments for June 30, 2019 (unaudited) in the Form 10-Q for the period ended June 30, 2019.

    The amounts for “investments, at fair value” in the PTMN Pro Forma Condensed Consolidated Statement of Financial Condition and capitalization table under “Portfolio and Investment Activity” in the Registration Statement do not include $27,443,091
      of short-term investments. Those short-term investments are accounted for in the “Cash, cash equivalents and restricted cash” and “Other assets” line items. The Consolidated Schedule of Investments in PTMN’s Form 10-Q for the period ended June 30,
      2019 includes short-term investments, and we note that the PTMN Pro Forma Condensed Consolidated Schedule of Investments included in the Registration Statement is identical in that respect.

              9.

                Will there be any unfunded commitments for the combined entity?  If so, please supplementally confirm that PTMN’s assets will provide adequate coverage to satisfy all unfunded commitments of the combined entity.

    It is likely that there will be unfunded commitments for the combined entity at closing of the Merger, and it is anticipated that the combined entity will have adequate coverage to satisfy all such unfunded commitments.

              10.

                On page 75, the Registration Statement states that approximately $7.8 million in cash consideration will be paid to OHAI Stockholders.  However, other parts of the Registration Statement reference $8 million in cash consideration to
                  OHAI Stockholders.  Please revise accordingly or explain supplementally the discrepancy between the two numbers.

      4

    PTMN has incorporated the requested revisions.

              11.

                In the “PTMN Pro Forma Condensed Consolidated Schedule of Investments” table beginning on page 77:

              a.

                Please confirm that all controlled or affiliated issuers are noted.

    PTMN confirms that all controlled or affiliated issuers are noted in the PTMN Pro Forma Condensed Consolidated Schedule of Investments.

              b.

                Certain investment interest rates/maturity include LIBOR but do not include the LIBOR reference rate.  Please update the table to include the proper reference rates and descriptions for such portfolio companies.

    PTMN has incorporated the requested revisions.

              c.

                The OCI Holdings, LLC entry on page 81 lists the investment interest rate as “LIBOR+ 12.0% cash with a 1.0% floor plus 3.0% PIK.”  Please confirm the accuracy of the description, as the disclosure in footnote 26 appears to be
                  inconsistent.

    The Registration Statement has been revised to eliminate the inconsistency.

              d.

                Please explain why the U.S. Treasury Bill rates are not disclosed.

    The Registration Statement has been revised to disclose the yield on OHAI’s U.S. Treasury Bill rates.

              e.

                Please supplementally explain how skim interest results in a higher interest rate spread, as noted in footnote 30.

    ClearChoice has debt in the form of a term loan and a revolver that are pari passu and both accrue interest at LIBOR+650bps.  A small amount of the term loan was tranched out to a third party lender on a first-out basis at a lower LIBOR spread.
      The difference between 6

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295 Madison Avenue, 6th Floor

New York, NY 10017

July 20, 2017

VIA EDGAR

James E. O’Connor

Kathy Churko

United States Securities and Exchange Commission

Division of Investment Management

100 F Street, N.E.

Washington, D.C. 20549-4041

    Re:
    KCAP Financial, Inc.

Pre-Effective Amendment No. 1
to Registration Statement on Form N-2

File No. 333-218596

Dear Mr. O’Connor and Ms. Churko:

On behalf of KCAP Financial, Inc. (the “Registrant”)
and pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended, I hereby request acceleration of the effective
date of the Pre-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form N-2 to 12:00 p.m. Eastern Time
on July 21, 2017, or as soon thereafter as is practicable.

Should you have any questions concerning
this request, please contact me at (212) 455-8300 or, our counsel, Harry Pangas at Eversheds Sutherland (US) LLP at (202) 383-0805.

    Sincerely,

    KCAP Financial, Inc.

    By: /s/ Dayl W. Pearson

    Name: Dayl W. Pearson

    Title: President and Chief Executive Officer

CORRESP
1
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    Eversheds Sutherland
        (US) LLP

        700 Sixth Street, NW,
        Suite 700

        Washington, DC 20001-3980

        D: +1 202.383.0176

        F: +1 202.637.3593

        harrypangas@eversheds-sutherland.com

July 20, 2017

VIA EDGAR

James E. O’Connor

Kathy Churko

U.S. Securities and Exchange Commission

Division of Investment Management

100 F Street, N.E.

Washington, D.C. 20549

 Re: KCAP Financial, Inc.

  Registration Statement on Form N-2

  File No. 333-218596

Dear Mr. O’Connor and Ms. Churko:

On behalf of
KCAP Financial, Inc. (the “Company”), set forth below are the Company’s responses to the
oral comments provided by the staff of the Division of Investment Management (the “Staff”) of
the Securities and Exchange Commission (the “Commission”) to the Company on June 30, 2017, July 7,
2017 and July 18, 2017 relating to the Company’s Registration Statement on Form N-2 (File No. 333-218596) (the
“Registration Statement”) filed with the Commission on June 8, 2017.

The Staff’s comments
are set forth below in italics and are followed by the Company’s responses. Where revisions to the Registration Statement
are referenced in the responses set forth below, such revisions have been included in Pre-Effective Amendment No. 1 to the Registration
Statement (the “Amended Registration Statement”) filed concurrently with this letter.

Legal Comments

Comment
No. 1: Please confirm, if applicable, that an up-to-date power of attorney has been filed with the Registration
Statement.

Response:
The Company confirms that an up-to-date power of attorney was included on the signature page of the Registration Statement.

Comment
No. 2: Reference is made to footnote 7 to the “Calculation of Registration Fee” table on the cover page
of the Registration Statement. The Staff notes that the securities on the Company’s prior shelf registration statement were
registered on May 23, 2013 (the “Prior Effective Date”), thus exceeding the three-year limit on offerings and
sales of Rule 415(a)(5). Please confirm to us that no offers and sales have been made by the Company off such shelf registration
statement more than three years after the Prior Effective Date.

    U.S. Securities and Exchange
        Commission

        Division of Investment
        Management

        July 20, 2017

        Page 2

Response:
The Company confirms that no offers and sales were made pursuant to the Company’s prior shelf registration statement more
than three years after the Prior Effective Date.

Comment
No. 3: Reference is made to the “Prospectus Summary” on page 1 of the Registration Statement. Please
clearly and prominently disclose in the prospectus included in the Registration Statement that the Company’s investments
in the residual interests of CLO funds are riskier than direct investments in the non-investment grade loans held by the CLO funds.
In addition, please disclose the increased risks associated with the Company’s investments in the residual interests of CLO
funds given that highly leverage nature of the CLO funds in which the Company typically invests.

Response:
The Company has revised the above-referenced disclosure in response to the Staff’s comment. See pages 1, 47 and 73 of
the Amended Registration Statement.

Comment
No. 4: We note the reference to a “$710,000 tax return of capital” on page 6 and elsewhere in the Registration
Statement. Please delete the word “tax” when referring to such term in the Registration Statement. Please disclose
here the total distributions paid by the Company for each of its last three fiscal years and the amounts and/or percentages of
those distributions that were returns of capital. Please also explain why the book and tax accounting characterizations of the
Company’s distributions may differ. In addition, please provide all distribution information, including returns of capital,
on a book basis. See Item 4.1.c.3 of Form N-2.

Response:
The Company has replaced all references to “tax return of capital” in the Registration Statement with the words
“return of capital.” See pages 6 and 78 of the Amended Registration Statement. In addition, given that the
requested disclosure regarding the total distributions paid by the Company for each of the last three years, including the
amounts of those distributions that were returns of capital, and the reasons why book and tax accounting characterizations of
the Company’s distributions may differ are already contained in the section entitled “Price Range of Common Stock
and Distributions” and Note 8. “Distributable Taxable Income” to the Company’s audited financial
statements included in the Registration Statement, the Company does not believe that it is necessary to repeat such
information in the “Prospectus Summary” section. Finally, the Company confirms that all distribution information,
including returns of capital information, set forth in the Registration Statement are presented on a book basis.

Comment
No. 5: Reference is made to the mention of the Company’s previously identified “material weakness in
internal control over financial reporting” on page 6 of the Registration Statement. Please provide appropriately detailed
disclosure about this weakness in internal controls.

Response:
The Company advises the Staff that the above-referenced material weakness related to the 2014 fiscal year and that since such time
the Company has received two “clean” internal control audit opinions from its independent registered public accounting
firm (i.e., for the fiscal years ended December 31, 2015 and 2016). As a result, the Company has removed the stale reference to
it from the Registration Statement.

Comment
No. 6: Reference is made to the “Fees and Expenses” table on page 12 of the Registration Statement.
As per the disclosure on page 122 of the Registration Statement, please include the $15.00 DRIP shares sale transaction fee referenced
therein in the “Other expenses” line item to the “Fees and Expenses” table and add the following information
regarding the DRIP to footnote 3 to the “Fees and Expenses” table:

        U.S. Securities and Exchange
        Commission

        Division of Investment
        Management

        July 20, 2017

        Page 3

The expenses
of the dividend reinvestment plan are included in “other expenses.” The plan administrator’s fees will be paid
by us. There will be no brokerage charges or other charges to stockholders who participate in the plan except that, 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 $15.00 transaction fee plus a $0.10 per share brokerage commission from the proceeds. For additional information, see
“Distribution Reinvestment Plan.”

See
instruction 4 to Item 3 of Form N-2.

Response:
The Company has revised the disclosure in the Amended Registration Statement to include the above-referenced footnote. The
Company has not included the $15 transaction fee in the line item disclosure under “Dividend reinvestment plan fees,”
however, because it believes that such line-item disclosure would only confuse investors. The $15 transaction fee is assessed
on the aggregate proceeds sold by the plan administrator on behalf of a given stockholder who instructs the sale in the future
and not on a per share basis. So the impact of the $15 transaction fee could vary significantly depending on the number of
shares sold by the stockholder in the future and the price of that sale, and may bear little to no relationship to the price
in the offering. For example, disclosing a $15 transaction fee as a shareholder transaction expense on a $10 per share offering
price may lead investors to believe that the $15 transaction fee is assessed on a per share basis. This disclosure would be
particularly confusing to an investor, say, who purchased 1,000 shares in the offering and later sold those shares for $10,000
in aggregate proceeds pursuant to the DRIP. The impact of the $15 transaction fee to this investor would be 1.5% per share
(or 0.15% of the sale proceeds), but not the 150% per share seemingly presented in the line-item disclosure. As a result,
instead of including the $15 transaction fee in the line-item disclosure, the Company will reference the fee in the footnote
disclosure so investors will have the information and context they need to understand how the fee would apply to the aggregate
proceeds in a future sale pursuant to the DRIP.

Comment
No. 7: Reference is made to the “Selected Financial and Other Data” table on page 14 of the Registration
Statement. Please disclose how “weighted average yield of income producing debt investments” is calculated and that
it is higher than what investors will receive from the Company in the form of distributions on the shares of the Company’s
common stock because such figure does not reflect expenses incurred by the Company or the sales load paid by the Company’s
stockholders. Please also disclose, immediately below this line item, the Company’s “total return based on net asset
value” and “total return based on market value.” Please also describe briefly how these two numbers are calculated
and that they do not reflect any sales load that may be paid by the Company’s investors. The Staff notes that this comment
applies globally throughout the document where “weighted average yield of income producing debt investments” is referenced.

Response:
The Company has added disclosure in the Amended Registration Statement relating to how it calculates the “weighted
average interest rate on income producing debt investments” and that such figure is higher than what investors will
receive from the Company in form of distributions on the shares of the Company’s common stock because it does not
reflect expenses incurred by the Company or the sales load paid by the Company’s stockholders. In addition, the Company
has included the additional requested disclosure. See pages 4, 14, 50, 55,  59 and 76 of the Amended
Registration Statement.

Comment
No. 8: Reference is made to the section entitled “Risk Factors” on page 16 of the Registration Statement.
Is the risk factor entitled “Uncertainty about the financial stability of the United States, China and several countries
in the European Union could have a significant adverse effect on our business, financial condition and results of operations”
a principal risk for a business development company such as the Company?

Response:
The Company has deleted the above-referenced risk factor.

    U.S. Securities and Exchange
        Commission

        Division of Investment
        Management

        July 20, 2017

        Page 4

Comment
No. 9: Reference is made to the section entitled “Risk Factors” on page 19 of the Registration Statement.
In the risk factor entitled, “Our Asset Manager Affiliates may incur losses . . . ,” please strike the words “if
applicable” from the last sentence thereof.

Response:
The Company has complied with this comment. See page 18 in the Amended Registration Statement.

Comment
No. 10: Reference is made to the section entitled “Risk Factors” on page 21 of the Registration Statement.
Does the Company intend to take any steps to increase the cited asset coverage ratio of 203% as of March 31, 2017?

Response:
The Company advises the Staff that it is managing its asset coverage ratio through the maintenance of sufficient liquidity to enable
it to redeem, repurchase or otherwise retire its debt securities as necessary to remain in compliance with the 200% asset coverage
requirement under the Investment Company Act of 1940. In this regard, during the second quarter of 2017 we redeemed $6.5 million of the Company’s debt securities.  In addition, the Company is seeking to enter into an arrangement with a third party pursuant to which the parties would seek to securitize their existing loan investments to generate cash.  The Company would use the cash proceeds from the securitization transaction to reduce its outstanding indebtedness.

Comment
No. 11: Reference is made to the section entitled “Risk Factors” on page 22 of the Registration Statement.
Under the risk regarding pending legislation, please strike “assets” in the third line and replace it with the words
“gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities.”

Response:
The Company has revised the disclosure accordingly. See page 22 of the Amended Registration Statement.

Comment No. 12:
Reference is made to the final risk factor on page 26 of the Registration Statement, which is entitled, “We will be subject
to corporate-level U.S. federal income taxes if we are unable to qualify as a RIC under Subchapter M of the Code.” The last
sentence of the first bullet provides: “If we are unable to obtain cash from other sources, we could fail to qualify for
RIC tax treatment and thus become subject to corporate-level U.S. federal income taxes.” The Staff notes that a RIC does
not lose qualification as a RIC by failing to satisfy the distribution requirement – it loses the ability to deduct the amount
distributed.

Response:
The Company respectfully believes the disclosure is accurate as it states that the Company would fail to qualify for
“RIC tax treatment,” not that it would fail to qualify as a RIC. Notwithstanding such fact, the Company has
revised the disclosure to clarify that it “could fail to qualify for taxation as a RIC under subchapter M of the
Code” if it were unable to obtain cash from other sources. See page 26 of the Amended Registration Statement. The
Company also notes that the consequences of failing to satisfy the minimum distribution requirement are much broader than
merely losing the ability to deduct the amount distributed.

Comment
No. 13: Reference is made to the risk factor on page 27 of the Registration Statement, which is entitled, “Proposed
regulations may impact our ability to qualify as a RIC if we do not receive timely distributions from our CLO investments.”
Please make clear and prominent that, as appears to be the case, most of the CLOs in which the fund invests will be in tax haven
foreign countries and that the CLOs themselves will be subject to the complicated PFIC tax regime. In addition, the Staff notes
that the Code provides no basis for a conclusion that non-distributed Subpart F income is qualifying income, so please update the
disclosure accordingly.

Response:
The Company has added the requested disclosure as an additional risk factor except as noted in the
following sentences. The Company respectfully notes that the location of the CLOs in so-called “tax haven foreign
jurisdictions” is irrelevant to the determination of whether such CLOs are PFICs or CFCs and is therefore irrelevant
from a disclosure standpoint. In light of the foregoing, the Company has not added the requested disclosure. Further, as noted in the
response to Comment No. 14 below, the Company believes that the Code does provide a basis for a conclusion that
non-distributed Subpart F income is qualifying income and, as a result, the Company has not added this disclosure.

    U.S. Securities and Exchange
        Commission

        Division of Investment
        Management

        July 20, 2017

        Page 5

Comment
No. 14: The same risk factor on page 27 of the Registration Statement includes a statement that, under current law,
the Company believes that the income inclusions from a CLO that is a QEF or a CFC would be “good income.” The Staff
notes that this belief does not appear to be valid. As you note, the Treasury and IRS have recently published proposed regulations
(REG-123600-15) concerning corporations seeking to qualify as a “regulated investment company,” as defined in Subchapter
M of the Intern

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[Letterhead of Sutherland Asbill & Brennan
LLP]

June 15, 2015

VIA EDGAR

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

 RE: KCAP Financial, Inc. – Form 10-K for the year
ended December 31, 2014

Dear Ms. Stout:

On behalf of KCAP Financial, Inc. (the “Company”),
set forth below are the Company’s responses to the oral comments of the staff of the Division of Investment Management (the
“Staff”) of the Securities and Exchange Commission (the “SEC”) that you provided
to us on May 13, 2015, regarding the Company’s Form 10-K for the year ended December 31, 2014 (the “Form 10-K”).
The Staff’s comments are set forth below and are followed by the Company’s responses.

1.            Comment: We note that the Company holds
a number of investments in holding companies. In this regard, we refer the Company to the October 2014 IM Guidance Update, “Investment
Company Consolidation” which states, in part:

“In reviewing registration statements and
financial statements, the staff has observed a number of BDCs that have wholly owned subsidiaries, for example, in order to facilitate
investment in a portfolio company. Certain of these BDCs do not consolidate such subsidiaries, even though the design and purpose
of the subsidiary (e.g., a holding company) may be to act as an extension of the BDC’s investment operations and to facilitate
the execution of the BDC’s investment strategy. As part of the registration statement and financial statement review process,
the staff has generally suggested BDCs consolidate such subsidiaries because the staff believes that consolidation provides investors
with the most meaningful financial presentation in those statements.”

The Company should review the above-referenced IM Guidance
Update and confirm to the Staff that none of the Company’s holding company investments are an extension of the Company’s
investment operations nor are they designed to facilitate the execution of the Company’s investment strategy.

Response: The Company has
reviewed the October 2014 IM Guidance Update, “Investment Company Consolidation” (the “IM Guidance”)
and confirms that its holding company investments are not an extension of its investment operations nor are they designed to facilitate
the execution of its investment strategy, in each case as outlined in the IM Guidance. In this regard, none of the holding companies
of the Company’s holding company investments was created for or in contemplation of the Company’s investment therein
or a subsidiary thereof.

2.            Comment: Please inform us whether the Company
has assessed the implications of Rule 3-09 and Rule 4-08(g) of Regulation S-X. Also, please confirm to us that all entities that
the Company is required to consolidate under SEC rules and U.S. generally accepted accounting principles have been consolidated
in the financial statements included in the Form 10-K.

Response:  The Company has
undertaken an analysis related to Rules 3-09 or 4-08(g) of Regulation S-X and confirms that no additional financial disclosure
relating to its investment portfolio is required to be included as a result thereof. In addition, the Company confirms that all
entities that it is required to consolidate under SEC rules and U.S. generally accepted accounting principles have been consolidated
in the financial statements included in the Form 10-K.

3.            Comment: Please advise us whether there
is an overlap in the portfolio management team at the Company and the Asset Manager Affiliates.

Response: There is no overlap
in the portfolio management team at the Company and the Asset Manager Affiliates (i.e., the portfolio management team at the Asset
Manager Affiliates makes investment decisions independent from the Company). However, certain of the Company’s executive
officers also act in similar capacities for one or both of the Asset Manager Affiliates.

4.            Comment: We refer to the audited financial
statements for the year ended December 31, 2013 of Katonah X CLO Ltd. included in the Form 10-K in accordance with Rule 3-09 of
Regulation S-X. We also refer to the summarized financial information for the year ended December 31, 2014 of Katonah X CLO Ltd.
included in the Form 10-K. In light of the guidance set forth in Section 2405.3 of the Financial Reporting Manual of the SEC’s
Division of Corporation Finance, please advise us as to why the Company did not include unaudited financial statements for
the year ended December 31, 2014 of Katonah X CLO Ltd. in the Form 10-K (i.e., instead of the summarized financial information
for the year ended December 31, 2014 of Katonah X CLO Ltd. that was included in the Form 10-K).

Response: Please be advised
that the Company’s investment in Katonah X CLO Ltd. only triggered the summary financial information requirement of
Rule 4-08(g) of Regulation S-X for the year ended December 31, 2013 and not the separate audited financial statement requirement
of Rule 3-09 of Regulation S-X. However, the Company elected to satisfy the requirement to include summary financial information
for the year ended December 31, 2013 of Katonah X CLO Ltd. in its Form 10-K for the year ended December 31, 2013 (the “2013
Form 10-K”) by the inclusion of separate audited financial statements of Katonah X CLO Ltd. in the 2013 Form 10-K.
The Company re-assessed this approach in connection with the Form 10-K filing and ultimately decided to only provide summary financial
information of Katonah X CLO Ltd. for the year ended December 31, 2014 in accordance with Rule 4-08(g) of Regulation S-X given
that the Company’s investment therein again only triggered the summary financial information requirement of Rule 4-08(g)
of Regulation S-X.

    2

5.            Comment: We refer to the statement in
the Form 10-K that “[a]lthough there was no effect on net income or total shareholders’ equity as a result of this
error, the Company has nevertheless determined that these errors are material and, as a result, previously issued financial statements
have been restated to correct for the error.” Please advise us as to why the Company believes it is not misleading to use
the term “net income” in the foregoing sentence given the potential confusion by investors of such term with the term
“net investment income.”

Response: Net income, which
is often referred to as “the bottom line” since it is listed at the bottom of the income statement, is generally understood
to mean the residual of all revenues and gains over all expenses and losses for the period. Given such fact, the Company used to
the term “net income” in the sentence referenced by the Staff to indicate that the accounting errors did not impact
the Company’s “bottom line” numbers for the prior periods, but instead impacted other offsetting line items on
the income statement. Moreover, the Company does not believe that investors will confuse the term “net income” with
the term “net investment income” given that the immediately preceding sentence states that the accounting errors resulted
in net investment income being overstated for the applicable periods. Finally, the Company notes that other business development
companies (“BDCs”) and research analysts covering BDCs use the term “net income” in the same
manner as the Company used it in the Form 10-K.

6.            Comment: We refer to the adjustments
disclosed in various locations in the Form 10-K. Please explain to us why the adjustments resulted in an increase in investment
income from “CLO Fund Securities managed by non-affiliates,” but a decrease in investment income from “CLO Fund
Securities managed by affiliates.”

Response: As set forth on
Exhibit A attached hereto, the application of the effective interest method in accounting for the investment income from
the Company’s equity investments in collateralized loan obligation funds (“CLOs”) resulted in increases
as well as decreases in the adjusted investment income recognized from the individual CLO equity investments included within
the “CLO Fund Securities managed by affiliates” category. However, because such decreases exceeded such increases on
an aggregate basis, the adjustment line item in the Form 10-K referenced by the Staff only discloses the net decrease in investment
income from “CLO Fund Securities managed by affiliates” and not the variability therein.

Similarly, the application of the effective
interest method in accounting for the investment income from the Company’s CLO equity investments resulted in increases
as well as a decrease in the adjusted investment income recognized from the individual CLO equity investments included within
the “CLO Fund Securities managed by non-affiliates” category. However, because such increases exceeded such decrease
on an aggregate basis, the adjustment line item in the Form 10-K referenced by the Staff only discloses the net increase in investment
income from “CLO Fund Securities managed by non-affiliates” and not the variability therein.

The above-discussed variability in connection
with the application of the effective interest method to the Company’s CLO equity investments is the result of the varying
inputs, particularly, changes in expected future cash flows, applicable to each of the Company’s CLO equity investments.
As a result, the reason for the difference between adjusted investment income recognized under the effective interest method from
the “CLO Fund Securities managed by non-affiliates” and the “CLO Fund Securities managed by affiliates”
is a function of the above-described netting as well as the varying inputs applicable to each of the Company’s CLO equity
investments used in connection therewith.

    3

7.            Comment: Unfunded commitments, which
are contractual obligations of the Company to make loans up to a specified amount at future dates, may subject the Company to risks
similar to those created by standby commitment agreements. Unfunded commitments, like standby commitment agreements, may be senior
securities under Section 18(g) (“any … obligation or instrument constituting a security and evidencing indebtedness”).
See Investment Company Act Release 10666, “Securities Trading Practices of Registered Investment Companies” (April
18, 1979). We consider unfunded commitments that specify an interest rate to be senior securities subject to the coverage requirements
of Sections 18 and 61 unless the Company has segregated liquid assets, or does it have borrowing capacity within its 200% asset
coverage limitation, equal to the market value of its unfunded commitments. Does the Company currently treat its unfunded commitments
as senior securities? If not, why not? Does the Company currently segregate liquid assets sufficient to cover its unfunded commitments?

Response: As of March 31,
2015 and December 31, 2014, the Company had no outstanding commitments to extend credit to any of its portfolio companies. Currently,
the Company only has an outstanding commitment to extend credit to one portfolio company, Trimaran Advisors, LLC (“Trimaran”),
pursuant to the terms of a $23 million senior revolving credit facility. Trimaran borrows under the facility from time to time
to facilitate the warehousing of loans in connection with the formation of new CLOs to be managed by the Asset Manager Affiliates.
However, because the Company controls the Asset Manager Affiliates, they would not enter into a warehouse and Trimaran would not
borrow under the facility without the Company’s prior consent. As a result, the Company believes that this arrangement differs
significantly from the other arrangements that the Staff is currently focusing on in connection with its review of SEC filings
by other BDCs given that these BDCs are contractually obligated to fund these other instruments if certain objective criteria
set forth therein were satisfied. Thus, the Company does not treat the Trimaran senior revolving credit facility as a “senior
security” for purposes of the Investment Company Act of 1940 and, accordingly, does not “cover” such arrangement
by earmarking and holding unencumbered liquid assets equal in value to the amounts outstanding under the Trimaran senior revolving
credit facility.

Notwithstanding the foregoing, the Company
understands that the Staff is in discussions with a number of other BDCs with respect to this issue and, as a result, undertakes
to comply with any industry-wide position taken by the Staff resulting therefrom with respect to unfunded commitments other than
the Trimaran senior revolving credit facility and similar arrangements with entities controlled by the Company.

8.            Comment: We refer to the disclosure under the
heading entitled “Management’s Report on Internal Control over Financial Reporting” on pages 74 and 75 of the
Form 10-K. Please advise us why the disclosure therein does not discuss the error relating to the Company’s accounting for
its equity investments in collateralized loan obligation funds discussed elsewhere in the Form 10-K.

    4

Response: The Company determined
that the error relating to the Company’s accounting for its equity investments in collateralized loan obligation funds resulted
in a significant deficiency in its internal control over financial reporting and that the error relating to the distributions received
by it from the Asset Manager Affiliates resulted in a material weakness in its internal control over financial reporting. As a
result and in conformance with guidance issued by the Office of Chief Accountant of the SEC’s Division of Corporation Finance,
the Company only disclosed the material weaknesses in its internal control over financial reporting relating to the distributions
received by it from the Asset Manager Affiliates in the management’s report on internal control over financial reporting
included in the Form 10-K.1

9.            Comment: On a going-forward basis, please
include the schedule required by Rule 12-14 of Regulation S-X in an appropriate location in the Company’s SEC filings. Similarly,
please separately identify each investment in the Company’s schedule of investments as a controlled investment, an affiliate
investment or a non-controlled/non-affiliate investment.

Response: The Company will
comply with the Staff’s comment regarding Rule 12-14 of Regulation S-X with its next Form 10-K filing. In addition, the Company
will comply with the Staff’s comment regarding categorizing its investments in its schedule of investments in one of the
three categories noted above in its SEC filings starting with its Form 10-Q for the quarter ending June 30, 2015.

10.            Comment: We refer to the borrowings
table on page F-54 of the Form 10-K. Please identify the applicable LIBOR rate associated with each debt security described therein.
Similarly, please identify the floating rate associated with each of the CLO rated notes set forth on page S-36 of the Form 10-K.

Response: The Company will
comply with this comment in connection with its next filing with the SEC.

11.            Comment: We refer to footnote 9 of the
Company’s schedule of investments which identifies those securities that are qualifying assets for purposes of Section 55(a)
of the Investment Company Act of 1940 (the “1940 Act”).  Consider disclosing the percentage of qualifying
assets at the reporting period date.

Response: The Company advises
the Staff that information regarding the percentage of qualifying assets at the reporting period date is disclosed in Note 4 –
Investments to the notes accompanying the financial statements. Specifically, Note 4 discloses that “[a]t December 31, 2014
and December 31, 2013, the total amount of non-qualifying assets was approximately 21% and 19% of total assets, respectively.”
As a result, the Company respectfully does not believe it is necessary to make the requested change.

1
See Question 11

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May 21, 2014

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

    RE:

        KCAP Financial, Inc. – Registration Statement
on Form N-2 (File No. 333-187570)

Dear Ms. Cole and Ms. Stout:

In accordance with Rule 461 of the General
Rules and Regulations under the Securities Act of 1933, as amended, KCAP Financial, Inc. hereby respectfully requests that the
above-captioned registration statement, including all amendments thereto, be ordered effective on May 22, 2014, at 11:00 a.m., or
as soon thereafter as practicable.

    KCAP Financial, Inc.

    By:
    /s/ Dayl W. Pearson

    Name:   Dayl W. Pearson

                    Title:     President and Chief Executive Officer

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May 21, 2014

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

    RE:

        KCAP Financial, Inc. – Post-Effective No. 1 to
Registration Statement on Form N-2

(File No. 333-187570) (the “Registration Statement”)

Dear Ms. Cole and Ms. Stout:

On behalf of KCAP Financial, Inc. (the “Company”),
set forth below are the Company’s responses to the oral comments of the staff of the Division of Investment Management (the
“Staff”) of the Securities and Exchange Commission (the “SEC”) that you provided
to us on April 21, 2014, regarding the Company’s Registration Statement that was filed with the SEC on March 20, 2014. The
Staff’s comments are set forth below and are followed by the Company’s responses.

1.	Comment: Please inform the Staff whether the
Company has assessed the implications of Rule 3-09 and Rule 4-08(g) of Regulation S-X.

Response:  The Company has
undertaken an analysis related to Rules 3-09 or 4-08(g) of Regulation S-X and confirms that no additional financial disclosure
relating to its investment portfolio is required to be included as a result thereof.

2.	Comment: We refer to the section entitled
“Fees and Expenses” in the Registration Statement. Please consider whether estimated offering expenses should be discussed
in the notes to the financial statements under the caption entitled “Commitments and Contingencies.”

Response: Given that the
nature of the Company’s shelf registration statement is a delayed offering of a multitude of securities (as opposed to an
immediate  continuous offering of one security), a reasonable estimate of expenses to be incurred in
connection with offerings of any or all of the securities therefrom cannot be readily determined, especially in light of the fact
that it is not possible to know with any degree of certainty when or even if the Company will seek to conduct an offering pursuant
to the shelf registration statement. As a result, any such estimate would be hard to develop with any accuracy, and may, in fact,
be misleading.

The ability of the Company to make such
an estimate is difficult given the variety of securities that could potentially be offered under the Company’s shelf registration
statement (i.e., common stock, preferred stock, warrants and debt securities) as well as the different levels of expenses relating
thereto (e.g., the offering expenses incurred in connection with an offering of shares of common stock are very different from
the offering expenses incurred in connection with an offering of debt securities).

The Company has reviewed the SEC filings
of several operating companies and other business development companies with delayed shelf registration statements and has not
seen any estimate comparable to that requested by the SEC staff in the “Commitments and Contingencies” notes to their
financial statements.

As a result, the Company respectfully responds
that it does not believe that a change to the “Commitments and Contingencies” note to the financial statements contained
in the Registration Statement is required in response to the Staff’s comment. However, the Company advises the Staff that
it will include a line on the balance sheet for “Commitments and Contingencies” that will reference the notes to the
financial statements regarding Commitments and Contingencies” and its discussion of such fees, if any.

3.	Comment: We refer to the third paragraph
on page 52 of the Registration Statement. Please explain the difference between the $9.75 per share purchase price to the public
in the offering described therein and the $9.31125 per share purchase price to a member of the Company’s board of directors
in the same offering. In addition, please address this per share purchase price differential in the context of the Big Apple Capital
Corporation no-action letter (May 6, 1982).

Response:   The Company
advises the Staff on a supplemental basis that the member of the board of directors purchased shares at the same 4.5% discount
offered to the underwriters. The Company does not believe that the analysis at issue in Big Apple Capital Corporation (pub.
avail. May 6, 1982) applies in this context, given that purchase price for the shares was the same for the member of the Company’s
board of directors and the underwriters, in the same offering.

4.	Comment: We refer to the section entitled
“Sales of Common Stock Below Net Asset Value” in the prospectus. We note that the Company’s common stock traded
at a significant discount to its net asset value in 2009 and 2010. Please revise the table on page 109 of the Registration Statement
to add an example with a 50% discount to the net asset value of the common stock.

Response: The Company has
revised the disclosure accordingly.

5.	 Comment: We refer to footnote 1 to the
table set forth under the section entitled “Portfolio Companies” in the prospectus. Please clarify which LIBOR rates
are being referenced in this footnote and in other locations in the Registration Statement, including the schedule of investments,
where the reference is a general use of the acronym LIBOR. In addition, please provide the stated interest rate in effect at period
end instead of a “weighted average annual interest rate” at period end.

Response: The Company’s schedule of investments
lists the current weighted average stated interest rate earned on each loan (i.e., current weighted average stated interest rate
of all of the tranches underlying the loan) by the Company at the end of the applicable period, plus the components of cash and
PIK interest income and the LIBOR spread with respect to each LIBOR based investment. In addition, given the manner in which the
debt investments held by the Company function, it is not possible to specify the LIBOR rate (e.g., the 30-day, 60-day or 180-day
LIBOR rate) for a particular debt investment. In this regard, the Company’s borrowers have the option to elect various LIBOR
rates for portions of the aggregate funds borrowed by them from the Company. Moreover, the Company’s loans typically allow
the borrowers to partition the aggregate loan amount into a large number of tranches. For example, a $4 million loan to a portfolio
company may be composed four $1 million tranches that accrue interest based on four different LIBOR rates. In such a situation
it would be cumbersome for the Company to have to separately list each tranche of the same loan as well as the LIBOR rate that
the borrower has elected with respect thereto. Based on the above, the Company does not believe that the requested granular disclosure
would be meaningful to investors. However, the Company advises the Staff that it agrees to include the LIBOR floor for each debt
investment and additional disclosure regarding the options afforded to its borrowers with respect to the ability to elect various
LIBOR rates for portions of the aggregate funds borrowed by them from the Company.

6.	Comment: On a going-forward basis, please
include the schedule required by Rule 12-14 of Regulation S-X in an appropriate location in the Company’s SEC filings.

Response: The Company advises
that it will comply with the Staff’s comments with its next Form 10-K filing.

 7. Comment: The Company's balance sheet includes a line item for the “Notes issued by KCAP Senior Funding I, LLC”
that does not separate the different classes of notes. Please consider whether it is necessary to list each class of the notes
on the face of the balance sheet or, alternatively, to include a cross reference on the balance sheet to a discussion of the various
classes of notes in the notes to the Company’s financial statements.

Response: The Company advises
the Staff that it has added a footnote to the balance sheet to cross reference a note to the accompanying financial statements
that lists the different classes of notes.

 8. Comment: We refer to footnote 9 of the Company’s schedule of investments which identifies those securities
that are qualifying assets for purposes of Section 55(a) of the Investment Company Act of 1940.  Consider disclosing the percentage
of qualifying assets at the reporting period date.

Response: The Company advises
the Staff that information regarding the percentage of qualifying assets at the reporting period date is disclosed in Note 4 –
Investments to the notes accompanying the financial statements. Specifically, Note 4 discloses that “[a]t December 31, 2013
and December 31, 2012, the total amount of non-qualifying assets was approximately 19% and 30% of total assets, respectively.”
As a result, the Company respectfully does not believe it is necessary to make the requested change.

 9. Comment: We refer to the line item entitled “In excess of net investment income” in the “Financial
Highlights” table on page F-20 of the Registration Statement. Please retitle this line item as “Tax Return of Capital.”

Response: The Company has revised the
disclosure accordingly.

 10. Comment: We refer to the “Financial Highlights” table on page F-20 of the Registration Statement. Please
confirm the line item entitled “Ratio of total expenses to average net assets” includes interest expense.

Response: The Company confirms that
the line item entitled “Ratio of total expenses to average net assets” includes interest expense.

 11. Comment: We refer to the fifth paragraph under the heading entitled “Basis of Presentation” on page F-22
of the Registration Statement. Please revise the disclosure therein to clarify that the financial information for the Asset Manager
Affiliates is required to be included in the Company’s SEC filings in accordance with Rule 3-09 and Rule 4-08(g) of Regulation
S-X, as applicable.

Response: The Company respectfully advises
the Staff that such requested disclosure is included in the second sentence of the sixth paragraph under the heading entitled “Basis
of Presentation” on page F-22.

 12. Comment: The table on page F-35 of the Registration Statement states that the “Primary Valuation Methodology”
for debt securities includes enterprise value, income approach and market approach; however, Note 2 to the financial statements
only makes reference to the income approach for valuing debt securities. Please revise Note 2 to the Company’s financial
statements to describe the enterprise value and market approach valuation methodologies used for valuing debt securities.

Response: The Company has revised the
disclosure accordingly.

 13. Comment: We refer to the “Range of Inputs (Weighted Average)” column on the table included on page F-35
of the Registration Statement. Please provide the weighted average for each line item relating to the “Equity Securities”
and “CLO Fund Securities” categories.

Response: The Company has revised the
information contained within the table accordingly.

*	*	*

In connection with
responding to the Staff’s comments on the Registration Statement, the Company acknowledges that:

 · the Company is responsible for the accuracy and adequacy of the disclosure in the Registration Statement;

 · the Staff’s comments or changes to disclosure in response to Staff comments in the Registration Statement do not foreclose
the SEC from taking any action with respect to the Registration Statement; and

 · The Company may not assert the Staff’s comments as defense in any proceeding initiated by the SEC or any person under
the federal securities laws of the United States.

If you have any questions or additional
comments concerning the foregoing, please contact me at (202) 383-0805.

    Sincerely,

    /s/ Harry S. Pangas

    Harry S. Pangas

CORRESP
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May 8, 2014

VIA EDGAR

Mary Cole

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

    Re:
    KCAP Financial, Inc. – Preliminary Proxy Filed on April

16, 2014

Dear Ms. Cole:

On behalf of KCAP Financial, Inc. (the “Company”),
set forth below is the Company’s response to the comments of the staff of the Division of Investment Management (the “Staff”)
of the Securities and Exchange Commission (the “SEC”) that we verbally received on April 21, 2014 regarding
the Company’s preliminary proxy statement filed on April 16, 2014. The Staff’s comments are set forth below and are
followed by the Company’s responses.

 1.      Comment: We note that the Company’s common stock traded at a significant discount to its net asset
value in 2009 and 2010. Please revise the table on page 8 of the preliminary proxy statement to add an example with a 50% discount
to the net asset value of the common stock.

Response:

The Company has revised the disclosure accordingly.
Please see pages 7-8 of the proxy statement filed by the Company with the SEC on the date hereof.

*    	*	    *	    *	    *

Ms. Mary Cole

Division of Investment Management

May [ ], 2014

Page 2

If you have any questions or additional
comments concerning the foregoing, please contact me at (202) 383-0805.

    Sincerely,

    /s/ Harry S. Pangas

    Harry S. Pangas

 cc: Jill Simone, Esq.

CORRESP
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May 23, 2013

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

 RE: KCAP Financial, Inc. – Registration Statement on Form N-2 (File No. 333-187570)

Dear Ms. Cole and Ms. Stout:

In accordance with Rule 461 of the General
Rules and Regulations under the Securities Act of 1933, as amended, KCAP Financial, Inc. hereby respectfully requests that the
above-captioned registration statement, including all amendments thereto, be ordered effective on May 23, 2013, at 3:30 p.m., or
as soon thereafter as practicable.

    KCAP Financial, Inc.

    By:
    /s/ Dayl W. Pearson

    Name:
    Dayl W. Pearson

    Title:
    President and Chief Executive Officer

CORRESP
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May 23, 2013

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E

Washington, DC 20549

 RE: KCAP Financial, Inc. – Registration Statement
on Form N-2

(File
Nos.: 333-187570; 814-00735)

Dear Ms. Cole and Ms. Stout:

On behalf of KCAP Financial, Inc. (the “Company”),
set forth below are the Company’s responses to the comments of the staff of the Division of Investment Management (the “Staff”)
of the Securities and Exchange Commission (the “SEC”) that you provided to us in a letter dated April
26, 2013 regarding the Company’s registration statement on Form N-2 (File No.: 333-187570) (the “Registration
Statement”) that was filed with the SEC on March 27, 2013. The Staff’s comments are set forth below in italics
and are followed by the Company’s responses.

 Comment No. 1: Cover—Calculation of Registration Fee—Why
are preferred shares not listed in this table, since the footnote 2 and prospectus disclosure refer to preferred shares being
registered under this registration statement?

Response: The Company advises the Staff that the
preferred shares are listed in the second line item in the “Calculation of Registration Fee” table on the cover page
of the Registration Statement.

 Comment No. 2: Cover—Please disclose the following information
on the front cover: (1) the securities in which the Company invests will generally not be rated by any rating agency; (2) if they
were rated, they would be below investment grade or “junk;” (3) indebtedness of below investment grade quality is
regarded as having predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay
principal. Please also include such information in the Summary section.

Response: The Company has revised the disclosure
accordingly. See the front cover of the prospectus included in the Registration Statement and pages 1 and 58 of the Registration
Statement.

 Comment No. 3: Disclose the most recently calculated net asset value
per share of the Company’s common shares. As needed, update the last reported sale price of the Company’s common stock.

Response: The Company has revised the disclosure
accordingly. See the front cover of the prospectus included in the Registration Statement and page 35 of the Registration
Statement.

 Comment No. 4: Please describe the units with specificity. Please fully
explain to the staff how the offering price will be allocated to the components of the units. For example, could a unit include
a common stock priced at net asset value (“NAV”) (which if alone may sell below NAV) together with another security
(which if alone may be offered at terms more favorable to the Company)? Do units present any unusual or unique risks that potential
purchasers should be aware of? Do units have any influence or relationship with the asset coverage requirements of the 1940 Act?
Will units have trading symbols of their own or will shareholders be able to trade the unit components individually? Are there
any voting right issues or conflicts with respect to unit components?

Response: The Company advises the Staff that it
no longer plans to offer units. As a result, the Company has revised the Registration Statement to remove all references to units.

 Comment No. 5: Concerning units, the disclosure states, “Each
unit may consist of a combination of any two or more of the securities being registered hereby or debt obligations of third parties,
including U.S. Treasury securities.” Please explain to the staff whether or not a unit containing debt obligations of third
parties may create co-registration issues.

Response: Please see the response
to Comment No. 4 above.

 Comment No. 6: Disclose the benefit to the Company of issuing units.
How does this benefit differ from the Company issuing the individual unit components? Does this benefit to the Company give rise
to any disadvantage for shareholders in purchasing units, when compared to the individual components comprising the units? Please
revise the disclosure accordingly. We may have further comment.

    2

Response: Please see the response
to Comment No. 4 above.

 Comment No. 7: Common shareholders should have some basis to determine
and understand the maximum dilution that might be imposed upon their shares as a result of the Company’s future issuances
of securities. Please expand the table provided under the heading “Stockholders may incur dilution if we issue securities
to subscribe to, convert to or purchase shares of our common stock” to show dilution amounts for a common stock offering
at different prices below NAV.” In addition, in your response, please represent that any such issuances of securities will
meet the conditions of Section 61 of the 1940 Act.

Response: The Company has revised the disclosure
accordingly. See pages 30 and 31 of the Registration Statement. In addition, the Company represents to the Staff on a supplemental
basis that any such issuances of securities subject to the conditions to Section 61 of the Investment Company Act of 1940 (e.g.,
warrants to purchase shares of common stock, preferred stock convertible into shares of common stock, etc.) will comply with the
conditions set forth therein.

 Comment No. 8: Include an undertaking in Part C of the registration
statement to file for staff review a post-effective amendment in respect of any units offering by the Company during the shelf
registration statement offering period. We may have further comments.

Response: Please see the response to Comment No.
4 above.

 Comment No. 9: Please advise the staff whether the Company may issue
debt securities with the term “senior” that will not be senior to any existing debt securities. We may have additional
comments.

Response: The Company advises the Staff on a supplemental
basis that it will not offer any debt securities with the term “senior” in the title thereof if such debt securities
are not senior to any of the Company’s then outstanding indebtedness.

 Comment No. 10: Please file a form of prospectus supplement for each
type of security to be sold under this registration statement.

Response: The Company has filed a form of prospectus
supplement for each type of security to be sold under the Registration Statement. See Exhibits 99.2, 99.3, 99.4 and 99.5
to the Registration Statement.

 Comment No. 11: Please reconcile the expense ratio as stated in the Financial
Highlights as of December 31, 2012, with the expense ratio as stated in the “Fees and Expenses” table included in
the Prospectus. In addition, please inform the staff whether the “Fees and Expenses” table assumes the proceeds of
the offering.

    3

Response: The Company informs the Staff that the
total annual expense ratio of 8.96% reflected in the “Fees and Expenses” table represents an estimate of the Company’s
expenses on a going forward basis for the next twelve months while the total expense ratio of 7.2% set forth under the caption
“Financial Highlights” is as of December 31, 2012. As a result, the 8.96% total annual expense ratio takes into account
expenses not incurred during the year ended December 31, 2012, including, for example, the full twelve month impact of the 7.375%
Notes due 2019 issued by the Company in October 2012. Also, please be advised that the “Fees and Expenses” table included
in the Registration Statement does not take into account the receipt of any proceeds that may be received from the offering
of the securities pursuant thereto.

 Comment No. 12: Page 4 of the Prospectus states that, currently, two
of the CLO funds managed by the Asset Manager Affiliate and held by the Company have achieved the threshold and are paying incentive
fees to the Adviser. Please inform the staff whether these incentive fees are reflected in the AFFE that is disclosed in the “Fees
and Expenses” table.

Response: The Company informs the Staff on a supplemental
basis that the calculation percentage set forth in the line item entitled “Acquired Fund Fees and Expenses” in the
“Fees and Expenses,” as currently disclosed, takes into account the additional fees payable to the Asset Manager Affiliates
by the two CLO funds referenced in the Staff’s comment above.

 Comment No. 13: At most, 25% of the value of a RIC’s total assets
may be invested in the securities of any one issuer, or multiple issuers that the RIC controls and 	which are engaged in similar
businesses. Please inform the staff of the 	compliance procedures in place for the Company to monitor the investments in the
two advisers to ensure that, as a RIC, the Company is in compliance with this particular test.

Response: The regulated investment company (“RIC”)
asset diversification requirement will be satisfied if the Company meets certain asset diversification requirements at the end
of each quarter of its taxable year. To satisfy this requirement, at least 50% of the value of the Company’s assets must
consist of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other acceptable securities; and
no more than 25% of the value of its assets can be invested in the securities, other than U.S. government securities or securities
of other RICs, of one issuer, of two or more issuers that are controlled by the Company and that are engaged in the same or
similar or related trades or businesses.

    4

Pursuant to Internal
Revenue Code Section 851(d)(1), a failure to meet the diversification requirements at a quarter end that is due solely to
changes in the valuations of the Company’s assets and not due in whole or in part to the acquisition of additional
securities will not prevent the Company from qualifying as a RIC. At the time that the Company last acquired any securities
issued by either of the advisers, the securities issued by such advisers constituted less than 25% of the value of the
Company’s assets. As a result, so long as the Company does not acquire (i) additional securities in the two advisers or
(ii) securities of another adviser that is controlled by the Company and engaged in the same or similar or related business
as the two advisers, then the Company will be treated as satisfying the 25% RIC diversification rule even if the value of the
securities of such advisers exceeds 25% of the Company’s assets as of a quarter end. Prior to making a new or follow on
investment in a portfolio company, including the two advisers, the Company’s Chief Compliance Officer and Chief
Financial Officer will review the investment for various regulatory purposes, including ensuring compliance with the RIC
diversification rule. In this respect, the Company will not acquire any additional securities in the two advisers (or in
other advisers engaged in the same or similar or related businesses) if the percentage of its total assets invested in the
securities of such advisers would exceed 25% of its total assets immediately after the acquisition. Thus, this compliance
procedure is intended to ensure that the Company does not run afoul of, among other things, the 25% RIC diversification
rule.

 Comment No. 14: In the Statement of Changes included in the financial
statements, there is a line item designated “Dividend to stockholders.” Distributions should be disclosed as a single
line item, except for tax return of capital distributions, which should be disclosed separately. Please confirm that there have
been no tax returns of capital that would have required separate disclosure. See also Section 7.156(e) of the AICPA
Audit and Accounting Guide for Investment Companies relating to the “Financial Highlights” presentation with respect
to tax return of capital distributions.

Response: As disclosed on page F-82 of the Registration
Statement, the distributions paid by the Company to its stockholders in 2012 and 2010 included tax returns of capital. In future
filings with the SEC, the Company will ensure that tax return of capital distributions are separately disclosed in its Statements
of Changes in Net Assets. In addition, the details of distributions contained in the “Financial
Highlights” will conform to those shown in the Company’s Statement of Changes in Net Assets.

 Comment No. 15: In the Statement of Changes in the financial statements
there is a line item under Capital share transactions, “interest in affiliate company.” Please inform the staff what
this entry means.

Response: The Company informs the Staff on a supplemental
basis that the line item entitled “interest in affiliate company” in the Statement of Changes in Net Assets relates
to the dollar value of shares of the Company’s common stock issued by it in connection with its acquisition of Trimaran Advisors,
L.L.C. in February 2012. This acquisition is discussed in numerous places in the Registration Statement. See pages 1, 39,
58 and F-18 of the Registration Statement.

 Comment No. 16: Please inform the staff the position of the Company in
determining when a 19a-1 notice under the 1940 Act is required to be sent to shareholders. In addition, please inform the staff
if a 19a-1 notice was sent to shareholders during the year.

    5

Response: The Company has elected to determine
whether it is required to send a notice to its stockholders in accordance with Section 19(a) of the Investment Company Act of 1940
on a tax basis and not on a book basis. Such determination is made in connection with the completion of its tax returns
for the applicable tax year and any tax return of capital in connection therewith is reflected in the Form 1099-DIVs that it sends
to its stockholders.

 Comment No. 17: In Note 4 to the financial statements, Investments, Fair
Value Measurements, consider providing additional disclosures in the Level III chart disclosing the asset type, fair value, valuation
technique, unobservable inputs and the range of inputs. The first item to include is an additional column disclosing the weighted
average range. Owing to the wide range of inputs and the effects that result from a wide range as disclosed, a weighted average
should be stated for each separate range of inputs. See the FASB example in ASC 820. In addition, since the Company relies on
the use of vendor pricing for its Level III holdings, consider adding as a best practice a row in the table that shows the amount
of vendor priced securities so the reader can reconcile the total Level III holdings in the ASU 2011-04 disclosure to the final
balance in the Level III roll forward.

Response: The Company has revised the disclosure
in the “Note 4, Investments, Fair Value Measurements” to the financial statements to include the requested weighted
average range column. See page F-33 of the Registration Statement. However, the Company has determined not to comply with
the best practices aspects of the Staff’s comment at this time.

 Comment No. 18: Please confirm and represent to the staff that all holdings
of subsidiaries as of December 31, 2012, have been assessed for compliance with Rule 3-09 and 4-08(g) of Regulation S-X.

Response: The Company advises the Staff on a supplemental
basis that it has assessed the implications of Rules 3-09 of Regulation S-X and 4-08(g) of Regulation S-X with respect to the holdings
of each of its subsidiaries as of December 31, 2012 and confirms that no additional financial information is required to be included
in the Registration Statement with respect thereto.

 Comment No. 19: Page 34 of the prospectus presents a table titled “Price
Ranges of Common Stock and Distributions.” According to the table for the quarters ended September 30, 2012, and December
31, 2012, the shares of the Company were trading at a premium for the high sales price to the NAV. The premium was 19.7% and 23.2%,
respectively. Please inform the staff if there were any changes that occurred during 2012, that would have caused the Company
to trade at a premium the last two quarters of the

CORRESP
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Mary and Sheila,

In connection with KCAP’s Form N-2 we have attached the
Company’s response to your comment letter dated April 26, 2013.  Please note that we are submitting the attached on
an informal basis in the interest of confirming that you do not have any additional comments before we file the Form N-2.
We will file this email, along with the attachments, as correspondence as soon as possible.  We have also attached the pages
of the Form N-2 that are referenced in the response letter, as well as a form of prospectus supplement
for each type of security being registered (Exhibits 99.2, 99.3, 99.4 and 99.5).

Please let us know if you have any additional comments, or if
we can provide you with any further information.

Have a nice weekend.

Payam

Payam Siadatpour | Associate

Sutherland Asbill & Brennan LLP

700 Sixth Street, NW, Suite 700 | Washington, DC 20001-3980

202.383.0278 direct | 202.637.3593 facsimile

payam.siadatpour@sutherland.com |
www.sutherland.com

May [•], 2013

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E

Washington, DC 20549

 RE: KCAP Financial, Inc. – Registration Statement on Form N-2

(File Nos.: 333-187570; 814-00735)

Dear Ms. Cole and Ms. Stout:

On behalf of KCAP Financial, Inc. (the “Company”),
set forth below are the Company’s responses to the comments of the staff of the Division of Investment Management (the “Staff”)
of the Securities and Exchange Commission (the “SEC”) that you provided to us in a letter dated April
26, 2013 regarding the Company’s registration statement on Form N-2 (File No.: 333-187570) (the “Registration
Statement”) that was filed with the SEC on March 27, 2013. The Staff’s comments are set forth below in italics
and are followed by the Company’s responses.

 Comment No. 1: Cover—Calculation of Registration Fee—Why
are preferred shares not listed in this table, since the footnote 2 and prospectus disclosure refer to preferred shares being
registered under this registration statement?

Response: The Company advises the Staff
that the preferred shares are listed in the second line item in the “Calculation of Registration Fee” table on the
cover page of the Registration Statement.

 Comment No. 2: Cover—Please disclose the following information
on the front cover: (1) the securities in which the Company invests will generally not be rated by any rating agency; (2) if they
were rated, they would be below investment grade or “junk;” (3) indebtedness of below investment grade quality is
regarded as having predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay
principal. Please also include such information in the Summary section.

Response: The Company has revised the
disclosure accordingly. See the front cover of the prospectus included in the Registration Statement and pages 1 and 58
of the Registration Statement.

    1

 Comment No. 3: Disclose the most recently calculated net asset value
per share of the Company’s common shares. As needed, update the last reported sale price of the Company’s common stock.

Response: The Company has revised the
disclosure accordingly. See the front cover of the prospectus included in the Registration Statement and page 35 of the
Registration Statement.

 Comment No. 4: Please describe the units with specificity. Please
fully explain to the staff how the offering price will be allocated to the components of the units. For example, could a unit
include a common stock priced at net asset value (“NAV”) (which if alone may sell below NAV) together with another
security (which if alone may be offered at terms more favorable to the Company)? Do units present any unusual or unique risks
that potential purchasers should be aware of? Do units have any influence or relationship with the asset coverage requirements
of the 1940 Act? Will units have trading symbols of their own or will shareholders be able to trade the unit components individually?
Are there any voting right issues or conflicts with respect to unit components?

Response: The Company advises the Staff
that it no longer plans to offer units. As a result, the Company has revised the Registration Statement to remove all references
to units.

 Comment No. 5: Concerning units, the disclosure states, “Each
unit may consist of a combination of any two or more of the securities being registered hereby or debt obligations of third parties,
including U.S. Treasury securities.” Please explain to the staff whether or not a unit containing debt obligations of third
parties may create co-registration issues.

Response: Please see the response to
Comment No. 4 above.

 Comment No. 6: Disclose the benefit to the Company of issuing units.
How does this benefit differ from the Company issuing the individual unit components? Does this benefit to the Company give rise
to any disadvantage for shareholders in purchasing units, when compared to the individual components comprising the units? Please
revise the disclosure accordingly. We may have further comment.

Response: Please see the response to
Comment No. 4 above.

    2

 Comment No. 7: Common shareholders should have some basis to determine
and understand the maximum dilution that might be imposed upon their shares as a result of the Company’s future issuances
of securities. Please expand the table provided under the heading “Stockholders may incur dilution if we issue securities
to subscribe to, convert to or purchase shares of our common stock” to show dilution amounts for a common stock offering
at different prices below NAV.” In addition, in your response, please represent that any such issuances of securities will
meet the conditions of Section 61 of the 1940 Act.

Response: The Company has revised the
disclosure accordingly. See pages 30 and 31 of the Registration Statement. In addition, the Company represents to the Staff
on a supplemental basis that any such issuances of securities subject to the conditions to Section 61 of the Investment Company
Act of 1940 (e.g., warrants to purchase shares of common stock, preferred stock convertible into shares of common stock, etc.)
will comply with the conditions set forth therein.

 Comment No. 8: Include an undertaking in Part C of the registration
statement to file for staff review a post-effective amendment in respect of any units offering by the Company during the shelf
registration statement offering period. We may have further comments.

Response: Please see the response to
Comment No. 4 above.

 Comment No. 9: Please advise the staff whether the Company may issue
debt securities with the term “senior” that will not be senior to any existing debt securities. We may have additional
comments.

Response: The Company advises the Staff
on a supplemental basis that it will not offer any debt securities with the term “senior” in the title thereof if such
debt securities are not senior to any of the Company’s then outstanding indebtedness.

 Comment No. 10: Please file a form of prospectus supplement for each
type of security to be sold under this registration statement.

Response: The Company has filed a form
of prospectus supplement for each type of security to be sold under the Registration Statement. See Exhibits 99.2, 99.3,
99.4 and 99.5 to the Registration Statement.

 Comment No. 11: Please reconcile the expense ratio as stated in the
Financial Highlights as of December 31, 2012, with the expense ratio as stated in the “Fees and Expenses” table included
in the Prospectus. In addition, please inform the staff whether the “Fees and Expenses” table assumes the proceeds
of the offering.

Response: The Company informs the Staff
that the total annual expense ratio of 8.96% reflected in the “Fees and Expenses” table represents an estimate of the
Company’s expenses on a going forward basis for the next twelve months while the total expense ratio of 7.2% set forth under
the caption “Financial Highlights” is as of December 31, 2012. As a result, the 8.96% total annual expense ratio takes
into account expenses not incurred during the year ended December 31, 2012, including, for example, the full twelve month impact
of the 7.375% Notes due 2019 issued by the Company in October 2012. Also, please be advised that the “Fees and Expenses”
table included in the Registration Statement does not take into account the receipt of any proceeds that may be received
from the offering of the securities pursuant thereto.

    3

 Comment No. 12: Page 4 of the Prospectus states that, currently, two
of the CLO funds managed by the Asset Manager Affiliate and held by the Company have achieved the threshold and are paying incentive
fees to the Adviser. Please inform the staff whether these incentive fees are reflected in the AFFE that is disclosed in the “Fees
and Expenses” table.

Response: The Company informs the Staff
on a supplemental basis that the calculation percentage set forth in the line item entitled “Acquired Fund Fees and Expenses”
in the “Fees and Expenses,” as currently disclosed, takes into account the additional fees payable to the Asset Manager
Affiliates by the two CLO funds referenced in the Staff’s comment above.

 Comment No. 13: At most, 25% of the value of a RIC’s total assets
may be invested in the securities of any one issuer, or multiple issuers that the RIC controls and which are engaged in similar
businesses. Please inform the staff of the compliance procedures in place for the Company to monitor the investments in the two
advisers to ensure that, as a RIC, the Company is in compliance with this particular test.

Response: The regulated investment company
(“RIC”) asset diversification requirement will be satisfied if the Company meets certain asset diversification
requirements at the end of each quarter of its taxable year. To satisfy this requirement, at least 50% of the value of the Company’s
assets must consist of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other acceptable securities;
and no more than 25% of the value of its assets can be invested in the securities, other than U.S. government securities or
securities of other RICs, of one issuer, of two or more issuers that are controlled by the Company and that are engaged in the
same or similar or related trades or businesses.

Pursuant to Internal Revenue Code Section 851(d)(1),
a failure to meet the diversification requirements at a quarter end that is due solely to changes in the valuations of the Company’s
assets and not due in whole or in part to the acquisition of additional securities will not prevent the Company from qualifying
as a RIC. At the time that the Company last acquired any securities issued by either of the advisers, the securities issued by
such advisers constituted less than 25% of the value of the Company’s assets. As a result, so long as the Company does not
acquire (i) additional securities in the two advisers or (ii) securities of another adviser that is controlled by the Company and
engaged in the same or similar or related business as the two advisers, then the Company will be treated as satisfying the 25%
RIC diversification rule even if the value of the securities of such advisers exceeds 25% of the Company’s assets as of a
quarter end.

    4

Prior to making a new or follow on investment in a
portfolio company, including the two advisers, the Company’s Chief Compliance Officer and Chief Financial Officer will review
the investment for various regulatory purposes, including ensuring compliance with the RIC diversification rule. In this respect,
the Company will not acquire any additional securities in the two advisers (or in other advisers engaged in the same or similar
or related businesses) if the percentage of its total assets invested in the securities of such advisers would exceed 25% of its
total assets immediately after the acquisition. Thus, this compliance procedure is intended to ensure that the Company does not
run afoul of, among other things, the 25% RIC diversification rule.

 Comment No. 14: In the Statement of Changes included in the financial
statements, there is a line item designated “Dividend to stockholders.” Distributions should be disclosed as a single
line item, except for tax return of capital distributions, which should be disclosed separately. Please confirm that there have
been no tax returns of capital that would have required separate disclosure.

Response: As disclosed on page F-82
of the Registration Statement, the distributions paid by the Company to its stockholders in 2012 and 2010 included tax returns
of capital. In future filings with the SEC, the Company will ensure that tax return of capital distributions are separately disclosed
in its Statements of Changes in Net Assets.

 Comment No. 15: In the Statement of Changes in the financial statements
there is a line item under Capital share transactions, “interest in affiliate company.” Please inform the staff what
this entry means.

Response: The Company informs the Staff
on a supplemental basis that the line item entitled “interest in affiliate company” in the Statement of Changes in
Net Assets relates to the dollar value of shares of the Company’s common stock issued by it in connection with its acquisition
of Trimaran Advisors, L.L.C. in February 2012. This acquisition is discussed in numerous places in the Registration Statement.
See pages 1, 39, 58 and F-18 of the Registration Statement.

 Comment No. 16: Please inform the staff the position of the Company
in determining when a 19a-1 notice under the 1940 Act is required to be sent to shareholders. In addition, please inform the staff
if a 19a-1 notice was sent to shareholders during the year.

Response: The Company has elected to
determine whether it is required to send a notice to its stockholders in accordance with Section 19(a) of the Investment Company
Act of 1940 on a tax basis and not on a book basis. Such determination is made in connection with the completion of its
tax returns for the applicable tax year and any tax return of capital in connection therewith is reflected in the Form 1099-DIVs
that it sends to its stockholders.

    5

 Comment No. 17: In Note 4 to the financial statements, Investments,
Fair Value Measurements, consider providing additional disclosures in the Level III chart disclosing the asset type, fair value,
valuation technique, unobservable inputs and the range of inputs. The first item to include is an additional column disclosing
the weighted average range. Owing to the wide range of inputs and the effects that result from a wide range as disclosed, a weighted
average should be stated for each separate range of inputs. See the FASB example in ASC 820. In addition, since the Company relies
on the use of vendor pricing for its Level III holdings, consider adding as a best practice a row in the table that shows the
amount of vendor priced securities so the reader can reconcile the total Level III holdings in the ASU 2011-04 disclosure to the
final balance in the Level III roll forward.

Response: The Company has revised the
disclosure in the “Note 4, Investments, Fair Value Measurements” to the financial statements to include the requested
weighted average range column. See page F-33 of the Registration Statement. However, the Company has determined not to comply
with the best practices aspects of the Staff’s comment at this time.

 Comment No. 18: Please confirm and represent to the staff that all
holdings of subsidiaries as of December 31, 2012, have been assessed for compliance with Rule 3-09 and 4-08(g) of Regulation S-X.

Response: The Company advises the Staff
on a supplemental basis that it has assessed the implications of Rules 3-09 of Regulation S-X and 4-08(g) of Regulation S-X with
respect to the holdings of each of its subsidiaries as of December 31, 2012 and

CORRESP
1
filename1.htm

May 7, 2013

VIA EDGAR

Mary Cole

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

 Re: KCAP Financial, Inc.

Proxy
Statement

Dear Ms. Cole:

On behalf of KCAP Financial, Inc. (the “Company”),
set forth below is the Company’s response to the comments of the staff of the Division of Investment Management (the “Staff”)
of the Securities and Exchange Commission (the “SEC”) that we received on April 18, 2013 regarding the
Company’s preliminary proxy statement filed on April 9, 2013. The Staff’s comments are set forth below and are followed
by the Company’s responses.

 1. Comment:	We note that the Company’s common stock
has traded in the past at a discount to net asset value per share (“NAV”) of up to 86.6%. Please include
an example of the dilutive effect of the issuance of shares at a price that is at least 86.6% below NAV.

Response:

The Company has revised the disclosure on pages
7 and 8 of the Company’s proxy statement as requested.

 2. Comment: We refer to the second proposal contained in
the Company’s proxy statement. Please explain to us how the Company can issue shares of its common stock upon conversion
of its outstanding 8.75% Convertible Senior Notes due 2016 (the “Convertible Notes”) at a price per
share below the then-current net value per share of its common stock without violating Section 23(b) of the Investment Company
Act of 1940 (the “1940 Act”). Also, please discuss whether the ability to do so relates to the first
proposal contained in the proxy statement.

Ms. Mary Cole

Division of Investment Management

May 7, 2013

Page 2

Response:

Notwithstanding the prohibition contained in
Section 23(b) of the 1940 Act on issuing shares of common stock below net asset value per share, Section 23(b)(3) of the 1940 Act
provides that the prohibition contained in Section 23(b) of the 1940 Act will not apply to the “conversion of a convertible
security in accordance with its terms.” Thus, the prohibition set forth in Section 23(b) of the 1940 Act does not
apply to the conversion of the Convertible Notes in accordance with their terms and, as a result, the Company does not need to
rely on the authorization sought by the first proposal included in the proxy statement in connection with the issuance of shares
of common stock upon the conversion of the Convertible Notes at a price per share below the then current net asset value per share
of its common stock. In light of the foregoing, the Company has revised Proposal 1 to clarify that the authority to issues securities
below net asset value per share is limited to shares of common stock of the Company and will not include warrants, options or rights
to acquire shares of common stock.

 3. Comment: In the first paragraph under the subheading
“Nasdaq Shareholder Approval Requirement” on page 11, please clarify that net asset value is the equivalent of book
value and not market value.

Response:

The Company has revised the disclosure on page
11 of the Company’s proxy statement as requested.

*    *    *    *    *

Ms. Mary Cole

Division of Investment Management

May 7, 2013

Page 3

If you have any questions or additional
comments concerning the foregoing, please contact me at (202) 383-0805.

Sincerely,

/s/ Harry S. Pangas

Harry S. Pangas

 cc: Stephani M. Hildebrandt

Harry S. Pangas
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, DC 20004- 2415     April 26, 2013

 RE: KCAP Financial, Inc. (the “Company”)
       File Nos.: 333- 187570; 814- 00735
  Dear M r. Pangas :
  On March 27, 2013, the Company, which has elected to be regulated as a business
development company under the provisions of the Investment Company Act of 1940 (“1940 Act”), filed a registration statement on Form N -2 under the Securities Act of 1933 (“1933 Act”)
to register up to $250 million in aggregate offering price of the Company’s common stock, warrants to purchase common stock, debt securities and units in a shelf offering under Rule 415 of the 1933 Act.  The units being registered may consist of a combination of any two or more of
the securities being registered or debt obligations of third parties, including U.S. Treasury securities.
  Pursuant to Release No. 33- 6510, we performed a limite d review of the registration
statement.  In a letter dated April 24, 2013, you represented that the disclosure is not materially different from the information presented in the Company’s registration statement, which was declared effective on April 24, 2013, other than with respect to updated financial statements and
certain other information.  We have reviewed the registration statement referenced above and have the following comments.   Prospectus

1. Cover —Calculation of Registration Fee —Why are preferred s hares not listed in this
table, since the footnote 2 and prospectus disclosure refer to preferred shares being registered under this registration statement?

2. Cover —Please disclose the following information on the front cover: (1) the securities in
which the Company invests will generally not be rated by any rating agency; (2) if they were rated, they would be below investment grade or “junk;” (3) indebtedness of below investment grade quality is regarded as having predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.  Please also
include such information in the Summary section.

3. Disclose the most recently calculated net asset value per share of the Company’s
common shares.  As needed, update the last reported sale price of the Company’s common stock.
 4. Please describe the units with specificity.  Please fully explain to the staff how the offering price will be allocated to the components of the units.  For example, could a unit include a common stock priced at net asset value (“NAV”)  (which if alone may sell
below NAV) together with another security (which if alone may be offered at terms more favorable to the Company )?  Do units present any unusual or unique risks that potential
purchase rs should be aware of?  Do units have any influence or relationship with the
asset coverage requirements of the 1940 Act?  Will units have trading symbols of their own or will shareholders be able to trade the unit components individually?  Are there any voting right issues or conflicts with respect to unit components?

5. Concerning units, the disclosure states, “Each unit may consist of a combination of any two or more of the securities being registered hereby or debt obl igations of third parties,
including U.S. Treasury securities.”  Please explain to the staff whether or not a unit containing debt obligations of third parties may create co -registration issues.

6. Disclose the benefit to the Company of issuing units.  How does this benefit differ from the Company issuing the individual unit components?  Does this benefit to the Company give rise to any disadvantage for shareholders in purchasing units, when compared to the individual components comprising the units?  Please revise the disclosure accordingly.
We may have further comment.
7. Common shareholders should have some basis to determine and understand the maximum dilution that might be imposed upon their shares as a result of the Company ’s
future issuances of securi ties.  Please expand the table provided under the heading
“Stockholders may incur dilution if we issue securities to subscribe to, convert to or purchase shares of our common stock to show dilution amounts for a common stock offering at different prices below NAV. ”  In addition, in your response, please represent
that any such issuances of securities will meet the conditions of Section 61 of the 1940 Act.

8. Include an undertaking in Part C of the registration statement to file for staff review a post-effective amendment in respect of any units offering by the Company during the
shelf registration statement offering period.   We may have further comments.

9. Please advise the staff whether the Company may issue debt securities with the term “senior” that will not be senior to any existing debt  securities.  We may have additional
comments.

10. Please file a form of prospectus supplement for each type of security to be sold under this registration statement.

Accounting Comments

11. Please reconcile the expense ratio as stated in the Financial Highlights as of December
31, 2012, with the expense ratio as stated in the “Fees and Expenses” table included in the Prospectus.  In addition, please inform the staff whether the “Fees and Expenses” table assumes t he proceeds of the offering.

12. Page 4 of the Prospectus states that, currently, two of the CLO funds managed by the Asset Manager Affiliate and held by the Company have achieved the threshold and are paying incentive fees to the Adviser.  Please inform the  staff whether these incentive fees
are reflected in the AFFE that is disclosed in the “Fees and Expenses” table.

13. At most, 25% of the value of a RIC’s total assets may be invested in the securities of any one issuer, or multiple issuers that the RIC controls and which are engaged in similar businesses.  Please inform the staff of the compliance procedures in plac e for the
Company to monitor  the investments in the two a dvisers to ensure that , as a RIC , the
Company is  in compliance with this particular tes t.

14. In the Statem ent of Changes included in the financial s tatements , there is a line item
designated  “Dividend to stockholders.”  Distributions should be disclosed as a single line
item, except for tax return of capital distributions, which should be di sclosed separately.
Please confirm that there have been no tax returns of capital that would have required separate disclosure.

15. In the Statement of Changes in the financial s tatements there is a line item under Capital
share transactions , “interest in affiliate company”.  Please inform the staff what this
entry means.

16. Please inform  the staff the position of the Company in determining when a 19a -1 notice
under the 1940 Act is required to be sent to shareholders.  In addition, please inform  the
staff i f a 19a- 1 notice was sent to shareholders during the year.

17. In Note 4 to the financial s tatements, Investments, Fair Value Measurements , consider
providing additional disclosures in the Level III chart disclosing the asset type, fair value, valuation tec hnique, unobservable inputs and the range of inputs.  The first item to
include is an additional column disclosing the weighted average range.  Owing to the wide range of inputs and the effects that result from a wide range as disclosed, a weighted average should be stated for each separate range of inputs. See the FASB example in ASC 820. In addition, since the Company relies on the use of vendor pricing for its  Level
III holdings, consider adding as a best practice a row in the table that shows the amount
of vendor priced securities so the reader can reconcile the total Level III holdings in the ASU 2011- 04 disclosure to the final balance in the Level III roll forward.

18. Please confirm and represent to the staff that all holdings of subsidiaries as of December 31, 2012, have been assessed for compliance with Rule 3- 09 and 4- 08(g) of Regulation S -
X.

19. Page 34 of the prospectus presents a table titled “Price Ranges of Common Stock and
Distributions.”  According to the table for the quarters ended September  30, 2012, and
December 31, 2012, the shares of the Company were trading at a premium for the high sales price to the NAV.  The premium was 19.7% and 23.2%, respectively.  Please inform the staff if there were any changes that occurred during 2012, that would have caused the Company to trade at a premium the last two quarters of the year ended December 31, 2012.  The staff notes that the Company traded at a discount to NAV for the years ended 2010 and 2011.

20. Please explain to the staff the accounting for capital structuring service fees.  In your discussion, please explain whether or not there is a difference in the timing of recognition of income for book purposes that differs from the timing for tax purposes .

***********************

The staff may have additional comments on disclosure made in response to these
comments, on information supplied supplementally, or on remaining exhibits.  Please respond to the foregoing in a pre -effective amendment  with changed material marked in conformity with
rule 210 under Regulation S -T.  The Company should provide a response to all comments.
Where no changes will be made in the filing in response to a comment made in this letter, please
indicate this fact in your letter and briefly state the basis for your position.
  We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filings reviewed by the staff to be certain that they have provided all information investors requir e for an informed decision.  Since the Company and its management are in possession of
all facts relating to the Company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a statement
from the Company acknowledging that:

(1) The Company is responsible for the accuracy and adequacy of the disclosure in the filing;
(2) Staff comments or changes to disclosure in response to staff comments in the filing
reviewed by the staff do not foreclose the Commission from taking any action with respect to the filing;
(3) The Company may not assert staff comments as defense in any proceeding initiated by
the Commission or any person under the federal se curities laws of the United States.

In addition, please be advised that the Division of Enforcement has access to all
information you provide to the staff of the Division of Investment Management in connection with our review of your filing or in response to our comments on your filing.

We will consider a written request for acceleration of the effective date of the registration
statement as a confirmation of the fact that those requesting acceleration are aware of their
respective responsibilities.  We will act on the request and, pursuant to delegated authority, grant acceleration of the effective date.

  Please respond to all comments.  Where no changes will be made in the filing in
response to a comment, please inform us in a supplemental let ter and state the basis for your
position.

If you have any questions prior to filing a pre -effective amendment, please call me at
(202) 551- 6970.
        Sincerely,
        Mary A. Cole
      Senior Counsel

      Sheila Stout
      Senior Staff A ccountant

CORRESP
1
filename1.htm

February 14, 2013

VIA EDGAR

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

 RE: KCAP Financial, Inc. – Registration Statement
on Form N-2

(File Nos.: 333-185559; 814-00735)

Dear Ms. Stout:

Pursuant to the request
of the staff of the Division of Investment Management, we have set forth below the understanding of KCAP Financial, Inc. (the “Company”)
with respect to the summarized financial and other information of Katonah 2007-1 CLO Ltd. (“Katonah CLO”)
required to be included in the filings made by the Company with the Securities and Exchange Commission (the “SEC”)
in accordance with Rule 4-08(g) of Regulation S-X. In this regard, the Company will include the following information regarding
Katonah CLO in its SEC filings to the extent required to do so by Rule 4-08(g) of Regulation S-X:

 · Schedule of investments for Katonah CLO as of the most
recently completed fiscal year end that contains the following information for each portfolio investment held by Katonah CLO as
of such date: the name of each portfolio company, a description of each portfolio company’s business and general information
regarding each portfolio investment, including the seniority, security, maturity date, interest rate, principal amount and fair
value of or for each portfolio investment, as applicable;

 · Schedule of investments for Katonah CLO as of any subsequent
interim quarter end that contains the following information for each portfolio investment held by Katonah CLO as of such date:
the name of each portfolio company, a description of each portfolio company’s business and general information regarding
each portfolio investment, including the seniority, security, maturity date, interest rate and principal amount of or for each
portfolio investment, as applicable;

 · Disclosure of whether the interest rates reflected
in the above-referenced schedules of investments include any payment-in-kind interest and, if so, the percentage amount thereof;

 · Disclosure of whether any portfolio investment held
by Katonah CLO was on non-accrual status as the dates of the above-referenced schedules of investments; and

 · Selected balance sheet and income statement information
for Katonah CLO as of the most recently completed fiscal year end and any subsequent interim quarter end containing the line items
therefor included in the final prospectus that the Company filed with the SEC on February 6, 2012.

*	        *        	*

If you have any questions
or additional comments concerning the foregoing, please contact me at (202) 383-0805.

Sincerely,

/s/ Harry S. Pangas

Harry S. Pangas

CORRESP
1
filename1.htm

February 4, 2013

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E

Washington, DC 20549

 RE: KCAP Financial, Inc. – Registration Statement
on Form N-2

(File Nos.: 333-185559; 814-00735)

Dear Ms. Cole and Ms. Stout:

On behalf of KCAP Financial,
Inc. (the “Company”), set forth below are the Company’s responses to the comments of the staff
of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the
“SEC”) that you provided to us in a letter dated January 16, 2013 regarding the Company’s registration
statement on Form N-2 (File No.: 333-185559) that was filed with the SEC on December 19, 2012 (the “Registration Statement”).
The Staff’s comments are set forth below and are followed by the Company’s responses.

Comments Relating to the Prospectus

 Comment No. 1: In the Fees and Expenses table on page 11 of the Prospectus
footnote 5 states that “Acquired fund fees and expenses represent the estimated indirect expense incurred due to investments
in other investment companies and private funds, including CLO Funds managed by the Asset Manager Affiliates.” The acquired
fund fees and expenses should be stated as a separate line item in the fee table.

Response:
The Company has revised the disclosure in the “Fees and Expenses” table accordingly. See page 11 of the Registration
Statement.

 Comment No. 2: In the Fees and Expenses table on page 11 of the Prospectus
the total annual expenses noted are 5.98%. The total annual expenses of the Company as noted in the September 30, 2012, Form 10-Q
are 7.0%. Please confirm in your response that the only difference between the two figures noted above is an assumption of the
sale of common shares that are being offered in this filing. In addition, include a statement above the fee table stating that
the expense ratios assume the receipt of the proceeds of the offering, if that is the case.

Response:
The Company has revised the disclosure in the “Fees and Expenses” table in light of the Staff’s comment. Furthermore,
pursuant to the Staff’s request, the Company has included a statement above the “Fees and Expenses” table noting
that the percentages set forth therein assume receipt of the proceeds of the Company’s contemplated offering.

 Comment No. 3: We note that portions of the filing are incomplete.
We may have additional comments on such portions when you complete them in a pre-effective amendment, on disclosures made in response
to this letter, on information supplied supplementally, or on financial statements and exhibits added in any pre-effective amendments.

Response:
The Company acknowledges the Staff’s comment.

Comments Relating
to the Financial Statement

 Comment No. 4: We understand that the Company does not have a “controlling
financial interest” in the wholly owned subsidiary, Katonah 2007- I CLO Ltd. In your response, please inform the staff whether
the Company has assessed the implications of Regulation S-X Article 3-09, Separate financial statements of subsidiaries not consolidated
and 50 percent or less owned persons, and Regulation S-X Article 4-08 (g), Summarized financial information of subsidiaries not
consolidated and 50 percent or less owned persons. Article 3-09(a) of Regulation S-X requires a registered investment company
to include the financial statements of a subsidiary not consolidated in its filings if the subsidiary meets one of the three significant
subsidiary tests in 1.02(w) of S-X. In your response, please state whether Katonah 2007-I CLO Ltd triggers any of the three significant
subsidiary tests in 1.02 (w) of Regulation S-X. If none of the tests are triggered, would the requirements of Article 4-08 (g)
apply to the Company?

Response:
The Company confirms that it has assessed the implications of Rule 3-09 of Regulation S-X, “Separate Financial Statements
of Subsidiaries Not Consolidated and 50 Percent-or-less Owned Person” (“Rule 3-09”) and Rule 4-08(g)
of Regulation S-X, “Summarized Financial Information of Subsidiaries Not Consolidated and 50 Percent-or-Less Owned Persons”
(“Rule 4-08(g)”), with respect to its wholly owned subsidiary, Katonah 2007- I CLO Ltd. (“Katonah
2007”). Based upon that assessment, the Company advises the Staff on a supplemental basis that Rule 3-09 does not
apply to the Company’s investment in Katonah 2007 because none of the conditions set forth in Rule 1.02(w) of Regulation
S-X (“Rule 1.02(w)”), as applied in accordance with Rule 3-09, are triggered. However, Rule 4-08(g) does
apply to the Company’s investment in Katonah 2007 in light of the fact that one of the conditions set forth in Rule 1.02(w),
as applied in accordance with Rule 4-08(g), is triggered. Therefore, the Company has revised the disclosure in the Registration
Statement to include summarized financial information relating to its investment in Katonah 2007 as required by Rule 4-08(g). See
pages 47 through 63 of the Registration Statement.

In addition, the Company undertakes to comply with Rules 3-09
and 4-08(g) of Regulation S-X, as applicable, on a going forward basis in its Form 10-Ks, Form 10-Qs and Form N-2s with respect
to Katonah 2007 or any of its wholly owned portfolio investments to the extent applicable thereto.

 Comment No. 5: In the September 30, 2012, 10-Q, the Financial Highlights
state that the total expense ratio is 6.9%. The total ratio is a combination of the interest expense of 3.2% and the non-interest
expense of 3.8%. The total expense should be stated as 7.0%, not 6.9%. Revise the ratio accordingly.

    2

Response:
The Company has revised the “Ratio of total expenses to average net assets” line item under “Financial Highlights”
accordingly. See page F-21 of the Registration Statement.

 Comment No. 6: The Balance Sheet as of September 30, 2012, includes
restricted cash of $6,093,126. In your response, please explain the purpose of the restricted cash balance.

Response:
In accordance with the terms of the Company’s secured credit facility agreement with Credit Suisse AG, the Company must maintain
a certain amount of cash and cash equivalents for the purpose of paying interest expenses, reducing borrowings, or to make other
payments in accordance with the credit facility agreement. The Company may not use such proceeds, which it refers to as restricted
cash, for general corporate purposes. Please also note that the Company has revised Note 2 to the Financial Statements, “Significant
Accounting Policies – Restricted Cash” to reflect the foregoing. See page F-27 of the Registration Statement.

 Comment No. 7: The Schedule of Investments (“SOI”) must
identify those assets considered “non-qualifying.” This comment was previously communicated to the Company; however,
such disclosure does not appear to be included in the SOI for September 30, 2012, or for December 31, 2011. The footnote that
was added in the last registration statement states the following, “Investment is not a qualifying asset as defined under
Section 55(a) of the 1940 Act.” Ensure that this footnote is added to this registration statement as well as all future
annual and quarterly filings.

Response:
The Company has revised the Schedule of Investments as of September 30, 2012 and December 31, 2011 included in the Registration
Statement accordingly. See pages 86 through 95, F-6 through F-13 and F-14 through F-20 of the Registration Statement.

 Comment No. 8: In Note 4 to the Financial Statements, Investments,
Fair Value Measurements, consider providing additional disclosures in the Level III chart disclosing the asset type, fair value,
valuation technique, unobservable inputs and the range of inputs. The first item to include is an additional column disclosing
the weighted average range. Owing to the wide range of inputs and the effects that result from a wide range as disclosed, a weighted
average should be stated for each separate range of inputs. See the example as stated in the FASB example in ASC 820. In addition,
since the Company relies on the use of vendor pricing for their Level III holdings, consider adding as a best practice a row in
the table that shows the amount of vendor priced securities so the reader can reconcile the total Level III holdings in the ASU
2011-04 disclosure to the final balance in the Level III roll forward. Lastly, provide a directional chart that illustrates the
change to an unobservable input that may result in a significant change to the value of the investment. For an example of this
chart, please refer to the notes to the financial statements of BlackRock Corporate High Yield Fund, Inc. semi-annual report dated
August 30, 2012, filed on November 5, 2012. The current disclosure is very broad in stating that a significant increase or decrease
in such unobservable inputs would result in a significant lower or higher fair value measurement.

Response:
The Company has revised the disclosure in Note 4 to the Financial Statements, “Investments – Fair Value Measurements”,
accordingly. See page F-38 of the Registration Statement.

*	*	*

    3

In connection with
responding to the Staff’s comments on the Registration Statement, the Company acknowledges that:

 · the Company is responsible for the accuracy and adequacy of the disclosure in the Registration
Statement;

 · the Staff’s comments or changes to disclosure in response to Staff comments in the Registration
Statement do not foreclose the SEC from taking any action with respect to the Registration Statement; and

 · The Company may not assert the Staff’s comments as defense in any proceeding initiated by
the SEC or any person under the federal securities laws of the United States.

If you have any questions
or additional comments concerning the foregoing, please contact me at (202) 383-0805.

    Sincerely,

    /s/ Harry S. Pangas

    Harry S. Pangas

    4

CORRESP
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filename1.htm

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549-3720

 Re: KCAP Financial, Inc. (the
“Company”)

Registration Statement on Form N-2 (File
No. 333-185559)

Ladies and Gentlemen:

In accordance with Rule 461 of the General
Rules and Regulations under the Securities Act of 1933 (the “Act”), we hereby join in the request of the Company
for acceleration of the effective date of the above-named Registration Statement so that it becomes effective at 5:30 P.M. Eastern
Time on February 4, 2013, or as soon thereafter as practicable.

We have and will comply with the requirements
of Rule 15c2-8 under the Securities Exchange Act of 1934. We will make reasonable efforts to ensure that an adequate number of
prospectuses will be distributed in connection with the offering pursuant to the Registration Statement.

    Very truly yours,

    BARCLAYS CAPITAL INC.

    As Representative of the several Underwriters

    By:
    BARCLAYS CAPITAL INC.

    By:
    /s/ Victoria Hale

    Victoria Hale
Vice President

CORRESP
1
filename1.htm

February 4, 2013

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

RE: KCAP Financial, Inc. – Registration Statement on
Form N-2 (File No. 333-185559)

Dear Ms. Cole and Ms. Stout:

In accordance with Rule 461 of the General
Rules and Regulations under the Securities Act of 1933, as amended, KCAP Financial, Inc. hereby respectfully requests that the
above-captioned registration statement, including all amendments thereto, be ordered effective on February 4, 2013, at 5:30 p.m.,
or as soon thereafter as practicable.

    KCAP Financial, Inc.

    By:
    /s/ Dayl W. Pearson

    Dayl W. Pearson

    President and Chief Executive Officer

Harry S. Pangas
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, DC 20004- 2415     January 16, 2013

RE:   K CAP Financial, Inc.  (“Company ”)
                   File Nos.: 333- 185559; 814- 00735

Dear M r. Pangas :
  On December 19,  2012, the Company, which has elected to be regulated as a business
development company under the provisions of the Investment Company Act of 1940 (“1940
Act”), filed a registration statement on Form N -2 under the Securities Act of 1933 (“1933 Act”)
to register up to $2 0 million in aggregate offering price of the Company’s common shares . Based
on your letter of December 19, 2012, which states that the disclosure in the registration statement contains no material changes from the disclosur e included in a prior filing  reviewed by the staff
related  to the offering of senior notes , except for the description of the Company’s common stock
and the inclusion of updated financial information, we have accorded the registration statement
selective r eview. Based on that review, we  have the following comments.

 Prospectus

1. In the Fees and Expenses table on page 11 of the Prospectus footnote 5 states that
“Acquired fund fees and expenses represent the estimated indirect expense incurred due
to investm ents in other investment companies and private funds, including CLO Funds
managed by the Asset Manager Affiliates.”  The acquired fund fees and expenses should be stated as a separate line item in the fee table.

2. In the Fees and Expenses table on page 11  of the Prospectus the total annual expenses
noted are 5.98%.  The total annual expenses of the Company as noted in the September
30, 2012, Form 10- Q are 7.0%.  Please confirm in your response that the only difference
between the two figures noted above is  an assumption of the sale of common shares that
are being offered in this filing.  In addition, include a statement above the fee table stating
that the expense ratios assume the receipt of the proceeds of the offering , if that is the
case.

2
 3. We note tha t portions of the filing are incomplete.  We may have additional comments on
such portions when you complete them in a pre -effective amendment, on disclosures
made in response to this letter, on information supplied supplementally, or on financial
statemen ts and exhibits added in any pre -effective amendments.

Financial Statement Comments

4. We und erstand that the Company  does not have a “controlling financial interest” in the
wholly owned subsidiary, Katonah 2007-  I CLO Ltd.  In your response, please inform  the
staff whether  the Company  has assessed the implications o f Regulation S -X Article 3 -09,
Separate financial statements of subsidiaries not consolidated and 50 percent or less
owned persons, and Regulation S -X Article 4-08 (g), Summarized financial info rmation
of subsidiaries not consolidated and 5 0 percent or less owned persons.   Article 3 -09(a) of
Regulation S -X requires a registered investment company  to include the financial
statements of a subsidiary not consolidated in its filings if the subsidiary  meets one of the
three significant subsidiary tests in 1.02(w) of S -X.  In your response, please state
whether Katonah 2007- I CLO Ltd triggers any of the three significant subsidiary tests  in
1.02 (w) of Regulation S -X.  If none of the tests are triggered, would the requirements of
Article 4 -08 (g) apply to the Company?

5.  In the September 30, 2012,  10-Q, the Financial Highlights state  that the total expense
ratio is 6.9%.  The total ratio is a combination of the interest expense of 3.2% and the non-interest expense of 3.8%.  The total expense should be stated as 7.0%, not 6.9%.
Revise the ratio accordingly.

6. The Balance Sheet as of September 30, 2012, includes restricted cash of $6,093,126.  In
your response, please explain the purpose of the restricted cash balance.

7. The Schedule of Investments (“SOI”) must identify those assets considered “non-
qualifying.”  This comment was previously communicated to the Company ; however,
such disclosure does not appear to be included in the SOI for September 30, 2012,  or for
December 31, 2011.  The footnote that was added in the last registration s tatement states
the following,   “ Investment is not a qualifying asset as defined under Section 55(a) of the
1940 Act.”   Ensure that this footnote is added to this registrat ion s tatement as well as all
future annual and quarterly filings.

8. In Note 4 to the Financial Statements, Investments, Fair Value Measurements, consider
providing additional disclosures in the Level III chart disclosing the asset type, fair value,
valuat ion technique, unobservable inputs and the range of inputs.  The first item to
include is  an additional column disclosing the weighted average range.  Owing  to the
wide range of inputs and the effects that result from a wide range as disclosed , a weighted
average should be stated for each separate range of inputs.  See the example as stated in
the FASB example in ASC 820.  In addition, since the Company relies on the use of
vendor pricing for their L evel III holdings , consider adding as a best practice a ro w in the
table that shows the amount of vendor priced securities so the reader can reconcile the
total Level III holdings in the ASU 2011- 04 disclos ure to the final balance in the L evel
III roll forward.   Lastly, provide a directional chart that illustrates the change to an
unobservable input that may result in a significant change to the value of the investment.
For an example of this chart , please refer to the notes to the financial statements of
BlackRock Corporate High Yield Fund, Inc. semi -annual rep ort dated August 30, 2012,
filed on November 5, 2012.  The current disclosure is very broad in stating that a

3
 significant increase or decrease in such unobservable inputs would result in a significant
lower or higher fair value measurement.

***************

      The staff may have additional comments on disclosure made in response to these
comments, on information supplied supplementally, or on remaining exhibits.  Please respond to
the foregoing in a pre -effective amendment with changed material marked  in conformity with
rule 210 under Regulation S -T.  The Company  should provide a response to all comments.
Where no changes will be made in the filing in response to a comment made in this letter, please
indicate this fact in your letter and briefly state  the basis for your position.

 We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filings reviewed by the staff to be certain that they have provided all information investors
require for an informed decision.  Since the Company and its management are in possession of all
facts relating to the Company’s disclosure, they are responsible for the accuracy and adequacy of
the disclosures they have made.

 In connection with responding to our comments, please provide,  in writing, a statement
from the Company acknowledging that:

• The Company is responsible for the accuracy and adequacy of the disclosure in
the filing ;
• Staff comments or changes to disclosure in response to staff comments in the
filing  reviewed by the sta ff do not foreclose the Commission from taking any
action with respect to the filing ;
• The Company may not assert staff comments as defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the
United States.

In addition, please be advised that the Division of Enforcement has access to all
information you provide to the staff of the Division of Investment Management in connection
with our review of your filing or in response to our comments on your filing.

We will consider a written request for acceleration of the eff ective date of the registration
statement as a confirmation of the fact that those requesting acceleration are aware of their
respective responsibilities.  We will act on the request and, pursuan t to delegated authority, grant
acceleration of the effective date.

Please respond to this letter by filing a pre- effective amendment pursuant to Rule 472
under the 1933 Act .  Please respond to all comments.  Where no changes will be made in the
filing in  response to a comment, please inform us in a supplemental letter and state the basis for
your position.

4

If you have any questions prior to filing a pre -effective amendment, please call me at
(202) 551- 6970 or Sheila Stout at (202) 551- 6987.

      Sincerely,

      Mary A. Cole
      Senior Counsel

       Sheila Stout
       Senior Staff Accountant

CORRESP
1
filename1.htm

[Letterhead of Sutherland Asbill & Brennan
LLP]

December
19, 2012

VIA EDGAR

Ms. Mary A. Cole

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

 Re: KCAP Financial, Inc.

Registration Statement on Form
N-2 Filed on December 19, 2012

Dear Ms. Cole:

On behalf of KCAP Financial,
Inc. (the “Company”), we hereby respectfully request that the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) afford the Company’s registration
statement on Form N-2, filed with the Commission on December 19, 2012 (the “Registration Statement”),
a selective review in accordance with Securities Act Release No. 6510 (February 15, 1984).

The disclosure contained
in the Registration Statement contains no material changes from the disclosure included in the Company’s registration statement
on Form N-2 (File No. 333- 183032), initially filed with the Commission on August 2, 2012, which registration statement related
to Company’s offering of its senior notes (the “Notes”), except for (i) the replacement of disclosure
describing the Notes and the related offering terms with disclosure describing the Company’s common stock and the related
offering terms and (ii) the inclusion of updated unaudited financial statements and information relating thereto.

* * *

Ms. Mary A. Cole

December 19, 2012

Page 2

If you have any questions
or additional comments concerning the foregoing, please contact me at (202) 383-0805.

Sincerely,

/s/ Harry S. Pangas

Harry S. Pangas

Harry S. Pangas
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, DC 20004- 2415     September  13, 2012

RE:   K CAP Financial, Inc.  (“Company ”)
                   File Nos.: 333- 183032; 814- 00735

Dear M r. Pang as:
  On August 2, 2012, the Company, which has elected to be regulated as a business
development company under the provisions of the Investment Company Act of 1940 (“1940
Act”), filed a registration statement on Form N -2 under the Securities Act of 1933 (“1933 Act”)
to register up to $30  million in aggregate offering price of the Company’s senior notes . We have
reviewed the registration st atement and  have the following comments.

 Prospectus

1. In your response, please explain the nature of KCAP Funding and the reason why the
financial statements of this wholly owned bankruptcy remote subsidiary have not been consolidated with the Company’s  financial statements .

2. In your response, explain why the financial statements of the wholly owned CLO Fund,
Katonah 2007- I CLO Ltd., have not been consolidated with the Company’s  financial
statements.  Please inform the staff whether there are other owners of Katonah 2007 -I
CLO Ltd.

3. The Schedule of Investments must identify those assets considered “non -qualifying.”

4. Please explain in your response the nature and the accounting treatment of the new
wholly owned subsidiary, Commodore Holdings.

5. In your response, explain whether the financial statements of Trimaran Advisors, LLC
will be included along with the financial stat ements of Katonah Debt Advisors, LLC in
future Form 10-K filings (  Form 10-Q filings should include summarized information).  If
not, please explain the rationale for the exclusion.  In addition, please discuss the

2
 accounting treatment of the new adviser and  whether consolidation of the financial
statements of the adviser with those of the Company would be appropriate.

6. We note that portions of the filing are incomplete.  We may have additional comments on
such portions when you complete them in a pre -effecti ve amendment, on disclosures
made in response to this letter, on information supplied supplementally, or on financial
statements and exhibits added in any pre -effective amendments.

***************

      The staff may have additional comments on disclosur e made in response to these
comments, on information supplied supplementally, or on remaining exhibits.  Please respond to
the foregoing in a pre -effective amendment with changed material marked in conformity with
rule 210 under Regulation S -T.  The Company  should provide a response to all comments.
Where no changes will be made in the filing in response to a comment made in this letter, please
indicate this fact in your letter and briefly state the basis for your position.
  We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filings reviewed by the staff to be certain that they have provided all information investors
require for an informed decision.  Since the Company and its management are in possession of all
facts relating to the Company’s disclosure, they are responsible for the accuracy and adequacy of
the disclosures they have made.

 In connection with responding to our comments, please provide, in writing, a statement
from the Company acknowledging that:

• The Company is responsible for the accuracy and adequacy of the disclosure in
the filing ;
• Staff comments or changes to disclosure in response to staff comments in the
filing  reviewed by the staff do not foreclose the Commission from taking any
action with  respect to the filing ;
• The Company may not assert staff comments as defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the
United States.

In addition, please be advised that the Division of Enforcement has access to all
information you provide to the staff of the Division of Investment Management in connection
with our review of your filing or in response to our comments on your filing.

We will consider a written request for acceleration of the eff ective date of the registration
statement as a confirmation of the fact that those requesting acceleration are aware of their
respective responsibilities.  We will act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.

Please respond to this letter by filing a pre- effective amendment pursuant to Rule 472
under the 1933 Act .  Please respond to all comments.  Where no changes will be made in the
filing in response to a comment, please inform us in a supplemental let ter and state the basis for
your position.

3
 If you have any questions prior to filing a pre -effective amendment, please call me at
(202) 551- 6970.

      Sincerely,

      Mary A. Cole
      Senior Counsel

       Sheila Stout
       Senior Staff Acco untant

CORRESP
1
filename1.htm

[Letterhead of Stifel, Nicolaus & Company,
Incorporated]

October 4, 2012

Via Electronic Submission

United States Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Re:	KCAP Financial, Inc.

Registration Statement on Form N-2

File No. 333-183032

Ladies and Gentlemen:

In accordance with Rule 461 of the General
Rules and Regulations under the Securities Act of 1933, as amended, Stifel, Nicolaus & Company, Incorporated, as representatives
of the several Underwriters, hereby join in the request of KCAP Financial, Inc. that the effective date of the above-captioned
Registration Statement be accelerated so that the same will become effective on October 4, 2012 at 3:30pm, New York City time,
or as soon as practicable thereafter.

The following is supplemental information
supplied under Rule 418(a)(7) and Rule 460 under the Securities Act of 1933:

	(i)	Date of preliminary prospectus: October 3, 2012

	(ii)	Dates of distribution: October 3, 2012-October 4,
2012

	(iii)	Number of prospective underwriters to whom the
preliminary prospectus was furnished: 7

	(iv)	Number of prospectuses so distributed: approximately
3,250

	(v)	We have been informed by the participating underwriters that they have complied and will comply with the requirements of Rule
15c2-8 under the Securities Exchange Act of 1934.

Very truly yours,

Stifel,
Nicolaus & Company, Incorporated

By /s/ Allen G. Laufenberg

 Name: Allen G. Laufenberg

Title: Managing Director

CORRESP
1
filename1.htm

October 4, 2012

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

RE:    KCAP Financial, Inc. – Registration Statement on
Form N-2 (File No. 333-183032)

Dear Ms. Cole and Ms. Stout:

In accordance with Rule 461 of the General
Rules and Regulations under the Securities Act of 1933, as amended, KCAP Financial, Inc. hereby respectfully requests that the
above-captioned registration statement, including all amendments thereto, be ordered effective on October 4, 2012, at 3:30
p.m., or as soon thereafter as practicable.

KCAP Financial,
Inc.

By: /s/ Edward U. Gilpin

Edward U. Gilpin

Chief Financial Officer

CORRESP
1
filename1.htm

October 3, 2012

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

 RE: KCAP Financial, Inc. – Registration Statement
on Form N-2 (File No. 333-183032)

Dear Ms. Cole and Ms. Stout:

On behalf of KCAP Financial, Inc. (the “Company”),
set forth below are the Company’s responses to the comments of the staff of the Division of Investment Management (the “Staff”)
of the Securities and Exchange Commission (the “SEC”) that you provided to us in a letter dated September
13, 2012, regarding the Company’s registration statement on Form N-2 (File No. 333-183032) that was filed with the SEC on
August 2, 2012 (the “Registration Statement”). The Staff’s comments are set forth below and are
followed by the Company’s responses.

 1. Comment: In your response, please explain the
nature of KCAP Funding and the reason why the financial statements of this wholly owned bankruptcy remote subsidiary have not
been consolidated with the Company’s financial statements.

Response: KCAP Funding is
a wholly owned, limited purpose financing subsidiary of the Company. KCAP Funding was created by the Company for the sole purpose
of providing a bankruptcy remote entity to hold collateral for the Company’s financings. Utilization of the separate, bankruptcy
remote entity KCAP Funding was and is a prerequisite for the Company to obtain financing under a secured credit facility (the “Facility”).

In order to finance loans through KCAP Funding,
the Company causes KCAP Funding to borrow under the Facility and to use the proceeds of such borrowings to fund third party loans
made by the Company. The debt issued by KCAP Funding under the Facility is secured by all of the loans
funded thereunder. All decisions relating to the funding of such loans are made by the Company. In this regard, the Company
owns 100% of the outstanding capital stock of KCAP Funding and all of the executive officers of KCAP
Funding are comprised of executive officers of the Company. KCAP Funding has no other employees. Moreover, even though such
loans are held by KCAP Funding, the Company services such loans. The Company intends to retain 100% ownership and control of KCAP
Funding in the future.

As disclosed in the Registration Statement,
the Company and KCAP Funding did not enter into the Facility until the end of the first quarter of 2012 and KCAP Funding did not
drawdown any borrowings thereunder until the second quarter of 2012. As a result, the Company’s financial statements for
the quarter ended March 31, 2012 included in the initial filing of the Registration Statement with the SEC did not reflect the
activities or operations of KCAP Funding because such activities and operations did not commence until after March 31, 2012. However,
given that KCAP Funding did drawdown $21.5 million under the Facility in the second quarter of 2012, the Company’s financial
statements for the quarter ended June 30, 2012 included in the current filing of the Registration Statement reflect the activities
and operations of KCAP Funding (i.e., the accounts of KCAP Funding are consolidated with the accounts of the Company in the Company’s
financial statements for the quarter ended June 30, 2012).

 2. Comment: In your response, explain why the
financial statements of the wholly owned CLO Fund, Katonah 2007-I CLO Ltd., have not been consolidated with the Company’s
financial statements. Please inform the staff whether there are other owners of Katonah 2007-I CLO Ltd.

Response: In 2007, Katonah
Debt Advisors L.L.C., a wholly owned portfolio company of the Company that has a separate investment team and different investment
focus from that of the Company, engaged Bear Stearns Companies, Inc. to structure and raise capital in connection with the formation
of Katonah 2007-I CLO Ltd., a collateralized loan obligation fund (“CLO Fund”) that would invest primarily
in broadly syndicated loans and be managed by Katonah Debt Advisors. In January 2008, Bear Stearns raised $315 million in connection
with the closing of the CLO Fund and the Company invested approximately $29 million to acquire all of the shares of the most junior
class of securities of the CLO Fund (such junior class of securities is referred to herein as the “Residual Interest”).
The Residual Interest has no substantive voting rights and is only entitled to receive the residual cash flows generated
by the CLO Fund (i.e., cash flows left over after the principal and interest on the senior tranches of securities of the CLO Fund
have been paid in full). In 2009, the Company purchased the class B-2L notes of the CLO Fund. The primary
purpose of the Company’s investments in the CLO Fund is to realize income and capital appreciation therefrom. The
Company’s investments in the CLO Fund are consistent with the Company’s publicly disclosed investment strategy of investing
in debt and equity securities issued by collateralized loan obligation funds.

The Company advises the Staff that consolidation
of the CLO Fund into the Company’s financial statements is not required because the CLO Fund is not an “investment
company” given that it relies on an exception to the definition of “investment company” set forth in Section
3(a)(1) of the Investment Company Act of 1940 (the “1940 Act”).

The specific rules regarding consolidation
of financial statements filed by investment companies set forth in Rule 6-03(c) of Regulation S-X state in pertinent part that
the “statements of [an investment company registrant] may be consolidated only with the statements of subsidiaries
which are investment companies.”1
[Emphasis added.] The Company therefore believes that the plain language of Rule 6-03(c) of Regulation S-X clearly restricts consolidation
of the CLO Fund, or similar portfolio companies, into the Company’s financial statements.

1 As discussed in the Company’s response to Comment No. 5, the
accounting guidance supports the consolidation of certain entities that are not investment companies. However, given the characteristics
of the CLO Fund, it would not fall within any of the categories set forth in this guidance.

An analysis of the consolidation guidance
set forth in Rule 3A-02 of Regulation S-X provides additional support for the Company’s position not to consolidate the CLO
Fund. Specifically, the Company does not have a “controlling financial interest” in the CLO Fund (as such term is used
in Rule 3A-02) by virtue of the fact that the Residual Interest held by the Company has no substantive voting rights and the CLO
Fund is managed by an investment team that is separate from the Company’s investment team (i.e., the Company does not control
the investment decisions made by Katonah Debt Advisors with respect to the CLO Fund). Rule 3A-02 generally requires consolidation
of entities that are majority owned. However, the rule recognizes that the determination of “majority ownership” requires
a careful analysis of the facts and circumstances of the particular relationship among the entities. Rule 3A-02 states that “consolidation
of a majority owned subsidiary may not result in a fair presentation, because the registrant, in substance, does not have a controlling
financial interest.” As a result, particularly given its inability to act to approve any portfolio decisions or generally
any other actions by the CLO Fund, the Company does not have the ability to assert the level of control normally associated with
a “controlling financial interest” or majority ownership position in a subsidiary that would ordinarily trigger consolidation
under Rule 3A-02.

In addition, the facts surrounding the Company’s
purchase of the Residual Interest and the class B-2L notes of the CLO Fund support its treatment of it as a portfolio investment
(i.e., it was purchased in order to recognize income and capital appreciation therefrom) and, for example, are in stark contrast
to facts surrounding KCAP Funding (i.e., its sole purpose is to provide a bankruptcy remote entity to hold collateral for the Company’s
financing of its investments). As a result, the Company does not believe that it is appropriate for it to consolidate the accounts
of the CLO Fund into its financial statements.

 3. Comment: The Schedule of Investments must identify
those assets considered “non-qualifying.”

Response: The Company has
revised the Schedule of Investments as of June 30, 2012 included in the Registration Statement accordingly. See pages 73
through 79 and F-6 through F-12 of the Registration Statement.

 4. Comment: Please explain in your response the
nature and the accounting treatment of the new wholly owned subsidiary, Commodore Holdings.

Response: Commodore Holdings, L.L.C.
is a Delaware limited liability company that

was formed by the Company for the sole purpose of effectuating
the Company’s acquisition of Trimaran Advisors, L.L.C. The Company owns 100% of the equity interests in Commodore Holdings
and, in turn, Commodore Holdings owns 100% of the equity interests in Trimaran Advisors. Commodore Holdings has no operations or
function other than to hold the equity interests of Trimaran Advisors on behalf of the Company. In light of the foregoing, the
Company “looks through” Commodore Holdings to its assets (i.e., to the equity interest its holds in Trimaran Advisors)
for financial reporting purposes much the same way as business development companies “look through” their tax blocker
subsidiaries to the assets held by the tax blocker subsidiaries for financial reporting purposes (i.e., the portfolio investments
of the tax blocker subsidiaries (and not the tax blocker subsidiaries themselves) are incorporated into, and listed in,
business development companies’ financial statements and schedules of investments, respectively). The Company believes that
the above-described financial presentation for Commodore Holdings, tax blocker subsidiaries of business development companies and
other entities formed for corporate, tax and other administrative purposes is the most meaningful in the circumstances and provides
the Company’s investors with a better of understanding of the financial reality of the situation.

 5. Comment: In your response, explain whether
the financial statements of Trimaran Advisors, LLC will be included along with the financial statements of Katonah Debt Advisors,
LLC in future Form10-K filings ( Form10-Q filings should include summarized information). If not, please explain the rationale
for the exclusion. In addition, please discuss the accounting treatment of the new adviser and whether consolidation of the financial
statements of the adviser with those of the Company would be appropriate.

Response: The Company hereby
confirms that the financial statements and summarized financial information of Trimaran Advisors, LLC and Katonah Debt Advisors,
LLC will be included in the Company’s future annual reports on Form 10-K and quarterly reports on Form 10-Q, respectively,
to the extent that the Company is required to continue to do so by Rule 3-09 of Regulation S-K or other applicable accounting guidance.

The accounting treatment of Trimaran Advisors,
LLC is consistent with the accounting treatment of Katonah Debt Advisors, LLC. In this regard, Rule 6-03(c)(1) of Regulation S-X
states that the financial statements of a business development company may only be consolidated with the financial statements of
subsidiaries which are investment companies. Paragraph 7.10 of the American Institute of Certified Public Accountants Audit and
Accounting Guides – Investment Companies (May 1, 2012) (the “AICPA Audit Guide”) provides an exception
to the above general principle if the business development company has an investment in an operating company that provides all
or substantially all of its services to the business development company.

With respect to the Trimaran Advisors, (i)
it is not an investment company and therefore should not be consolidated with the Company under Rule 6-03(c)(1) of Regulation S-X
and (ii) does not provide all or substantially all of its services to the Company. Therefore, it is not appropriate to consolidate
the accounts of Trimaran Advisors with those of the Company.

*     *     *

In connection with
responding to the Staff’s comments on the Registration Statement, the Company acknowledges that:

 · the Company is responsible for the accuracy and adequacy of the disclosure in the Registration Statement;

 · the Staff’s comments or changes to disclosure in response to Staff comments in the Registration Statement do not foreclose
the SEC from taking any action with respect to the Registration Statement; and

 · The Company may not assert the Staff’s comments as defense in any proceeding initiated by the SEC or any person under
the federal securities laws of the United States.

If you have any questions or additional
comments concerning the foregoing, please contact me at (202) 383-0805.

Sincerely,

/s/ Harry S. Pangas

Harry S. Pangas

CORRESP
1
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From: Pangas, Harry S.

Sent: Thursday, September 20, 2012 7:15 PM

To: Cole, Mary A.

Cc: Siadatpour, Payam

Subject: KCAP Financial, Inc. - Form N-2

Mary,

As discussed, attached please find (i) a letter
responding to comments issued by the SEC staff on KCAP Financial, Inc.’s Form N-2 registration statement and (ii) a clean
and marked copy of the Form N-2 registration statement.  The marked copy of the Form N-2 registration statements highlights
changes made to the previously filed version of the Form N-2 registration statement, including to update the financial information
contained therein (i.e., from March 31, 2012 to June 30, 2012).

We will file this email and the attached documents
as supplemental correspondence on EDGAR.

Thanks,

Harry

Harry Pangas | Partner |
202.383.0805

CIRCULAR 230 DISCLOSURE: To comply with Treasury Department regulations, we inform you that, unless otherwise expressly
indicated, any tax advice contained in this communication (including any attachments) is not intended or written to be used, and
cannot be used, for the purpose of (i) avoiding penalties that may be imposed under the Internal Revenue Code or any other applicable
tax law, or (ii) promoting, marketing or recommending to another party any transaction, arrangement, or other matter.

This e-mail message is intended only for the personal use of the recipient(s) named above. This message may be an attorney-client
communication and as such privileged and confidential. If you are not an intended recipient, you may not review, copy, or distribute
this message. If you have received this communication in error, please notify us immediately by e-mail and delete the original
message.

September , 2012

VIA EDGAR

Mary A. Cole, Senior Counsel

Sheila Stout, Senior Staff Accountant

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

 RE: KCAP Financial, Inc. – Registration Statement
on Form N-2 (File No. 333-183032)

Dear Ms. Cole and Ms. Stout:

On behalf of KCAP Financial, Inc. (the “Company”),
set forth below are the Company’s responses to the comments of the staff of the Division of Investment Management (the “Staff”)
of the Securities and Exchange Commission (the “SEC”) that you provided to us in a letter dated September
13, 2012, regarding the Company’s registration statement on Form N-2 (File No. 333-183032) that was filed with the SEC on
August 2, 2012 (the “Registration Statement”). The Staff’s comments are set forth below and are
followed by the Company’s responses.

 1. Comment: In your response, please explain the
nature of KCAP Funding and the reason why the financial statements of this wholly owned bankruptcy remote subsidiary have not
been consolidated with the Company’s financial statements.

Response: KCAP Funding is
a wholly owned, limited purpose financing subsidiary of the Company. KCAP Funding was created by the Company for the sole purpose
of providing a bankruptcy remote entity to hold collateral for the Company’s financings. Utilization of the separate, bankruptcy
remote entity KCAP Funding was and is a prerequisite for the Company to obtain financing under a secured credit facility (the “Facility”).

In order to finance loans through KCAP Funding,
the Company causes KCAP Funding to borrow under the Facility and to use the proceeds of such borrowings to fund third party loans
made by the Company. The debt issued by KCAP Funding under the Facility is secured by all of the loans
funded thereunder. All decisions relating to the funding of such loans are made by the Company. In this regard, the Company
owns 100% of the outstanding capital stock of KCAP Funding and all of the executive officers of KCAP
Funding are comprised of executive officers of the Company. KCAP Funding has no other employees. Moreover, even though such
loans are held by KCAP Funding, the Company services such loans. The Company intends to retain 100% ownership and control of KCAP
Funding in the future.

As disclosed in the Registration Statement,
the Company and KCAP Funding did not enter into the Facility until the end of the first quarter of 2012 and KCAP Funding did not
drawdown any borrowings thereunder until the second quarter of 2012. As a result, the Company’s financial statements for
the quarter ended March 31, 2012 included in the initial filing of the Registration Statement with the SEC did not reflect the
activities or operations of KCAP Funding because such activities and operations did not commence until after March 31, 2012. However,
given that KCAP Funding did drawdown $21.5 million under the Facility in the second quarter of 2012, the Company’s financial
statements for the quarter ended June 30, 2012 included in the current filing of the Registration Statement reflect the activities
and operations of KCAP Funding (i.e., the accounts of KCAP Funding are consolidated with the accounts of the Company in the Company’s
financial statements for the quarter ended June 30, 2012).

 2. Comment: In your response, explain why the
financial statements of the wholly owned CLO Fund, Katonah 2007-I CLO Ltd., have not been consolidated with the Company’s
financial statements. Please inform the staff whether there are other owners of Katonah 2007-I CLO Ltd.

Response: In 2007, Katonah
Debt Advisors L.L.C., a wholly owned portfolio company of the Company that has a separate investment team and different investment
focus from that of the Company, engaged Bear Stearns Companies, Inc. to structure and raise capital in connection with the formation
of Katonah 2007-I CLO Ltd., a collateralized loan obligation fund (“CLO Fund”) that would invest primarily
in broadly syndicated loans and be managed by Katonah Debt Advisors. In January 2008, Bear Stearns raised $315 million in connection
with the closing of the CLO Fund and the Company invested approximately $29 million to acquire all of the shares of the most junior
class of securities of the CLO Fund (such junior class of securities is referred to herein as the “Residual Interest”).
The Residual Interest has no substantive voting rights and is only entitled to receive the residual cash flows generated
by the CLO Fund (i.e., cash flows left over after the principal and interest on the senior tranches of securities of the CLO Fund
have been paid in full). In 2009, the Company purchased the class B-2L notes of the CLO Fund. The primary
purpose of the Company’s investments in the CLO Fund is to realize income and capital appreciation therefrom. The
Company’s investments in the CLO Fund are consistent with the Company’s publicly disclosed investment strategy of investing
in debt and equity securities issued by collateralized loan obligation funds.

The Company advises the Staff that consolidation
of the CLO Fund into the Company’s financial statements is not required because the CLO Fund is not an “investment
company” given that it relies on an exception to the definition of “investment company” set forth in Section
3(a)(1) of the Investment Company Act of 1940 (the “1940 Act”).

The specific rules regarding consolidation
of financial statements filed by investment companies set forth in Rule 6-03(c) of Regulation S-X state in pertinent part that
the “statements of [an investment company registrant] may be consolidated only with the statements of subsidiaries
which are investment companies.”1
[Emphasis added.] The Company therefore believes that the plain language of Rule 6-03(c) of Regulation S-X clearly restricts consolidation
of the CLO Fund, or similar portfolio companies, into the Company’s financial statements.

1 As discussed in the Company’s response to Comment No. 5, the
accounting guidance supports the consolidation of certain entities that are not investment companies. However, given the characteristics
of the CLO Fund, it would not fall within any of the categories set forth in this guidance.

An analysis of the consolidation guidance
set forth in Rule 3A-02 of Regulation S-X provides additional support for the Company’s position not to consolidate the CLO
Fund. Specifically, the Company does not have a “controlling financial interest” in the CLO Fund (as such term is used
in Rule 3A-02) by virtue of the fact that the Residual Interest held by the Company has no substantive voting rights and the CLO
Fund is managed by an investment team that is separate from the Company’s investment team (i.e., the Company does not control
the investment decisions made by Katonah Debt Advisors with respect to the CLO Fund). Rule 3A-02 generally requires consolidation
of entities that are majority owned. However, the rule recognizes that the determination of “majority ownership” requires
a careful analysis of the facts and circumstances of the particular relationship among the entities. Rule 3A-02 states that “consolidation
of a majority owned subsidiary may not result in a fair presentation, because the registrant, in substance, does not have a controlling
financial interest.” As a result, particularly given its inability to act to approve any portfolio decisions or generally
any other actions by the CLO Fund, the Company does not have the ability to assert the level of control normally associated with
a “controlling financial interest” or majority ownership position in a subsidiary that would ordinarily trigger consolidation
under Rule 3A-02.

In addition, the facts surrounding the Company’s
purchase of the Residual Interest and the class B-2L notes of the CLO Fund support its treatment of it as a portfolio investment
(i.e., it was purchased in order to recognize income and capital appreciation therefrom) and, for example, are in stark contrast
to facts surrounding KCAP Funding (i.e., its sole purpose is to provide a bankruptcy remote entity to hold collateral for the Company’s
financing of its investments). As a result, the Company does not believe that it is appropriate for it to consolidate the accounts
of the CLO Fund into its financial statements.

 3. Comment: The Schedule of Investments must identify
those assets considered “non-qualifying.”

Response: The Company has
revised the Schedule of Investments as of June 30, 2012 included in the Registration Statement accordingly. See pages 73
through 79 and F-6 through F-12 of the Registration Statement.

 4. Comment: Please explain in your response the
nature and the accounting treatment of the new wholly owned subsidiary, Commodore Holdings.

Response: Commodore Holdings, L.L.C.
is a Delaware limited liability company that

was formed by the Company for the sole purpose of effectuating
the Company’s acquisition of Trimaran Advisors, L.L.C. The Company owns 100% of the equity interests in Commodore Holdings
and, in turn, Commodore Holdings owns 100% of the equity interests in Trimaran Advisors. Commodore Holdings has no operations or
function other than to hold the equity interests of Trimaran Advisors on behalf of the Company. In light of the foregoing, the
Company “looks through” Commodore Holdings to its assets (i.e., to the equity interest its holds in Trimaran Advisors)
for financial reporting purposes much the same way as business development companies “look through” their tax blocker
subsidiaries to the assets held by the tax blocker subsidiaries for financial reporting purposes (i.e., the portfolio investments
of the tax blocker subsidiaries (and not the tax blocker subsidiaries themselves) are incorporated into, and listed in,
business development companies’ financial statements and schedules of investments, respectively). The Company believes that
the above-described financial presentation for Commodore Holdings, tax blocker subsidiaries of business development companies and
other entities formed for corporate, tax and other administrative purposes is the most meaningful in the circumstances and provides
the Company’s investors with a better of understanding of the financial reality of the situation.

 5. Comment: In your response, explain whether
the financial statements of Trimaran Advisors, LLC will be included along with the financial statements of Katonah Debt Advisors,
LLC in future Form10-K filings ( Form10-Q filings should include summarized information). If not, please explain the rationale
for the exclusion. In addition, please discuss the accounting treatment of the new adviser and whether consolidation of the financial
statements of the adviser with those of the Company would be appropriate.

Response: The Company hereby
confirms that the financial statements and summarized financial information of Trimaran Advisors, LLC and Katonah Debt Advisors,
LLC will be included in the Company’s future annual reports on Form 10-K and quarterly reports on Form 10-Q, respectively,
to the extent that the Company is required to continue to do so by Rule 3-09 of Regulation S-K or other applicable accounting guidance.

The accounting treatment of Trimaran Advisors,
LLC is consistent with the accounting treatment of Katonah Debt Advisors, LLC. In this regard, Rule 6-03(c)(1) of Regulation S-X
states that the financial statements of a business development company may only be consolidated with the financial statements of
subsidiaries which are investment companies. Paragraph 7.10 of the American Institute of Certified Public Accountants Audit and
Accounting Guides – Investment Companies (May 1, 2012) (the “AICPA Audit Guide”) provides an exception
to the above general principle if the business development company has an investment in an operating company that provides all
or substantially all of its services to the business development company.

With respect to the Trimaran Advisors, (i)
it is not an investment company and therefore should not be consolidated with the Company under Rule 6-03(c)(1) of Regulation S-X
and (ii) does not provide all or substantially all of its services to the Company. Therefore, it is not appropriate to consolidate
the accounts of Trimaran Advisors with those of the Company.

*     *     *

In connection with
responding to the Staff’s comments on the Registration Statement, the Company acknowledges that:

 · the Company is responsible for the accuracy and adequacy of the disclosure in the Registration Statement;

 · the Staff’s comments or changes to disclosure in response to Staff comments in the Registration Statement do not foreclose
the SEC from taking any action with respect to the Registration Statement; and

 · The Company may not assert the Staff’s comments as defense in any proceeding initiated by the SEC or any person under
the federal securities laws of the United States.

If you have any questions or additional
comments concerning the foregoing, please contact me at (202) 383-0805.

Sincerely,

Harry S. Pangas

CORRESP
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    ROPES & GRAY LLP

PRUDENTIAL TOWER

800 BOYLSTON STREET

BOSTON, MA 02199-3600

WWW.ROPESGRAY.COM

May 2, 2012

    Adam Collicelli

    T +1 617 235 4740

    F +1 617 951 7050

    adam.collicelli@ropesgray.com

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Investment Management

100 F Fifth Street, N.E.

Washington, DC 20549

 Attention: Mary A. Cole

 Re: Kohlberg Capital Corporation (the “Company”)

Definitive Proxy Statement on
Schedule 14A for the Company’s 2012 Special Stockholder Meeting

File No. 814-00735

Dear Ms. Cole:

On April 16, 2012, you provided, via telephone, a
comment of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
relating to the Company’s Preliminary Proxy Statement on Schedule 14A for the Company’s 2012 Special Stockholder Meeting
filed with the Commission on April 9, 2012 (File No. 814-00735) (the “2012 Preliminary Proxy Statement”). For
your reference, the Staff’s comment (the “Comment”) is reproduced below in bold:

Please confirm that the Company interprets Section
63 of the Investment Company Act of 1940, as amended (the “1940 Act”), to require that any shares of the Company’s
common stock, par value $0.01 per share (the “Common Stock”), underlying any options, warrants or other rights
that are sold pursuant to Section 63(2) (i.e., sold below net asset value (“NAV”)) are issued within
one year of the stockholder approval required by Section 63(2)(A) (i.e., the option, warrant or right must be exercised,
converted, or exchanged for the underlying shares of Common Stock, and thus the option, warrant or right must expire, within such
one-year period).

    - 2 -
    May 2, 2012

On April 24, 2012, Michael Doherty of this firm submitted
to the Staff, via EDGAR and e-mail, a response letter to the Comment on behalf of the Company (the “April 24 Response
Letter”). On April 30, 2012, you indicated, via telephone, that the Staff did not agree with the Company’s positions
set forth in the April 24 Response Letter. In light of the timing of the Company’s 2012 Special Stockholder Meeting, the
Company has revised the disclosure to reflect the Staff’s position that the issuance of shares of Common Stock underlying
any options, warrants or other rights at a price below the then current NAV per share of such Common Stock may only be effected
within one year of the stockholder approval. Such revisions are reflected on pages 4 and 9 of the Definitive Proxy Statement on
Schedule 14A for the Company’s 2012 Special Stockholder Meeting that was filed with the Commission on May 1, 2012 (File No.
814-00735), where the following disclosure has been added as the fourth sentence of the first paragraph and the new second sentence
of the penultimate paragraph, respectively:

If the Company issues any warrants, options or rights
to acquire Common Stock, the issuance of any Common Stock upon the exercise of any such warrants, options or rights may only be
effected within one year of such shareholder approval to the extent such issuance would result in an acquisition of Common Stock
at a price below the then current net asset value per share of such Common Stock.

In addition, the language that was included in parentheses
at the end of the third sentence of the first paragraph on p. 4 of the 2012 Preliminary Proxy Statement (“although warrants,
options and rights issued pursuant to this authority may be exercised after the end of the one-year period”) has been deleted.

As noted above, the Company made the requested change
because of the need to finalize its proxy statement in time for its Special Stockholder Meeting. The Company is not conceding that
its original position was incorrect, and it reserves the right to raise this issue with respect to future meetings. I understand
that Michael Doherty has contacted you to schedule a call to discuss this issue generally.

If you should have any questions about this letter
or require any further information, please contact the undersigned at 617-235-4740 or Richard Gluckselig at 212-841-0445. Thank
you for your assistance.

Very truly yours,

/s/  Adam Collicelli

Adam Collicelli

 cc: Dayl W. Pearson

CORRESP
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    ROPES & GRAY LLP

1211 AVENUE OF THE AMERICAS

    NEW YORK, NY 10036-8704

    WWW.ROPESGRAY.COM

April 24, 2012

    Michael G. Doherty

    T +1 212 497 3612

    F +1 646 728 1578

    michael.doherty@ropesgray.com

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Investment Management

100 F Fifth Street, N.E.

Washington, DC 20549

Attention:	Mary A. Cole

 Re: Kohlberg Capital Corporation (the “Company”)

Preliminary Proxy Statement on
Schedule 14A for the Company’s 2012 Special Stockholder Meeting

File No. 814-00735

Dear Ms. Cole:

On April 16, 2012, you provided, via telephone, a
comment of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
relating to the Company’s Preliminary Proxy Statement on Schedule 14A for the Company’s 2012 Special Stockholder Meeting
filed with the Commission on April 9, 2012 (File No. 814-00735) (the “Proxy Statement”).

On behalf of the Company, please find below the Company’s
response to the Staff’s comment. The response to the Staff’s comment set forth in this letter is submitted on behalf
of the Company at its request. For your convenience and in order to expedite the Staff’s review, the Staff’s comment
is reproduced in bold, and the corresponding response of the Company is shown below such comment.

Proxy Statement

 1. Please confirm that the Company interprets Section 63 of the Investment Company Act of 1940, as amended (the “1940
Act”), to require that any shares of the Company underlying any options, warrants or other rights that are sold pursuant
to Section 63(2) (i.e., sold below net asset value (“NAV”)) are issued within one year of the shareholder
approval required by Section 63(2)(A) (i.e., the option, warrant or right must be exercised, converted, or exchanged for
the underlying shares, and thus the option, warrant or right must expire, within such one-year period).

    - 2 -
    April 24, 2012

RESPONSE TO COMMENT

Although the Company cannot affirm that it has located
all of the legislative history relevant to an interpretation of Section 63, the legislative history the Company reviewed does not
state whether options, warrants or rights to acquire common stock at a price below the current NAV of a business development company’s
(a “BDC’s”) common stock must be exercised, converted or exchanged (and thus must expire) within one year
of the shareholder approval required by Section 63(2)(A).  The legislative history of the Small Business Investment Incentive
Act of 1980, the bill that added Section 63 (among others) to the 1940 Act, clearly indicates, however, that the purpose of the
bill was to provide the businesses it affected with means to more readily raise needed capital.  The legislative history also
suggests that a specific purpose of Section 63 is to enable BDCs to, among other things, purchase the assets of small businesses
in exchange for securities.  Others have also supported the notion that Section 63 was designed to facilitate the raising
of capital by BDCs.1  The Company
believes that the ability of a BDC to purchase assets in exchange for options, warrants or other similar rights (either alone or,
more likely, in connection with other securities) would be severely hampered if those securities must expire within one year or
less.  Therefore, reading Section 63 to require that such rights must expire in one year would seem to frustrate the Congressional
intent in enacting Section 63.  Similarly, it is worth noting that as a practical matter, requiring the options, warrants
and rights to expire within one year of shareholder approval means that they will as a practical matter have a term of less than
one year from issuance, further eroding their utility.

The Company also notes that the plain language of Section
63 supports an interpretation that options, warrants and other similar rights should be allowed to expire outside of one year after
shareholder approval.  The language in Section 63(2) allows a company to “sell any common stock” and to “sell
warrants, options, or rights to acquire any such common stock.”  Section 63(2)(A) states that shareholders must approve
the policy and practice of making “such sales of securities” within one year immediately prior to “such sale.”
The Company believes that a straightforward reading of the provisions indicates that references to “such sale” and
“such sales” are referring to the initial issuances of the options, warrants or rights, and not to any securities issued
upon exercise, conversion or exchange of the options, warrants or rights.  Assuming the Company’s reading is correct,
the requirement that the sale take place within one year of shareholder approval limits only the sale of the options, warrants
or rights, not their exercise, conversion or exchange.  Similarly, Section 63(2)(C) addresses “the issuance of such
securities” and “the price at which such securities are to be sold,” where the price is the price at the time
of issuance.  The Company believes this language, while not directly speaking to the length of time a security may be outstanding,
supports a reading that the limitations in Section 63 are focused on the original issuance of the options, warrants and rights
and not the date of exercise, conversion or exchange of such securities.

1 See
Reginald L. Thomas and Paul F. Roye, Regulation of Business Development Companies under the Investment Company Act, 55 S.
Cal. L. Rev. 895 (1982).

    - 3 -
    April 24, 2012

The Company acknowledges that Section
63 does not specify how long options, warrants and other rights issued pursuant to Section 63(2) may last before they must expire.
Given that any such options, warrants and rights must be sold at a price which “closely approximates the market value”
of the securities, as determined by the “required majority” of the BDC’s directors, the Company believes it is
reasonable to conclude that no expiration date is required as the expiration date would be one of the factors which determines
the price of the option, warrant or right (and therefore the BDC would presumably receive a higher price for securities with a
longer expiration date).  However, the Company also acknowledges that one might look to Section 61(a)(3)(A) of the 1940 Act,
which provides for the issuance of options, warrants and rights, with shareholder approval, provided that they expire by their
terms within 10 years.  The Company does not see a reason for treating options, warrants or rights sold pursuant to shareholder
approval under Section 63(2)(A) more restrictively than options, warrants or rights sold pursuant to shareholder approval under
Section 61(a)(3)(A)(iv). However, the Company recognizes that policy arguments with respect to dilution may favor requiring that
options, warrants or rights sold pursuant to shareholder approval under Section 63(2)(A) be subject to certain of the restrictions
imposed on options, warrants and rights sold pursuant to shareholder approval under Section 61(a)(3)(A)(iv). As discussed, the
Company is willing to agree that any options, warrants or rights to subscribe or convert to securities of the Company that it sells
pursuant to Section 63(2) and that may be exercised or converted more than one year from the date of the shareholder approval contemplated
by Section 63(2) will be issued with an exercise or conversion price that is not less than the net asset value of the underlying
securities at the date of issuance.

The Company has authorized us to
acknowledge on its behalf that (i) it is responsible for the adequacy and accuracy of the disclosure in the filings; (ii) Staff
comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect
to the filings; and (iii) it is the Staff’s view that the Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the United States.

    - 4 -
    April 24, 2012

I hope that the foregoing has been responsive to your comments.
If you should have any questions about this letter or require any further information, please contact the undersigned at 617-951-7802
or Richard Gluckselig at 212-841-0445. Thank you for your assistance.

Very truly yours,

/s/ Michael G. Doherty

Michael G. Doherty

 cc: Dayl W. Pearson

CORRESP
1
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    April 16, 2012
    Craig E. Marcus

    617-951-7802

    Craig.Marcus@ropesgray.com

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Investment Management

100 F Fifth Street, N.E.

Washington, DC 20549

 Attention: Mary A. Cole

 Re: Kohlberg Capital Corporation (the “Company”)

Preliminary Proxy Statement on
Schedule 14A for the Company’s 2012 Annual Stockholder Meeting

File No. 814-00735

Dear Ms. Cole:

On April 16, 2012, you provided, via telephone, comments of
the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) relating
to the Company’s Preliminary Proxy Statement on Schedule 14A for the Company’s 2012 Annual Stockholder Meeting filed
with the Commission on April 6, 2012 (File No. 814-00735) (the “Proxy Statement”).

On behalf of the Company, please find below the Company’s
responses to the Staff’s comments. All responses to the Staff’s comments set forth in this letter are submitted on
behalf of the Company at its request. For your convenience and in order to expedite the Staff’s review, the Staff’s
comments are reproduced in bold in numerical sequence in this letter, and the corresponding responses of the Company are shown
below such comments.

Proxy Statement

 1. On page 19 of the Proxy Statement under “Long-Term Incentives,” the fourth sentence of the first paragraph refers
to all grants under the Amended and Restated 2006 Equity Incentive Plan as being approved by the Company’s Board of Directors.
Please confirm supplementally that the reference to Board approval refers to approval pursuant to Section 57(o) of the Investment
Company Act of 1940, as amended.

RESPONSE TO COMMENT 1

The Company supplementally confirms
to the Staff that the reference to Board approval in the above-mentioned sentence refers to approval pursuant to Section 57(o)
of the Investment Company Act of 1940, as amended.

 2. Please confirm supplementally that the Company has no soft-dollar or affiliated brokerage arrangements in place.

RESPONSE TO COMMENT 2

The Company supplementally confirms
to the Staff that the Company currently has no soft-dollar or affiliated brokerage arrangements in place.

* * *

    Securities and Exchange Commission
    - 2 -
    April 16, 2012

The Company has authorized us to acknowledge on its behalf
that (i) it is responsible for the adequacy and accuracy of the disclosure in the filings; (ii) Staff comments or changes to disclosure
in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and (iii) it
is the Staff’s view that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission
or any person under the federal securities laws of the United States.

I hope that the foregoing has been responsive to your comments.
If you should have any questions about this letter or require any further information, please contact the undersigned at 617-951-7802
or Richard Gluckselig at 212-841-0445. Thank you for your assistance.

Very truly yours,

/s/ Craig E. Marcus

 cc: Dayl W. Pearson

Diane Fernandes
Ropes & Gray LLP
One International Place
Boston, MA 02110-2624     September  18  , 2006

 RE:  Kohlberg Capital, LLC
         File Nos.:  333-136714 and 814-00727

Dear Ms. Fernandes:

 On August 18, 2006, your firm file d a registration statement on Form
N-2 on behalf of Kohlberg Capital, LLC (the “Company”).  The Company has
also filed a Notification on Form 6-F informing the Commission of its intent to
elect to be treated as a business development company (“BDC”). We have reviewed the registration statement and have set forth our comments below.  For convenience, we generally organize our comments using the headings and page numbers in the registration statement.

Prospectus

1. The name of the Company as it appears on the cover and the name on the inside front cover do not correspond.  Please conform the disclosure.

2. Inside front cover—

a.) Please disclose whether the Company is diversified or non-diversified.
b.) Disclose the amount of immediate dilution to be experienced by purchasers in the initial offering.
c.) In a supplemental letter to the staff, describe in greater detail the “strategic relationship” between the Company and Kohlberg & Co. and analyze whether the relationship contemplated
violates the affiliated transaction provisions of Section 57 of the
Investment Company Act of 1940 (“1940 Act”).
d.) In your response letter explain in detail the relationship
between the Company and Katonah Debt Advisors (“KDA”). Specifically, analyze whether this entity would be an “eligible portfolio company” under the terms of the BDC provisions of
the 1940 Act or whether the Company would be engaged in an
 1

operating business (an advisory business) through the
activities of a wholly owned subsidiary.
e.) In the disclaimer before the Ta ble of Contents state that the
Company will amend the prospectus in the event of material changes to the disclosure in the current prospectus.

3. Overview—This section states that  KDA manages collateralized debt
obligation funds (“KDO Funds”). In yo ur response letter describe in
detail these KDO Funds and explain who invests in these funds. Analyze whether the transactions contemplated would constitute affiliated transactions under Section 57 of the 1940 Act.

4.  Will the “strategic relationsh ip” with Kohlberg & Co. (“Kohlberg”)
involve the payment of any fees to Kohlberg?  If so, who will be
responsible for the payment of such fees?

5. Page 2—This section describes the employees of the Company.
Please note that Rule 38a-1 under the 1940 Act mandates that a BDC
have a functioning Chief Compliance Officer.  Who is serving in that
capacity and how is such person being compensated?  Will the
Company’s CCO review and approve all response letters and revised
disclosure documents filed with the Commission?

6. Risks Related to our Investments—Please add the risk of leverage to
this section of the prospectus.

7. Risks Related to this Offering —Please disclose the amount of
immediate dilution to be experienced by the purchasers in the initial
offering.

8. The Offering (Use of Proceeds)—This section states that the proceeds to be used by KDA will in turn be used to repay a credit facility provided by an affiliate of one of the underwriters in the offering.  In
your response letter analyze this transaction under the affiliated
transaction provisions of Section 57 of the 1940 Act.

9. Fees and Expenses—Please delete the phrase “borne by us” in the “Offering expenses” line item of the fee table.

10. Fee Table—Please move the footnotes so that they follow the
Example.

11. Fee Table—In your response letter, explain why the expenses of
employing investment management professionals is not reflected under “Management Fees” instead of under “Other Expenses”.  See,
Instructions 7.a. and 7.b. to Item 3.1 of Form N-2.

 2

12. Example—Please delete the phrase “and the expenses in the tables
above” in the last paragraph of this section.

13. Our Board of Directors May Change our Investment Objective—Please
disclose that the Company may not change its status as a BDC
without shareholder vote.

14. The Equity in Katonah Debt Advisors (page 18)—The disclosure in
this section is confusing. Appa rently, the Company has already
acquired the equity in KDA and subordinated securities in KDA’s CDO Funds and expects to acquire addition al securities from KDA. In your
response letter, provide a description of the terms of the effectuated transactions and when they occurred. Distinguish these from the transactions yet to be effectuated.  The disclosure further states that
the valuation of these assets may not reflect the value that could have been obtained from a transaction with a third party.  In your letter, explain why this would not constitute overreaching by an
affiliate and why the transaction would not require an exemptive
order under the 1940 Act.

15. Restructuring—In your response letter, please provide a diagram of
the salient features of the restructuring. Our review of the diagram may result in the need for additional disclosure in this section.

16. CDO Fund Securities—Disclose whether there are third party
investors in the CDO Funds. Analyz e in your letter whether the CDO
Funds constitute “eligible portfolio securities” under Section 2(a)(46) of the 1940 Act.

17.  Management Compensation—The disclosure indicates that
consultants will be issued stock options.  In your letter explain how issuing options to consultants complies with Section 61 of the 1940 Act.

18.  Fee Income—In your letter explain whether any fees rendered to the
Company for providing managerial assistance to portfolio companies are directed to affiliates of the Company.

19.  Background (page 40)—This section states that the CDO Funds
invest in below-investment-grade broadly syndicated loans, bonds
and other credit instruments.  In your letter analyze whether these
underlying instruments constitute appropriate investments for a BDC.

20.  Equity Incentive Plan (page 62)—This section states that the
Company will seek Commission exemptive relief to grant stock-based compensation in exchange for services.  In your letter inform us
whether your research shows that the Commission has granted such relief in the past.
 3

21.  Federal Income Tax Considerations—Please disclose the tax
consequences relative to the fee income generated by KDA.

General Comments

22.We note that portions of the filing are incomplete.  We may have
additional comments on such portions when you complete them in a
pre-effective amendment, on disclosures made in response to this letter, on information supplied supplementally, or on exhibits added in any pre-effective amendments.
23. If you intend to omit certain information from the form of prospectus
included with the registration statement that is declared effective in
reliance on Rule 430A under the Securities Act of 1933 (“Securities
Act”), please identify the omitted information to us in your supplemental letter, preferably before filing the final pre-effective amendment.

24. Response to this letter should be in the form of a pre-effective
amendment filed pursuant to Rule 472 under the Securities Act.  Where no change will be made in the filing in response to a comment, please indicate this fact in your letter and briefly state the basis for
your position.

We urge all persons who are responsible for the accuracy and
Adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an informed decision.  Since the Company and its management are in possession of all facts relating to the Company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.

   In connection with responding to our comments, please provide, in
writing, a statement from th e Company acknowledging that:

• The Company is responsible for the accuracy and adequacy of
the disclosure in the filings;
• Staff comments or changes to di sclosure in response to staff
comments in the filings reviewed  by the staff do not foreclose
the Commission from taking any action with respect to the
filings;
• The Company may not assert staff comments as defense in any
proceeding initiated by the Comm ission or any person under the
federal securities laws of the United States.

In addition, please by advised that the Division of Enforcement has
 4

access to all information you provide to the staff of the Division of
Investment Management in connection wi th our review of your filing or in
response to our comments on your filing.

 We will consider a written request for acceleration of the effective date of the registration statement as a co nfirmation of the fact that those
requesting acceleration are aware of their respective responsibilities.  We will act on the request and, pursuant to delegated authority, grant acceleration of
the effective date.

 Please respond to this letter by filing a pre-effective amendment
pursuant to Rule 472 under the Securities Act.  Please respond to all comments.  Where no changes will be made in the filing in response to a comment, please inform us in your supplemental letter and state the basis
for your position.

 If you have any questions prior to filing the pre-effective amendment
and providing the supplemental letter, please call me at (202 551-6970.

      S i n c e r e l y ,

      M a r y  A .  C o l e
      S e n i o r  C o u n s e l

 5

CORRESP
1
filename1.htm

Acceleration Request

 December 7, 2006

 VIA EDGAR

 Securities and Exchange Commission

 Division of Investment Management

 100 F Street, N.E.

 Washington, DC 20549

Attention:
Mary A. Cole – Legal

Jim Campbell – Accounting

 Re:    Kohlberg Capital Corporation1

           Registration Statement on Form N-2

           Registration No. 333-136714

 Ladies and Gentlemen:

 Pursuant to Rule 461(a) under the Securities Act of 1933, as amended (the “Securities Act”), the company hereby requests that the effective date for the Registration Statement referred to above (the “Registration
Statement”) be accelerated so that it will be declared effective by 12:00 p.m. eastern time on Monday, December 11, 2006 or as soon as possible thereafter.

 In addition, the company also requests that the effective date of the company’s registration statement on Form 8-A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), filed with
the Securities and Exchange Commission (the “SEC”) on December 4, 2006, be accelerated concurrently with that of the company’s Registration Statement on Form N-2.

 The company hereby acknowledges that the accuracy and adequacy of the disclosure in the Registration Statement is the responsibility of the company and
further acknowledges that SEC staff comments or changes to disclosure in the Registration Statement in response to SEC staff comments do not foreclose the SEC from taking any action with respect to the Registration Statement. The company also
acknowledges that it is the SEC staff’s position that the company may not assert SEC staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States. The company
acknowledges its responsibilities under the Securities Act and the Exchange Act as they relate to the proposed public offering of the securities specified in the above-referenced Registration Statement.

 Please call Justin Plouffe at Ropes & Gray LLP at 617-951-7551, as soon as the Registration Statement has been declared effective.

 Very truly yours,

 Kohlberg Capital, LLC1

 By:

 /S/    DAYL W.
PEARSON

 Name: Dayl W. Pearson

 Title: President and Chief Executive Officer

1
In connection with the offering contemplated by the Registration Statement referred to above, the registrant, which is currently named Kohlberg Capital, LLC, a
Delaware limited liability company, will convert, in accordance with Delaware law, to a Delaware corporation to be named Kohlberg Capital Corporation.

 295 Madison Avenue, 6th Floor • New York, NY 10017

 Telephone (212) 455-8300 •
Facsimile (212) 983-7654

 December 7, 2006

 VIA EDGAR

 Securities and Exchange Commission

 100 F Street, N.E.

 Washington, DC 20549

 Attention:        Mary A. Cole – Legal

                          Jim Campbell – Accounting

 Kohlberg Capital Corporation1

 Registration Statement on Form N-2 (File No. 333-136714)

 Ladies and Gentlemen:

 Pursuant to Rule 460 of the General Rules and Regulation under the Securities Act of 1933, as amended (the “Securities Act”), we, on behalf of ourselves and the several Underwriters, wish to advise you that in connection
with the above-captioned Registration Statement that approximately 19,584 copies of the Preliminary Prospectus dated November 24, 2006 have been or will be distributed during the period November 24, 2006 through December 11, 2006 as
follows:

Preliminary Prospectus

 Underwriters:

11,792

 Dealers:

25

 Local Offices:

5,105

 Institutions:

2,650

 Individuals:

12

 Total:

19,584

 No Statement of Additional Information was prepared in connection with this offering, as all the
information to be contained therein has been included in the Prospectus itself.

 Reference is made to the letter from the issuer dated
December 7, 2006 requesting effectiveness of the Registration Statement at 12:00 PM Eastern Standard Time on December 11, 2006. In accordance with Rule 461 of the General Rules and Regulations under the Securities Act, we hereby join in
the request of the issuer for acceleration of the effective date of the above-named Registration Statement so that it becomes effective at 12:00 PM Eastern Standard Time on December 11, 2006, or as soon thereafter as practicable.

 If you have questions or comments regarding this request, please call Jay L. Bernstein of Clifford Chance at (212) 878-8527.

 Very truly yours,

 LEHMAN BROTHERS INC.,

 on behalf itself and the several underwriters

By:

 /s/ John Sowinski

 Name: John Sowinski

 Title: Vice
President

cc:

Kohlberg Capital Corporation

 Ropes & Gray LLP

 Clifford Chance US
LLP

1
In connection with the offering contemplated by the Registration Statement referred to above, the registrant, which is currently named Kohlberg Capital LLC, a
Delaware limited liability company, will convert, in accordance with Delaware law, to a Delaware corporation to be named Kohlberg Capital Corporation.

Diane Fernandes
Ropes & Gray LLP
One International Place
Boston, MA 02110-2624     September  18  , 2006

 RE:  Kohlberg Capital, LLC
         File Nos.:  333-136714 and 814-00727

Dear Ms. Fernandes:

 On August 18, 2006, your firm file d a registration statement on Form
N-2 on behalf of Kohlberg Capital, LLC (the “Company”).  The Company has
also filed a Notification on Form 6-F informing the Commission of its intent to
elect to be treated as a business development company (“BDC”). We have reviewed the registration statement and have set forth our comments below.  For convenience, we generally organize our comments using the headings and page numbers in the registration statement.

Prospectus

1. The name of the Company as it appears on the cover and the name on the inside front cover do not correspond.  Please conform the disclosure.

2. Inside front cover—

a.) Please disclose whether the Company is diversified or non-diversified.
b.) Disclose the amount of immediate dilution to be experienced by purchasers in the initial offering.
c.) In a supplemental letter to the staff, describe in greater detail the “strategic relationship” between the Company and Kohlberg & Co. and analyze whether the relationship contemplated
violates the affiliated transaction provisions of Section 57 of the
Investment Company Act of 1940 (“1940 Act”).
d.) In your response letter explain in detail the relationship
between the Company and Katonah Debt Advisors (“KDA”). Specifically, analyze whether this entity would be an “eligible portfolio company” under the terms of the BDC provisions of
the 1940 Act or whether the Company would be engaged in an
 1

operating business (an advisory business) through the
activities of a wholly owned subsidiary.
e.) In the disclaimer before the Ta ble of Contents state that the
Company will amend the prospectus in the event of material changes to the disclosure in the current prospectus.

3. Overview—This section states that  KDA manages collateralized debt
obligation funds (“KDO Funds”). In yo ur response letter describe in
detail these KDO Funds and explain who invests in these funds. Analyze whether the transactions contemplated would constitute affiliated transactions under Section 57 of the 1940 Act.

4.  Will the “strategic relationsh ip” with Kohlberg & Co. (“Kohlberg”)
involve the payment of any fees to Kohlberg?  If so, who will be
responsible for the payment of such fees?

5. Page 2—This section describes the employees of the Company.
Please note that Rule 38a-1 under the 1940 Act mandates that a BDC
have a functioning Chief Compliance Officer.  Who is serving in that
capacity and how is such person being compensated?  Will the
Company’s CCO review and approve all response letters and revised
disclosure documents filed with the Commission?

6. Risks Related to our Investments—Please add the risk of leverage to
this section of the prospectus.

7. Risks Related to this Offering —Please disclose the amount of
immediate dilution to be experienced by the purchasers in the initial
offering.

8. The Offering (Use of Proceeds)—This section states that the proceeds to be used by KDA will in turn be used to repay a credit facility provided by an affiliate of one of the underwriters in the offering.  In
your response letter analyze this transaction under the affiliated
transaction provisions of Section 57 of the 1940 Act.

9. Fees and Expenses—Please delete the phrase “borne by us” in the “Offering expenses” line item of the fee table.

10. Fee Table—Please move the footnotes so that they follow the
Example.

11. Fee Table—In your response letter, explain why the expenses of
employing investment management professionals is not reflected under “Management Fees” instead of under “Other Expenses”.  See,
Instructions 7.a. and 7.b. to Item 3.1 of Form N-2.

 2

12. Example—Please delete the phrase “and the expenses in the tables
above” in the last paragraph of this section.

13. Our Board of Directors May Change our Investment Objective—Please
disclose that the Company may not change its status as a BDC
without shareholder vote.

14. The Equity in Katonah Debt Advisors (page 18)—The disclosure in
this section is confusing. Appa rently, the Company has already
acquired the equity in KDA and subordinated securities in KDA’s CDO Funds and expects to acquire addition al securities from KDA. In your
response letter, provide a description of the terms of the effectuated transactions and when they occurred. Distinguish these from the transactions yet to be effectuated.  The disclosure further states that
the valuation of these assets may not reflect the value that could have been obtained from a transaction with a third party.  In your letter, explain why this would not constitute overreaching by an
affiliate and why the transaction would not require an exemptive
order under the 1940 Act.

15. Restructuring—In your response letter, please provide a diagram of
the salient features of the restructuring. Our review of the diagram may result in the need for additional disclosure in this section.

16. CDO Fund Securities—Disclose whether there are third party
investors in the CDO Funds. Analyz e in your letter whether the CDO
Funds constitute “eligible portfolio securities” under Section 2(a)(46) of the 1940 Act.

17.  Management Compensation—The disclosure indicates that
consultants will be issued stock options.  In your letter explain how issuing options to consultants complies with Section 61 of the 1940 Act.

18.  Fee Income—In your letter explain whether any fees rendered to the
Company for providing managerial assistance to portfolio companies are directed to affiliates of the Company.

19.  Background (page 40)—This section states that the CDO Funds
invest in below-investment-grade broadly syndicated loans, bonds
and other credit instruments.  In your letter analyze whether these
underlying instruments constitute appropriate investments for a BDC.

20.  Equity Incentive Plan (page 62)—This section states that the
Company will seek Commission exemptive relief to grant stock-based compensation in exchange for services.  In your letter inform us
whether your research shows that the Commission has granted such relief in the past.
 3

21.  Federal Income Tax Considerations—Please disclose the tax
consequences relative to the fee income generated by KDA.

General Comments

22.We note that portions of the filing are incomplete.  We may have
additional comments on such portions when you complete them in a
pre-effective amendment, on disclosures made in response to this letter, on information supplied supplementally, or on exhibits added in any pre-effective amendments.
23. If you intend to omit certain information from the form of prospectus
included with the registration statement that is declared effective in
reliance on Rule 430A under the Securities Act of 1933 (“Securities
Act”), please identify the omitted information to us in your supplemental letter, preferably before filing the final pre-effective amendment.

24. Response to this letter should be in the form of a pre-effective
amendment filed pursuant to Rule 472 under the Securities Act.  Where no change will be made in the filing in response to a comment, please indicate this fact in your letter and briefly state the basis for
your position.

We urge all persons who are responsible for the accuracy and
Adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an informed decision.  Since the Company and its management are in possession of all facts relating to the Company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.

   In connection with responding to our comments, please provide, in
writing, a statement from th e Company acknowledging that:

• The Company is responsible for the accuracy and adequacy of
the disclosure in the filings;
• Staff comments or changes to di sclosure in response to staff
comments in the filings reviewed  by the staff do not foreclose
the Commission from taking any action with respect to the
filings;
• The Company may not assert staff comments as defense in any
proceeding initiated by the Comm ission or any person under the
federal securities laws of the United States.

In addition, please by advised that the Division of Enforcement has
 4

access to all information you provide to the staff of the Division of
Investment Management in connection wi th our review of your filing or in
response to our comments on your filing.

 We will consider a written request for acceleration of the effective date of the registration statement as a co nfirmation of the fact that those
requesting acceleration are aware of their respective responsibilities.  We will act on the request and, pursuant to delegated authority, grant acceleration of
the effective date.

 Please respond to this letter by filing a pre-effective amendment
pursuant to Rule 472 under the Securities Act.  Please respond to all comments.  Where no changes will be made in the filing in response to a comment, please inform us in your supplemental letter and state the basis
for your position.

 If you have any questions prior to filing the pre-effective amendment
and providing the supplemental letter, please call me at (202 551-6970.

      S i n c e r e l y ,

      M a r y  A .  C o l e
      S e n i o r  C o u n s e l

 5

CORRESP
1
filename1.htm

Letter to the SEC

 ROPES

 &GRAY

 ROPES & GRAY LLP

 ONE INTERNATIONAL PLACE    BOSTON, MA 02110-2624    617-951-7000    F 617-951-7050

 BOSTON    NEWYORK    SAN FRANCISCO    WASHINGTON, DC

 August 18, 2006

 Securities and Exchange Commission

 100 F Street, NE

 Washington, DC 20549

Re:
Kohlberg Capital, LLC

 Ladies and
Gentlemen:

 We are filing today via EDGAR the following documents on behalf of Kohlberg Capital, LLC, a Delaware limited liability company
(the “Company”):

(i)
a notice of intent to be subject to sections 55 through 65 of the Investment Company Act of 1940, as amended, on Form N-6F; and

(ii)
an initial registration statement on Form N-2 pursuant to the Securities Act of 1933, as amended (the “Securities Act”).

 Pursuant to Section 6 of the Securities Act, we have calculated the registration fee (based on a rate of $107.00 per $1 million offered) and have
transmitted such fee in the amount of $24,075.00 to the designated lockbox at Mellon Bank in Pittsburgh, Pennsylvania.

 As described in the
registration statement, the Company will enter into a series of restructuring transactions which will result in its conversion into a Delaware corporation to be named Kohlberg Capital Corporation prior to the completion of the offering.

Please direct any questions or comments regarding this filing to me at (617) 951-7760 or, in my absence, to Craig Marcus of this office at
(617) 951-7802. Thank you for your attention in this matter.

 Very truly yours,

 /s/ Diane Fernandes

 Diane Fernandes

cc:
Dayl W. Pearson

 Christopher Lacovara

 Craig Marcus, Esq.

 Michael Doherty, Esq.