BC Partners Lending CorporationDistributions

NotesThe Company may fund its cash distributions to Financial Statementstockholders from any sources of funds available to it, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to the Company on account of preferred and common equity investments in portfolio companies and expense reimbursements from the Adviser, which are subject to recoupment. The Company has not established limits on the amount of funds it may use from available sources to make distributions. During certain periods, the Company’s distributions may exceed its taxable earnings. As a result, it is possible that a portion of the distributions the Company makes may represent a return of capital. A return of capital generally is a return of a stockholder’s investment rather than a return of earnings or gains derived from the Company’s investment activities.

(Unaudited)Dividend Reinvestment

The Company has adopted an “opt out” distribution reinvestment plan (“DRP”) for its stockholders. As a result, if the Company pays a cash dividend, its stockholders will have their cash dividends reinvested in additional shares of the Company’s common stock unless they specifically “opt out” of the DRP to receive the distribution in cash. Any fractional share otherwise issuable to a participant in the DRP will instead be paid in cash. Under the DRP, cash distributions to participating stockholders will be reinvested in additional shares of the Company’s common stock at a purchase price equal to the net asset value per share as of the last day of the calendar quarter immediately preceding the date such distribution was declared.

Note 5. Commitments and Contingencies

From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. As of March 31,September 30, 2019, the Company is not aware of any pending or threatened litigation.

The Adviser and its affiliates have incurred organization and offering costs and operating expenses on behalf of the Company in the amount of approximately $1.3$1.4 million and $0.5$1.2 million, respectively, from December 22, 2017 (inception) to March 31,September 30, 2019. If receipt of a formal commitment of external capital does not occur, organization and offering costs incurred will be borne by the Adviser. As there has been no formal commitment of external capital as of the date of issuance of this financial statement, these organization and offering costs and operating expenses have not been recorded by the Company. All organization and offering costs, and operating expenses will be funded by the Adviser and the Company will have no responsibility for such costs until the Company commences operations and the Adviser submits such costs, or a portion thereof, for reimbursement, subject to a cap of 1.50% of the Company’s total commitments for organization and offering costs and provided further that the Adviser or its affiliates may not be reimbursed for payment of excess organization and offering expenses that were incurred more than three years prior to the proposed reimbursement.

On October 2, 2019, pursuant to the Subscription Agreements, the Company delivered a capital drawdown notice to its investors relating to the issuance of 842,554 common shares for an aggregate offering price of $21.1 million, of which $10.8 million is from the Adviser and its affiliates, executives and employees of the Adviser, and directors of the Company, and the Company commenced operations on such date. The shares were issued on October 16, 2019.

In October 2019, the Company closed on its first portfolio company investments.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations

The information contained in this section should be read in conjunction with the financial statementstatements and related notes thereto appearing elsewhere in this quarterly report. This discussion includes forward-looking statements that involve substantial risks and uncertainties and should be read in conjunction with the “Cautionary Statement Regarding Forward-Looking Statements” set forth on page 2 of this quarterly report onForm 10-Q for further information regarding forward-looking statements.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. These forward-looking statements apply only as of the date of this quarterly report. Moreover, we assume no duty and do not undertake to update the forward-looking statements. Because we are an investment company, the forward-looking statements and projections contained in this quarterly report are excluded from the safe harbor protection provided by Section 21E of the 1934 Act.

Overview

The Company was incorporated under the laws of the State of Maryland on December 22, 2017. As of March 31,September 30, 2019, we arewere still devoting substantially all of our efforts to establishing the business and our planned principal operations havehad not commenced. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and intend to elect to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes, and to qualify annually, as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As such, we are required to comply with various regulatory requirements, such as the requirement to invest at least 70% of our assets in “qualifying assets,” source of income limitations, asset diversification requirements and the requirement to distribute annually at least 90% of our investment company taxable income andtax-exempt interest. Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SECSecurities and Exchange Commission (“SEC”) rules, the term “eligible portfolio company” includes most private companies, whose principal place of business is the United States, companies whose securities are not listed on a national securities exchange and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million. These rules also permit us to include as qualifying assets certainfollow-on investments in companies that were eligible portfolio companies at the time of initial investment but that no longer meet the definition. In addition, we will not invest more than 30% of our total assets in companies whose principal place of business is outside the United States. The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and the Company will take advantage of the extended transition period for complying with certain new or revised accounting standards provided for emerging growth companies in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”).

Our investment objective is to make investments that generate current income and, to a lesser extent, capital appreciation. We intend for our investments primarily to take the form of debt investments, which may include secured debt, unsecured debt, other debt and/or equity in private middle-market companies (we define “middle-market companies” as those with annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) between $10 million and $1 billion). In addition, to a lesser extent, we may invest in the securities of public companies and in structured products. While our primary focus will be on investments within the United States, we may, on occasion, invest in securities ofnon-U.S. entities.

We are managed by BC Partners Advisors L.P. (the “Adviser”) and supervised by our board of directors (the “Board”), a majority of whom are not “interested persons” of the Company or the Adviser as defined in the 1940 Act. On April 23, 2018, we entered into an Investment Advisory Agreement which was amended on November 7, 2018 and July 9, 2019 (the “Investment Advisory Agreement”) with the Adviser. Under the Investment Advisory Agreement, we have agreed to pay the Adviser a base management fee based on average gross assets, excluding cash and cash equivalents but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters and an incentive fee based on our performance. We engaged BC Partners Management LLC (the “Administrator”) to act as our administrator. On April 23, 2018, we entered into an Administration Agreement (the “Administration Agreement”) with the Administrator. Under the Administration Agreement, we have agreed to reimburse the Administrator for certain services performed to enable us to operate.

We are currently in the development stage and have10

As of September 30, 2019, we had not commenced investment or other operations since the Company’s inception.

On April 10, 2018, we issued and sold 4,000 shares of common stock at an aggregate purchase price of $100,000 to BC Partners Investment Holdings Limited, an affiliate of the Adviser.

Subscription Agreement

During the quarter ended September 30, 2019, we entered into subscription agreements (the “Subscription Agreements”) with a number of investors, including affiliates of our Adviser, providing for the private placement of our common shares. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase shares of our common stock up to the amount of their respective capital commitment on an as-needed basis each time we deliver a drawdown notice to our investors. As of September 30, 2019, we had received capital commitments totaling $21.1 million. On October 2, 2019, pursuant to the Subscription Agreements, we delivered our first capital drawdown notice to investors relating to the issuance of 842,554 common shares for an aggregate offering price of $21.1 million, of which $10.8 million is from the Adviser and its affiliates, executives and employees of the Adviser, and directors of the Company, and we commenced operations on such date. The shares were issued on October 16, 2019 (the “Initial Closing Date”).

Liquidity

We intend to seek exemptive relief from the SEC, subject to applicable law, to initiate one or more transactions intended to provide investors with liquidity options with respect to their investments in shares of our common stock (each, a “Reorganization”), pursuant to which an investor would have the option to exchange their shares and any remaining commitment, or a portion of their shares and any remaining commitment, in us for an interest in an entity (a “Liquidating Company”) that generally would seek to liquidate and distribute the proceeds of its investments, as they are received, to its equity holders over time, such that it would likely substantially complete its liquidation within a reasonable period of time following the date of the Reorganization. It is anticipated that, if initiated, the first Reorganization would occur as soon as reasonably practicable following the end of the fiscal year during which the third anniversary of the Initial Closing Date (the “Initial Reorganization”). Immediately following a Reorganization, the applicable Liquidating Company would hold a proportionate share of the assets and liabilities held by the Company immediately prior to the Reorganization based on investor participation levels.

If the SEC grants us the exemptive relief permitting Reorganizations, it is possible that the SEC may impose certain conditions on us and each Reorganization. Our ability to initiate a Reorganization will depend upon applicable legal, tax and other relevant considerations at the time of the Reorganization.

In order to effect the Reorganization and provide stockholders optionality, we expect to, after determining the net asset value of our common stock as of the end of the fiscal year in which the third anniversary of the Initial Closing Date occurs, transfer a portion of our assets and liabilities to a Liquidating Company (which may be a wholly-owned subsidiary of the Company), and thereafter provide stockholders the opportunity to own interests in the Liquidating Company in exchange for all or a portion of their shares of common stock and any remaining commitments.

In establishing a Liquidating Company, all (i) assets, (ii) liabilities and (iii) investors’ uncalled capital commitments would be split pro rata between us and the Liquidating Company, and the pro rata portion would be transferred to the Liquidating Company. Assets may include funded commitments to portfolio companies.  Liabilities may include unfunded commitments to portfolio companies, subscription-based financing (in the case of a continuous offering) and asset-based financing. We may need to call some or all of our uncalled capital commitments from stockholders, including stockholders not participating in a Reorganization, in order to pay down some or all of our existing debt prior to the Reorganization.  While no assurances can be provided, the Board expects that a Liquidating Company will be treated as a BDC that is taxed as a RIC for U.S. federal income tax purposes.

Following the Initial Reorganization, if initiated, we expect to offer additional liquidity opportunities through corporate action, which may include the creation of additional Liquidating Companies at the end of every third fiscal year following the year of the creation of the initial Liquidating Company (if permitted by applicable law and/or the SEC).

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Because the Adviser intends to manage the Liquidating Company, to the extent the 1940 Act continues to prohibit entities under common control from engaging in certain transactions at the time of the Reorganization, we may be required to obtain exemptive and/or no-action relief from the SEC in order to transfer assets to a Liquidating Company. If we do not obtain any required exemptive and/or no-action relief, or if it is determined that no such relief is necessary, our Board will make the determination as to if and when it is appropriate us to undertake the Reorganization.

We may not propose a Reorganization, even if we receive exemptive relief, unless we have been advised by tax counsel or other advisors that effecting the Reorganization will not have material adverse tax consequences for the Company. Even if the Company does receive exemptive relief to pursue a Reorganization, we may determine not to proceed with a Reorganization if the Board determines that it would not be in the best interest of stockholders or there is insufficient Stockholder interest in participating in a Reorganization.

There can be no assurance that we will be able to obtain any required exemptive and/or no-action relief from the SEC or that the Board will authorize the Reorganization. If we do not obtain any required exemptive and/or no-action relief, or if we do receive the required relief but the Board determines not to proceed with a Reorganization, then we will wind down our operations within ten years after the Initial Closing Date unless the Board and/or stockholders determine to take different action, including listing our common stock on a national securities exchange or periodic repurchases or tender offers.

Key Components of Our Results of Operations

Revenues

As we are in the development stage, weWe did not earn any revenues during the period from December 22, 2017 (inception)(inception date) through March 31,September 30, 2019.

The principal measure of our financial performance will be net increase or decrease in net assets resulting from operations, which includes net investment income or loss, net realized gain or loss on investments, net realized gain or loss on foreign currency, net change in unrealized appreciation or depreciation on investments and net change in unrealized appreciation or depreciation on foreign currency. Net investment income or loss is the difference between our income from interest, dividends, fees and other investment income and our operating and other expenses. Net realized gain or loss on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost, including the respective realized gain or loss on foreign currency for those foreign denominated investment transactions. Net realized gain or loss on foreign currency is the portion of realized gain or loss attributable to foreign currency fluctuations. Net change in unrealized appreciation or depreciation on investments is the net change in the fair value of our investment portfolio and their amortized cost, including the respective unrealized appreciation or depreciation on foreign currency for those foreign denominated investments. Net change in unrealized appreciation or depreciation on foreign currency is the net change in the value of receivables or accruals due to the impact of foreign currency fluctuations.

We plan to generate revenues in the form of interest income on the debt investments we anticipate holding. To a lesser extent, we may also generate revenues in the form of dividends and other distributions on the equity or other securities we anticipate holding. In addition, we may generate revenues in the form ofnon-recurring commitment, closing, origination, structuring or diligence fees, fees for providing managerial assistance, consulting fees, prepayment fees and performance-based fees. Any such fees generated in connection with our investments will be recognized when earned.

Expenses

Our primary operating expenses will be the payment of management and incentive fees and other expenses under the Investment Advisory Agreement, interest expense from financing arrangements, administrator fees under the Administrative Agreement, and other expenses necessary for our operations. The management and incentive fees will compensate the Adviser for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments.

We will reimburse the Administrator for expenses necessary to perform services related to our administration and operations, including the Adviser’s portion of the compensation and related expenses for certain personnel who provide administrative services. Such services include, among other things, clerical, bookkeeping and recordkeeping services, investor relations, performing or overseeing the performance of our corporate operations (which includes being responsible for the financial records that we are required to maintain and preparing reports for

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our stockholders and reports filed with the Securities and Exchange Commission (“SEC”))SEC), assisting us in calculating the net asset value per share, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others.

We will bear all other costs and expenses of our operations, administration and transactions, including reimbursing the Administrator for such costs incurred on our behalf, including but not limited to:

Other than obligations under the Investment Advisory Agreement, the Administration Agreement and the AdministrationExpense Support and Conditional Reimbursement Agreement, we have no known related-party contractual obligations as of March 31,September 30, 2019.

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Off-Balance Sheet Arrangements

We currently have nooff-balance sheet arrangements.arrangements as of September 30, 2019.

Recent Developments

On August 20, 2019, we entered into a Letter Agreement with the Adviser pursuant to which, for the period ending December 31, 2019, the Adviser will waive 50% of the base management fee to be paid by us under the Investment Advisory Agreement. The waiver will be prorated for any partial month or quarter. Management fees waived are not subject to recoupment by the Adviser.

On August 22, 2019, we entered into an Expense Support and Conditional Reimbursement Agreement (the “Expense Support Agreement”) with the Adviser, the purpose of which is to ensure that no portion of distributions made to our stockholders will be paid from our offering proceeds or borrowings (the “Distribution Objective”). Commencing with the fourth quarter 2019 and on a quarterly basis thereafter, the Adviser will reimburse us for operating expenses in an amount sufficient to meet the Distribution Objective. Following any calendar quarter in which our available operating funds, as defined in the Expense Support Agreement, exceed the cumulative distributions paid to our stockholders in such calendar quarter, we shall pay such excess operating funds, or a portion thereof, to the Adviser until such time as all expense payments made by the Adviser to us within three years prior to the last business day of such calendar quarter have been reimbursed or waived.

On September 26, 2019, we completed our initial closing of our private offering and received capital commitments totaling $21.1 million. There were no capital calls made through September 30, 2019.

Critical Accounting Policies

The preparation of our financial statementstatements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statementstatements of assets and liabilities. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods.

Income Taxes

We intend to elect to be treated for U.S. federal income tax purposes, and to qualify annually, as a RIC under the Code. To qualify for and maintain qualification as a RIC, we must, among other things, meet certainsource-of-income and asset diversification requirements, and make minimum distributions to stockholders. We will be subject to a 4% nondeductible U.S. federal excise tax on undistributed income. See “Note 2. Significant Accounting Policies – Income Taxes.”

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Item 3. Quantitative and QualitativeQualitative Disclosures About Market Risk.Risk

As of March 31,September 30, 2019, we havehad not commenced our planned principal operations. Once we commence operations, we will be subject to financial market risks, including changes in interest rates. Generally, a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to any variable rate investments we may hold and to declines in the value of any fixed rate investments we may hold. However, for those variable rate investments we may hold that provide for an interest rate floor, our interest income will not decrease below a threshold amount. To the extent that a substantial portion of our investments may be in variable rate investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed the hurdle rate applicable to the upper level breakpoint of thepre-incentive fee net investment income incentive fee, and may result in a substantial increase in our net investment income and to the amount of incentive fees payable to the Adviser with respect to our increasedpre-incentive fee net investment income.

In addition, in the future we may seek to borrow funds in order to make additional investments. Our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we will be subject to risks relating to changes in market interest rates. In periods of rising interest rates when we or any future subsidiaries have debt outstanding or financing arrangements in effect, our interest expense will increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.

We expect that our long-term investments will be financed primarily with equity and debt. If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations.

We plan to invest primarily in illiquid debt and equity securities of private companies. Most of our investments will not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our Audit Committee and independent third-party valuation firm(s) engaged at the direction of the Board, and in accordance with our valuation policy. There is no single technique for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If, in the future, we are required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

Item 4. Controls and Procedures.Procedures

As required byRule 13a-15(b) under the 1934 Act, we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined inRule 13a-15(e) of the 1934 Act) as of March 31,September 30, 2019. Based on the foregoing evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level that we would meet our disclosure obligations.

There have been no changes in our internal control over financial reporting (as defined inRules 13a-15(f) or15d-15(f) under the 1934 Act) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHEROTHER INFORMATION

Item 1. Legal Proceedings.Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us. From time to time, we may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of these legal or regulatory proceedings cannot be predicted with certainty, we do not expect that any these proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors.Factors

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form10-K filed with the SEC on February 7, 2019.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.Proceeds

During the period covered by this quarterly report, we did not sell any equity securities that were not registered under the Securities Act of 1933, and we did not repurchase any of our securities.

Item 3. Defaults Upon Senior Securities.Securities

Not applicable.

Item 4. Mine Safety Disclosures.Disclosures

Not applicable.

Item 5. Other Information.Information

On May 9, 2019, the Board accepted the resignation of Graeme Dell as Chief Financial Officer and Treasurer effective immediately. Immediately following the resignation of Mr. Dell, the Board appointed Edward U. Gilpin as the Company’s Chief Financial Officer and Treasurer effective immediately.Not applicable.

Mr. Dell did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Mr. Gilpin, 57, joined Sierra Crest Investment Management LLC (“Sierra Crest”), an affiliate of the Company’s Adviser and is a member of the BCP Partners Credit Team (“BCP Credit”), in each case since April 2019. He is the Chief Financial Officer, Secretary and Treasurer of Portman Ridge Finance Corporation (f/k/a KCAP Financial Inc.) (“Portman Ridge”), which he joined in June 2012. Portman Ridge is a non-diversified closed-end investment company that is regulated as a business development company, is externally managed by Sierra Crest and is an affiliate of the Company. Mr. Gilpin has more than 30 years of experience. Mr. Gilpin served as the Chief Financial Officer at Associated Renewable Inc., an end-to-end full service energy consulting from December 2010 to June 2012. From January 2008 to May 2010, he served as Executive Vice President and Chief Financial Officer of Ram Holdings, Ltd., a provider of financial guaranty reinsurance, and prior to that he was the Executive Vice President, Chief Financial Officer and Director of ACA Capital Holdings, Inc., a holding company that provided asset management services and credit protection products, from December 2000 to January 2008. Prior to joining ACA Capital, Mr. Gilpin was Vice President in the Financial Institutions Group at Prudential Securities, Inc.’s investment banking division. From 1998 to 2000, Mr. Gilpin served in the capacity of Chief Financial Officer for an ACA Capital affiliated start-up venture, developing the financial plans and spearheading the capital raising process. From 1991 to 1998, Mr. Gilpin was with MBIA, Inc., a holding company whose subsidiaries provide financial guarantee insurance, fixed-income asset management, and other specialized financial services, where he held various positions in the finance area. His most recent position with MBIA was Director, Chief of Staff for MBIA Insurance Company’s President. Mr. Gilpin began his career as an Assistant Vice President in the Mutual Funds Department of BHC Securities, Inc. Mr. Gilpin holds an M.B.A. from Columbia University and a B.S. from St. Lawrence University.17

There is no arrangement or understanding between Mr. Gilpin and any other person pursuant to which he was appointed Chief Financial Officer and Treasurer, nor is there any family relationship between Mr. Gilpin and any of our directors or other executive officers. There are no transactions since the beginning of our last fiscal year, or any currently proposed transaction, in which we are a participant, the amount involved exceeds $120,000, and in which Mr. Gilpin had, or will have, a direct or indirect material interest.

Item 6. Exhibits.Exhibits

The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC (and are numbered in accordance with Item 601 ofRegulation S-K):

SIGNATURESSIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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