N-2	9 Months Ended
Sep. 30, 2022
Cover [Abstract]
Entity Central Index Key	0001901037
Amendment Flag	false
Securities Act File Number	000-56378
Document Type	10-Q
Entity Registrant Name	Stellus Private Credit BDC
Entity Address, Address Line One	4400 Post Oak Parkway
Entity Address, Address Line Two	Suite 2200
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77027
City Area Code	713
Local Phone Number	292-5400
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
General Description of Registrant [Abstract]
Investment Objectives and Practices [Text Block]	We were organized as a Delaware statutory trust on December 7, 2021, and formally commenced operations on February 1, 2022. Our investment objective is to maximize the total return to our shareholders in the form of current income and capital appreciation through debt and related equity investments in middle-market companies. We are an externally managed, non-diversified, closed-end investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). Our investment activities are managed by our investment advisor, Stellus Private BDC Advisor, LLC. As a BDC, we are required to comply with certain regulatory requirements. For instance, as a BDC, we may not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets. Qualifying assets include investments in “eligible portfolio companies (as defined in the 1940 Act).” Under the relevant SEC rules, the term “eligible portfolio company” includes all private operating companies, operating companies whose securities are not listed on a national securities exchange, and certain public operating companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million, in each case organized and with their principal of business in the United States. We qualify and intend to elect to be treated for tax purposes as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). To qualify for tax treatment as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. As of September 30, 2022, we were in compliance with the RIC requirements. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders as dividends. In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing. As of September 30, 2022, our asset coverage ratio was 219%. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing.
Risk Factors [Table Text Block]	Item 1A. Risk Factors There have been no material changes in the information provided under the heading “Risk Factors” in our Registration Statement on Form 10 as of December 31, 2021 and in our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2022 and June 30, 2022 other than as provided below. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially affect our business, financial condition and/or operating results. Our investments in the consumer goods industry are subject to unique risks relating to technological developments, regulatory changes and changes in customer preferences. Our investments in portfolio companies that operate in the consumer goods industry represent 25.62% of our total portfolio as of September 30, 2022. Our investments in portfolio companies in the consumer goods sector include those that provide a wide range of daily usable products that are manufactures according to individual usage and as per end user requirements. Portfolio companies in the consumer goods sector are subject to many risks, including changes in consumer preferences, cyclical variations in the general economy and to uncertainty regarding future economic conditions a competitive marketplace and difficulty in obtaining financing. Portfolio companies in the consumer goods industry must respond quickly to these changes and understand the impact of these changes on customers’ preferences. Adverse economic, business, or regulatory developments affecting the consumer goods sector could have a negative impact on the value of our investments in portfolio companies operating in this industry, and therefore could negatively impact our business and results of operations. We may be subject to risks associated with our investments in chemical, plastics and rubber companies. As of September 30, 2022, our investment in portfolio companies operating in this sector represents 6.03% of our total portfolio. There are risks in investing in companies that operate in this market, including the negative impact of regulation, product obsolescence, changing technology, a competitive marketplace and difficulty in obtaining financing. Any of these factors could materially and adversely affect the operations of a portfolio company in this industry and, in turn, impair our ability to timely collect principal and interest payments owed to us.

N-2

9 Months Ended

Sep. 30, 2022

Entity Central Index Key

0001901037

Amendment Flag

false

Securities Act File Number

000-56378

Document Type

10-Q

Entity Registrant Name

Stellus Private Credit BDC

Entity Address, Address Line One

4400 Post Oak Parkway

Entity Address, Address Line Two

Suite 2200

Entity Address, City or Town

Houston

Entity Address, State or Province

Entity Address, Postal Zip Code

77027

City Area Code

713

Local Phone Number

292-5400

Entity Emerging Growth Company

true

Entity Ex Transition Period

false

General Description of Registrant [Abstract]

Investment Objectives and Practices [Text Block]

We were organized as a Delaware statutory trust on December 7, 2021, and formally commenced operations on February 1, 2022. Our investment objective is to maximize the total return to our shareholders in the form of current income and capital appreciation through debt and related equity investments in middle-market companies.

We are an externally managed, non-diversified, closed-end investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). Our investment activities are managed by our investment advisor, Stellus Private BDC Advisor, LLC.

As a BDC, we are required to comply with certain regulatory requirements. For instance, as a BDC, we may not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets. Qualifying assets include investments in “eligible portfolio companies (as defined in the 1940 Act).” Under the relevant SEC rules, the term “eligible portfolio company” includes all private operating companies, operating companies whose securities are not listed on a national securities exchange, and certain public operating companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million, in each case organized and with their principal of business in the United States.

We qualify and intend to elect to be treated for tax purposes as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). To qualify for tax treatment as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. As of September 30, 2022, we were in compliance with the RIC requirements. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders as dividends.

In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing. As of September 30, 2022, our asset coverage ratio was 219%. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing.

Risk Factors [Table Text Block]

Item 1A. Risk Factors

There have been no material changes in the information provided under the heading “Risk Factors” in our Registration Statement on Form 10 as of December 31, 2021 and in our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2022 and June 30, 2022 other than as provided below. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially affect our business, financial condition and/or operating results.

Our investments in the consumer goods industry are subject to unique risks relating to technological developments, regulatory changes and changes in customer preferences.

Our investments in portfolio companies that operate in the consumer goods industry represent 25.62% of our total portfolio as of September 30, 2022. Our investments in portfolio companies in the consumer goods sector include those that provide a wide range of daily usable products that are manufactures according to individual usage and as per end user requirements. Portfolio companies in the consumer goods sector are subject to many risks, including changes in consumer preferences, cyclical variations in the general economy and to uncertainty regarding future economic conditions a competitive marketplace and difficulty in obtaining financing. Portfolio companies in the consumer goods industry must respond quickly to these changes and understand the impact of these changes on customers’ preferences. Adverse economic, business, or regulatory developments affecting the consumer goods sector could have a negative impact on the value of our investments in portfolio companies operating in this industry, and therefore could negatively impact our business and results of operations.

We may be subject to risks associated with our investments in chemical, plastics and rubber companies.

As of September 30, 2022, our investment in portfolio companies operating in this sector represents 6.03% of our total portfolio. There are risks in investing in companies that operate in this market, including the negative impact of regulation, product obsolescence, changing technology, a competitive marketplace and difficulty in obtaining financing. Any of these factors could materially and adversely affect the operations of a portfolio company in this industry and, in turn, impair our ability to timely collect principal and interest payments owed to us.