Exhibit 10.12



INCREASE AGREEMENT



THIS
INCREASE AGREEMENT dated as of December 27, 2019 (this “Agreement”), is among STELLUS CAPITAL INVESTMENT
CORPORATION, a Maryland corporation (the “Borrower”), the LENDERS party hereto, and ZIONS BANCORPORATION,
N.A. dba AMEGY BANK, as Administrative Agent. Capitalized terms used herein and not otherwise defined shall have the meanings given
to such terms in Article Iof this Agreement.



W I T N E S S E T H:



WHEREAS,
the Borrower, the Lenders and the Administrative Agent are parties to that certain Senior Secured Revolving Credit Agreement, dated
as of October 10, 2017 (as amended by that certain First Amendment to Senior Secured Revolving Credit Agreement and Commitment
Increase dated as of August 2, 2018, that certain Second Amendment to Senior Secured Revolving Credit Agreement and Commitment
Increase dated as of September 13, 2019, and as the same may be further amended, supplemented, amended and restated or otherwise
modified from time to time, the “Credit Agreement”);



WHEREAS,
the Borrower requests that the total Commitments be increased from $200,000,000 to $220,000,000; and



WHEREAS,
each Increasing Lender named in Article IIIhereof is willing on the terms and subject to the conditions hereinafter
set forth, to increase their respective Commitment, subject to the terms and conditions of this Agreement.



NOW, THEREFORE, the parties hereto hereby covenant
and agree as follows:



ARTICLE I

DEFINITIONS



Section
1.1 Certain Definitions. The following terms when used in this Agreement shall have the following meanings (such meanings
to be equally applicable to the singular and plural forms thereof):



“Agreement” is defined
in the preamble.



“Borrower” is defined in the preamble.



“Credit Agreement”
is defined in the first recital.



“Effective Date” is defined in Article V.



Section
1.2 Other Definitions. Capitalized terms used in this Agreement but not defined herein, shall have the meanings given such
terms in the Credit Agreement.



ARTICLE II

COMMITMENT INCREASE
REQUEST



On or
before December 19, 2019, the Borrower irrevocably requested that the Commitments be increased from $200,000,000 to $220,000,000
in the aggregate (the “Commitment Increase”) pursuant to Section 2.08(e)of the Credit
Agreement.













ARTICLE III

AGREEMENT TO INCREASE
COMMITMENTS



Subject
to the occurrence of the Effective Date (as hereinafter defined), the Commitments are increased on the Effective Date as follows:



Section
3.1       Increasing Lenders. Zions Bancorporation, N.A. dba Amegy Bank hereby agrees to increase its Dollar Commitment from
$30,000,000 to $35,000,000. Hancock Whitney Bank hereby agrees to increase its Dollar Commitment from $20,000,000 to
$30,000,000. Frost Bank hereby agrees to increase its Dollar Commitment from $30,000,000 to $35,000,000. The foregoing
Lenders in this Section 4.1are referred to herein collectively, as “Increasing
Lenders.”



Section
3.2       Commitment Increase. On the Effective Date, adjustments of Borrowings will be made in accordance with Section
2.08(e)(iv)of the Credit Agreement that will result in, after giving effect to all such deemed prepayments and borrowings,
such Loans and participations in Letters of Credit, Swingline Loans and Multicurrency Loans being held by the Lenders ratably in
accordance with their Commitments, after giving effect to the Commitment Increase herein, as described on Schedule 1.01(b)attached hereto.



ARTICLE IV

BORROWER COMMITMENT INCREASE
CERTIFICATIONS



Pursuant
to Section 2.08(e)(i)of the Credit Agreement, the Borrower hereby certifies as of the date hereof that:



Section 4.1       No Default. No Default or Event
of Default has occurred and is continuing.



Section
4.2       Representations and Warranties. The representations and warranties contained in
the Credit Agreement are be true and correct in all material respects (or, in the case of any portion of the representations and
warranties already subject to a materiality qualifier, true and correct in all respects) on and as of the date hereof as if made
on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific
date, as of such specific date).



ARTICLE V

CONDITIONS TO EFFECTIVENESS



Section
5.1 Effective Date. This Agreement shall become effective on the date (the “Effective Date”) when
the Administrative Agent shall have received:



| | (a) | counterparts of this Agreement duly executed and delivered
on behalf of the Borrower and each of the Increasing Lenders, together with the Subsidiary Guarantors’ Consent and Agreement
executed by each Subsidiary Guarantor;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | a replacement Revolving Credit Note in the maximum principal amount of $35,000,000 executed by Borrower and made payable to
Zions Bancorporation, N.A. dba Amegy Bank;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | a replacement Revolving Credit Note in the maximum principal amount of $35,000,000 executed by Borrower and made payable to
Frost Bank;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



| | (d) | a replacement Revolving Credit Note in the maximum principal amount of $30,000,000 executed by Borrower and made payable to
Hancock Whitney Bank;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | a certificate of a duly authorized officer of the Borrower stating that each of the applicable conditions set forth in Section
2.8(e)(i)of the Credit Agreement have been satisfied; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | payment by the Borrower of all fees payable pursuant to the Increase Agreement Fee Letter dated as of the date hereof between
the Borrower and Amegy Bank.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------





2







ARTICLE VI

MISCELLANEOUS



Section
6.1 Representations. The Borrower hereby represents and warrants that (i) this Agreement constitutes a legal, valid and
binding obligation of it, enforceable against it in accordance with its terms, (ii) upon the effectiveness of this Agreement, no
Event of Default shall exist and (iii) its representations and warranties as set forth in the Loan Documents, as applicable, are
true and correct in all material respects (except those representations and warranties qualified by materiality or by reference
to a material adverse effect, which are true and correct in all respects) on and as of the date hereof as though made on and as
of the date hereof (unless such representations and warranties specifically refer to a specific date, in which case, they shall
be complete and correct in all material respects (or, with respect to such representations or warranties qualified by materiality
or by reference to a material adverse effect, complete and correct in all respects) on and as of such specific date).



Section
6.2       Cross-References. References in this Agreement to any Article or Section are, unless otherwise specified, to such Article
or Section of this Agreement.



Section
6.3       Loan Document Pursuant to Credit Agreement. This Agreement is a Loan Document executed pursuant to the Credit Agreement
and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with all of the terms
and provisions of the Credit Agreement, as amended hereby, including Article IX thereof.



Section
6.4       Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.



Section
6.5      Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of
an executed counterpart of a signature page of this Agreement by telecopy electronically (e.g. pdf) shall be effective as delivery
of a manually executed counterpart of this Agreement.



Section
6.6       Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.



Section
6.7      Full Force and Effect. All of the representations, warranties, terms,
covenants, conditions and other provisions of the Credit Agreement and the other Loan Documents shall remain unchanged and
shall continue to be, and shall remain, in full force and effect in accordance with their respective terms. Upon and after
the execution of this Agreement by each of the parties hereto, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement,
and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”,
“thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement as modified hereby.



[Signatures
on Following Pages.]





3













IN WITNESS WHEREOF, the parties hereto
have executed and delivered this Agreement as of the date first above written.



|BORROWER: | STELLUS CAPITAL INVESTMENT CORPORATION
|--------- | --------------------------------------
|          |                                       
|          | By:                                   
|          |                                       
|          |                                       





Signature
Page to Increase Agreement – Stellus















|LENDERS: | ZIONS BANCORPORATION, N.A. DBA AMEGY BANKas Administrative Agent, Swingline Lender, Issuing Bank and as a Lender
|-------- | ----------------------------------------------------------------------------------------------------------------
|         |                                                                                                                 
|         | By:                                                                                                             
|         |                                                                                                                 
|         |                                                                                                                 





Signature
Page to Increase Agreement – Stellus















| | FROST BANK, as a Lender
| | -----------------------
| |                        
| | By:                    
| | Name:                  
| | Title:                 
| |                        



Signature
Page to Increase Agreement – Stellus















| | HANCOCK WHITNEY BANK, as a Lender
| | ---------------------------------
| |                                  
| | By:                              
| | Name:                            
| | Title:                           



Signature
Page to Increase Agreement – Stellus













SUBSIDIARY GUARANTORS’
CONSENT AND AGREEMENT TO INCREASE AGREEMENT



As an
inducement to Administrative Agent and Lenders party thereto to execute, and in consideration of Administrative Agent’s and
such Lenders’ execution of, the Increase Agreement dated as of December 27, 2019 (the “Agreement”)
(capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in Article Iof
the Agreement), among Stellus Capital Investment Corporation, a Maryland corporation, the Lenders party thereto, and Zions Bancorporation,
N.A. dba Amegy Bank, as Administrative Agent, each of the undersigned Subsidiary Guarantors hereby consents to the Agreement, and
agrees that the Agreement shall in no way release, diminish, impair, reduce or otherwise adversely affect the obligations and liabilities
of the undersigned under any Guarantee and Security Agreement executed by the undersigned in connection with the Credit Agreement,
or under any Loan Documents, agreements, documents or instruments executed by the undersigned to create liens, security interests
or charges to secure any of the Guaranteed Obligations (as defined in the Guarantee and Security Agreement), all of which are in
full force and effect. Each of the undersigned further represents and warrants to Administrative Agent and the Lenders that, after
giving effect to the Agreement, (a) the representations and warranties in each Loan Document to which the undersigned is a party
are true and correct in all material respects (or, in the case of any portion of the representations and warranties already subject
to a materiality qualifier, true and correct in all respects) on and as of the date of the Agreement as if made on and as of the
date of the Agreement (or, if any such representation or warranty is expressly stated to have been made as of a specific date,
as of such specific date), and (b) no Default or Event of Default has occurred and is continuing. Each undersigned Subsidiary Guarantor
agrees to be bound by the terms, conditions, covenants and agreements in the Agreement. This Consent and Agreement is executed
as of the date of the Agreement and shall be binding upon each of the undersigned, and their respective successors and assigns,
and shall inure to the benefit of Administrative Agent, Lenders, and their successors and assigns.



[Signatures
on Following Pages.]















|SUBSIDIARY GUARANTORS:                                                       |                       |                                                                             
|---------------------------------------------------------------------------- | --------------------- | ----------------------------------------------------------------------------
|                                                                             |                       |                                                                             
|SCIC – ERC BLOCKER 1, INC.,
                    a Delaware corporation       |                       | SCIC – CC BLOCKER 1, INC.,
                    a Delaware corporationt      
|                                                                             |                       |                                                                             
|By:                                                                          | /s/ W. Todd Huskinson |                                                                             
|Name: W. Todd Huskinson                                                      |                       | Name: W. Todd Huskinson                                                     
|Title: Authorized Signatory                                                  |                       | Title: Authorized Signatory                                                 
|                                                                             |                       |                                                                             
|SCIC – SKP BLOCKER 1, INC.,
                    a Delaware corporation       |                       | SCIC – HOLLANDER BLOCKER 1, INC.,
                    a Delaware corporation
|                                                                             |                       |                                                                             
|By:                                                                          | /s/ W. Todd Huskinson |                                                                             
|Name: W. Todd Huskinson                                                      |                       | Name: W. Todd Huskinson                                                     
|Title: Authorized Signatory                                                  |                       | Title: Authorized Signatory                                                 
|                                                                             |                       |                                                                             
|SCIC – APE BLOCKER 1, INC.,
                    a Delaware corporation       |                       | SCIC – ICD BLOCKER 1, INC.
                    a Delaware corporation       
|                                                                             |                       |                                                                             
|By:                                                                          | /s/ W. Todd Huskinson |                                                                             
|Name: W. Todd Huskinson                                                      |                       | Name: W. Todd Huskinson                                                     
|Title: Authorized Signatory                                                  |                       | Title: Authorized Signatory                                                 
|                                                                             |                       |                                                                             
|SCIC – CONSOLIDATED BLOCKER, INC.
                    a Delaware corporation |                       | SCIC – FBO BLOCKER 1, INC.
                    a Delaware corporation       
|                                                                             |                       |                                                                             
|By:                                                                          | /s/ W. Todd Huskinson |                                                                             
|Name: W. Todd Huskinson                                                      |                       | Name: W. Todd Huskinson                                                     
|Title: Authorized Signatory                                                  |                       | Title: Authorized Signatory                                                 
|                                                                             |                       |                                                                             
|SCIC – INVINCIBLE BLOCKER 1, INC.                                            |                       |                                                                             
|a Delaware corporation                                                       |                       |                                                                             
|                                                                             |                       |                                                                             
|By:                                                                          | /s/ W. Todd Huskinson |                                                                             
|Name: W. Todd Huskinson                                                      |                       |                                                                             
|Title: Authorized Signatory                                                  |                       |                                                                             















SCHEDULE 1.01(b)



Commitments



|Lender                                                           | Total Commitment    | Applicable Percentage
|---------------------------------------------------------------- | ------------------- | ---------------------
|Zions Bancorporation, N.A. dba Amegy Bank (Administrative Agent) | $35,000,000         | 15.9090909091%       
|Frost Bank (Documentation Agent)                                 | $35,000,000         | 15.9090909091%       
|Cadence Bank, N.A. (Co-Syndication Agent)                        | $30,000,000         | 13.6363636364%       
|Hancock Whitney Bank (Co-Syndication Agent)                      | $30,000,000         | 13.6363636364%       
|City National Bank                                               | $25,000,000         | 11.3636363636%       
|CommunityBank of Texas, N.A.                                     | $20,000,000         | 9.0909090909%        
|Woodforest National Bank                                         | $20,000,000         | 9.0909090909%        
|Stifel Bank and Trust                                            | $15,000,000         | 6.8181818182%        
|Texas Capital Bank, National Association                         | $10,000,000         | 4.5454545454%        
|                                                                 | USD $220,000,000.00 | 100.0000000000%      





Schedule 1.01(b) To Increase A Greement – Stellus