The slow growth, low interest rate environment is making this a good time to be a lender. And business development companies are in a sweet spot because banks are being held back by regulations, says Michael Forman, CEO of FS Investments (FSIC) .

"With all the regulatory changes, banks are less inclined to lend to non-investment grade middle market companies," says Forman. "With Dodd-Frank and the Volcker Rule, banks are much more conservative and the regulators are more aggressive, so it creates a real opening for BDCs to fill that void that the banks used to dominate." Forman added that there are nearly 50% less banks than there were a decade ago, which is creating a huge amount of opportunity for BDCs.

FS Investments, which boasts $18 billion in assets under management, invests in the credit of private companies, working with Blackstone in providing loans to middle-market players. Loans in the company's portfolio include the Brooklyn Nets, Sequential Brands, Zeta, Warren Resources, Latham Pools and Dent Wizard.

Loans typically range from $200 million to $500 million to American companies, and unlike PE firms or banks, investors can see every loan on the FS balance sheet; and they are all publicly filed with the SEC.

Shares of FS Investments are up around 10% thus far in 2016. A large part of the attraction to the stock is it's nearly 9% yield and Forman says he is currently comfortable with that level.

If the Federal Reserve raises rates this fall, Forman does not believe it will be a sustained increase. Moreover, he believes FS Investments will perform better even if the Fed moves by a quarter point later this year.

"Our loans are all floating rate, so the rate will go up with interest rates," says Forman. "But we are prepared to be defensive, we think that the Fed will raise interest rates modestly but we are in a lower-for-longer period."