Exhibit 99.1

KCAP Financial, Inc. Announces 2014 Financial Results and Completion of Restatement of Prior-period Financial Statements

NEW YORK, March 30, 2015 – KCAP Financial, Inc. (Nasdaq GS: KCAP) announces its 2014 financial results and the completion of the previously announced restatement of its prior-period financial statements. The restatement has no effect on previously reported Net Asset Value or net income per share and has no impact on cash generated to pay distributions to KCAP’s stockholders.

Financial Highlights

Dayl Pearson, President and Chief Executive Officer of KCAP Financial, Inc., noted, “We are encouraged by the positioning of our business, and the pipeline for future growth.  We successfully issued 3 million shares of common stock, raising approximately $23.8 million of growth capital that, while a modest drag on fourth quarter results, positions KCAP to take advantage of reinvestment opportunities over the medium term.”

Mr. Pearson continued, “Subsequent to the end of the fourth quarter, we determined that errors existed relating to our accounting for the equity investments in our collateralized loan obligation funds (CLO Fund Securities) as well as the accounting treatment for cash distributions received from our wholly-owned asset management companies, Trimaran Advisors, LLC and Katonah Debt Advisors, LLC (collectively, the “Asset Manager Affiliates”). We have taken the appropriate steps to rectify these errors and would again note that the restatements contained within this press release have no impact on previously reported Net Income or Net Asset Value or cash generated to pay distributions to our stockholders.”

Operating Results

For the year ended December 31, 2014, we reported total investment income of approximately $41.2 million as compared to approximately $39.2 million (restated) in the prior year, an increase of approximately 5%. Investment income from debt securities increased 53% to approximately $21.4 million from approximately $14.0 million in the year-ended December 31, 2013. Investment income from investments in CLO Fund Securities in 2014 decreased approximately 30% to $13.4 million from $19.1 million (restated) in 2013, and dividends from our Asset Manager Affiliates decreased 5% from $5.7 million (restated) to $5.5 million.

For the year ended December 31, 2014, total expenses were higher by approximately 9% as compared to the same period in 2013, primarily attributable to the 14% increase in interest expense related to the higher average outstanding principal balance on our borrowings during 2014, as well as a 3.8% increase to operating expenses.

Net investment income for the years ended 2014 and 2013 was approximately $20.1 million and $19.9 million (restated), or $0.59 and $0.62 (restated) per share, respectively. Net realized and unrealized depreciation on investments for the year ended 2014 was approximately $4.3 million, as compared to net realized and unrealized depreciation on investments of $2.1 million (restated) for the same period in 2013.

Taxable distributable income, which has historically been reported in our financial statement footnotes, and which management believes to be a meaningful metric for a regulated investment company, was $0.78 for the year ended December 31, 2014, compared with $0.70 (restated) for the year-ended December 31, 2013.

Restatement of Historical Financial Results

On March 24, 2015, the Audit Committee of the Board of the Directors of KCAP Financial, Inc. concluded that the Company’s previously issued audited consolidated financial statements for the years ended December 31, 2010 through 2013 as well as the previously issued unaudited consolidated financial statements for the fiscal quarters ended March 31, 2010 through September 30, 2014 require corrections due to errors related to the accounting for investment income from its equity investments in collateralized loan obligation funds and dividend income from its Asset Manager Affiliates. Neither change, as outlined below, impacted previously reported Net Asset Value or Net Income.

Accounting for CLO Equity Investments - Since its inception in 2006, the Company recorded distributions received from its CLO equity investments as investment income and reflected changes in the fair value of the CLO equity investments in its consolidated statement of operations. However, Management and the Audit Committee have determined that the “effective interest” method is the appropriate method for recognizing investment income from CLO equity investments, with any difference between the cash distribution received and the amount calculated pursuant to the effective interest method being recorded as an adjustment to the cost basis of the investment.

Distributions from Asset Manager Affiliates - The Company has restated its financial statements for the correction of an error related to the accounting for distributions that the Company has received from its Asset Manager Affiliates. Specifically, distributions from the Asset Manager Affiliates to the Company were historically recorded entirely as investment income over the prior year periods. It was determined that a portion of certain distributions contained tax-basis return of capital which should have been recorded as adjustments to the cost basis of the investment in Asset Manager Affiliates (“Distributions received in excess of tax-basis earnings and profits”). Prior period financial statements have been restated to correct this error.

As shown in the following table, the restatement adjustments to correct CLO investment income and dividend income from Asset Manager Affiliates have a corresponding offsetting effect on the change in unrealized appreciation (depreciation) for those investments, respectively, in the statement of operations.

These reclassifications of amounts between investment income and unrealized gains (losses) did not have any effect on total net income, Net Asset Value, total cash flows from operations, earnings per share or total return for any periods presented.

Supplemental Information: Analysis of Shareholder Distributions

On a supplemental basis, we are providing information relating to our shareholder distributions. The Company believes that taxable distributable income as reported in our financial statement footnotes is an important measure for investors. The Company may not distribute all of its taxable distributable income, or may over-distribute during any period.

The following table reflects the components of stockholder distributions for the years ended December 31, 2014 and 2013 (restated):

Portfolio and Investment Activity

The fair value of our portfolio was approximately $480 million as of December 31, 2014. The composition of our investment portfolio at December 31, 2014 and December 31, 2013 at cost and fair value was as follows:

Liquidity and Capital Resources

At December 31, 2014, we had unrestricted cash and money market balances of approximately $2.8 million, total assets of approximately $510.4 million and stockholders' equity of approximately $255.3 million. Our Net Asset Value per common share was $6.94. As of December 31, 2014, we had $223.9 million of borrowings outstanding ($220.4 million net of discount) with a weighted average interest rate of approximately 4.4%.

Subject to prevailing market conditions, we intend to grow our portfolio of assets by raising additional capital, including through the prudent use of leverage available to us. As a result, we may seek to enter into new agreements with other lenders or into other financing arrangements as market conditions permit. Such financing arrangements may include a new secured and/or unsecured credit facility or the issuance of unsecured debt or preferred stock.

Distributions

Generally, we seek to fund distributions to shareholders from current distributable earnings, primarily from net interest and dividend income generated by our investment portfolio and any distributions from our Asset Manager Affiliates. A portion of these distributions paid to shareholders may be considered a return of capital. We announced a regular quarterly distribution of $0.25 per share for the quarter ended December 31, 2014. The record date for this distribution was December 29, 2014 and the distribution was paid on January 27, 2015.

We have adopted a dividend reinvestment plan that provides for reinvestment of dividends in shares of our common stock, unless a stockholder elects to receive cash. As a result, if we declare a cash dividend, shareholders who have not "opted out" of our dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of our common stock, rather than receiving the cash dividends. Please contact your broker or other financial intermediary for more information regarding the dividend reinvestment plan.

Conference Call and Webcast

We will hold a conference call on Tuesday, March 31, 2015 at 9:00 a.m. Eastern Time to discuss our fourth quarter 2014 financial results. Shareholders, prospective shareholders and analysts are welcome to listen to the call or attend the webcast.

The conference call dial-in number is (866) 757-5630. No password is required. A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on our Company's website www.kcapfinancial.com in the Investor Relations section under Events. The online archive of the webcast will be available after 7:00 p.m. Eastern Time for approximately 90 days.

A replay of this conference call will be available from 7:00 p.m. on March 31, 2015 until 11:59 p.m. on April 7, 2015. The dial in number for the replay is (855) 859-2056 and the conference ID is 18000514.

About KCAP Financial, Inc.

KCAP Financial, Inc. is a publicly traded, internally managed business development company. The Company's middle market investment business originates, structures, finances and manages a portfolio of term loans, mezzanine investments and selected equity securities in middle market companies. The Company's wholly owned portfolio companies, Katonah Debt Advisors, L.L.C. and Trimaran Advisors, L.L.C. (the “Asset Manager Affiliates”), manage collateralized debt obligation funds (“CLO Funds”) that invest in broadly syndicated corporate term loans, high-yield bonds and other credit instruments. The Company also invests in securities issued by CLO Funds, most of which are managed by our Asset Manager Affiliates.

The KCAP Financial, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3121

Forward Looking Statements

This press release contains forward-looking statements. The matters discussed in this press release that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as "may,'' "will,'' "should,'' "expects,'' "plans,'' "anticipates,'' "could,'' "intends,'' "target,'' "projects,'' "contemplates,'' "believes,'' "estimates,'' "predicts,'' "potential'' or "continue'' or the negative of these terms or other similar words. Further information about factors that could affect our financial and other results is included in our filings with the Securities and Exchange Commission. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.