UPDATE 1-Prospect Capital posts higher 2nd-qtr profit

* Q2 NII $0.33/shr vs $0.23/shr, a year ago

* Sees Q3 NII to be $0.53 to $0.58 per share

Feb 9 (Reuters) - Prospect Capital Corp posted a higher quarterly investment income, as the business lender gained from its investments in small and medium sized companies.

For the October-December quarter, Prospect posted net investment income (NII) of $36.5 million, or 33 cents a share, compared with $19.1 million, or 23 cents per share.

The company is targeting growth in NII per share as it invests in new originations and sees NII of 53 cents to 58 cents a share in the current quarter.

Total interest income for the second quarter rose 66 percent to $45.5 million.

Popularly known as BDCs (business development companies), business lenders make debt and equity investments in small- and middle-sized companies in return for equity stakes.

Shares of New York-based Prospect Capital were up about 2 percent in trading after the bell. They had closed at $10.68 on Thursday on the Nasdaq.