<PAGE>
Supplement Dated April 10, 1996
to Prospectus dated February 14, 1996
of
SIERRA PRIME INCOME FUND
9301 Corbin Avenue
P.O. Box 1160
Northridge, California 91328-1160
The prospectus dated February 14, 1996 of the Sierra Prime Income Fund (the
"Fund") is hereby amended and supplemented by the following:
The second paragraph under the heading "APPLICATION OF CLASS A COMMON SHARES
EARLY WITHDRAWAL CHARGE" on page 33 is amended and restated by the following:
Purchases of $1 million or more and certain other purchases are
not subject to the sales charge at the time of purchase, but may
be subject to a 1.0% early withdrawal charge on repurchases or
tenders within one year of purchase or a 0.5% early withdrawal
charge on repurchases or tenders during the second year after
purchase. No sales charge at time of purchase and no early
withdrawal charge will be assessed on the reinvestment of
dividends or distributions on Class A Common Shares or on
purchases of Class A Common Shares under the 180-day
reinvestment privilege described in a previous section.
PLEASE RETAIN THIS SUPPLEMENT
FOR FUTURE REFERENCE
