Ameritrans Capital Corporation Announces Agreement for Sale of Taxicab Medallion Portfolio

NEW YORK–(EMWNews)–Ameritrans Capital Corporation (NASDAQ: AMTC, AMTCP) today announced

that Ameritrans and its wholly owned subsidiary, Elk Associates Funding

Corporation, executed a definitive agreement with Medallion Financial

Corp. and its wholly owned subsidiary Medallion Bank for the sale of

substantially all of Elk’s taxicab medallion

loans. Another subsidiary of Medallion Financial, Freshstart Venture

Capital Corp., will purchase certain other small business loans at the

closing. The transaction is anticipated to generate approximately $31

million in gross proceeds. The transaction is subject to customary

closing conditions, and is subject to certain terms and conditions,

including approval by Ameritrans shareholders. The Company expects to

distribute definitive proxy materials to shareholders as soon as

practicable which will set forth in detail the closing conditions and

terms and conditions of the transaction. The transaction is expected to

close no later than October 15, 2008.

Ameritrans expects to use substantially all of the net proceeds from

this transaction to continue to build its portfolio of corporate loans,

consistent with its strategy of repositioning and growing its portfolio

as well as reduce its outstanding borrowings, pay operating expenses,

and for general corporate purposes.

“We are delighted to announce the sale of our

medallion portfolio,” said Michael Feinsod,

President of Ameritrans. “Ameritrans and Elk

are proud to have built a profitable and vibrant medallion finance

business over the past 28 years. This transaction enables Ameritrans to

continue the expansion of our senior-secured, middle market corporate

loan portfolio. Given the continued stress on the credit markets, we

continue to see excellent opportunities to grow the portfolio and

generate attractive risk adjusted returns for our shareholders.”

Ameritrans Capital Corporation is an internally managed, closed-end

investment company that has elected to be regulated as a business

development company (“BDC”)

under the Investment Company Act of 1940, as amended. Ameritrans

originates, structures and manages a portfolio of medallion loans,

secured business loans and selected equity securities. Ameritrans’

wholly owned subsidiary Elk Associates Funding Corporation is licensed

by the United States Small Business Administration as a Small Business

Investment Company (SBIC) in 1980. The Company maintains its offices at

747 Third Avenue, 4^th Floor, New York, NY 10017.

This announcement contains forward-looking statements within the

meaning of the Private Securities Litigation Reform Act of 1995. Such

anticipated or projected. Ameritrans Capital Corporation cautions

which speak only as to management’s expectations on this date.

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