Allied Capital Provides Financing to Advantage Sales & Marketing, Inc.

Business Editors/High-Tech Writers

WASHINGTON--(BUSINESS WIRE)--Dec. 9, 2003

Allied Capital Corporation (NYSE:ALD) today announced that it has agreed to provide approximately $180 million in the form of equity and subordinated debt to recapitalize and acquire a majority interest in Advantage Sales & Marketing, Inc. ("Advantage"). This transaction is subject to customary closing conditions, including regulatory and shareholder approvals and certain other adjustments.

Advantage will be the parent company of Advantage Sales & Marketing, LLC ("ASM"), a leading sales and marketing agency providing outsourced sales, merchandising, and marketing services to the consumer packaged goods ("CPG") industry. ASM and its member companies employ over 12,000 associates and operate collectively to provide services nationwide to more than 1,200 manufacturers of branded food products and consumer goods. ASM will continue to be managed by the existing ASM executive team, led by Chief Executive Officer Sonny King.

"ASM is one of three companies capable of providing true national representation to CPG manufacturers" said Bill Walton, Chairman and CEO of Allied Capital. "ASM operates at the nexus of two industry sectors where we have specifically chosen to focus our investments -- consumer products and business services. This makes ASM a strategic addition to our investment portfolio. We look forward to continuing to work with ASM's strong management team as they guide the company's future growth."

"We are excited about the strategic partnership we have created between ASM and Allied Capital," said Sonny King, Chairman and CEO of ASM. "Our common goal is to maintain a leadership position in ASM's core business while accelerating growth in emerging areas of our business."

In December 2001, Allied Capital invested $11.0 million of subordinated debt in Advantage Mayer, Inc. ("Advantage Mayer"), a member of ASM. In July 2003, Allied Capital provided an additional $6.7 million to Advantage Mayer. These existing investments are included in the total commitment of approximately $180 million. It is anticipated that this transaction will close in the first quarter of 2004.

About Allied Capital

Allied Capital is the nation's largest business development company and provides long-term debt and equity investment capital to companies in a variety of industries. The company also participates in the real estate capital markets as an investor in non-investment grade commercial mortgage-backed securities, collateralized debt obligation bonds and preferred shares. The company is headquartered in Washington, DC. For more information, please visit the web site at www.alliedcapital.com or contact Allied Capital Investor Relations toll-free at [phone] or by e-mail at [e-mail].

About Advantage Sales and Marketing, LLC

Headquartered in Irvine, California, Advantage Sales and Marketing, LLC provides sales, marketing, and merchandising services to manufacturers in the consumer packaged goods industry. ASM has operations throughout the United States and Canada. For more information, please visit the Company's website at www.asmnet.com.

Forward-Looking Statements

The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in Allied Capital's periodic filings with the Securities and Exchange Commission.