Ameritrans Announces Sale of SBA Debenture.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 18, 2004

Ameritrans Capital Corporation (NASDAQ:AMTC) today announced that its wholly-owned subsidiary, Elk Associates Funding Corporation, a licensed Small Business Investment Company, sold $1,950,000 principal amount of debentures to the United States Small Business Administration. The new 10-year debenture sold to the SBA bears interest at 0.5% above LIBOR, plus a user fee of .866% per annum until March 24, 2004, at which time the 10-year debenture rate will be set by the SBA under its long-term debenture financing program. The sale of the debenture was made pursuant to the $12.0 million, 5-year commitment given by the SBA to Elk in January 2002. This will be the final sale under the $12.0 million commitment. Previously, Elk had drawn down $2,050,000 that matures in September, 2012, $3,000,000 that matures in March, 2013 and $5,000,000 that matures in March 2014.

The company further announced that it is Elk's intention to pay off out of available cash on March 1, 2004, an outstanding SBA debenture in the amount of $430,000 that matures in March, 2007. This debenture is presently costing 8.38% with the user fee and will be replaced by increasing short term bank debt at an anticipated rate of 1.5% above 30 day LIBOR, or approximately 2.6% at this time.

After giving effect to the anticipated prepayment and the completed sale of Elk's new debenture, Elk will have $12,000,000 principal amount of debentures outstanding with the SBA. The $2,050,000 debenture bears interest at 4.67% before the user fee of .866% per annum. The $3,000,000 debenture bears interest at 4.63% before the user fee of .866% per annum. The $5,000,000 debenture sold in September, 2003 and the $1,950,000 debenture sold on February 17, 2004 will have their ten year interest rates set on March 24, 2004 for the upcoming ten year period. Based upon current ten year interest rates, the company believes that the total of $6,950,000 of debentures will have similar long term rates as the two other debentures previously completed out of the $12 million commitment. The above rates do not include amortization of SBA points and fees which are amortized over the life of each loan.

Gary C. Granoff, president of the company, stated, "We are pleased to have completed this round of debenture financing with the SBA. We have prepaid our higher cost debentures that had shorter maturities and we are now positioned to have historically low interest rates on our long term SBA debentures. Over the last two years we have increased our SBA debt by over $3,000,000 and since the SBA debt is subordinate to our banks, our banks look favorably on this addition to our capital structure."

Ameritrans Capital Corporation is a specialty finance company engaged in making loans to and investments in small businesses. Ameritrans' wholly-owned subsidiary, Elk Associates Funding Corporation, has been licensed by the United States Small Business Administration (SBA) as a Small Business Investment Company since 1980. The company maintains its offices at 747 Third Avenue, 4th Floor, New York, New York 10017.

This announcement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presently anticipated or projected. Ameritrans Capital Corporation cautions investors not to place undue reliance on forward-looking statements, which speak only as to management's expectations on this date.