Ameritrans Capital Corporation to Merge into Medallion Financial.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 5, 2000

The board of directors of Ameritrans Capital Corporation, (NASDAQ: AMTC) and Medallion Financial Corporation (NASDAQ: TAXI) have unanimously approved the merger of the two companies that will create the largest national taxi medallion lender in the United States.

Under the agreement approved by the boards of both companies, AMTC shares will be converted into shares of TAXI at a rate that is dependent on the average price of Medallion common shares for the 20 days prior to the closing of the merger. Based upon the 52 week high and low price for TAXI shares of $15.00 and $22.25, the conversion rate would be 0.603 and 0.501 shares respectively of TAXI shares for each share of Ameritrans. These conversion rates have an implied value to AMTC shareholders of $9.04 and $11.14 per share, respectively. Based upon Medallion's closing price on Thursday, May 4, of $16.50, that would equate to a price of $9.64 to Ameritrans shareholders.

Gary Granoff, chief executive officer of Ameritrans Capital Corp. said that the merger consummates a 20 year partnership between the two companies. "Ameritrans and Medallion have competed for loans and have invested side by side for more than 20 years. In the past, Ameritrans personnel have performed varied and extensive legal work for Medallion. The two companies have an extremely close working relationship, and as a result, we have been able to craft a merger that capitalizes on the strengths of both firms."

After the merger, Mr. Granoff will become Executive Vice President and General Counsel of Medallion Financial.

Andrew Murstein, President of Medallion said, "We have been extremely active with mergers and acquisitions during the past year. The merger with Ameritrans is our largest asset transaction to date and strategically, we consider it one of our most important in terms of helping us grow our core businesses. The addition of Gary Granoff to our staff brings a significant level of legal experience, industry contacts and taxi medallion lending expertise to our senior management team. Personally, I am extremely pleased he will be part of our team, and I look forward to working with him."

The transaction, which is expected to close during the fourth quarter of 2000, is subject to customary regulatory approvals, satisfactory completion of due diligence, the approval of AMTC shareholders and the approval of certain lenders.

Benefits of Transaction

- The merger of Medallion and AMTC will extend the geographic reach of both companies' medallion lending business.

- The merger of AMTC and Medallion will combine the commercial lending practices of both businesses, creating a greater presence in the non-bank commercial lending business.

- The merger of AMTC and Medallion will increase the pool of managerial and executive talent.

- The merger will combine approximately $60 million of Ameritrans assets with the more than $509 million of Medallion assets. In addition, Ameritrans capital of approximately $14 million will be added to Medallion's more than $150 million of capital.

- The merger will enable the combined entity to enjoy economies of scale in its operating costs.

- The merger may enable the Ameritrans portfolio of loans to enjoy a lower cost of capital.

- The merger will result in AMTC shareholders receiving Medallion shares with more liquidity and greater visibility in the capital markets.

- Both AMTC and Medallion are Regulated Investment Companies (RICs) and as a result are required to pay at least 90% of their net income to shareholders in the form of dividends. As a result, shareholders of AMTC will continue to receive dividends that are paid by Medallion.

Summary Transaction Terms

Exchange Ratio                      Dependent upon the closing price
                                     of Medallion prior to closing.
Accounting Structure                Pooling of interests.
Company Name                        Ameritrans Capital Corporation
                                     name continues as a Medallion
                                     subsidiary.
Headquarters                        New York City
Target Closing Date                 Fourth quarter 2000

About Ameritrans

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 was 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; 4th Floor; New York, NY 10017.

About Medallion Financial Corp.

Medallion Financial Corp. is a specialty finance company with a leading position in the origination and servicing of loans financing the purchase of taxicab medallions and related assets. The Company also originates and services commercial loans financing small businesses in other targeted industries, and operates one of the largest taxicab rooftop advertising businesses in the nation. The Company and its subsidiaries have lent over $1 billion to the taxicab industry and commercial equipment industries. As a regulated investment company (RIC), Medallion complies with the requirement to distribute at least 90% of its income to shareholders, and as a consequence, pays no corporate income tax on the amount of income distributed.

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.