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Allied Capital Corporation and Subsidiaries
Exhibit 11 Statement of Computation of Earnings Per Common Share
Form 10-Q
March 31, 1997

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<CAPTION>
                                                                 For the Three Months Ended
                                                                          March 31,
                                                                ----------------------------
                                                                     1997         1996
                                                                ----------------------------
<S>                                                              <C>            <C>         
Primary Earnings Per Common Share:                                                          
                                                                                            
         Net Increase in Net Assets Resulting                                               
              from Operations                                    $1,956,000     $4,442,000  

         Less:  Dividends for Preferred Stock                       (55,000)       (55,000) 
                                                                ----------------------------
                                                                                            
         Net Increase in Net Assets Resulting                                               
              from Operations Available to                                                  
              Common Shareholders                                $1,901,000     $4,387,000  
                                                                ============================
         Weighted average number of common                                                  
              shares outstanding                                  7,316,014      6,301,619  
         Weighted average number of common                                                  
              shares issuable on exercise                                                   
              of outstanding stock options                           78,122         41,135  
                                                                ----------------------------
         Weighted average number of common                                                  
              shares and common share equivalents outstanding     7,394,136      6,342,754  
                                                                ============================
                                                                                            
         Earnings per Common Share                                    $0.26          $0.69  
                                                                ============================
                                                                                            
                                                                                            
                                                                                            
Fully Diluted Earnings Per Common Share:                                                    
                                                                                            
         Net Increase in Net Assets Resulting                                               
              from Operations                                    $1,956,000     $4,442,000  
         Less:  Dividends for Preferred Stock                       (55,000)       (55,000) 
                                                                ----------------------------
         Net Increase in Net Assets Resulting                                               
              from Operations Available to                                                  
              Common Shareholders                                $1,901,000     $4,387,000  
                                                                ============================
                                                                                            
                                                                                            
         Weighted average number of common                                                  
              shares and common share                                                       
              equivalents outstanding as computed for                                       
              primary earnings per share                          7,394,136      6,342,754  
         Weighted average of additional                                                     
              shares issuable on exercise                                                   
              of outstanding stock options                                -              -  
                                                                ----------------------------
         Weighted average number of common                                                  
              shares and common share equivalents                                           
              outstanding, as adjusted                            7,394,136      6,342,754  
                                                                ============================
                                                                                            
                                                                                            
         Earnings per Common Share                                    $0.26          $0.69  
                                                                ============================
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