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Allied Capital Corporation and Subsidiaries
Exhibit 11 Statement of Computation of Earnings Per Common Share
Form 10-Q
September 30, 1996

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                                                                 For the Three Months Ended              For the Nine Months Ended 
                                                                       September 30,                           September 30,
                                                                 --------------------------              --------------------------
                                                                   1996              1995                   1996             1995
                                                                 --------------------------              --------------------------
Primary Earnings Per Common Share:

<S>                                                              <C>           <C>                       <C>           <C>
  Net Increase in Net Assets Resulting 
    from Operations                                              $ 5,705,000   $ 3,089,000               $ 9,781,000   $12,419,000

  Less: Dividends for Preferred Stock                                (55,000)      (55,000)                 (165,000)     (165,000)
                                                                 -------------------------               -------------------------
  Net Increase in Net Assets Resulting 
    from Operations Available to 
    Common Shareholders                                          $ 5,650,000   $ 3,034,000               $ 9,616,000   $12,254,000
                                                                 =========================               =========================


  Weighted average number of common
    shares outstanding                                             6,986,512     6,185,660                 6,791,205     6,207,004

  Weighted average number of common
    shares issuable on exercise
    of outstanding stock options                                      69,073         7,695                    47,871           397
                                                                 -------------------------               -------------------------
  Weighted average number of common
    shares and common share equivalents outstanding                7,055,585     6,193,355                 6,839,076     6,207,401
                                                                 =========================               =========================

  Earnings per Common Share                                           $ 0.80        $ 0.49                    $ 1.41        $ 1.97
                                                                 =========================               =========================



Fully Diluted Earnings Per Common Share:

  Net Increase in Net Assets Resulting                  
    from Operations                                              $ 5,705,000   $ 3,089,000               $ 9,781,000   $12,419,000
                                                        
  Less: Dividends for Preferred Stock                                (55,000)      (55,000)                 (165,000)     (165,000)
                                                                 -------------------------               -------------------------
  Net Increase in Net Assets Resulting                  
    from Operations Available to                        
    Common Shareholders                                          $ 5,650,000   $ 3,034,000               $ 9,616,000   $12,254,000
                                                                 =========================               =========================
  Weighted average number of common                     
    shares and common share                             
    equivalents outstanding as computed for             
    primary earnings per share                                     7,055,585     6,193,355                 6,839,076     6,207,401
                                                        
  Weighted average of additional                        
    shares issuable on exercise                         
    of outstanding stock options                                      39,646         7,963                    60,135        13,976
                                                                 -------------------------               -------------------------
  Weighted average number of common                     
    shares and common share equivalents                 
    outstanding, as adjusted                                       7,095,231     6,201,318                 6,899,211     6,221,377
                                                                ==========================               =========================
                                                        
  Earnings per Common Share                                           $ 0.80        $ 0.49                    $ 1.39        $ 1.97
                                                                ==========================               =========================

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