Exhibit 10.3


                              EMPLOYMENT AGREEMENT

     This  EMPLOYMENT  AGREEMENT  (this  "Agreement")  is dated as of October 1,
2001,  between Ellen M. Walker  ("Executive"),  Ameritrans  Capital  Corporation
("Ameritrans"),  and Elk Associates Funding Corporation  ("Elk")  (collectively,
Ameritrans and Elk are hereinafter referred to as the "Employer").

     In consideration  of the premises and the mutual covenants  hereinafter set
forth and other good and valuable consideration,  the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

1.   Employment of Executive.

     Employer hereby agrees to employ Executive,  and Executive hereby agrees to
be and  remain  in the  employ  of  Employer,  upon  the  terms  and  conditions
hereinafter set forth.

2.   Employment Period.

     Subject to the  earlier  termination  as provided in Section 5, the term of
Executive's  employment  under this  Agreement  shall commence as of the date of
execution (the  "Effective  Date"),  and shall continue for a period of five (5)
years  (the  "Initial  Employment  Period").  Unless  Employer  gives  notice of
non-renewal  at least four (4) months  prior to the  expiration  of the  Initial
Employment  Period or  Executive  gives notice of  non-renewal  at least two (2)
months prior to the  expiration of the Initial  Employment  Period,  the term of
this Agreement  shall be extended for an additional  five (5) year period beyond
the end of the Initial  Employment  Period on the same terms and  conditions  in
effect under this  Agreement at the time of  extension  (the Initial  Employment
Period and any  extension  thereof is hereafter  referred to as the  "Employment
Period").  During the period between the fourth month and the second month prior
to the expiration of the Initial Employment Period, Employer and Executive shall
negotiate  in good faith with  respect to any  additional  terms to the  renewed
Employment Agreement.

3.   Duties and Responsibilities.

     3.1. General. During the Employment Period,  Executive shall have the title
of Executive Vice  President and General  Counsel of the Employer and shall have
duties commensurate with her office and title similar to other senior executives
of the Employer. Executive shall report directly to and take direction from Gary
Granoff or the Board of Directors of the Employer (the "Board"). Executive shall
devote such of her business time, consistent with past practice,  and expend her
best efforts, energies, and skills to the Employer;  provided, however, that (i)
Executive shall be allowed to devote such reasonable time as she deems necessary
to her personal and family business  matters,  (ii) Employer  acknowledges  that
Executive  currently  is and may remain as a director and an officer or employee
of Gemini Capital  Corporation,  (iii)  Executive  shall be permitted to provide
services to Pierre Funding Corporation consistent with past practice as such has
been disclosed by Executive to the Company, and (iv) Employer  acknowledges that
Executive  currently  is and may  remain a partner  in the law firm of  Granoff,
Walker & Forlenza, P.C. and continue to practice law in a manner consistent with
past practice, so long as such time, attention,  and duties in (i), (ii), (iii),
and (iv),  above, do not (A) interfere with her duties and  responsibilities  to
Employer or (B) violate her  obligations  under Section 7, herein,  or any duty,
consistent  with her status with  Employer,  as she may be assigned from time to
time by Gary Granoff or the Board.

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4.   Compensation and Related Matters.

     4.1.  Base  Salary.  For  each  of  the  twelve-month  periods  during  the
Employment  Period,  commencing with the  twelve-month  period  beginning on the
Effective Date (each such period, an "Employment  Year"),  Employer shall pay to
Executive a base salary equal to $114,400 for the first  Employment  Year, which
shall increase by 4% for each  subsequent  Employment Year (with respect to each
Employment  Year, the "Base  Salary").  The Base Salary for each Employment Year
shall be payable in accordance with the normal payroll procedures of Employer.

     4.2. Annual Bonus. For each fiscal year during the Employment Period (each,
a "Bonus Year"),  Executive shall be eligible to receive a  discretionary  bonus
based on the achievement of corporate and/or individual  performance  objectives
set by the Board for such Bonus Year.

     4.3. Other Benefits.  During the Employment Period,  subject to, and to the
extent  Executive is eligible under their respective  terms,  Executive shall be
entitled to receive  such  benefits as are, or are from time to time  hereafter,
generally  provided  by  Employer  to  Employer's  senior  management  employees
(including any executive vice president or chief financial  officer) (other than
those provided under or pursuant to separately  negotiated individual employment
agreements or  arrangements)  under any pension or retirement  plan,  disability
plan, or insurance,  group life insurance,  family medical and dental insurance,
accidental death and  dismemberment  insurance,  travel accident  insurance,  or
other  similar plan or program of Employer.  In  addition,  Employer  shall make
regular  contributions to Executive's SEP IRA account of 15% of Executive's Base
Salary and Bonus  subject to  limitations  under the plan,  and shall  reimburse
Executive for the use of a cell phone ($75/month).

     4.4.  Expense  Reimbursement.  Employer shall  reimburse  Executive for all
business  expenses  reasonably  incurred by her in the performance of her duties
under this Agreement upon her  presentation  of signed and itemized  accounts of
such expenditures,  all in accordance with Employer's procedures and policies as
adopted and in effect from time to time and applicable to its senior  management
employees.

     4.5.  Vacations.  Executive  shall be entitled to 20 business days vacation
for each calendar year during the Employment  Period,  which  vacations shall be
taken at such time or times as shall not unreasonably interfere with Executive's
performance of her duties under this Agreement.

     4.6. Stock Options.  In order to provide further incentive to Executive and
align the  interests of Executive  with those of the  stockholders  of Employer,
Employer shall grant to Executive, from time to time, options to purchase shares
of common stock of Employer,  par value per share $.01 (the "Common Stock"),  in
an amount  determined by the Company's board of directors or committee  thereof,
as the case may be. The  options  shall be granted  pursuant  to the  Employer's
existing Stock Option Plan consistent with the terms and conditions therein. The
options  shall  have such  other  terms and  conditions  as set forth in a stock
option agreement.  Employer shall register the sale of Common Stock to Executive
upon the exercise of any such options  pursuant to a  Registration  Statement on
Form S-8,  provided that Form S-8 is available to Employer  under the Securities
Act of 1933  and the  rules  and  regulations  of the  Securities  and  Exchange
Commission at the time Executive exercises such options.

5.   Termination of Employment Period.

     5.1.  Voluntary  Termination  by  Executive.  Executive  may,  by notice to
Employer  at any time  during the  Employment  Period,  voluntarily  resign from
Employer and terminate the Employment Period.


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<PAGE>


The effective  date of such  termination of Executive from Employer shall be the
date that is thirty (30) days following the date on which such notice is given.

     5.2. By Employer for Cause. Employer may, at any time during the Employment
Period, by notice to Executive,  terminate the Employment Period for "Cause." As
used herein,  "Cause" shall mean (i) incompetence,  fraud,  personal dishonesty,
defalcation,  or acts of gross  negligence  or gross  misconduct  on the part of
Executive in the course of her  employment,  (ii) an intentional  breach of this
Agreement by Executive  that is injurious  to Employer,  (iii)  substantial  and
continued  failure by  Executive to perform her duties  hereunder,  (iv) willful
failure by  Executive  to follow the lawful  directions  of Gary  Granoff or the
Board,  (v) use of alcohol by Executive  or her illegal use of drugs  (including
narcotics)  which in either  case is, or could  reasonably  expected  to become,
materially injurious to the reputation or business of Employer or which impairs,
or could reasonably be expected to impair, the performance of Executive's duties
hereunder,  (vi) Executive's conviction by a court of competent jurisdiction of,
or pleading "guilty" or "no contest" to, (x) a felony, or (y) any other criminal
charge (other than minor traffic  violations)  which has or could  reasonably be
expected to have a material adverse impact on Employer's reputation and standing
in the  community,  or (vii)  Executive's  violation of any of the provisions of
Section 7 herein.  Any notice  given by Employer  pursuant  to Section  5.2(ii),
(iii), or (iv), above,  shall specify in writing in reasonable detail the nature
of  Executive's  action or inaction  that is the cause for giving  such  notice.
Executive will have 30 days to cure, to the reasonable satisfaction of Employer,
any action or inaction charged by Employer for Cause under (ii), (iii), or (iv),
above.  In the event of a termination of the  Employment  Period for Cause under
(i),  (v),  (vi),  or  (vii),  above,  the  Employment  Period  shall  terminate
immediately upon notice by Employer of termination for Cause. In all other cases
of a termination of the Employment Period for Cause, the Employment Period shall
terminate 30 days after such notice of termination for Cause,  unless  Executive
has satisfactorily cured such actions or inactions.

     5.3. By Executive for Good Reason.

          (a) Executive may, at any time during the Employment  Period by notice
     to Employer, terminate the Employment Period under this Agreement for "Good
     Reason" (as defined below).  For the purposes hereof,  Executive shall have
     "Good  Reason" to terminate  employment  with Employer on account of any of
     the following events without Executive's  consent: (i) any reduction in the
     Base Salary; (ii) Employer relocating its principal headquarters outside of
     a 30 mile radius from  Manhattan;  (iii) the failure of Employer to provide
     employee benefits  consistent with Section 4.3 herein, or (iv) a "Change in
     Control" (as defined below); provided,  however, that the circumstances set
     forth in this  Section  5.3 shall  not be Good  Reason if within 30 days of
     notice by Executive to Employer,  Employer  cures such  circumstances.  The
     effective date of such  termination of Executive from Employer shall be the
     date that is thirty  (30) days  following  the date on which such notice is
     given.

          (b) For purposes of this  Section 5.3, a "Change in Control"  shall be
     deemed to have  taken  place if any  "Person"  (as such term is  defined in
     Section 3(a)(9) of the Securities Exchange Act of 1934 (the "Exchange Act")
     and as used in Sections  13(d)(3) and 14(d)(2) of the Exchange Act) becomes
     a  "beneficial  owner" (as defined in Rule 13d-3 under the  Exchange  Act),
     directly or indirectly,  of securities of the Corporation  representing 50%
     or more  of the  combined  voting  power  of  Employer's  then  outstanding
     securities  eligible  to vote for the  election  of the Board (the  "Voting
     Securities"); provided, however, that the event described in this paragraph
     (b) shall not be deemed to be a Change in  Control  by virtue of any of the
     following  acquisitions:  (i) by Employer or any  subsidiary of Employer in
     which  Employer  owns more than 50% of the  combined  voting  power of such
     entity (a  "Subsidiary"),  (ii) by any  employee  benefit  plan (or related
     trust) sponsored or maintained by Employer or any Subsidiary, (iii) by


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<PAGE>

     any underwriter  temporarily  holding Employer's Voting Securities pursuant
     to an  offering  of  such  Voting  Securities,  or  (iv)  pursuant  to  any
     acquisition  by Executive or any group or persons  including  Executive (or
     any  entity  controlled  by  Executive  or any group of  persons  including
     Executive).

     5.4. Disability.  During the Employment Period, if, as a result of physical
or mental  incapacity  or  infirmity,  Executive  shall be unable to perform her
duties under this Agreement for (i) a continuous period of at least 120 days, or
(ii) periods  aggregating  at least 180 days during any period of 12 consecutive
months (each, a "Disability  Period"),  and at the end of the Disability  Period
there is no reasonable probability that Executive can promptly resume her duties
hereunder,  Executive shall be deemed disabled (the  "Disability") and Employer,
by notice to Executive,  shall have the right to terminate the Employment Period
for  Disability  at,  as of,  or after  the end of the  Disability  Period.  The
existence  of the  Disability  shall  be  determined  by a  reputable,  licensed
physician selected by Employer in good faith, whose determination shall be final
and binding on the parties. Executive shall cooperate in all reasonable respects
to enable  an  examination  to be made by such  physician.  Notwithstanding  the
foregoing,  Employer  may  conclusively  determine  Executive to be disabled and
terminate  the  Employment  Period on  account of  Disability  at any time after
Executive has commenced receiving benefits under Employer's long-term disability
insurance policy.

     5.5.  Death.  The  Employment  Period shall end on the date of  Executive's
death.

     5.6.  Any  termination  under  this  Section  5 shall  act as a  notice  of
non-renewal of this Agreement pursuant to Section 2 herein.

6.   Termination Compensation.

     6.1. Termination for Good Reason by Executive.  If the Employment Period is
terminated  by Employer for Good Reason  pursuant to the  provisions  of Section
5.3, hereof,  Employer will pay to Executive Executive's Base Salary through the
date of termination and an amount equal to the sum of the Base Salary multiplied
by the  number of years  (and  fractional  portions  thereof)  remaining  in the
Employment  Period (the "Severance  Payment");  provided,  however,  the minimum
Severance  Payment to be paid to Executive  hereunder  shall not be less than an
amount equal to  two-and-one-half  years of Executive's Base Salary as in effect
at the time this Agreement is terminated as provided herein. Employer shall have
no obligation to continue any other benefits  provided for in Section 4 past the
date of termination.

     6.2. Certain Other Terminations.  If the Employment Period is terminated by
Employer on account of  Executive's  Disability  pursuant to the  provisions  of
Section 5.4, or by death,  pursuant to the  provisions of Section 5.5,  Employer
shall  pay to  Executive,  within  thirty  (30)  calendar  days  of the  date of
termination,  Executive's  Base  Salary  through the date of  termination  and a
pro-rated share of the discretionary bonus if already  determined.  In the event
that the  Employment  Period is  terminated by Employer on account of Disability
pursuant to the provisions of Section 5.4 or on account of death pursuant to the
provisions of Section 5.5 and provided  Executive has been employed for at least
six months during the year of termination,  Employer shall also pay to Executive
a portion of a bonus for the year of  termination  based upon the bonus paid, if
any,  for  the  immediately   preceding  year  prorated   through  the  date  of
termination.  Employer  shall have no obligation to continue any other  benefits
provided for in Section 4 past the date of termination.


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<PAGE>


     6.3. Payment;  No Other Termination  Compensation.  Any payment pursuant to
this  Section  6 shall  be made in a lump sum  within  ten  (10)  business  days
following the date of such termination. Executive shall not, except as set forth
in this Section 6, be entitled to any compensation  following termination of the
Employment Period.

7.   Non-Competition, Non-Solicitation.

     7.1.  Non-solicitation  of Employees.  The Executive agrees that during the
term of the Executive's employment with the Company and for a period of one year
thereafter,  the  Executive  shall not  directly  recruit,  solicit or otherwise
induce or attempt to induce any employees of the Company to leave the employment
of the Company.

     7.2.  Non-competition.  The  Executive  agrees  that during the term of the
Executive's  employment  with the Company,  the Executive  shall not directly or
indirectly,  except as a passive  investor in publicly held companies and except
for investments held at the date hereof,  engage in competition with the Company
or any of its subsidiaries,  excluding those activities described in Section 3.1
hereof,  or own or  control  any  interest  in, or act as  director,  officer or
employee of, or consultant to, any firm,  corporation  or  institution  directly
engaged in competition with the Company or any of its subsidiaries.

8.   Successors; Binding Agreement.

     This  Agreement  and all rights of Executive  hereunder  shall inure to the
benefit of and be  enforceable  by Executive and  Executive's  personal or legal
representatives,  executors,  administrators,  successors,  heirs, distributees,
divisees, and legatees. If Executive should die while any amounts would still be
payable to her hereunder if she had continued to live, all such amounts,  unless
otherwise  provided  herein,  shall be paid in accordance with the terms of this
Agreement to Executive's devisee,  legatee, or other beneficiary or, if there be
no such beneficiary, to Executive's estate.

9.   Survivorship.

     The  respective  rights and  obligations  of the  parties  hereunder  shall
survive  any  termination  of this  Agreement  to the  extent  necessary  to the
intended preservation of such rights and obligations.

10.  Miscellaneous.

     10.1. Notices. Any notice,  consent, or authorization required or permitted
to be given pursuant to this Agreement shall be in writing and sent to the party
for or to whom  intended,  at the  address  of such  party set forth  below,  by
registered or certified mail, postage paid (deemed given five days after deposit
in the U.S.  mails) or  personally  delivered or sent by facsimile  transmission
(deemed  given upon  receipt),  or at such other  address as either  party shall
designate by notice given to the other in the manner provided herein.

          If to Employer:     Ameritrans Capital Corporation
                              747 Third Avenue, 4th Floor
                              New York, New York 10017
                              Attn:  Gary Granoff, President

          If to Executive:    Ms. Ellen Walker
                              28 Basket Neck Lane
                              Remsenburg, New York  11960


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     10.2.  Taxes.  Employer is authorized to withhold (from any compensation or
benefits  payable  hereunder to Executive)  such amounts for income tax,  social
security,  unemployment  compensation,  and other taxes as shall be necessary or
appropriate  in the  reasonable  judgment of Employer to comply with  applicable
laws and regulations.

     10.3.  Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without reference
to the principles of conflicts of laws therein.

     10.4.  Arbitration.   Any  dispute  or  controversy  arising  under  or  in
connection  with this Agreement  shall be settled  exclusively by arbitration in
the city in which  Employer's  main  corporate  headquarters  is then located in
accordance  with  the  rules of the  American  Arbitration  association  then in
effect.  Judgment  may be entered on the  arbitration  award in any court having
jurisdiction.

     10.5. Headings. All descriptive headings in this Agreement are inserted for
convenience  only,  and shall be  disregarded  in  construing  or  applying  any
provision of this Agreement.

     10.6. Counterparts. This Agreement may be executed in counterparts, each of
which  shall be deemed to be an  original,  but all of  which,  together,  shall
constitute one and the same instrument.

     10.7.  Severability.  If any  provision  of  this  Agreement,  or any  part
thereof,  is held to be unenforceable,  the remainder of such provision and this
Agreement,  as the case may be,  shall  nevertheless  remain  in full  force and
effect.

     10.8.  Entire  Agreement and  Representation.  This Agreement  contains the
entire agreement and  understanding  between Employer and Executive with respect
to the subject matter hereof.  No  representations  or warranties of any kind or
nature relating to Employer or its several businesses, or relating to Employer's
assets, liabilities, operations, future plans, or prospects have been made by or
on  behalf  of  Employer  to  Executive.  This  Agreement  supersedes  any prior
agreement between the parties relating to the subject matter hereof.

     10.9.  Validity.  The  invalidity or  unenforceability  of any provision or
provisions of this Agreement shall not affect the validity or  enforceability of
any other provision or provisions of this Agreement,  which shall remain in full
force and effect.  If any  provision  of this  Agreement  is held to be invalid,
void, or unenforceable in any  jurisdiction,  any court or arbitrator so holding
shall substitute a valid,  enforceable provision that preserves,  to the maximum
lawful extent, the terms and intent of such provisions of this Agreement. If any
of the  provisions  of, or covenants  contained in, this Agreement are hereafter
construed to be invalid or unenforceable in any jurisdiction, the same shall not
affect the  remainder of the  provisions  or the  enforceability  thereof in any
other jurisdiction,  which shall be given full force and effect,  without regard
to the  invalidity  or  unenforceability  is such other  jurisdiction.  Any such
holding  shall  affect  such  provision  of this  Agreement,  solely  as to that
jurisdiction,  without  rendering that or any other provisions of this Agreement
invalid,  illegal, or unenforceable in any other  jurisdiction.  If any covenant
should  be  deemed  invalid,  illegal,  or  unenforceable  because  its scope is
considered  excessive,  such  covenant will be modified so that the scope of the
covenant is reduced only to the minimum extent  necessary to render the modified
covenant valid, legal, and enforceable.


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<PAGE>


     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the date first above written.


                                        AMERITRANS CAPITAL CORPORATION


                                        By:  /s/ Gary Granoff
                                             ----------------------------------
                                             Gary Granoff



                                        ELK ASSOCIATES FUNDING CORPORATION


                                        By:  /s/ Gary Granoff
                                             ----------------------------------
                                             Gary Granoff

                                             /s/ Ellen M. Walker
                                             ----------------------------------
                                             Ellen M. Walker


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