U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q |X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2007 or |_| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____________ to _______________ Commission File Number 0-22153 AMERITRANS CAPITAL CORPORATION (Exact name of registrant as specified in its charter) Delaware                                      52-2102424
(State of incorporation)           (I.R.S. Employer Identification No.)

747 Third Avenue, New York, New York 10017
(Address of Registrant's principal executive office)         (Zip Code)

(800) 214-1047
(Registrant's telephone number, including area code)  Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Act") during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes |X| No |_|  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Act). Large accelerated filer |_| Accelerated filer |  |  Non-accelerated filer |X| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes |_| No |X| The number of shares of Common Stock, par value $.0001 per share, outstanding as of May 11, 2007:  3,401,208.              AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES FORM 10-Q  TABLE OF CONTENTS AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES1 PART I. FINANCIAL INFORMATION1 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS 1 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 18 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 24 ITEM 4. CONTROLS AND PROCEDURES 25 PART II. OTHER INFORMATION28 ITEM 1. LEGAL PROCEEDINGS 28 ITEM 1A. RISK FACTORS 28 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 28 ITEM 3. DEFAULT UPON SENIOR SECURITIES 28 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 28 ITEM 5. OTHER INFORMATION 28 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 28 EXHIBIT INDEX 29 (a) Exhibits 29 (b) Reports on Form 8-K 31 SIGNATURES 33 EXHIBIT 31.1 34 EXHIBIT 32.1 35            PART I. FINANCIAL INFORMATION      ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES     CONSOLIDATED BALANCE SHEETS
As of March 31, 2007 (Unaudited) and June 30, 2006  ASSETS   March 31, 2007 (unaudited)June 30, 2006Loans receivable$48,872,769$49,855,530Less: unrealized depreciation on loans receivable(236,550)(290,300)Loans receivable, net48,636,21949,565,230Cash and cash equivalents646,587846,623Accrued interest receivable, net of unrealized depreciation of $31,500 and $31,500, respectively752,122662,846Assets acquired in satisfaction of loans72,300288,251Receivables from debtors on sales of assets acquired in satisfaction of loans477,136482,525Equity investments1,874,1561,782,924Investment in life settlement contracts1,778,724-Medallions under lease1,361,9161,706,901Furniture, equipment and leasehold improvements, net193,570244,340Prepaid expenses and other assets493,246439,171TOTAL ASSETS$56,285,976$56,018,811  See accompanying notes to consolidated financial statements.  1     AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS
As of March 31, 2007 (Unaudited) and June 30, 2006     LIABILITIES AND STOCKHOLDERS EQUITY  March 31, 2007
(unaudited)June 30, 2006LIABILITIESDebentures payable to SBA$12,000,000$12,000,000Notes payable, banks22,182,50020,927,500Accrued expenses and other liabilities569,903880,203Accrued interest payable97,448367,465Dividends payable84,37584,375TOTAL LIABILITIES34,934,22634,259,543COMMITMENTS AND CONTINGENCIES (Notes 3,4, 5, 6, 7 and 10)STOCKHOLDERS' EQUITYPreferred stock 500,000 shares authorized, none issued or outstanding--9 3/8% cumulative participating callable preferred stock $ 0.01 par value, $12.00 face value, 500,000 shares authorized; 300,000 shares issued and outstanding3,600,0003,600,000Common stock, $ 0.0001 par value;  10,000,000 shares authorized; 3,401,208 shares issued and 3,391,208 shares outstanding340340Deferred compensation (Note 8)(83,320)-Stock options outstanding (Note 8)107,320-Additional paid-in-capital21,119,81721,119,817Accumulated deficit(3,024,873)(2,683,314)Accumulated other comprehensive loss(297,534)(207,575)21,421,75021,829,268Less:  Treasury stock, at cost, 10,000 shares of common stock(70,000)(70,000)TOTAL STOCKHOLDERS' EQUITY21,351,75021,759,268TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$56,285,976$56,018,811  See accompanying notes to consolidated financial statements.  2     AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES     CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Nine Months Ended March 31, 2007 and 2006(Unaudited)  Three Months Ended March 31, 2007Three Months Ended March 31, 2006Nine Months
Ended March 31, 2007Nine Months
Ended March 31, 2006INVESTMENT INCOMEInterest on loans receivable$
1,376,993$
1,049,562$
3,978,125$
3,441,067Fees and other income126,531143,064364,750294,014Leasing income13,56638,50676,383134,243TOTAL INVESTMENT INCOME1,517,0901,231,1324,419,2583,869,324OPERATING EXPENSESInterest537,964501,8201,619,6091,627,274Salaries and employee benefits423,811302,0151,041,889860,784Occupancy costs59,76441,667169,506142,687Professional fees244,701128,110603,371344,356Other administrative expenses332,007281,260878,544790,619Loss and impairments on assets acquired  in satisfaction of loans, net6,4002,54938,0696,580Foreclosure expenses, net(524)(2,379)(982)12,162Write off and depreciation on interest and loans receivable5,975101,240100,624235,864TOTAL OPERATING EXPENSES1,610,0981,356,2824,450,6304,020,326OPERATING LOSS(93,008)(125,150)(31,372)(151,002)OTHER INCOME (EXPENSE)Gain on sale of medallions19,058-28,373-Loss on sale of automobiles---(2,867)Equity in loss of investee (Note 3)(44,675)-(83,183)-TOTAL OTHER EXPENSE, Net(25,617)-(54,810)(2,867)LOSS BEFORE PROVISION FOR INCOME TAXES(118,625)(125,150)(86,182)(153,869)PROVISION FOR INCOME TAXES1973022,25210,026NET LOSS$
(118,822)$
(125,452)$
(88,434)$
(163,895)DIVIDENDS ON PREFERRED STOCK$
(84,375)$
(84,375)$
(253,125)$
(253,125)NET LOSS AVAILABLE TO COMMON STOCKHOLDERS$
(203,197)$
(209,827)$
(341,559)$
(417,020)WEIGHTED AVERAGE SHARES OUTSTANDING:- Basic3,391,2082,975,2323,391,2082,409,024-Diluted3,391,2082,975,2323,391,2082,409,024NET LOSS PER COMMON SHARE- Basic$
(0.06)$
(0.07)$
(0.10)$
(0.17)- Diluted$
(0.06)$
(0.07)$
(0.10)$
(0.17)  See accompanying notes to consolidated financial statements.  3     AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES     CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended March 31, 2007 and 2006 (Unaudited)  Nine Months Ended
March 31, 2007Nine Months Ended
March 31, 2006CASH FLOWS FROM OPERATING ACTIVITIESNet Loss$
(88,434)$
(163,895)Adjustments to reconcile net loss to net cash used in  operating activities:Depreciation and amortization88,46591,634Deferred compensation24,000-Gain on sale of medallions(28,373)-Gain on sale of life settlement contract(8,501)-Loss on sale of automobiles-2,867Equity in loss of investee83,184-Loss on write down of assets acquired35,000-Change in operating assets and liabilities:Changes in unrealized depreciation on loans receivable and accrued interest receivable(53,750)52,800Accrued interest receivable(89,276)93,372Prepaid expenses and other assets(84,855)86,820Accrued expenses and other liabilities(310,301)(175,544)Accrued interest payable(270,017)(140,475)TOTAL ADJUSTMENTS(614,424)11,474NET CASH USED IN OPERATING ACTIVITIES(702,858)(152,421)CASH FLOWS FROM INVESTING ACTIVITIESLoans receivable982,7612,243,228Receivables from debtors on sales of assets  acquired in satisfaction of loans5,38956,609Proceeds from sale of assets acquired180,9512,589Proceeds from sales of Medallions and Autos373,358335,500Purchases of equity investments(329,574)(60,000)Investment in life settlement contracts(2,031,464)-Proceeds from sale of equity investments65,2004,870Proceeds from sale of life settlement contract261,241-Purchase of furniture and equipment(6,915)(11,927)NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES(499,053)2,570,869CASH FLOWS FROM FINANCING ACTIVITIESProceeds from notes payable, banks8,305,0008,215,713Repayments of notes payable, banks(7,050,000)(17,158,866)Dividends paid(253,125)(253,125)Gross proceeds from stock offering-7,930,310Costs associated with stock offering-(672,085)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES1,001,875(1,938,053)NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(200,036)480,395CASH AND CASH EQUIVALENTS  Beginning846,623327,793CASH AND CASH EQUIVALENTS  Ending$
646,587$
808,188SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid for interest$
1,889,626$
1,702,263SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITIESUnrealized loss on equity investments arising during the period$
(89,958)$
(56,485)Stock options granted$
107,320$
-  See accompanying notes to consolidated financial statements.  4     AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1.      Organization and Summary of Significant Accounting Policies Financial Statements The consolidated balance sheet of Ameritrans Capital Corporation ("Ameritrans", the "Company", "our", "us", or "we") as of March 31, 2007, and the related consolidated statements of operations and cash flows for the three months and nine months ended March 31, 2007 and 2006 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Board of Directors and management of the Company ("Management" or "Board of Directors"), the accompanying consolidated financial statements include all adjustments (consisting of normal, recurring adjustments) necessary to summarize fairly the Companys financial position and results of operations. The results of operations for the three months and nine months ended March 31, 2007, are not necessarily indicative of the results of operations for the full year or any other interim period. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended June 30, 2006, as filed with the Commission.     Organization and Principal Business Activity Ameritrans is a Delaware closed-end investment company formed in 1998, which through its subsidiary, Elk Associates Funding Corporation ("Elk"), makes loans to taxi owners to finance the acquisition and operation of taxi medallions and related assets, and to other small businesses.  Ameritrans also makes loans to and investments in opportunities that Elk has historically been unable to make due to U.S. Small Business Administration (the "SBA") Regulation. Elk, a New York corporation, is licensed by the SBA to operate as a Small Business Investment Company ("SBIC") under the Small Business Investment Act of 1958, as amended.  Elk is also registered as an investment company under the Investment Company Act of 1940 to make business loans. Basis of Consolidation The consolidated financial statements include the accounts of Ameritrans, Elk and Elks wholly owned subsidiaries, EAF Holding Corporation ("EAF"), EAF Enterprises LLC ("EAF Enterprises"), Medallion Auto Management LLC ("Medallion"), EAF Leasing LLC, EAF Leasing II LLC and EAF Leasing III LLC.  All significant inter-company transactions have been eliminated in consolidation.  5     EAF began operations in December 1993 and owns and operates certain real estate assets acquired in satisfaction of defaulted loans by Elk. EAF Enterprises owned, leased and resold medallions acquired in satisfaction of foreclosures by Elk. EAF Enterprises was voluntarily liquidated and dissolved on April 20, 2006. Medallion owned, leased and resold automobiles in conjunction with the activities of EAF Enterprises. Medallion was voluntarily liquidated and dissolved on April 21, 2006. EAF Leasing LLC began operations in October 2003 and owns and leases medallions acquired in satisfaction of foreclosures by Elk. EAF Leasing II LLC began operations in October 2003 and owns and leases medallions acquired in satisfaction of foreclosures by Elk. EAF Leasing III LLC owned, leased and resold medallions acquired in satisfaction of foreclosures by Elk.  EAF Leasing III LLC was voluntarily liquidated and dissolved on April 10, 2007. Ameritrans organized another subsidiary on June 8, 1998, Elk Capital Corporation ("Elk Capital"), which may engage in lending and investment activities similar to its parent.  Since its inception, Elk Capital has had no operations.      Income Taxes The Company has elected to be taxed as a Regulated Investment Company ("RIC") under the Internal Revenue Code (the "Code").  An RIC generally is not taxed at the corporate level to the extent its income is distributed to its stockholders.  In order to qualify as an RIC, a company must payout at least 90 percent (90%) of its net taxable investment income to its stockholders as well as meet other requirements under the Code.  In order to preserve this election for fiscal year 2006/2007, the Company intends to make the required distributions to its stockholders. The Company is subject to certain state and local franchise taxes, as well as related minimum filing fees assessed by state taxing authorities.  Such taxes and fees are reported as provisions for income taxes and reflected in each of the fiscal years presented. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding for the applicable period.  Diluted earnings per share reflect, in periods in which they have a dilutive effect, the effect of common shares issuable upon the exercise of stock options and warrants.  The difference between reported basic and diluted weighted average common shares results from the assumption that all dilutive stock options outstanding were exercised.  For the periods presented, the effect of stock options and warrants has been excluded from the diluted calculation since their inclusion would be antidilutive.      6     Loan Valuations The Companys loan portfolio is carried at fair value.  Since no ready market exists for these loans, the fair value is determined in good faith by the Board of Directors of the Company with Management's participation.  In determining the fair value, the Board considers factors such as the financial condition of the borrower, the adequacy of the collateral to support the loans, individual credit risks, historical loss experience and the relationships between current and projected market rates and portfolio rates of interest and maturities.  The fair value of the loans approximates cost less unrealized depreciation. Unrealized depreciation in loan values has generally been caused by specific events related to credit risk.  Loans are considered "non-performing" once they become 90 days past due as to principal or interest.  These past due loans are periodically evaluated by management and if, in the judgment of management, the amount is not collectible and the fair value of the collateral is less than the amount due, a reserve is established.  If the fair value of the collateral exceeds the loan balance at the date of valuation, the Company makes no write-down of the loan amount. Stock Options  The Company began applying Statement of Financial Accounting Standards No. 123R ("SFAS No. 123R"), "Accounting for Stock-Based Compensation",and related interpretations in accounting for its stock option plans effective January 1, 2006, and accordingly, the Company will expense these grants as required.  Stock-based employee compensation costs pertaining to stock options will be reflected in net income (loss), for new grants only, since there were no unvested options outstanding at March 31, 2006, using the fair values established by usage of the Black-Scholes option pricing model, expensed over the vesting period of the underlying option.  Previously, the Company applied APB Opinion No. 25 and related Interpretations in accounting for all the plans.  Accordingly, no compensation cost was recognized under these plans, and the Company followed the disclosure-only provisions of SFAS No. 123 and SFAS No. 148, Accounting for Stock-Based Compensation Transition and Disclosure. The Company elected the modified prospective transition method for adopting SFAS No. 123R.  Under this method, the provisions of SFAS 123R apply to all awards granted or modified after the date of adoption.  The compensation cost is then recognized over the vesting period of the options (see Note 8). Equity Investments Equity investments are comprised principally of common stock investments, as well as member and limited partnership interests in various companies.  The Company classifies its investments under the equity and cost basis methods of accounting, and certain investments are classified as available-for-sale. Investments that meet certain ownership criteria, or when the Company has the ability to exercise significant influence regarding operating and financial policies, are accounted for under the equity basis method.  Under the equity method, the carrying value of the investment is  7     adjusted by the Companys proportionate share of net income (loss) of the investee and is decreased by any dividends received from the investee. Investments that do not qualify to be treated as equity basis investments, and have no readily determinable fair value, are accounted for under the cost method.  Under the cost method, a long-term investment is recorded at cost and carried at that amount until it is sold or otherwise disposed of or until it is written down due to either an impairment of value, as determined in good faith by the Board of Directors, or a dividend representing a return of capital is received.  Any dividends received from investee earnings are recorded as investment income when received. Investments classified as available-for-sale are required to be reported at fair value with unrealized gains and losses, net of taxes, excluded from earnings and recorded in the statement of comprehensive income (loss), and separately as a component of accumulated other comprehensive income (loss) within stockholders equity unless an unrealized loss is deemed to be other than temporary, in which case, the cost basis of the individual security is written down to fair value as a new cost basis and such loss is charged to earnings.  Realized gains and losses on the sale of securities available-for-sale are determined using the specific-identification method and are reported in earnings.  In addition, any unrealized gains and losses deferred in accumulated other comprehensive income (loss) is recognized in determining net gain or loss on disposition. Investment in Life Settlement Contracts The Company uses the investment method to value contracts, which capitalizes contract costs plus premiums paid to keep the policies in force.  The difference between the carrying value of the contract and proceeds received, either upon death of the insured or sale of the policy, are recorded in earnings.  Contracts are also tested for impairment based on changes in the insureds life expectancy or creditworthiness of the issuer of the policy.  If an impairment loss is recognized, the carrying amount of the investment is written down to its estimated fair value. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires Management to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Estimates that are particularly susceptible to change are these estimates that relate to the determination of the fair value of loans receivable and other financial instruments.  2.      Medallions During the year ended June 30, 2004, Elk transferred Chicago taxicab medallions obtained from defaulted and foreclosed loans to certain newly formed wholly-owned subsidiaries.  The subsidiaries borrowed funds in the amount of $2,382,201 from Elk to complete  8     the purchases of the medallions and gained title by paying related transfer fees and satisfying outstanding liens with Elk and Chicago. The subsidiaries, in turn, leased these medallions to taxicab operators or companies in the Chicago market under weekly and long-term operating lease terms.  By the close of the fiscal year ended June 30, 2006, there were no leases to individuals in effect and all medallions previously leased to individual operators were sold. The long-term medallion leases are with taxicab companies, which expire at various dates between January 31, 2008 and December 31, 2008, and may be cancelled by either party with forty-five (45) days advance written notice.  During the quarter ended December 31, 2006, three (3) medallions were sold for a total of $183,000.  The gain on the sale of $9,315 was recognized in the period.  In addition, during the quarter ended March 31, 2007, three (3) medallions were sold for a total of $190,358.  The gain on the sale of $19,058 was recognized in the period. Leasing income under all medallion and taxi cab leases for the three (3) months and nine (9) months ended March 31, 2007, was $13,566 and $76,383, respectively. 3. Equity Investments  Investments consist of the following:  March 31, 2007
(unaudited)June 30, 2006Investments, equity basis$    666,816$    750,000Investments, other1,207,3401,032,924$ 1,874,156$ 1,782,924  Investments, Equity Basis.  The Company invested $750,000 to obtain a membership interest in a limited liability company in June 2006.  Since the Company has a membership interest in excess of 20% interest, this investment is accounted for using the equity basis of accounting.  For the three months and nine months ended March 31, 2007, equity in loss of this investment was $44,675 and $83,183, respectively. Investments, Other.  As of March 31, 2007 and June 30, 2006, the Company held $49,512 and $139,470, respectively, of securities classified as available-for-sale.  The unrealized loss for the quarter equals $32,078 and the cumulative unrealized loss to date equals $317,515.  As of March 31, 2007 and June 30, 2006, the Company also held $1,157,828 and $893,454, respectively, of non-publicly traded cost-method investments.  During the quarter ended September 30, 2006, one (1) of the equity investments was sold and the Company recognized a gain of $5,699 in the period.  During the year ended June 30, 2006, the Company made a commitment to make capital contributions of $500,000 for a limited partnership interest in a real estate partnership.  As of March 31, 2007, the Company has contributed approximately $456,000, therefore a commitment of approximately $44,000 of additional capital contributions remains.  9     4.      Investment in Life Settlement Contracts On September 20, 2006, the Company entered into an agreement (the "Agreement") with an unaffiliated company for the purpose of purchasing life insurance policies on unrelated individuals.  Under terms of the Agreement, the Company was designated as nominee to maintain possession of the policies and process transactions related to such policies until the policies are subsequently sold.  The Company is entitled to receive from the unaffiliated company a twelve percent (12%) annual return on the amount of funds paid by the Company and outstanding on a monthly, prorated basis.  Proceeds from the sale of the policies are to be distributed, net of direct expenses, as defined in the Agreement.  As of March 31, 2007, the carrying value of amounts invested was $1,778,724.  The amount represents payments made to cover first year premiums for eight (8) life insurance policies with an aggregate face value of $40,750,000 in order to obtain the rights of being the owner and beneficiary on those policies.  Premiums on the policies will continue to be paid by the Company, until the policies are sold.  If an insured dies before the policy is resold, then the terms of the contractual agreements with the insured provide that 50% of the death benefit proceeds of the policy will be paid to the insured party's family, and the other 50% of the death benefit proceeds will be paid to the Company, to be distributed in accordance with the terms of the Agreement.  The Company may sell the policies at any time, at its sole discretion.  However, if the Company were to continue to make payments on each of the policies for the life expectancy of the insured, premiums due would be approximately $8,200,000 over the next five (5) years and $13,400,000 thereafter.  During the quarter ended March 31, 2007, one (1) life insurance policy was sold for $261,241.  The gain on the sale of $8,501 was recognized in the period.   5.      Debentures Payable to SBA At March 31, 2007 and June 30, 2006, debentures payable to the SBA consisted of subordinated debentures with interest payable semiannually, as follows: Issue DateDue DateEffective
Interest Rate03/31/07 and 6/30/06
Principal AmountJuly 2002September 20124.67%(1)$      2,050,000December 2002March 20134.63%(1)3,000,000September 2003March 20144.12%(1)5,000,000February 2004March 20144.12%(1)1,950,000$    12,000,000 (1) Elk is required to pay an additional annual user fee of 0.866% on these debentures. Under the terms of the subordinated debentures, the Company may not repurchase or retire any of its capital stock or make any distributions to its stockholders other than dividends  10     out of retained earnings (as computed in accordance with SBA regulations) without the prior written approval of the SBA. 6.      Notes Payable to Banks At March 31, 2007 and June 30, 2006, Elk had loan agreements with three (3) banks for lines of credit aggregating $36,000,000. At March 31, 2007 and June 30, 2006, $22,182,500 and $20,927,500, respectively, were outstanding under these lines. The loans mature at various dates through December 31, 2007, and bear interest at the lower of either the reserve adjusted LIBOR rate plus 1.5%, or the banks prime rate minus 0.50%.  At March 31, 2007, the weighted average interest rate on outstanding bank debt was approximately 6.84%, before taking into account the effect of offsetting income received from interest rate swaps on $10,000,000 of swaps at an average effective rate of approximately 6.215% (see Note 7). Upon maturity, the Company anticipates that the banks will extend these lines of credit for another year, as has been the practice in previous years.  Pursuant to the terms of the agreements, the Company is required to comply with certain covenants and conditions, as defined in the agreements.  The Company has pledged its loans receivable and all other assets as collateral for the above lines of credit.  Pursuant to the SBA agreement and an "intercreditor agreement" among the lending banks, the SBA agreed to subordination in favor of the banks, provided that the Company maintains certain debt levels based on performance of its portfolio. 7.      Commitments and Contingencies Interest Rate Swaps On October 14, 2005, Elk entered into two (2) interest rate swap transactions for $5,000,000 each, which expire October 15, 2007 and October 14, 2008, respectively.  As a portion of the Companys loan portfolio is at fixed rates, Elk entered into these swap transactions to hedge against an upward movement in interest rates relating to outstanding bank debt. The swap transaction expiring October 15, 2007, provides for a fixed rate of 6.20%, and the swap transaction expiring October 14, 2008, provides for a fixed rate of 6.23%. If the Company's floating borrowing rate (the one-month LIBOR rate plus 1.5%) falls below the fixed rate, Elk is obligated to pay the bank the difference in rates. If the Companys floating borrowing rate rises above the fixed rate, the bank is obligated to pay Elk the difference in rates.  As of March 31, 2007, the LIBOR plus 1.5% was above the fixed rates of 6.20% and 6.23%. 8.      Stock Option Plans Employee Incentive Stock Option Plan An employee stock option plan (the "1999 Employee Plan") was adopted by the Ameritrans Board of Directors, including a majority of the non-interested directors, and approved by a vote of the stockholders, in order to link the personal interests of key employees to our long-term financial success and the growth of stockholder value.  An amendment to the 1999 Employee Plan was approved by the stockholders in January 2002.  The amendment increased the number of shares reserved under the plan from 125,000 to 200,000 shares.  11     The 1999 Employee Plan authorizes the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code for the purchase of an aggregate of 200,000 shares (subject to adjustment for stock splits and similar capital changes) of common stock to our employees.  By adopting the 1999 Employee Plan, the Board believes that we will be better able to attract, motivate, and retain as employees people upon whose judgment and special skills our success in large measure depends.  As of March 31, 2007, options to purchase an aggregate of 147,600 shares of Common Stock were issued and outstanding under the 1999 Employee Plan. The 1999 Employee Plan is administered by the 1999 Employee Plan Committee of the Board of Directors, which is comprised solely of non-employee directors (who are "outside directors" within the meaning of Section 152(m) of the Internal Revenue Code and "disinterested persons" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act")).  The committee can make such rules and regulations and establish such procedures for the administration of the 1999 Employee Plan as it deems appropriate. Non-Employee Directors Stock Option Plan A stock option plan for non-employee directors (the "Director Plan") was adopted by the Ameritrans Board of Directors and approved by a vote of the stockholders, in order to link the personal interests of non-employee directors to our long-term financial success and the growth of stockholder value.  The Director Plan is substantially identical to, and the successor to, a non-employee director stock option plan adopted by the Board of Directors of Elk and approved by its stockholders in September 1998 (the "Elk Director Plan").  Ameritrans and Elk submitted an application for, and received on August 31, 1999, an exemptive order relating to these plans from the SEC.  The Director Plan was amended by the Board of Directors on November 14, 2001, and approved by the stockholders at the Annual Meeting on January 18, 2002.  The amendment is still subject to the approval of the Securities and Exchange Commission.  The amendment (i) increases the number of shares reserved under the plan from 75,000 to 125,000 and (ii) authorizes the automatic grant of an option to purchase up to 1,000 shares at the market value at the date of grant to each eligible director who is re-elected to the Board of Directors. The total number of shares for which options may be granted from time to time under the Director Plan is 75,000 shares, which will be increased to 125,000 shares upon SEC approval of the Amended Director Plan.  As of March 31, 2007, options to purchase an aggregate of 46,370 shares were issued and outstanding under the Director Plan.  The Director Plan is administered by a committee of directors who are not eligible to participate in the Director Plan.  12     The fair market value for options was estimated at the date of grant using a Black-Scholes option-pricing model and the following assumptions for the nine months ended March 31, 2007 and 2006: 20072006Risk-free rate5.00%5.00%Dividend yield0.00%0.00%Volatility factor.08.08Average life5 years5 years The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Companys employee stock options have characteristics signif­icantly different from those of traded options, and because changes in the subjective input assump­tions can materially affect the fair value estimate, in managements opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. Compensation expense related to the amortization of deferred compensation for the options that vested during the three and nine months ended March 31, 2007, was $0 and $24,000, respectively, and is reflected in the consolidated statements of operations.  The Companys pro forma information for the three and nine months ended March 31, 2006, are as follows:  Three Months Ended March 31, 2006
(unaudited)Nine Months Ended March 31, 2006
(unaudited)Net loss available to common stockholders as reported$ (209,827)$ (417,020)Deduct:  stock-based compensation expense determined under fair value method(22,400)(76,377)Pro forma net loss available to common stockholders$ (232,227)$ (493,397)Net loss per common share:
Basic as reported$ (0.07)$ (0.17) pro forma$ (0.08)$ (0.20)Diluted   as reported$ (0.07)$ (0.17) pro forma$ (0.08)$ (0.20)   13     Options Granted Pursuant to the Director Plan, on December 22, 2006, the Company granted a member of the Board of Directors, options to purchase up to 9,433 shares of common stock, $.0001 par value of the Company (the Common Stock or Shares).  These options vest on December 22, 2007, and are exercisable for five (5) years from the grant date at an exercise price of $5.30 per Share.  On November 27, 2006, the Company granted an employee options to purchase up to 80,000 Shares of the Company excisable for five years from vesting date at $5.28 per Share.  Subject to the employees continued employment with the Company and certain acceleration provisions, the options vest in four (4) equal annual installments, with the first installment vesting on the date of grant. The fair value of the options granted amounted to $107,320 at March 31, 2007, which is reflected as stock options outstanding in the accompanying consolidated balance sheets.  Deferred compensation is $83,320 at March 31, 2007, net of amortized compensation expense of $24,000. The following tables summarize information about the stock option transactions of both Stock Option Plans:  Stock OptionsShares Available for OptionsNumber of Options OutstandingWeighted Average Exercise Price Per ShareOptions outstanding at June 30, 2006170,463104,537$5.30Granted(89,433)89,433$5.28Canceled---Expired---Exercised---Options outstanding at March 31, 200781,030193,970$5.30   14      Options OutstandingOptions ExercisableRange of Exercise PricesNumber Outstanding at March 31, 2007Weighted Average Remaining Contractual LifeWeighted Average Exercise PriceNumber Exercisable at March 31, 2007Weighted Average Exercise Price$ 4.50-$ 4.9533,8002.58 years$ 4.6833,800$ 4.68$ 5.56-$ 6.1233,8003.75 years$ 5.7833,800$ 5.78$ 4.5810,9171.49 years$ 4.5810,917$ 4.58$ 4.9910,0202.42 years$ 4.9910,020$ 4.99$ 6.2516,0002.79 years$ 6.2516,000$ 6.25$ 5.2880,0006.17 years$ 5.2820,000$ 5.28$ 5.309,4334.73 years$ 5.30-$ 5.30$ 4.50-$ 6.25193,9704.32 years$ 5.30124,537$ 5.29  9. Comprehensive Income (Loss)  The components of comprehensive income (loss) are as follows:  Three Months Ended March 31
(unaudited)Nine Months Ended 
March 31 
(unaudited)2007200620072006Net loss$(118,822)$(125,452)$(88,434)$(163,895)Other comprehensive income (loss):Unrealized gains (losses) on equity investments(32,078)48,117(89,958)(56,485)Total comprehensive loss$(150,900)$(77,335)$(178,392)$(220,380)  10.      Other Matters Quarterly Dividend The Company has declared and paid the quarterly dividend on its 9 3/8% Cumulative Participating Preferred Stock (the "Participating Preferred Stock") since the Participating Preferred Stock was issued. Most recently, on March 20, 2007, the Company's Board of Directors declared a dividend of $0.28125 per share on the Participating Preferred Stock for the period January 1, 2007 through March 31, 2007, which was paid on or about April 16, 2007, to all holders of record as of March 30, 2007. SBA Matter On August 29, 2005, the Company received a letter from the U.S. Small Business Administration together with a copy of the Examination Report for the period ended March 31, 2004.  The letter and Examination Report contained findings that Elk had potentially violated certain provisions of the SBA regulations, relating to (1) the sale of certain foreclosed Chicago medallions to an associate of Elk without obtaining the SBAs final written approval, and (2) the  15     creation of subsidiary companies and completion of certain related financings to those subsidiary companies without obtaining the SBAs prior written approval.  The letter contained certain other comments with respect to partial use of proceeds concerning one loan that the Company made to a third party borrower, and the prepayment provision contained in loan documents to a different borrower. Certain members of the Company's Management met with the SBA on September 20, 2005, to discuss and resolve these issues.  The Company believes that it was acting in good faith when it effectuated the transactions with respect to the sale of the foreclosed Chicago medallions to an associate, as it had applied for permission from SBA prior to completion of the loan in question, had obtained an indication of approval and SBA was in the process of taking the steps to obtain formal written approval for the transaction.  The Company believes that it was also acting in good faith when it created the subsidiary companies (deemed "associates" under SBA regulations) to purchase the foreclosed medallions, as it was having ongoing discussions with SBA at the time to obtain SBAs approval of the transaction and had received verbal indications that it felt it had or would, in due course, subsequently obtain SBAs written approval to the transactions. On February 21, 2006, the Company received a letter (the "SBA Letter") from the SBA regarding the September 20, 2005, meeting between the SBA and the Company, the Examination Report and the SBA findings.  The Company responded in writing to the SBA Letter on March 29, 2006. On November 8, 2006, the Company received a response letter from the SBA requesting additional information concerning the sale of the remaining medallions and the dissolution of the three remaining subsidiaries.  The Company responded to the November 8, 2006, letter in mid January 2007.  The Company will be required to provide this additional information to the SBA on an ongoing basis until all of the medallions are sold and the subsidiaries are dissolved.  The SBA has given the Company until February 21, 2008, to sell all of the remaining medallions and to dissolve the remaining three subsidiaries.  As previously noted, all of the medallions owned by EAF Leasing III LLC have now been sold, and EAF Leasing III was dissolved on April 10, 2007. As of January 1, 2007, there were 27 remaining unsold medallions.  In January 2007, the Company closed on the sale of three (3) medallions, which contracts were signed in August 2006.  During the period January 1, 2007 through March 31, 2007, the Company entered into agreements for the sale of a total of twenty-three (23) additional medallions with sales prices of approximately $77,000 per medallion, with aggregate anticipated sale proceeds of $1,777,000.  During May 2007 the Company entered into a contract of sale to sell one (1) medallion at a price of $80,000.  Since the twenty-four (24) medallions have a carrying value of approximately $1,380,000 or $57,500 per medallion, the Company is anticipating approximately $477,000 of gains to be reported upon the completion of the sales of such medallions, before closing expenses for brokerage and legal fees related thereto.  On April 19, 2007, the closing took place on the sale of seventeen (17) medallions and on May 2, 2007, the sale took place of one (1) additional medallion.  On May 8, 2007, one (1) additional closing took place on the sale of an additional medallion.  There are an additional five (5) medallions that are presently pending sales to various individual buyers with closings anticipated to take place within the next thirty (30) to ninety (90) days.  The Company believes that it will have all medallions owned by it sold and closed substantially prior in time to the SBA deadline date of February 21, 2008.  16     The SBA also stated in the November 8, 2006, letter that the matter relating to the partial use of proceeds concerning one loan that the Company made to a third party borrower, and the prepayment provision contained in loan documents to a different borrower were resolved. During January 2007, the Company received a letter from SBA dated December 28, 2006, which gave final approval to the financing of 24 Chicago Taxi Medallions with Across the Town Cab Corp., a majority of the stock of which was owned by an Associate of Elk Associates Funding Corporation.  Accordingly the financing of an Associate matter has now been concluded with SBA. New Accounting Standards In June 2006, the Financial Accounting Standards Board (FASB) issued Financial Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109.  This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.  FIN 48 is effective for our fiscal year beginning July 1, 2007.  The Company does not believe that FIN 48 will have an impact on the Companys operations or financial position. In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets  an amendment of FASB Statement No. 140."  This Statement requires that all separately recognized servicing rights be initially measured at fair value.  Subsequently, an entity may either recognize its servicing rights at fair value or amortize its servicing rights over an estimated life and assess for impairment at least quarterly.  SFAS No. 156 also amends how gains and losses are computed in transfers or securitizations that qualify for sale treatment in which the transferor retains the right to service the transferred financial assets.  Additional disclosures for all separately recognized servicing rights are also required.  This Statement is effective January 1, 2007, for calendar year companies.  The Company is currently in the process of evaluating the impact that SFAS No. 156 will have on the Companys financial position and results of operations. In March 2006, the FASB issued FASB Staff Position No. FTB 85-4-1, "Accounting for Life Settlement Contracts by Third-Party Investors" (FSP FTB 85-4-1), which allows an investor to account for its investments in a life settlement contract using either the investment method or the fair value method.  The investment method requires the initial investment to be recognized at the transaction price, while the fair value method requires the initial investment to be recognized at its transaction price and remeasured to fair value each subsequent reporting period.  The election of the investment method or fair value method is irrevocable and should be made on an instrument-by-instrument basis. Previously, only the fair value method was available.  FSP FTB 85-4-1 is effective for fiscal years beginning after June 15, 2006.  Prospective application is required for all new investments in life settlement contracts, and a cumulative-effect adjustment to retained earnings should be made at the date of adoption to recognize the impact on existing life settlement contract investments.  The Company adopted the investment method in the first quarter of fiscal 2007, and did not have any previous investments subject to a cumulative-effect  17     adjustment at the time of the adoption.  The adoption of FSP FTB 85-4-1 did not have a material impact on its consolidated financial position or results of operations. In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments" an amendment of SFAS No. 133 and 140.  This statement permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are free standing derivatives or that are hybrid financial instruments that contain an embedded derivative that require bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.  This statement is effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006, as defined.  The Company does not expect that the adoption of SFAS No. 155 will have a material impact on its consolidated financial position or results of operations.     ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information contained in this section should be read in conjunction with the consolidated financial statements and notes therewith included elsewhere in this quarterly report on Form 10-Q and in the Company's Annual Report on Form 10-K for the year ended June 30, 2006, filed with the Commission by the Company on September 28, 2006, which is also available on the Company's web site at www.ameritranscapital.com.  This report contains forward-looking information and comments which generally include the plans and objectives of management for future operations, including plans and objectives relating to future economic performance and our current beliefs regarding revenues we might earn if our business strategies are successfully implemented. Critical Accounting Policies In the preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States, management uses judgment in selecting policies and procedures and making estimates and assumptions that affect amounts reported and disclosed in the financial statements and related notes. Significant estimates that the Company makes include (1) valuation of loans receivable and equity investments, (2) evaluation of the recoverability of various receivables, and (3) the assessment of litigation and other possible contingencies. The Company's ability to collect receivables and recover the value of its loans depends on a number of factors, including the financial condition of the debtors and its ability to enforce provisions of its contracts in the event of disputes, through litigation if necessary. Although the Company believes that estimates and assumptions used in determining the recorded amounts of net assets and liabilities at March 31, 2007, are reasonable, actual results could differ materially from the estimated amounts recorded in the Company's financial statements. Our key critical accounting policies are those applicable to the valuation of loans receivable and other investments including medallions, and contingencies from daily operations, as discussed below:  18     Valuation of Loans Receivable. For loans receivable, fair value generally approximates cost less unrealized depreciation. Overall financial condition of the borrower, the adequacy of the collateral supporting the loans, individual credit risks, historical loss experience and other factors are criteria considered in quantifying the unrealized depreciation, if any, that might exist at the valuation date. Equity Investments. The fair value of publicly traded corporate equity securities is based on quoted market prices. Privately held corporate equity securities are recorded at the lower of cost or estimated fair value. For these non-quoted investments, the Company reviews the financial performance of the privately held companies in which the investments are maintained. If and when a determination is made that a decline in fair value below the cost basis is other than temporary, the related investment is written down to its estimated fair value. Investment in Life Settlement Contracts.  The Company uses the investment method to value contracts, which capitalizes contract costs plus premiums paid to keep the policies in force.  The difference between the carrying value of the contract and proceeds received, either upon death of the insured or sale of the policy, are recorded in earnings.  Contracts are also tested for impairment based on changes in the insureds life expectancy or creditworthiness of the issuer of the policy.  If an impairment loss is recognized, the carrying amount of the investment is written down to its estimated fair value. Assets Acquired in Satisfaction of Loans. Assets acquired in satisfaction of loans are carried at the lower of the net value of the related foreclosed loan or the estimated fair value less cost of disposal. Losses incurred at the time of foreclosure are charged to the unrealized depreciation on loans receivable. Subsequent reductions in estimated net realizable value are charged to operations as losses on assets acquired in satisfaction of loans. Medallions.  The Company obtained medallions through foreclosure of loans and the value of such medallions are carried at the lower of the net value of the related foreclosed loans or the fair market value of the medallions.  The medallions are being treated as having indefinite lives, therefore, the assets are not being amortized.  However, the Company periodically tests their carrying value for impairment. Contingencies.  The Company is subject to legal proceedings in the course of its daily operations from enforcement of its rights in disputes pursuant to the terms of various contractual arrangements.  In this connection, the Company assesses the likelihood of any adverse judgment or outcome to these matters as well as a potential range of probable losses.  A determination of the amount of reserve required, if any, for these contingencies is made after careful analysis of each individual issue.  The required reserves may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters.  19     Results of Operations for the Three Months Ended March 31, 2007 and 2006 Total Investment Income The Companys interest income for the three months ended March 31, 2007, increased $327,431, or 31% to $1,376,993 as compared to the three months ended March 31, 2006.  The increase in investment income between the periods can be attributed to higher interest rates charged on the total loan portfolio for the quarter which offset a decrease in total loans outstanding.  Fees and other income decreased by $16,533, or 12% to $126,531 as compared to the three months ended March 31, 2006. The decrease is primarily attributed to a decrease in loan origination fees of approximately $38,800 and a decrease in late fees of approximately $3,500 which was partially offset by an increase in other income of approximately $25,700.  There was also a decrease in leasing income of $24,940 to $13,566 as compared to the three months ended March 31, 2006, due to the sale of medallions. Operating Expenses Interest expense for the three months ended March 31, 2007, increased $36,144, or 7% to $537,964 as compared to the three months ended March 31, 2006, due to an increase in the outstanding banks notes payable from the same period last year of approximately $1,360,000 and higher interest rate charges on outstanding bank borrowings.  Salaries and employee benefits increased $121,796, or 40% as compared to the similar period in the prior year. This is primarily due to salary compensation related to the hiring of an additional senior level officer which was approximately $94,597 for the March 31, 2007 quarter. Occupancy costs partially increased primarily from an increase in office space for the additional officer.  Professional fees increased $116,591, or 91% as compared to the comparable period in the prior year, due primarily to fees for the Sarbanes-Oxley Section 404 Compliance Project in the amount of $71,070 and an increase in legal fees and audit fees of $45,521.  Write off and depreciation on interest and loans receivable decreased $95,265, or 94% as compared to the similar quarter in the prior year. The decrease in the amount of write-offs and depreciation reflects the improved portfolio performance from that of previous quarters. Net Loss Net loss decreased from $125,452 for the three months ended March 31, 2006, to $118,822 for the three months ended March 31, 2007.  Part of the loss included $44,675 equity in loss of investee.  The decrease in net loss between the periods was attributable primarily to increases in interest income as well as decreases in bad debt expense which were partially offset by increases in salaries and employees benefits, professional fees and other administrative expenses. Dividends for Participating Preferred Stock were unchanged at $84,375 for the three months ended March 31, 2007 and 2006.  20     Results of Operations for the Nine Months Ended March 31, 2007 and 2006 Total Investment Income The Companys interest income for the nine months ended March 31, 2007, increased $537,058, or 16% to $3,978,125 as compared to the nine months ended March 31, 2006, as a result of an increase in the average interest rates charged on new and modified loans, which was partially offset by a reduction in the overall loan portfolio. Operating Expenses Interest expense for the nine months ended March 31, 2007, decreased $7,665, or 0.5% to $1,619,609 as compared to the nine months ended March 31, 2006.  The decrease was partially due to short-term reduction in Elks bank debt as a result of Ameritrans using a portion of the capital raised to reduce Elks bank debt until Ameritrans made suitable investments.  As a result, Elk saved some interest expense which was offset by generally higher interest rates charged by the bank during the period and increase in the total outstanding banks notes payable at the end of the period.  Salaries and employee benefits increased $181,105, or 21% as compared to the similar period in the prior year. This is primarily due to salary and options compensation related to the hiring of an additional senior level officer, and other annual increases in officers salaries. Occupancy costs partially increased primarily from an increase in office space for the additional officer.  Professional fees increased $259,015, or 75% as compared to the comparable period in the prior year, due to fees for Sarbanes-Oxley Section 404 Project, an increase in legal fees, including legal fees to a related party for loan closings, and an increase in accounting and audit fees. Foreclosure expenses decreased $13,144, or 108% as compared to the similar period in the prior year.  Write off and depreciation on interest and loans receivable decreased $135,240, or 57% as compared to the similar period in the prior year. The decrease in the amount of write-offs and depreciation reflects the reduction of foreclosures of Chicago medallion loans. Other administrative expenses increased $87,925, or 11% as compared to the similar period in the prior year, due primarily to an increase in filing fees, insurance, and brokers fees. Net Loss Net loss decreased from $163,895 for the nine months ended March 31, 2006, to $88,434 for the nine months ended March 31, 2007. Majority of the loss included $83,183 equity in loss of investee reported as a result of the accounting rules requiring our percentage of the investees loss to be included in our earnings.  The decrease in net loss between the periods was attributable primarily to an increase in total investment revenue as well as decreases in interest expense and bad debt expense which were partially offset by increases in salaries and employees benefits, professional fees and other administrative expenses. Dividends for Participating Preferred Stock were unchanged at $253,125 for the nine months ended March 31, 2007 and 2006.  21     Financial Condition at March 31,2007 and June 30, 2006 Balance Sheet and Reserves Total assets increased $267,165 to $56,285,976 at March 31, 2007, as compared to the June 30, 2006, total assets of $56,018,811. This increase was primarily due to an increase in investment in life settlement contracts, partially offset by a decrease in loans receivable. Short-term bank borrowings increased $1,255,000 to $22,182,500 at March 31, 2007, as compared to June 30, 2006. Liquidity and Capital Resources The Company has funded its operations through private and public placements of its securities, bank financing, the issuance to the SBA of its subordinated debentures and internally generated funds. On March 2, 2006, the Company closed on the sale of 1,355,608 shares (the "Shares") of Common Stock and 338,902 warrants to purchase shares of Common Stock ("Private Offering Warrants") for aggregate gross proceeds totaling $7,930,310, ($7,250,407 net of expenses).  The Company granted a total of 338,902 Private Offering Warrants.  Each Private Offering Warrant entitles the holder thereof to purchase one share of Common Stock at an exercise price of $6.44 per share. The Private Offering Warrants may be exercised in whole or in part, and expires five (5) years from the date of issuance.  These Shares and Private Offering Warrants were issued pursuant to the private offering of the Company dated July 29, 2005, of which various closings took place throughout December 2005, and January, February and March 2006.  The increased capital that was raised for Ameritrans will help the Company significantly in its plans for the expansion of the Companys business, enabling Ameritrans to make loans to and investments in opportunities that the Company's operating subsidiary, Elk has historically been unable to make due to SBA Regulation.  On March 15, 2006, Ameritrans filed a registration statement (the "March Registration Statement") with the SEC to cover the Shares and the Private Offering Warrants sold in the Private Offering.  The March Registration Statement did not cover any authorized but unissued shares of the Companys Common Stock or Participating Preferred Stock.  The March Registration Statement was declared effective by the SEC on April 25, 2006. At March 31, 2007, approximately 64% of Elk's indebtedness was represented by indebtedness to its banks with variable rates ranging from 6.82% to 6.89%, whereas approximately 34% of Elk's indebtedness was due to debentures issued to the SBA with fixed rates of interest plus user fees resulting in rates ranging from 4.99% to 5.54%. Elk currently may borrow up to $36,000,000, of which $13,817,500 was available for draw down as of March 31, 2007, under its existing lines of credit, subject to limitations imposed by its borrowing base agreement with its banks and the SBA, the statutory and regulatory limitations imposed by the SBA and the availability of funds. On January 2002, the Company and the SBA entered into an agreement whereby the SBA committed to reserve debentures in the amount of $12,000,000 to be issued to the Company on or prior to September 30, 2006. In July and December 2002,  22     debentures payable to the SBA were drawn from the reserved pool of $12,000,000 in the amount of $2,050,000 and $3,000,000, respectively. The interim interest rates assigned were 2.351% and 1.927%, respectively, subsequently adjusted to long term fixed rates of 4.67% and 4.628% determined on the pooling dates of September 25, 2002 and March 26, 2003, respectively. On September 15, 2003 and February 17, 2004, two additional debentures payable to the SBA were drawn in the amount of $5,000,000 and $1,950,000, respectively.  Interim interest rates assigned were 1.682% and 1.595%, respectively, subsequently adjusted to the long term fixed rate of 4.12% on the pooling date of March 24, 2004. In addition to the fixed rates, there is an additional annual SBA user fee on each debenture of 0.866% per annum making the rates 5.54%, 5.498% and 4.99% before applicable amortization of points and fees.  The draw down in February 2004 was the final draw from the $12,000,000 commitment. At March 31, 2007, the Company invested in life settlement contracts which require the Company to continue premium payments to keep the policies in force through the insureds life expectancy, or until such time the policies are sold.  The Company may sell the policies at any time, at its sole discretion.  However, if the Company chooses to keep the policies, as of March 31, 2007, premium payments due through the life expectancy of the insured are approximately $8,200,000 over the next five years and $13,400,000 thereafter. Loan amortization and prepayments also provide a source of funding for Elk. Prepayments on loans are influenced significantly by general interest rates, economic conditions and competition. Like Elk, Ameritrans will distribute at least 90% of its investment company taxable income and, accordingly, will continue to rely upon external sources of funds to finance growth. To provide the funds necessary for expansion, management expects to raise additional capital and to incur, from time to time, additional bank indebtedness and (if deemed necessary) to obtain SBA loans. There can be no assurances that such additional financing will be available on acceptable terms. Recently Issued Accounting Standards In June 2006, the Financial Accounting Standards Board (FASB) issued Financial Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109.  This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.  FIN 48 is effective for our fiscal year beginning July 1, 2007.  The Company does not believe that FIN 48 will have an impact on the Companys operations or financial position. In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets  an amendment of FASB Statement No. 140."  This Statement requires that all separately recognized servicing rights be initially measured at fair value.  Subsequently, an entity may either recognize its servicing rights at fair value or amortize its servicing rights over an estimated life and assess for impairment at least quarterly.  SFAS No. 156 also amends how gains and losses are computed in transfers or securitizations that qualify for sale treatment in which the transferor  23     retains the right to service the transferred financial assets.  Additional disclosures for all separately recognized servicing rights are also required.  This Statement is effective January 1, 2007, for calendar year companies.  The Company is currently in the process of evaluating the impact that SFAS No. 156 will have on the Companys financial position and results of operations. In March 2006, the FASB issued FASB Staff Position No. FTB 85-4-1, "Accounting for Life Settlement Contracts by Third-Party Investors" (FSP FTB 85-4-1), which allows an investor to account for its investments in a life settlement contract using either the investment method or the fair value method.  The investment method requires the initial investment to be recognized at the transaction price, while the fair value method requires the initial investment to be recognized at its transaction price and remeasured to fair value each subsequent reporting period.  The election of the investment method or fair value method is irrevocable and should be made on an instrument-by-instrument basis. Previously, only the fair value method was available.  FSP FTB 85-4-1 is effective for fiscal years beginning after June 15, 2006.  Prospective application is required for all new investments in life settlement contracts, and a cumulative-effect adjustment to retained earnings should be made at the date of adoption to recognize the impact on existing life settlement contract investments.  The Company adopted the investment method in the first quarter of fiscal 2007, and did not have any previous investments subject to a cumulative-effect adjustment at the time of the adoption.  The adoption of FSP FTB 85-4-1 did not have a material impact on its consolidated financial position or results of operations. In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments" an amendment of SFAS No. 133 and 140.  This statement permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are free standing derivatives or that are hybrid financial instruments that contain an embedded derivative that require bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.  This statement is effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006, as defined.  The Company does not expect that the adoption of SFAS No. 155 will have a material impact on its consolidated financial position or results of operations.     ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK The Company's business activities contain elements of risk. The Company considers the principal types of risk to be fluctuations in interest rates and portfolio valuations. The Company considers the management of risk essential to conducting its businesses. Accordingly, the Company's risk management systems and procedures are designed to identify and analyze the Company's risks, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.  24     The Company values its portfolio at fair value as determined in good faith by the Company's Board of Directors in accordance with the Company's valuation policy. Unlike certain lending institutions, the Company is not permitted to establish reserves for loan losses. Instead, the Company must value each individual investment and portfolio loan on a quarterly basis. The Company records unrealized depreciation on investments and loans when it believes that an asset has been impaired and full collection is unlikely. Without a readily ascertainable market value, the estimated value of the Company's portfolio of investments and loans may differ significantly from the values that would be placed on the portfolio if there existed a ready market for the investments. The Company adjusts the valuation of the portfolio quarterly to reflect the Board of Directors' estimate of the current fair value of each component of the portfolio. Any changes in estimated fair value are recorded in the Company's statement of operations as net unrealized depreciation on investments. In addition, the illiquidity of our loan portfolio and investments may adversely affect our ability to dispose of loans at times when it may be advantageous for us to liquidate such portfolio or investments. Also, if we were required to liquidate some or all of the investments in the portfolio, the proceeds of such liquidation might be significantly less than the current value of such investments. Because we borrow money to make loans and investments, our net operating income is dependent upon the difference between the rate at which we borrow funds and the rate at which we loan and invest these funds. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our interest income. As interest rates rise, our interest costs increase, decreasing the net interest rate spread we receive and thereby adversely affect our profitability. Although we intend to continue to manage our interest rate risk through asset and liability management, including the use of interest rate swaps, general rises in interest rates will tend to reduce our interest rate spread in the short term. Assuming that the balance sheet were to remain constant and no actions were taken to alter the existing interest rate sensitivity, a hypothetical immediate 1% change in interest rates would have resulted in an additional annual net income of approximately $18,370 at March 31, 2007. This is comprised of a 1% change in two components, loans receivable of approximately $14,020,000 at variable interest rate terms, and approximately $12,183,000 for bank debt subject to variable market rates.  This example takes into account the impact of the two (2) $5,000,000 interest rate swaps the Company has in place on its bank debt to mitigate the effects of increases in variable interest rates. No assurances can be given however, that actual results would not differ materially from the potential outcome simulated by these estimates.  ITEM 4. CONTROLS AND PROCEDURES The Company maintains disclosure controls and procedures as defined under the Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our periodic reports filed pursuant to the rules promulgated under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and that such information is accumulated and communicated to our management including our Chief Executive Officer (also acting as Chief Financial Officer), to allow timely decisions regarding required disclosure.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter  25     how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (also acting as Chief Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the Company concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in timely communicating the material information required to be included in our periodic SEC filings. IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS Cautionary Note Regarding Forward-Looking Statements This report, including, but not limited to, "Management's Discussion and Analysis of Financial Condition and Results of Operations," may contain certain forward-looking statements within the meaning of the federal securities laws.  Some of the forward-looking statements can be identified by the use of forward-looking words. When used in this report, statements which are not historical in nature, including the words "anticipate," "may," "estimate," "should," "seek," "expect," "plan," "believe," "intend," and similar words, or the negatives of those words, are intended to identify forward-looking statements. Statements which also contain a projection of revenues, earnings (loss), capital expenditures, dividends, capital structure or other financial terms are intended to be forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in such statements. In connection with certain forward-looking statements contained in this Form 10-Q and those that may be made in the future by or on behalf of Ameritrans, Ameritrans notes that there are various factors that could cause actual results to differ materially from those set forth in any such forward-looking statements. The forward looking statements contained in this Form 10-Q were prepared by management and are qualified by, and subject to, significant business, economic, competitive, regulatory and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of Ameritrans. Accordingly, there can be no assurance that the forward-looking statements contained in this Form 10-Q will be realized or that actual results will not be significantly higher or lower.  Readers of this Form 10-Q should consider these facts in evaluating the information contained herein. In addition, the business and operations of Ameritrans are subject to substantial risks which increase the uncertainty inherent in the forward-looking statements contained in this Form 10-Q. The inclusion of the forward-looking statements contained in this Form 10-Q should not be regarded as a representation by Ameritrans or any other person that the forward-looking statements contained in this Form 10-Q will be achieved. In light of the foregoing, readers of this Form 10-Q are cautioned not to place undue reliance on the forward-looking statements contained herein. These risks and others that are detailed in this Form 10-Q and other documents that Ameritrans files from time to time with  26     the Commission, including quarterly reports on Form 10-Q and any current reports on Form 8-K must be considered by any investor or potential investor in Ameritrans.   27     PART II. OTHER INFORMATION INFORMATION INCORPORATED BY REFERENCE. Certain information previously disclosed in Part I of this quarterly report on Form 10-Q are incorporated by reference into Part II of this quarterly report on Form 10-Q.     Item 1. Legal Proceedings The Company is not currently a party to any material legal proceeding. From time to time, the Company is engaged in various legal proceedings incident to the ordinary course of its business. In the opinion of the Companys management and based upon the advice of legal counsel, there is no proceeding pending, or to the knowledge of management threatened, which in the event of an adverse decision would result in a material adverse effect on the Companys results of operations or financial condition.     Item 1A. Risk Factors  No change.   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None     Item 3. Default upon Senior Securities None     Item 4. Submission of Matters to a Vote of Security Holders None     Item 5. Other Information  On February 5, 2007, the members of the Audit Committee approved a revised version of their formal written charter.  This revised Charter was subsequently approved by the Board on February 9, 2007.  The Audit Committee Charter is filed as Exhibit 99.1 to this quarterly report filed on Form 10-Q. The Charter and any changes or updates thereto will also be posted on the Company's internet website at http://www.ameritranscapital.com.   Item 6. Exhibits and Reports on Form 8-K The Exhibits filed as part of this report on Form 10-Q are listed on the Exhibit Index immediately preceding such Exhibits, which Exhibit index is incorporated by reference.      28     Exhibit Index      (a) Exhibits  3(i)       Certificate of Incorporation (3)  3(ii)      By-laws (3)  4          Form of subordinated debentures issued to the U.S. Small Business Administration ("SBA") by Elk Associates Funding Corporation ("Elk") Debenture issued March 26, 1997 - principal amount - $430,000; Maturity Date - March 1, 2007; Stated Interest Rate - 7.38%.(4)  The following debentures are omitted pursuant to Rule 483:  a.         Debenture issued September 22, 1993 - principal amount $1,500,000; Maturity Date - September 1, 2003; Stated Interest Rate - 6.12%.  b.         Debenture issued September 22, 1993 - principal amount  $2,220,000; Maturity Date - September 1, 2003; Stated Interest Rate - 6.12%.  c.         Debenture issued September 28, 1994 - principal amount $2,690,000; Maturity Date - September 1, 2004; Stated Interest Rate - 8.20%. d.         Debenture issued December 14, 1995 - principal amount $1,020,000; Maturity Date - December 1, 2005; Stated Interest Rate - 6.54%.  e.         Debenture issued June 26, 1996 - principal amount $1,020,000; Maturity Date - June 1, 2006; Stated Interest Rate - 7.71%.  10.1       Security Agreement between Elk and the SBA, dated September 9, 1993. (4)  10.3       1999 Employee Stock Option Plan. (5)  10.4       Non-Employee Director Stock Option Plan. (5)  10.5       Custodian Agreement among Elk; Bank Leumi Trust Company of New York ("Leumi"), Israel Discount Bank of New York ("IDB"), Bank Hapoalim B.M. ("Hapoalim") and Extebank; the SBA, and IDB as Custodian; dated September 9, 1993 (the "Custodian Agreement").(4)  10.6        Agreements between Elk and the SBA.(4)  10.7       Intercreditor Agreement among Elk, Leumi, IDB, Hapoalim, Extebank and the SBA dated September 9, 1993 (the "Intercreditor Agreement") (4)  10.8       Amendments to the Custodian and Intercreditor Agreements. (4)  a.         Amendment removing Hapoalim and Extebank and adding European American Bank ("EAB"), dated September 28, 1994.  b.         Form of Amendment adding bank:   29     i.         Amendment adding United Mizrahi Bank and Trust Company ("UMB"), dated June, 1995 was previously filed.  ii.        Amendment adding Sterling National Bank and Trust Company of New York ("Sterling"), dated April, 1996 - omitted pursuant to Rule 483.  10.9       Bank Intercreditor Agreement among Elk, Leumi, IDB, Hapoalim and Extebank, dated September 9, 1993 (the "Bank Intercreditor Agreement"). (4)  10.10      Amendments to the Bank Intercreditor Agreement. (4)  a.         Amendment removing Hapoalim and Extebank and adding European American Bank ("EAB"), dated September 28, 1994.  b.         Form of Amendment adding bank:  i.         Amendment adding UMB, dated June, 1995 was previously filed.  ii.        Amendment adding Sterling, dated April, 1996 omitted pursuant to Rule 483.   10.12      Promissory Note dated March 3, 2003 between Ameritrans and Bank Leumi USA and Letter Agreement dated March 11, 2003 between aforementioned parties. (6)  10.13      Master Note dated October 4, 1999 between Ameritrans and European American Bank. (6)  10.14      Line of Credit Agreement dated January 3, 2002 between Elk and Citibank. (7)  10.15      Form of indemnity agreement between Ameritrans and each of its directors and officers. (3)  10.16      Amended and Restated Employment Agreement dated as of December 31, 2002 between Ameritrans and Gary Granoff. (8)  10.17      Amended and Restated Consulting Agreement dated as of December 31, 2002 between Ameritrans and Gary Granoff. (8)  10.18     Amended and Restated Employment Agreement dated as of September 28, 2006 between Ameritrans and Silvia Mullens.  (10)  10.19      Amended and Restated Employment Agreement dated as of September 28, 2006 between Ameritrans and Margaret Chance. (10) 10.20 Letter Agreement between Israel Discount Bank of New York and Elk dated May 9, 2006 extending the line of credit. (10) 10.21 Amended and Restated Employment Agreement dated as of February 21, 2006 between Ameritrans and Lee Forlenza. (2) 10.22 Amended and Restated Employment Agreement dated as of February 21, 2006 between Ameritrans and Ellen Walker.  (2)  30     10.23 Form of Warrant Agreement relating to the Warrants subject to this Registration Statement (2) 10.24 Form of Registration Rights Agreement relating to the Shares subject to this Registration Statement (2) 10.25 Form of Common Share Subscription Agreement relating to the Shares subject to this Registration Statement (2) 10.26 Form of Waiver relating to Common Share Subscription Agreement (2) 10.27 Code of Ethics adopted under Rule 17j-1 under the 1940 Act. (2) 10.28 Line of Credit Agreement dated November 7, 2006 between Elk and Israel Discount Bank of New York. (11) 10.29 Employment Agreement dated as of November 27, 2006 between Ameritrans and Michael Feinsod. (12) 22.1 Proxy statement on Schedule 14A mailed to stockholders on April 7, 2006 (1)  31.1       Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  Attached hereto.  32.1       Certification pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  Attached hereto.  99.1         Audit Committee Charter adopted February 9, 2007.  Attached hereto.      (b) Reports on Form 8-K  On April 19, 2007, the Company filed a current report on Form 8-K reporting under Item 8.01 that the Company issued a press release announcing the expiration of the Companys Public Warrants and the closing on the sale of 17 Chicago Taxi Medallions.  On March 20, 2007, the Company filed a current report on Form 8-K reporting under Item 2.02 that the Company issued a press release announcing the Company's declaration of a quarterly dividend for its 9 3/8% Preferred Stock for the third quarter of 2007.  On February 15, 2007, the Company filed a current report on Form 8-K reporting under Items 2.02, 9.01 and 1.01 that the Company issued a press release announcing the Company's results for the second quarter of fiscal year 2007, the execution of the Michael Feinsod Agreement and the adoption of the revised audit committee charter. .  (1) Incorporated by reference from the Registrant's Schedule 14-A (File No. 811-08847) filed April 7, 2006.  (2) Incorporated by reference from the Registrants Registration Statement on Form N-2 (File No. 333-132438) filed March 15, 2006.   31     (3) Incorporated by reference from the Registrant's Registration Statement on Form N-14 (File No. 333-63951) filed September 22, 1998.  (4) Incorporated by reference from the Registrant's Registration Statement filed on Form N-2 (File No. 333-82693) filed July 12, 1999.  (5) Incorporated by reference from the Registrant's Proxy Statement on Form 14A (File No. 811-08847) filed on December 14, 2001.  (6) Incorporated by reference from the Registrant's 10-Q (File No. 811-08847) filed May 14, 2004.  (7) Incorporated by reference from the amendment to the Registrant's N-2 (File No. 333-82693) filed March 1, 2002.  (8) Incorporated by reference from the Registrant's 10-Q (File No. 811-08847) filed February 14, 2003.  (9) Incorporated by reference from the Registrant's 10-Q (File No. 811-08847) filed February 14, 2002.  (10) Incorporated by reference from the Registrant's 10-Q (File No. 811-08847) filed May 14, 2006.  (11) Incorporated by reference from the Registrant's 10-K (File No. 811-08847) filed September 28, 2006.  (12) Incorporated by reference from the Registrants 10-Q (File No. 811-08847) filed February 14, 2007.  (All other items of Part II are inapplicable)  32     AMERITRANS CAPITAL CORPORATION      SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERITRANS CAPITAL CORPORATION Dated:  May 14, 2007
By: /s/ Gary C. Granoff
Gary C. Granoff
Chief Executive Officer and
Chief Financial Officer   33     Exhibit 31.1  CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 DISCLOSURE IN THE REGISTRANT'S QUARTERLY REPORT  I, Gary C. Granoff, Chief Executive Officer, and Chief Financial Officer of Ameritrans Capital Corporation, certify that:  . I have reviewed this quarterly report on Form 10-Q of Ameritrans Capital Corporation (the "report");  . Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  . Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operation, and cash flows of the registrant as of, and for, the periods presented in the report.  . I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  () Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;  (b) Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle;  (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  (d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and  . I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):  () All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and  () Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.   Dated: May 14, 2007 By: /s/ Gary C. Granoff Gary C. Granoff Chief Executive Officer and Chief Financial Officer   34     Exhibit 32.1  CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the Quarterly Report of Ameritrans Capital Corporation (the "Company") on Form 10-Q for the quarter ended March 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gary C. Granoff, Chief Executive Officer, and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:  1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and  2. The information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company.   By: /s/Gary C. Granoff Gary C. Granoff Chief Executive Officer, and Chief Financial Officer  May 14, 2007     35