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 December 31, 2005
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|

The number of shares of Common Stock, par value $.0001 per share, outstanding as
of February 10, 2006: 2,773,220.






                                       1

<PAGE>
                        AMERITRANS CAPITAL CORPORATION
                                   FORM 10-Q


                               TABLE OF CONTENTS


                        AMERITRANS CAPITAL CORPORATION 1


                        PART I. FINANCIAL INFORMATION 1

    CONSOLIDATED BALANCE SHEETS                                                1
    LIABILITIES AND STOCKHOLDERS' EQUITY                                       2
    CONSOLIDATED STATEMENTS OF OPERATIONS                                      3
    CONSOLIDATED STATEMENTS OF CASH FLOWS                                      4
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                   5
  ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITY                                 5
  INCOME TAXES                                                                 6
  LOAN VALUATIONS                                                              7
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
  RESULTS OF OPERATIONS                                                       12
  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK           19
  ITEM 4. CONTROLS AND PROCEDURES                                             21

PART II. OTHER INFORMATION                                                    23

  ITEM 1. LEGAL PROCEEDINGS                                                   23
  ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS                            23
  ITEM 3 DEFAULT UPON SENIOR SECURITIES                                       23
  ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                  23
  ITEM 5-OTHER INFORMATION                                                    23
  ITEM 6-- EXHIBITS AND REPORTS ON FORM 8-K                                   24
  EXHIBIT INDEX                                                               24
    (a) Exhibits                                                              24
    (b) Reports on Form 8-K                                                   27
  SIGNATURES                                                                  28


EXHIBIT 31.1                                                                  29

EXHIBIT 32.1                                                                  30






                                       1


<PAGE>
                         PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                DECEMBER 31, 2005 (UNAUDITED) AND JUNE 30, 2005

                                    ASSETS


<TABLE>

                                                                December 31, 2005   June  30, 2005
                                                                        <C>               <C>

Loans receivable                                                    $ 50,750,739    $ 52,060,254
Less: unrealized depreciation on loans receivable                       (225,000)       (150,000)

      Loans receivable, net                                           50,525,739      51,910,254
Cash and cash equivalents                                                518,932         327,793
Accrued interest receivable, net of   unrealized
    deprecation of $36,800 and $59,000, respectively                     771,374         756,701
Assets acquired in satisfaction of  loans                                384,528         384,528
Receivables from debtors on sales of assets acquired
    in satisfaction of loans                                             406,850         455,184
Equity securities                                                        858,985         908,457
Furniture, equipment and leasehold improvements, net                     244,906         329,573
Medallions under lease                                                 2,224,701       2,282,201
Prepaid expenses and other assets                                        386,456         531,904

            TOTAL ASSETS                                            $ 56,322,471    $ 57,886,595
</TABLE>






  The accompanying notes are an integral part of these financial statements.




                                       1


<PAGE>
                AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                DECEMBER 31, 2005 (UNAUDITED) AND JUNE 30, 2005

                     LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                         December 31, 2005        June 30,2005
<S>                                                                             <C>                   <C>
LIABILITIES
   Debentures payable to SBA                                                $12,000,000            $12,000,000
   Notes payable, banks                                                      25,125,568  	    29,770,652
   Accrued expenses and other liabilities                                       492,214                604,942
   Accrued interest payable                                                     240,139                256,285
   Dividends payable                                                             84,375                 84,375

      TOTAL LIABILITIES                                                      37,942,296             42,716,254

COMMITMENTS AND CONTINGENCIES (Notes 3,4 and 5)
STOCKHOLDERS' EQUITY
   Preferred stock 500,000 shares authorized,
   none issued or outstanding
   9 3/8% cumulative participating callable
   preferred stock $.01 par value, $12.00
   face value, 500,000 shares authorized;
   300,000 shares issued and outstanding                                     3,600,000   	     3,600,000


   Common stock, $0.0001 par value; 5,000,000 shares authorized;
   2,703,220 and 2,045,600 shares issued and 2,693,220 and
   2,035,600 shares outstanding at December 31, 2005 and
   June 30, 2005, respectively                                                     270     		   205



   Additional paid-in-capital                                                17,391,109  	    13,869,545
   Accumulated deficit                                                      (2,334,327) 	   (2,127,134)
   Accumulated other comprehensive loss                                       (206,877)              (102,275)

                                                                             18,450,175  	    15,240,341

   Less:   Treasury stock, at cost, 10,000 shares
	   of common stock              				       (70,000)    	      (70,000)

	      TOTAL STOCKHOLDERS' EQUITY                                     18,380,175  	    15,170,341

	   	TOTAL LIABILITIES AND
		  STOCKHOLDERS' EQUITY                                     $ 56,322,471  	  $ 57,886,595
</TABLE>




   The accompanying notes are an integral part of these financial statements.










                                       2


<PAGE>

                AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004 (Unaudited)

<TABLE>
<CAPTION>
                   			Three Months Ended	Three Months Ended	Six Months	Six Months
		  	 		December 31,2005	December 31,2004	  Ended 	  Ended
		                                      		 			 December	 December
							        			 31,2005         31,2004

                                               <C>                    <C>                  <C>             <C>
INVESTMENT INCOME
   Interest on loans receivable            $1,241,722       	    $1,154,708         	$2,391,505      $2,283,765
   Fees and other income                       68,649           	88,687             150,950         189,227
   Leasing income                              46,269           	73,796              95,737         125,333
   (Loss) gain on sale of securities	          -    		       (50,000)       	       -           (50,000)


TOTAL INVESTMENT INCOME                     1,356,640                1,267,191   	 2,638,192       2,548,325


OPERATING
EXPENSES
   Interest                                 586,181          	       441,400           1,125,454          823,156
   Salaries and  employee benefits          282,531         	       293,081             558,769          555 745
   Occupancy Costs                           46,304                     46,434             101,020           95,617

   Professional fees                        146,684                    195,734             216,496          331,298

   Other administrative expenses            227,320                    297,485             509,109          542,953

   Loss and impairments on assets
   acquired in satisfaction of
   loans, NET                                 1,031                     22,154               4,031 	     32,547

   Foreclosure expenses                      12,333                      9,194              14,541           14,194

   Write off and depreciation
   on interest and loans receivable          98,776                    288,541             134,624          390,059




TOTAL OPERATING EXPENSES                      1,401,160              1,593,623            2,664,044        2,785,569

OPERATING LOSS                                  (44,520)              (326,432)             (25,852)        (237,244)


OTHER INCOME (EXPENSE)

Gain on sale of asset acquired                      -                    1,884                  -              1,884
Loss on sale of automobiles                      (2,867)                   -                 (2,867)             -
Equity in loss of investee                         -                    (2,010)                -              (4,021)



TOTAL OTHER EXPENSE NET                          (2,867)                  (126)              (2,867)          (2,137)

LOSS BEFORE PROVISION FOR
INCOME TAXES                                    (47,387)              (326,558)             (28,719)        (239,381)


PROVISION FOR INCOME TAXES                          -                        682              9,724            3,147
NET LOSS                                   $    (47,387)              $ (327,240)           (38,443)        (242,528)


DIVIDENDS ON PREFERRED STOCK               $    (84,375)              $  (84,375)          (168,750)        (168,750)


NET LOSS AVAILABLE TO COMMON
SHAREHOLDERS                               $   (131,762)              $ (411,615)         $(207,193)        (411,278)


WEIGHTED AVERAGE SHARES
OUTSTANDING

- Basic                                       2,132,075                2,035,600          2,228,551         2,035,600
-Diluted                                      2,132,075                2,035,600          2,228,551         2,035,600

NET LOSS PER COMMON SHARE

- Basic                                     $ (0.06)                       (0.20)             (0.09)            (0.20)

- Diluted                                   $ (0.06)                       (0.20)             (0.09)            (0.20)

</TABLE>

   The accompanying notes are an integral part of these financial statements



                                       3


<PAGE>
                AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

        FOR THE SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004 (Unaudited)

<TABLE>
<CAPTION>
                                                         Six Months Ended            Six Months Ended
                                                         December 31, 2005           December 31, 2004
<S>                                                           <C>                         <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net Loss                                              $       (38,443)            $    (242,528)
Adjustments to reconcile net loss to net
cash provided by operating activities:

   Depreciation and amortization                                  60,669                    74,601
   Loss on sale of equity securities                                -                       50,000

   (Gain) loss on sale of
   assets and assets acquired                                      2,867                    (1,884)
   Equity in loss of investee                                       -                        4,021

Change in operating assets and liabilities:

   Changes in unrealized depreciation on loans
   receivable and accrued interest receivable                     52,800                   275,019
   Accrued interest receivable                                     7,527                   166,206
   Prepaid expenses and other assets                             124,778                   (37,644)
   Accrued expenses and other liabilities                       (112,728)                   20,949
   Accrued interest payable                                      (16,146)                    4,068

 TOTAL ADJUSTMENTS                                               119,767                   555,336

NET CASH PROVIDED BY OPERATING ACTIVITIES                         81,324                   312,808

CASH FLOWS FROM INVESTING ACTIVITIES
      Loans receivable                                         1,309,515                (2,683,208)
      Assets acquired in satisfaction of loans                       -                     538,319
      Receivables from debtors on sales of
      assets acquired in satisfaction of loans                    48,334                   390,458
      Proceeds from sale of Medallions and Autos                 105,500                      -
      Purchases of equity securities                             (60,000)                  (54,153)
      Proceed from equity securities                               4,880                      -
      Purchase of furniture and equiptment                        (6,209)                     -



NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES            1,402,020                 1,808,584)


CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds from notes payable, banks                      5,615,713                17,493,961
       Repayments of notes payable, banks                    (10,260,797)              (15,756,961)
       Dividends paid                                           (168,750)                 (168,750)
       Gross proceeds from stock offering                      3,847,080                     -
       Costs associated with stock offering                     (325,451)                    -


NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES           (1,292,205)                1,568,250

NET INCREASE IN CASH AND CASH EQUIVALENTS                        191,139                    72,474


CASH AND CASH EQUIVALENTS - Beginning                            327,793                   416,600

CASH AND CASH EQUIVALENTS - Ending                             $ 518,932                   489,074

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITIES


Unrealized (loss) gain on equity securities                   $ (104,603)               $    7,108
arising during the period
Reclassification adjustment for loss  included                $      -                  $   45,000
in net  loss
Reclassification of assets acquired to                        $      -                  $ (154,633)
receivables from debtors on sales of assets
acquired
</TABLE>


 The accompanying notes are an integral part of these financial statements.


                                         4


<PAGE>


                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",  or the "Company", "our", "us", or "we") as of December 31, 2005,
and the related consolidated  statements  of  operations  and cash flows for the
three months and six months ended December 31, 2005 and 2004 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 ended December 31, 2005  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, 2005, as filed  with  the
Commission.

      Organization and Principal Business Activity

       Ameritrans,  a  Delaware corporation, is a specialty finance company that
through its subsidiary,  Elk  Associates  Funding  Corp.  ("Elk"),  makes  loans
primarily  to  taxi  owners  to  finance  the  acquisition and operation of taxi
medallions and related assets, and to other small  businesses  in  the  New York
City, Chicago, Miami, and Boston markets.


       Both Ameritrans and Elk are registered as business development companies,
or  "BDC's"  under  the  investment  Company  Act  of  1940  and are subject the
provisions  thereof.  In addition, both Ameritrans and Elk have  elected  to  be
treated as regulated  investment  companies,  or  "RIC's" for purposes under the
Internal Revenue Code (the "Code").


       Additionally,  Elk,  a New York corporation, is  licensed  by  the  Small
Business Administration ("SBA")  to  operate  as  a  Small  Business  Investment
Company ("SBIC") under the Small Business Investment Act of 1958, as amended.





                                       5


<PAGE>

      Basis of Consolidation


       The consolidated financial statements include the accounts of Ameritrans,
Elk,   and  Elk's  wholly  owned  subsidiaries,  EAF  Holding  Corporation,  EAF
Enterprises  LLC, Medallion Auto Management LLC, EAF Leasing LLC, EAF Leasing II
LLC and EAF Leasing  III  LLC, (collectively referred to as the "Company").  All
significant inter-company transactions have been eliminated in consolidation.


       EAF  Holding Corporation,  which  was  formed  in  June  1992  and  began
operations in  December  1993,  owns  and  operates  certain  real estate assets
acquired in satisfaction of defaulted loans made by Elk.


        EAF Enterprises LLC, which was formed in June 2003 and  began operations
in  July  2003, owns, leases and resells medallions acquired in satisfaction  of
foreclosures by Elk.

        Medallion  Auto  Management LLC, which was formed in June 2003 and began
operations in July 2003, owns,  leases  and  resells  automobiles in conjunction
with the medallions owned by EAF Enterprises LLC.

        EAF Leasing LLC and EAF Leasing II LLC, which were formed in August 2003
and  began  operations  in  October 2003, own and lease medallions  acquired  in
satisfaction of foreclosures by Elk.

        EAF  Leasing III LLC,  which  was  formed  in  January  2004  and  began
operations in April 2004, owns and leases medallions acquired in satisfaction of
foreclosures by Elk.

        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 "Code".  A  RIC  generally is not taxed at the corporate level
to  the extent its income is distributed  to  its  stockholders.   In  order  to
qualify as a RIC, a Company must payout at least ninety 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, the
Company intends to make  the  required  distributions  to  its  stockholders  in
accordance with the applicable tax code.

       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 periods presented.










                                       6


<PAGE>

      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 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  common  stock  equivalents  has been excluded from the  diluted
calculation since the effect would be antidilutive.

      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 (the "Board of Directors").   In  determining
the fair  value,  the  Board  of  Directors,  with  Management's  participation,
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  Board  of  Directors has
determined  that  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  the  Board  of Directors, with Management's
participation, and if, in the judgment of  the Board of Directors, the amount is
not collectible and 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.


      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
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 the purchases of the medallions and gained title
by  paying related transfer fees and satisfying outstanding liens with  Elk  and
Chicago.






                                       7


<PAGE>

       The  subsidiaries in turn, lease these medallions to taxicab operators or
companies in  the  Chicago  market  under  weekly  and long-term operating lease
terms.  The weekly leases, which include both medallions  and  automobiles,  are
with  individuals  and  automatically renew each week, up to a maximum period of
157 weeks, but may be terminated  by  the lessee at the conclusion of any weekly
period.  These weekly leases also include  an  option for the lessee to purchase
either  the  medallion  or  automobile  or both, at an  amount  defined  in  the
agreement, at any time throughout the term of the lease, with credit given for a
portion of the lease payments towards the  purchase  price.  As of September 30,
2005,  no purchase options had been exercised.  The long-term  medallion  leases
have been  made  with  taxicab  companies, expire from December 31, 2005 through
February 28, 2006, and may be canceled by either party upon forty-five (45) days
advance written notice.


       Leasing income under all medallion  and taxi cab leases for the three (3)
months  and  six (6)  months  ended  December  31,  2005  was  $46,269
and  $95,737 respectively.


       During the year ended June 30, 2005, the medallions  were written down by
$100,000  to  their  estimated  fair value, based on current market  conditions.
During the quarter ended September 30, 2005, one medallion with a carrying value
of $57,500 was sold.


3.      DEBENTURES PAYABLE TO SBA


       At December 31, 2005 and June  30,  2005,  debentures  payable to the SBA
consisted  of  subordinated  debentures  with interest payable semiannually,  as
follows:

<TABLE>
<CAPTION>

  ISSUE DATE      DUE DATE      EFFECTIVE             12/31/05 AND 6/30/05
                              INTEREST RATE            PRINCIPAL AMOUNT
<S>            <        C>            <C>                    <C>
  July 2002    September 2012      4.67%(1)            $      2,050,000
December 2002    March 2013        4.63%(1)                   3,000,000
September 2003   March 2014        4.12%(1)                   5,000,000
February 2004    March 2014        4.12%(1)                   1,950,000
                                                        $    12,000,000
</TABLE>

         (1) Elk is required to pay an additional  annual  user fee of 0.866% on
         these debentures.


       Under the terms of the subordinated debentures, Elk may not repurchase or
retire  any of its capital stock or make any distributions to  its  stockholders
other than  dividends  out  of retained earnings (as computed in accordance with
SBA regulations) without the prior written approval of the SBA.










                                       8


<PAGE>

      SBA Commitment

        In 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 by the Company on or prior to September 30, 2006.  A 2% leverage  fee
is to be deducted pro rata as the commitment proceeds are drawn down.  A 1% non-
refundable  commitment  fee  of $120,000 was paid by Elk in 2002 at the time the
$12,000,000 commitment was obtained.   In February 2004, Elk made the final draw
down under this commitment.

4.      NOTES PAYABLE TO BANKS


       At December 31, 2005 and June 30,  2005,  Elk  had  loan  agreements with
three  (3)  banks  for  lines  of credit aggregating $36,000,000 and $40,000,000
respectively. On December 19, 2005,  the  Company voluntarily reduced the credit
line with one bank from $8,000,000 to $4,000,000.  At December 31, 2005 and June
30, 2005, $25,125,568 and $29,770,652 respectively, were outstanding under these
lines. The loans, which mature at various dates between  various  dates  through
December  31, 2006 and bear interest at the lower of either the reserve adjusted
LIBOR rate plus 1.5% or the banks' prime rates minus 0.5%.


       Elk  anticipates  that  upon maturity of the loans, the banks will extend
these lines of credit for another twelve (12) months, as has been their 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.


5.      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. 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.

6.    COMPREHENSIVE INCOME (LOSS)

       Total  comprehensive  income  (loss)  for  the  three-month periods ended
December 31, 2005 and 2004, after considering other comprehensive  income (loss)
including  unrealized  losses on marketable securities of ($53,510) and  $12,556
was ($100,897), and ($314,684), respectively.




                                       9


<PAGE>
        Total comprehensive  income  (loss)  for  the  six-month  periods  ended
December  31, 2005 and 2004, after considering other comprehensive income (loss)
including unrealized  losses on marketable securities of ($104,603) and ($7,108)
was ($143,046) and ($235,420), respectively.

7.      OTHER MATTERS

Quarterly Dividend

        The  Company has  declared  and  paid  the  quarterly  dividend  on  the
Company's 9 3/8  Cumulative  Participating  Preferred  Stock (the "Participating
Preferred  Stock")  since  the Participating Preferred Stock  was  issued.  Most
recently, the Company's Board  of  Directors declared a dividend of $0.28125 per
share on December 20, 2005 on the Participating  Preferred  Stock for the period
October 1, 2005 through December 31, 2005, payable on January  16,  2006  to all
holders of the Participating Preferred Stock of record as of December 31, 2005.

Stock Offering

      On  July 29, 2005, Ameritrans commenced a private offering of Common Stock
with warrants  to "accredited investors," as that term is defined in Rule 501 of
Regulation D promulgated  under  the  1933  Act (the "Offering").  The shares of
Common Stock are being offered at a price no less than book value as of the date
of  the  Offering.  For every four (4) shares of  Common  Stock  purchased,  the
Company will issue to  the  investor  one  (1) warrant, exercisable for five (5)
years from the date of issuance, to purchase  one  (1)  share of Common Stock of
the  Company  at an exercise price equal to 110% of the purchase  price  of  the
Shares.  This  Offering  was  previously  approved  by  the  requisite  vote  of
shareholders. The Offering is for maximum gross proceeds totaling $10 million.


      The Offering period will expire on March 31, 2006.  The Board of Directors
believe that raising  additional  capital  pursuant  to  a private offering will
allow the Company to expand its investment portfolio and diversify the Company's
investments  beyond  the  SBA-regulated  loans  and  investments  of  Elk.  This
diversification will provide the Company with the flexibility  to participate in
a wide range of investment opportunities.


      As  of  December  31,  2005, the Company issued 657,620 shares  for  gross
proceeds totaling $3,847,080,  ($3,521,629 net of expenses).  A total of 164,405
warrants to purchase shares of Common  Stock  were  issued.   Since December 31,
2005,  the  Company  issued  an  additional  70,000 shares for additional  gross
proceeds  totaling  $409,500.   To date, the Company  has  raised  approximately
$3,891,676, net of expenses.






                                       10


<PAGE>

SBA Matter

        On August 29,  2005, the Company received a letter from the SBA 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 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 a prepayment provision
contained in loan  documents  to  a  different borrower.  Management has already
responded  to  the SBA in writing concerning  the  findings,  and  is  currently
waiting for a written response from the SBA.

        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 the SBA prior
to completion of the loan in question,  had  obtained  an indication of approval
and  the  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  the  SBA  at  the time to obtain the SBA's  approval  of  the
transaction and had received verbal indications that it felt it had or would, in
due course, subsequently obtain the  SBA's written approval to the transactions.
The Company believes that it has adequate  explanations  for the use of proceeds
issue on the third party loan and the prepayment issue.

Chicago Medallion Sales

    At September 30, 2005 Elk had one executed contract with  one  (1) purchaser
to purchase a total of five (5) Chicago medallions: one (1) being foreclosed and
four (4) being sold by one of Elk's subsidiaries, EAF Enterprises LLC.  As  part
of  the  purchase contract, Elk agreed to finance the entire purchase price plus
applicable  transfer  taxes.   The  financing term of the loan is an eighty four
(84) month period based upon a 144 month  amortization  schedule  with a balloon
principal payment due at the end of the eighty four (84) month period.    As  of
October  1,  2005,  Elk  executed an additional contract with the same principal
purchaser to sell an additional  five (5) Chicago medallions being foreclosed on
essentially the same terms and conditions  as  previously described.  On October
24,  2005,  Elk  signed an additional contract with  a  different  purchaser  to
purchase six (6) Chicago  medallions  being foreclosed.  In connection with this
sale, Elk agreed to finance the entire  purchase  price,  but  the  purchaser is
paying  the applicable transfer tax from its own funds.  The purchaser  is  also
supplying its own taxi vehicles as part of this transaction.  The financing term
of the loan  is  a  sixty  (60) month period based upon a 120 month amortization
schedule with a balloon principal payment due at the end of the sixty (60) month
period.   This purchaser is  also interested in purchasing an additional six (6)
Chicago medallions being foreclosed  on  the  same  terms  and  conditions.  The
parties  are  presently  working on obtaining an additional executed contract of
sale.






                                       11


<PAGE>

      New Accounting Standards


        In December 2004,  the  Financial  Accounting  Standards  Board ("FASB")
issued  Statement  No.  123(R),  "Share-Based  Payment"  ("SFAS 123(R)"),  which
replaced SFAS No. 123, "Accounting for Stock-Based Compensation," and superseded
APB  Opinion  25,  "Accounting  for  Stock  Issued to Employees."   SFAS  123(R)
requires  that  all  share-based  payments to employees  be  recognized  in  the
financial statements based on their  fair  values  on  the  date  of grant.  The
Company  currently  uses  the  intrinsic  value  method  to measure compensation
expense  for  stock-based  awards.   On  April  14,  2005, the SEC  amended  the
compliance dates for SFAS 123(R), which extended the Company's required adoption
date of SFAS 123R to its fiscal third quarter in its fiscal  year ended June 30,
2006.   The  Company is evaluating the requirements of SFAS 123(R)  and  expects
that its adoption  will  not have a material impact on its financial position or
results of operations.

        Also in December 2004,  the  FASB issued Statement No. 153, Exchanges of
Nonmonetary  Assets,  ("SFAS  No.  153")  which  addresses  the  measurement  of
exchanges of non-monetary assets and eliminates  the  exception  from fair value
measurement for nonmonetary exchanges of similar productive assets  and replaces
it with an exception for exchanges that do not have commercial substance.   SFAS
No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods
beginning  after  June 15, 2005, with earlier application permitted.  Management
believes that the adoption  of  SFAS  No.  153  has  not  had  any impact on the
Company's results of operations or its financial position.

        In June 2005, the FASB issued Statement No. 154, Accounting  Changes and
Error   Corrections,  ("SFAS  No.  154")  which  changes  the  requirements  for
accounting  for and reporting of a change in accounting principle.  SFAS No. 154
requires retrospective  application  to prior periods' financial statements of a
voluntary change in accounting principle  unless  it is impracticable.  SFAS No.
154  also  requires  that a change in method of depreciation,  amortization,  or
depletion for long-lived,  non-financial  assets be accounted for as a change in
accounting estimate that is effected by a change  in accounting principle.  SFAS
No. 154 is effective for accounting changes and corrections  of  errors made for
fiscal  years  beginning  after  December  15,  2005,  but  does not change  the
transition provisions of any existing accounting pronouncements, including those
that  are  in  a  transition  phase  as of the effective date of the  Statement.
Management believes that the adoption  of  SFAS  No.  154 has not had a material
effect on the Company's results of operations or its financial position.

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 appearing 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, 2005, filed by the Company on September 28, 2005 and
which is available on the Company's web site at www.ameritranscapital.com.






                                       12


<PAGE>

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   valuation  of  loans  and  equity  investments,  evaluation   of   the
recoverability of various receivables and the assessment of litigation and other
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  December  31,  2005  are  reasonable,  actual
results  could  differ  materially  from  the  estimated amounts recorded in the
Company's  financial  statements.  Key critical accounting  policies  are  those
applicable to the valuation of loans  receivable and other investments including
medallions, and contingencies arising from daily operations, as discussed below:

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   risk,  historical  loss  experience  and  other  factors  are  criteria
considered  in quantifying the unrealized depreciation, if any, that might exist
at the valuation date.

EQUITY SECURITIES. 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 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.

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 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.  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.










                                       13


<PAGE>

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.


GENERAL


      Ameritrans  acquired  Elk  on  December  16, 1999 in  a  share  for  share
exchange. Elk is licensed by the Small Business  Administration (SBA) to operate
as  a  Small  Business  Investment  Company  (SBIC)  under  the  Small  Business
Investment Act of 1958, as amended (the "1958 Act"). Both Ameritrans and Elk are
registered as investment companies under the Investment Company Act of 1940.

      Elk makes loans to and investments in businesses  that  qualify  under SBA
regulations  for funding under the 1958 Act.  Elk's primary lending activity  is
to originate and service loans collateralized by the cities of New York, Boston,
Chicago and Miami  taxicab  medallions.  Elk also makes loans and investments in
other diversified businesses.  At December 31, 2005, 72% of Elk's loan portfolio
consisted of loans secured by taxi medallions  and  28%  consisted  of  loans to
other diversified businesses.

      From inception through April 2002, Ameritrans' only activity had been  the
operations  of  Elk.  In  May  2002, Ameritrans began making loans to businesses
using the proceeds raised from a  public  offering, which was completed in April
2002.  Since July 2002 Ameritrans has been making equity investments.


      Elk has six (6) wholly-owned subsidiaries:  EAF  Holding  Corporation, EAF
Enterprises LLC, Medallion Auto Management LLC, EAF Leasing LLC,  EAF Leasing II
LLC and EAF Leasing III LLC.

      EAF  Holding  Corporation  was  formed  in 1992, and its sole activity  is
owning  and operating certain real estate assets  acquired  in  satisfaction  of
loans. EAF  Enterprises LLC was formed in June 2003 to take title to some of the
Company's remaining  Chicago foreclosed medallions, and to thereafter lease them
to taxi drivers under a 36-month lease. Medallion Auto Management LLC was formed
in  June  2003  to own taxi  vehicles  used  primary  in  conjunction  with  EAF
Enterprises LLC's  taxi  medallion  leasing  operation.   In  order to lease the
medallions, Medallion Auto Management LLC was formed to purchase  taxi  vehicles
and lease the vehicles to operators, pursuant to leases which the operator  will
own  the  vehicle  for a nominal payment at the end of the term of the lease, or
have an option to purchase  the  vehicle  for  its  then  unamortized  cost. EAF
Leasing  LLC,  EAF  Leasing  II  LLC and EAF Leasing III LLC were formed to take
title  to  approximately  35 foreclosed  medallions  and  lease  them  to  large
medallion operators.



                                       14


<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2005 AND 2004


TOTAL INVESTMENT INCOME


      The Company's interest income for the three months ended December 31, 2005
increased $87,014 or  8% to  $1,241,722  as  compared  to the three months ended
December  31,  2004,  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  three  months  ended December 31, 2005 increased
$144,781, or 33%, to $586,181 as compared to the three months ended December 31,
2004, due to higher interest rates charged on outstanding  bank borrowing, which
was  partially  offset  by a reduction in the outstanding banks  notes  payable.
Salaries and employee benefits  decreased  $10,550,  or  4%,  as compared to the
similar  period  in  the  prior  year.  These decreases resulted primarily  from
decreases  in  commissions paid to an  employee.   Professional  fees  decreased
$49,050, or 25%,  as  compared  to  the comparable period in the prior year, due
primarily to a reduction in Chicago legal  fees  which  is due to improvement in
the Chicago Market.  Foreclosure expenses increased $3,139 or 34% as compared to
the similar quarter in the prior year.  Write off and depreciation  of  interest
and  loans  receivable  decreased  $189,765,  or 66%, as compared to the similar
quarter  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 decreased  $70,165  or  24%  as  compared  to  the
similar period in the prior year, due primarily to a decrease in Chicago service
fees and computer expense.


NET LOSS


      Net loss decreased from $(327,240) for the three months ended December 31,
2004 to $(47,387) for the three months ended December 31, 2005.  The decrease in
net  loss  between  the  periods  was  attributable  primarily  to  decreases in
salaries, professional fees and write off and depreciation of interest and loans
receivable,  which more than offset the increase in interest expense.  Dividends
for Participating Preferred Stock were unchanged at $84,375 for the three months
ended December 31, 2005 and 2004.










                                       15


<PAGE>

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004


TOTAL INVESTMENT INCOME


      The Company's  interest  income for the six months ended December 31, 2005
increased $107,740 or 5% to $2,391,505  as  compared  to  the  six  months ended
December  31,  2004,  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  six  months  ended  December  31, 2005 increased
$302,298, or 38%, to $1,125,454 as compared to the six months ended December 31,
2004, due to higher interest rates charged on outstanding bank  borrowing, which
was  partially  offset  by  a reduction in the outstanding banks notes  payable.
Salaries and employee benefits  increased  $3,024,  or  1%,  as  compared to the
similar  period  in  the  prior  year.  These increases resulted primarily  from
increases  specified  in certain officers'  employment  agreements  as  well  as
commissions paid to an  employee.  Professional fees decreased $114,802, or 35%,
as compared to the comparable period  in  the  prior  year,  due  primarily to a
reduction in Chicago legal fees. Foreclosure expenses increased $347  or  2%  as
compared to the similar period in the prior year.  Write off and depreciation of
interest  and  loans  receivable  decreased  $255,435 or 65%, 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 decreased $33,844 or 6% as compared to the similar
period in the prior year, due primarily to a decrease in  Chicago  service  fees
and computer expense.


NET LOSS


      Net  loss  decreased from $(242,528) for the six months ended December 31,
2004 to $(38,443)  for  the  six months ended December 31, 2005. The decrease in
net  loss  between  the  periods was  attributable  primarily  to  decreases  in
salaries, professional fees and write off and depreciation of interest and loans
receivable, which more than  offset  the increase in interest expense. Dividends
for Participating Preferred Stock were  unchanged at $168,750 for the six months
ended December 31, 2005 and 2004.


FINANCIAL CONDITION AT DECEMBER 31, 2005 AND 2004


BALANCE SHEET AND RESERVES


      Total  assets  decreased  by $1,564,124  as  of  December  31,  2005  from
$57,886,595 as of June 30, 2005.  This  decrease  was  primarily  due  to  lower
outstanding  loans  receivable  which  is  partially  attributable to payoffs on
loans. In addition, Elk's proceeds from notes payable from banks for the quarter
were  $5,615,713  versus $10,260,797 in repayments made on  notes payable  from
banks. This resulted in a $4,645,084 decrease in its short-term bank borrowings.





                                       16


<PAGE>
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 July 29, 2005, Ameritrans commenced a private  offering of Common Stock
with warrants to "accredited investors," as that term is  defined in Rule 501 of
Regulation  D promulgated under the 1933 Act (the "Offering").   The  shares  of
Common Stock are being offered at a price no less than book value as of the date
of the Offering.  For  every  four  (4)  shares  of  Common Stock purchased, the
Company  will issue to the investor one (1) warrant, exercisable  for  five  (5)
years from  the  date  of issuance, to purchase one (1) share of Common Stock of
the Company at an exercise  price  equal  to  110%  of the purchase price of the
Shares.  This  Offering  was  previously  approved  by  the  requisite  vote  of
shareholders. The Offering is for maximum gross proceeds totaling $10 million.


      The Offering period will expire on March 31, 2006.  The Board of Directors
believe  that  raising  additional capital pursuant to a private  offering  will
allow the Company to expand its investment portfolio and diversify the Company's
investments  beyond  the  SBA-regulated  loans  and  investments  of  Elk.  This
diversification will provide  the Company with the flexibility to participate in
a wide range of investment opportunities.


      As of December 31, 2005,  the  Company  issued  657,620  shares  for gross
proceeds totaling $3,847,080, ($3,521,629 net of expenses).  A total of  164,405
warrants  to  purchase  shares  of Common Stock were issued.  Since December 31,
2005,  the  Company issued an additional  70,000  shares  for  additional  gross
proceeds totaling  $409,500.    To  date,  the  Company has raised approximately
$3,891,676, net of expenses.

        On December 29, 2005, the Company distributed  to  shareholders  a proxy
statement  and  invitation  to  a  Special Meeting of Shareholders to be held on
January  23, 2005 (the "Meeting").  The  Meeting  was  called  to  consider  the
approval of  an  extension  of  the offering period of the Offering to March 31,
2006, which Offering period extension,  if  not  approved by Shareholders, would
have expired on January 25, 2006.  The extension of the Offering was approved at
the Meeting.  For more information, please see the  Company's  definitive  proxy
statement  filed  with  the  SEC  on  December  29, 2005 and the Company's press
release filed with the SEC on Form 8-K on January  24,  2005,  both of which are
available online at www.sec.org.












                                       17


<PAGE>

      At  December  31,  2005,  68%  of  Elk's  indebtedness was represented  by
indebtedness to its banks and 32% by debentures issued  to  the  SBA  with fixed
rates  of  interest  plus  user  fees  resulting in rates ranging from 5.17%  to
5.8750%. Elk currently may borrow up to  $36,000,000,  of  which $10,874,432 was
available  for  draw  down as of December 31, 2005 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, 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 0.87% 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.


      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. In order 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.



                                       18


<PAGE>

NEW ACCOUNTING STANDARDS


      In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement No. 123(R), "Share-Based Payment" ("SFAS 123(R)"), which replaced SFAS
No. 123,  "Accounting  for Stock-Based Compensation," and superseded APB Opinion
25, "Accounting for Stock  Issued  to Employees."  SFAS 123(R) requires that all
share-based payments to employees be  recognized  in  the  financial  statements
based on their fair values on the date of grant.  The Company currently uses the
intrinsic  value method to measure compensation expense for stock-based  awards.
On April 14,  2005,  the SEC amended the compliance dates for SFAS 123(R), which
extended the Company's  required  adoption date of SFAS 123R to its fiscal third
quarter in its fiscal year ended June  30,  2006.  The Company is evaluating the
requirements  of SFAS 123(R) and expects that  its  adoption  will  not  have  a
material impact on its financial position or results of operations.


      Also in December  2004,  the  FASB  issued Statement No. 153, Exchanges of
Nonmonetary  Assets,  ("SFAS  No.  153")  which  addresses  the  measurement  of
exchanges of non-monetary assets and eliminates  the  exception  from fair value
measurement for nonmonetary exchanges of similar productive assets  and replaces
it with an exception for exchanges that do not have commercial substance.   SFAS
No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods
beginning  after  June 15, 2005, with earlier application permitted.  Management
believes that the adoption  of  SFAS  No.  153  has  not  had  any impact on the
Company's results of operations or its financial position.


      In June 2005, the FASB issued Statement No. 154, "Accounting  Changes  and
Error  Corrections,"  ("SFAS  No.  154")  which  changes  the  requirements  for
accounting  for and reporting of a change in accounting principle.  SFAS No. 154
requires retrospective  application  to prior periods' financial statements of a
voluntary change in accounting principle  unless  it is impracticable.  SFAS No.
154  also  requires  that a change in method of depreciation,  amortization,  or
depletion for long-lived,  non-financial  assets be accounted for as a change in
accounting estimate that is effected by a change  in accounting principle.  SFAS
No. 154 is effective for accounting changes and corrections  of  errors  made  a
fiscal  years  beginning  after  December  15,  2005,  but  does  not change the
transition provisions of any existing accounting pronouncements, including those
that  are  in  a  transition  phase  as  of the effective date of the Statement.
Management believes that the adoption of SFAS  No.  154  has  not had a material
effect on the Company's results of operations or its financial position.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

      We maintain disclosure controls and procedures that are designed to ensure
that  information  required  to  be  disclosed  in  the Exchange Act reports  is
recorded, processed, summarized and reported within the  time  periods specified
in  the  Commission's rules and forms, and that such information is  accumulated
and communicated  to  Management  to  allow  timely decisions regarding required
disclosure  based  closely  on  the  definition  of   "disclosure  controls  and
procedures" in Rule 13a-15(e) promulgated under the Exchange  Act.  In designing
and  evaluating  the  disclosure  controls and procedures, management recognizes
that any controls and procedures, no  matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control










                                       19


<PAGE>

objectives, and management necessarily  is  required  to  apply  its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.


      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.


      The Company values its portfolio of loans and investments at fair value as
determined  in  good  faith  by  the   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 and loans. The Company adjusts the valuation of the portfolio of
loans and investments quarterly to reflect the Board  of  Directors' estimate of
the current fair value of each investment and loan in the portfolio. Any changes
in estimated fair value of loans are recorded in the Company's  balance sheet as
unrealized depreciation on loans receivable and also in the Company's  statement
of  operations  as  write off and depreciation on interest and loans receivable.
Any changes in estimated fair value of investments are recorded in the Company's
balance sheet as accumulated other comprehensive loss.


      In addition, the  illiquidity  of  our  investments and loan portfolio may
adversely affect our ability to dispose of investments or loans at times when it
may be advantageous for us to liquidate such investments  or  loans. Also, if we
were  required  to  liquidate  some or all of these items in the portfolio,  the
proceeds of such liquidation might  be significantly less than the current value
of  such  investments or loans. 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.










                                       20


<PAGE>
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 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.


      There were no changes to the Company's  internal  controls  over financial
reporting  as defined in Rule 13a-15(f) of the Exchange Act that occurred during
our  most  recently  completed  fiscal quarter that materially affected,  or  is
reasonably  likely to materially affect  our  internal  control  over  financial
reporting.


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,










                                       21


<PAGE>

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 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.










                                       22


<PAGE>



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

Please refer to Note 7 to the Consolidated Financial  Statements  in  Part I for
discussion of the Company's Offering of July 29, 2005.  The Company is not using
an underwriter in the Offering.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Please  refer  to  Item  2  of  Part  I  for a discussion of the Company's proxy
statement distributed to shareholders on December 29, 2005.

ITEM 5. OTHER INFORMATION

None












<PAGE>


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.

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)






<PAGE>


            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 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.

10.11      Letter Agreement renewing line of credit  for Elk with IDB Bank dated
April 13, 2004.(6)

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 December 31,
2002 between Ameritrans and Lee Forlenza. (8)

10.19       Employment Agreement dated as of October 1, 2001 between  Ameritrans
and Ellen Walker. (9)

10.20      Employment  Agreement  dated as of January 1, 2002 between Ameritrans
and Silvia Mullens.(9)

10.21      Employment Agreement dated  as  of January 1, 2002 between Ameritrans
and Margaret Chance. (9)





<PAGE>



10.22 Letter Agreement between Israel Discount  Bank  of  New York and Elk dated
      February 1, 2006 extending the line of credit.


10.23 Promissory  Note dated December 31, 2005 between Ameritrans  and  Citibank
and Letter Agreement dated December 27, 2005 renewing the line of credit between
aforementioned parties.


10.24 Promissory Note  dated December 19, 2005 between Ameritrans and Bank Leumi
USA and Letter Agreement  extending  the  line  of credit between aforementioned
parties.

22.1  Proxy  statement on Schedule 14A mailed to shareholders  on  December  29,
2005 (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.

32.1       Certification pursuant to 18 USC Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.






<PAGE>


 (B) REPORTS ON FORM 8-K

On  December 29, 2005, the Company filed a current report on Form 8-K  reporting
under  Item  8.01  that  the Company issued a press release announcing a Special
Meeting of the Shareholders of the Company.

On December 22, 2005, the  Company  filed a current report on Form 8-K reporting
under Item 5.02 that the Company issued  a  press  release  regarding  Board  of
Director member resignations and appointment of new directors.

On  December  20, 2005, the Company filed a current report on Form 8-K reporting
under  Item 2.02  that  the  Company  issued  a  press  release  announcing  the
declaration of a quarterly dividend on its 9 3/8% Preferred Stock.

On December  6,  2005,  the Company filed a current report on Form 8-K reporting
under Item 2.02 that the  Company  issued a press release announcing the initial
closing of the Company's private offering of common stock.

On November 15, 2005, the Company filed  a  current report on Form 8-K reporting
under Item 8.01 that the Company issued a press  release  announcing  its  first
quarter financial results of operations.

On  October  18,  2005, the Company filed a current report on Form 8-K reporting
under Item 8.01 that the Company issued a press release announcing the Company's
completion of interest rate swaps.


(1)        Incorporated by reference from the Registrant's Registrant's Schedule
14-A (File No. 811-08847) filed December 29, 2005.

(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.


                 (All other items of Part II are inapplicable)





<PAGE>


                         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:  February 14, 2006
                                        By: /s/ Gary C. Granoff
                                           Gary C. Granoff
                                           President, Chief Executive Officer
					 and Chief Financial Officer

<page>

                         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, President, Chief Executive Officer, and Chief Financial
Officer of Ameritrans Capital Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ameritrans Capital
Corporation (the "report");

2. 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 the report;

3.  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.

4.  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:

	(a)	Designed such disclosure controls and procedures, or caused such
                disclosure controls and procedures to be designed under our
                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 our 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 principles;

	(c)	Evaluated the effectiveness of the registrant's disclosure controls
                and procedures and presented in this report our 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

5.	I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee
of the board of directors (or persons performing the equivalent functions):

	(a)	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

	(b)	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:  February 14, 2006


                       /s/ GARY C. GRANOFF
                       --------------------------------------
                       GARY C. GRANOFF
                       PRESIDENT, CHIEF EXECUTIVE OFFICER AND
                       CHIEF FINANCIAL OFFICER

<page>

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 September 30, 2005, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Gary C. Granoff, President, Chief Executive Officer, and Chief Financial Officer
of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 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.


/s/ GARY C. GRANOFF
----------------------------------------------
GARY C. GRANOFF
PRESIDENT, CHIEF EXECUTIVE OFFICER, AND CHIEF FINANCIAL OFFICER
February 14, 2006