FORM 10-KSB

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
ANNUAL REPORT
(Mark One)
[X]  ANNUAL  REPORT  PURSUANT  TO  SECTION  13  OR  15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended September 30, 1998

OR
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF  THE  SECURITIES
EXCHANGE ACT OF 1934 [NO FEE
        REQUIRED]
For the Transition Period from __________ to __________

        Commission file number        33-75594


MERIDIAN FINANCIAL CORPORATION
(Name of small business issuer in its charter)
                             Indiana 35-1894846
(State  or  other  jurisdiction  of (I.R.S. Employer Identification No.)
                      incorporation or organization)

        9265 Counselor's Row, Suite 106
                                    Indianapolis,                   Indiana
46240-6402
                   (Address     of     principal     executive     offices)
(Zip Code)

(317) 814-2000
(Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:

NONE

Securities registered under Section 12(g) of the Exchange Act:

NONE

Check whether the issuer (1) filed all reports  required  to  be  filed  by
Section  13  or 15(d) of the Exchange Act during the past twelve 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 [  ]

Check if there is no disclosure of delinquent filers in  response  to  Item
405  of  Regulation  S-B  contained in this form, and no disclosure will be
contained, to the best of registrant's  knowledge,  in  definitive proxy or
information statements incorporated by reference in Part  III  of this Form
10-KSB or any amendment to this Form 10-KSB.   Not applicable

Issuer's  revenues  for  the  fiscal  year ended September 30, 1998:    Not
Available

Aggregate  market value of the voting stock  held  by  non-affiliates:  The
voting stock  of  the  Company  is  closely  held and there is currently no
liquid market.

Number  of common shares, without par value, outstanding  at  December  31,
1998: 1,066.63

DOCUMENTS INCORPORATED BY REFERENCE: NONE

Transitional  Small  Business Disclosure Format:               Yes [  ]  No
[X]


MERIDIAN FINANCIAL CORPORATION
Indianapolis, Indiana

Annual Report to Securities and Exchange Commission
September 30, 1998

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

Meridian  Financial  Corporation  ("Company")  is  an  Indiana  corporation
organized  in  1993 to engage  primarily  in  the  business  of  commercial
equipment leasing  to  franchisees  of  national  restaurant  chains  under
full-payout, triple-net leases.

Through  1996,  the  Company  funded  its  purchases of equipment primarily
through the proceeds of a private placement  of  five-year  bonds, a public
offering of five-year bonds, and private placements of common and preferred
stock.   During  1994  and  1995, the Company issued and sold approximately
$7.8 million aggregate principal  amount  of  bonds  under  an indenture of
trust, the net proceeds of which were used to fund equipment  leases.   The
Company's  payment  obligations  on  the  bonds  are  secured  by  security
interests   in   the  equipment  acquired  with  the  proceeds,  collateral
assignments of the  related  leases,  and  a  debt  service reserve fund on
deposit  with  the  trustee.   Also during 1994, the Company  realized  net
proceeds of approximately $1.4 million from the issuance of preferred stock
together with warrants to purchase  common stock.  These proceeds were used
to fund finance receivables and for general corporate purposes.

During the year-ended September 30, 1997 ("FY/97") the Company successfully
completed two financing transactions  that  represented  the culmination of
efforts to secure alternative sources of financing after the  expiration of
the Company's public bond offering on December 31, 1995.  On March 28, 1997
the  Company  entered  into a transaction with three venture capital  funds
raising $6.5 million of new capital in two stages.  This capital was in the
form of Series C Convertible  Preferred Stock ($3 million) and Subordinated
Debt ($3.5 million in two tranches).   The Company utilized $1.5 million of
the proceeds to redeem its Series B Preferred  Stock  and related warrants.
In conjunction with this capital transaction, on April 18, 1997 the Company
entered  into a credit agreement ("Agreement") with LaSalle  National  Bank
("Bank") for  a  total  of  $10 million.  The Agreement consisted of two $5
million warehouse lines, which  were  to  convert  to term loans six months
after their respective effective dates.

During  the year-ended September 30, 1998 ("FY/98") the  Company  converted
the first warehouse line to a 29-month term loan for $4,906,000 on November
18, 1997.   The second warehouse line was converted to a 28-month term loan
for $4,799,000  on  July  19,  1998.   Equipment  leases  originated by the
Company's personnel collateralized both term loans.  These  term  loans are
being  repaid  on  a  monthly basis with principal payments of $89,200  and
$85,700 respectively plus  interest.   On  September  29,  1998 the Company
signed  an  agreement for a third warehouse line of $2.5 million  with  the
Bank.  The Company  currently  is  in default of covenants under its credit
facilities with the Bank.  See "Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations."

The  closing  of  these  transactions  has  allowed  the  Company access to
significant  amounts  of  capital, which previously were unavailable.   The
Company has been able to grow  the lease portfolio at a much faster rate in
FY/98 and FY/97 than in prior years.

To better maintain its expanded  lease  portfolio,  the  Company  installed
state-of-the-art  accounting  and lease accounting software on its computer
network during the fourth quarter  of  FY/98. The addition of this software
will enable the Company to maintain real-time  financial information on all
of its leasing customers.

The  Company  currently  has  eight  full-time  employees.   The  Company's
executive  offices  are  located  at  9265  Counselor's   Row,  Suite  106,
Indianapolis, Indiana 46240-6402, and its telephone number is 317.814.2000.

Marketing

The  marketing of the Company's leasing product is accomplished  through  a
variety  of  methods  including  franchisor  referrals,  equipment  leasing
brokers, restaurant equipment dealer referrals and referrals from
other leasing companies across the country.  Management of the Company also
attends  food  industry  trade shows and conventions, providing the Company
with high visibility in the industry.

The Company's target market  is  seasoned,  multi-site,  national franchise
restaurant  operators who are adding locations under a franchise  agreement
with a Company-approved  franchisor  group.   These  franchisees  typically
require leases in amounts from $100,000 to $300,000.  Substantially  all of
the  Company's  equipment  leases  are  for a 60-month term.  The qualified
franchisees are likely seasoned operators  who  have  outgrown  their local
banks' credit ceilings, geographic boundaries or willingness to fund newer,
unfamiliar  (from  the  bank's  perspective)  franchise  concepts.  From  a
geographic standpoint, the Company's market includes both the United States
and Canada.

The  Company  also  has  opportunities,  principally through referrals,  to
review financing transactions, which are outside  of  the Company's, target
market.  Management considers these non-targeted leases  on  a case-by-case
basis.

Leasing Activities

The  Company has entered into restaurant equipment leases with  franchisees
representing  a  wide  variety of national restaurant chains.  Those chains
representing more than 5% of the total finance receivables at September 30,
1998 include Great Steak and Potato, Papa John's Pizza, Red River Barbecue,
Checkers and T.G.I.Friday's.  The current portfolio represents 22 different
franchise restaurant concepts.

Equipment

The  Company  focuses  on  purchasing  and  leasing  complete  packages  of
restaurant  equipment  for  national   restaurant   franchises,   including
freezers,   refrigerators,   grills,   broilers,  fryers,  signs,  exterior
lighting, point-of-sale registers, seating  units and other items necessary
for the operation of a restaurant.  However,  the  Company may purchase and
lease a wide variety of other types of equipment where,  in  the opinion of
management, the nature of the opportunity and the creditworthiness  of  the
potential lessee warrant.

Purchases  of  equipment  may  be  made  directly  from manufacturers, from
dealers, from independent third parties, or from existing  users subject to
sale-leaseback.  In most cases, management of the Company does  not  obtain
appraisals  or  other  indications  of fair value of the equipment acquired
because all equipment is acquired subject to full-payout leases, is new and
is purchased from vendors specified by the franchisor.

Leases

Although certain minimum requirements must be met for each lease, the terms
and  conditions of the leases are determined  by  negotiation  between  the
Company  and  the  lessee  and  may  vary  from lease to lease.  All of the
Company's  current  leases  have a fixed base lease  rate,  however  future
leases may provide for percentage rentals subject to a specified guaranteed
minimum.   All  of the Company's  leases  are  full-payout,  non-cancelable
leases, and most have non-renewable five-year terms.  At the termination of
each lease, the lessee is required to purchase the equipment subject to the
lease for an amount  agreed  upon  by  the  Company  and  the lessee at the
inception of the lease.

Each  of  the  Company's present leases is a triple-net lease.  All  leases
require the lessee  to  repair  and  maintain  the equipment, pay all taxes
relating to the lease and the lessee's use of the  equipment,  and bear the
entire  risk  of  the  equipment being lost, damaged, destroyed or rendered
unfit or unavailable for  use.   Historically  the Company has retained and
serviced all of its leases, except for those sold  to  a  third  party on a
non-recourse basis, and it reserves the right to sell its interest in other
leases and the underlying equipment.

Credit Criteria

The Company bases its credit decisions upon a two-tiered approval  process.
Senior  management  initially  reviews  and  performs  due diligence on the
franchise  concept  and the financial capital of the franchisor.  If  these
components are acceptable,  the  Company  will  consider  applications from
franchisees  of  the approved concept.  The Company's credit  officer  will
then  conduct an initial  review  of  the  potential  lessee's  credit  and
financial  information  and  generate  a  "Lessee  Profile"  which includes
relevant  business information concerning the potential lessee.   A  senior
member of the  management  team  visits  the  franchise  location, inspects
operations and interviews the management/ownership of the  franchise.   The
Company  utilizes  an  internally developed; comprehensive "Franchisee Site
Visit Checklist" which focuses  on  the  key operational issues confronting
restaurant franchisees.  After all due diligence  is  complete, the Company
will issue its conditional commitment to fund.

The  Company  focuses  its  leasing  efforts  on  the franchise  restaurant
industry because the franchisor generally monitors  its  franchisees  on  a
regular  basis  and  insists  that  franchisees  stay  current  with  their
obligations  to  creditors.   In  the  event of default, the franchisor may
intervene to protect the value of the franchise.

Competition

The equipment leasing industry is highly competitive, and the Company faces
competition from various sources.  There are numerous potential competitors
seeking  to  purchase  and lease equipment,  many  of  which  have  greater
financial resources than  the  Company  and/or  more  experience  than  the
Company's management.  The Company competes in the leasing marketplace with
various  entities, including equipment dealers, brokers, leasing companies,
financial  institutions and manufacturers or their affiliates.  In addition
to attractive  financial  terms,  manufacturers  may  also  provide certain
ancillary  services the Company cannot offer directly, such as  maintenance
services  (including   possible  equipment  substitution  rights)  warranty
services, purchase rights and trade-in privileges.

The  Company  identifies  potential   lessees   through   various  sources.
Management  of  the  Company  has  relationships  with  various  restaurant
franchisors and other potential sources of business.  Because the Company's
business  is  concentrated in the restaurant industry, the Company receives
referrals from  other  leasing  companies  that do not serve the restaurant
industry.

ITEM 2.  DESCRIPTION OF PROPERTY

Due to the nature of the Company's business,  its  investment  in  tangible
property,  other  than  equipment  subject  to  leases,  is not significant
relative to its total assets.  The Company leases its executive offices.

ITEM 3.  LEGAL PROCEEDINGS

The Company is not presently a party to any pending legal proceeding.

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

 No matter was submitted to a vote of the security holders  during  the 4th
quarter of FY/98.

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There  is no public trading market for the Company's common shares.  As  of
December  31,  1998,  there were 11 holders of record of the common shares.
No cash dividends were  declared  or  paid on the common shares in FY/97 or
FY/98.

The  terms  of  the  Company's Series A Preferred  Stock  provide  that  no
dividends (other than  dividends  paid  in  common  shares)  may be paid or
declared  and set aside for payment or other distribution upon  the  common
shares unless  full  cumulative  dividends  on the Series A Preferred Stock
have been paid.  The Company paid all quarterly  dividends  on the Series A
Preferred Stock during FY/98.

The  terms  of  the Company's Series C Convertible Preferred Stock  provide
that approval by  the  holders  of  at  least two-thirds of the outstanding
shares of Series C Convertible Preferred  Stock,  voting  separately  as  a
series,  is  required prior to the purchase of, or payment of any dividends
or distributions  on,  any  shares  of  stock of the Company other than the
Series  C  Convertible Preferred Stock. Dividends  payable  on  the  common
shares solely in the form of additional common shares and regular quarterly
dividends on  the  Series  A  Preferred  Stock are excluded.  The Company's
Articles  of  Incorporation and Indiana Business  Corporation  Law  further
provide that no  dividend or other distribution may be made upon any shares
if, after giving it effect, the Company would be unable to pay its debts as
they become due in  the  usual  course  of  business or the Company's total
assets would be less than its total liabilities.

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                RESULTS OF OPERATIONS

The Company's Financial Statements are not Available

The Company is filing this Annual Report on Form 10-KSB without its audited
financial statements for FY/98.  These financial statements and the related
audit  are not complete as of the date this report  is  being  filed.   The
Company  will  file the financial statements as soon as they are available,
which is expected  to  be on or before January 31, 1999.  At that time, the
company also will complete  the  portions  of  "Management's Discussion and
Analysis of Financial Condition and Results  of  Operations"  that  discuss
financial statement items.

Liquidity and Capital Resources

As stated under "Description of Business" above, the Company has funded its
leasing activities primarily by:

* the sale of five-year bonds under an indenture of trust,
* the issuance of common and preferred stock,
* the issuance of subordinated notes to three venture capital funds and
* borrowing under a credit facility with the Bank.

The  Company  currently is in default of several covenants under its credit
facility with the  Bank.   Management does not expect the Company to return
into compliance with these covenants, as they are currently written, during
the next 12 months; however,  Management is working with the Bank to resolve
the defaults, either by waiver,  modification  of  the  covenants,  or some
other  means.  If the defaults are not resolved, the Bank would be entitled
to declare  the  entire amount of the Company's indebtedness to the Bank to
be immediately due  and  payable.   This,  in  turn, would likely result in
defaults under other financing agreements of the Company.  The acceleration
of any material portion of the Company's indebtedness would have a material
adverse effect on the Company.

The covenant defaults under the credit facility  result  from delinquencies
and  defaults  in the Company's lease portfolio.  The Company  historically
has experienced some delinquency in payments by its lessees.

Management considers  a  certain level of delinquency to be consistent with
normal business operations  in the segment of the leasing industry in which
the Company operates.  The credit  facility  provides  that  the  Company's
ratio  of  delinquent receivables to total receivables will not exceed  5%;
however, at  December  31, 1998 the dollar amount of delinquent receivables
was  $6,196,110  which  represented  32.9%  of  the  total.   A  delinquent
receivable  outside the restaurant  industry  in  the  amount  of  $920,743
contributed to  the ratio.  In addition, defaulted leases from two lessees,
whose operations  are now controlled by the Company, contributed $2,480,854
to the ratio.  The  overall  delinquency  ratio  was 26.9% at September 30,
1998 compared to 10.3% at September 30, 1997.

While  delinquencies  are  not  unusual for the Company,  before  1998  the
Company  had  not experienced significant  defaults  with  lessees  in  the
restaurant industry.   In FY/98, however, five restaurant leases defaulted,
resulting in net charge-offs  of $107,112 against the Company's reserve for
credit losses.   Management believes  that  these  defaults  are not due to
problems applicable to the portfolio as a whole, but instead occurred  as a
result of circumstances unique to each case.

The  Company  is diligently addressing its delinquencies and defaults.  The
newly installed  automated system provides on-line access to information on
delinquent accounts.   The  report  generator in the program provides daily
reports for the collection effort and individual account responsibility has
been  assigned  to collectors.  Although  the  program  has  been  recently
implemented, at least  25% of the delinquent accounts, by number, have been
brought current.   Management  believes  the Company's allowance for credit
losses of $152,217 at September 30, 1998 is  adequate  to absorb any losses
that are likely to result from the current defaults.

In addition to addressing the delinquency and default issues, Management is
working  to  establish additional funding sources for the  Company.   These
funding sources  are  needed in order to refinance maturing portions of the
Company's indebtedness and to originate new lease transactions.

In  FY/98,  the  Company expects  the  following  indebtedness  to  mature,
assuming the current covenant defaults are resolved without acceleration of
any indebtedness:

        Five-Year Bonds:
$1,278,873

        Bank Indebtedness:
$1,514,100

        Other:
     $1,341,000

                        Total
     $4,133,973

The company expects to repay maturing indebtedness through a combination of
activities including:

*  Cash  flow  generated  by  lease payments on performing leases.  Monthly
payments  currently  average  $320,000/month.
* Recovery of delinquent accounts, success in litigation and liquidation of
defaulted accounts.  Approximately $1.0 million is expected to be recovered
in the second fiscal quarter.
*  Sale of leases to third parties. Performing lease  receivables  totaling
$3.0  million  have  been  identified and will be discounted to lessors and
investors at rates below the contract lease rate.  These sales of leases on
a discounted basis will generate an immediate gain on sale.
* Additional funding with the  Bank and other participating banks are being
sought to increase the funds available to the Company. Increased  capacity at 
competitive
rates will increase lease revenues.
* The board will consider an infusion of capital through  the  addition  of
new common shares.

The  Company's  business  plan  anticipates  continued  growth in its lease
portfolio.  The financing transactions completed in prior  years positioned
the  Company  to achieve growth.  During FY/98, the Company substantially 
increased
the size of its  lease  portfolio  from  $11.1  million  to  $17.8 million.
 As of December
30, 1998, however, the Company has borrowed substantially  all of the funds
available to it under the credit facility with the Bank.  The  Company will
have  to  establish  a  new  funding  source  in 1999 to achieve its growth
targets.

Management believes the best funding source to  support  future growth is a
warehouse credit facility in which lease receivable would be aggregated for
later  sale  in  a  securitization.   Management  has  been in negotiations
throughout 1998 with various lenders that provide this type  of  financing,
and these negotiations are continuing.  The Company has signed a term sheet
with  one  of  these lenders.  The term sheet, which is subject to numerous
substantial conditions,  contemplates  establishing a $50 million warehouse
facility. The lender is continuing its due diligence of the Company.  If the
Company is unsuccessful in engaging in a securitization program,
another  liquidity  provider will be sought to supplement  or  replace  the
Bank.  Management continues  to discuss this option with the Bank and other
liquidity providers.

As an additional means of obtaining  liquidity  for  the origination of new
lease  transactions  or for other purposes, the Company  has  entered  into
agreements to sell leases  on  a  non-recourse  basis to third parties from
time to time.  Newcourt/ATT Capital provides, through a discount agreement,
an annual line of approximately $10 million, funding  for  leases  that the
Company  can sell from its portfolio.  Additionally, two additional leasing
companies  interested  in buying leases on terms similar to or better than,
those offered by Newcourt/ATT have approached the Company.  In the past the
focus has primarily been  on  building the portfolio's critical mass rather
than selling lease receivables;  liquidity  pressure has forced the company
to step-up sale efforts.  The Company is currently  in  discussion  for the
sale of $2.0 million of leases.  The Company typically recognizes immediate
income  on  the sale of the lease.  The Company recognized gains of $39,776
in FY/98 from the sale of leases.

1997 and 1998 Financing Transactions

On March 28,  1997  the  Company  entered  into  a  $6.5 million Securities
Purchase  Agreement ("Purchase Agreement") with Inroads  Capital  Partners,
L.P.  ("Inroads"),  Mesirow  Capital  Partners  VII,  an  Illinois  Limited
Partnership   ("Mesirow"),   Edgewater   Private   Equity   Fund  II,  L.P.
(collectively, the "Purchasers"), Michael F. McCoy and William  L.  Wildman
pursuant  to  which  the  Purchasers  purchased from the Company a total of
3,000  shares of the Company's new Series  C  Convertible  Preferred  Stock
("Preferred  Shares")  and  $3,500,000  aggregate  principal  amount of 10%
Subordinated  Notes  due  March  31,  2002  ("Subordinated  Notes").    The
aggregate  purchase  price  for the Preferred Shares was $3,000,000 and the
aggregate purchase price for  the  Subordinated  Notes  was $3,500,000.  On
March 28, 1997 $500,000 of the Subordinated Notes were purchased,  with the
remaining $3,000,000 being purchased on September 18, 1997.

The  Subordinated  Notes  are  subject to a Subordination and Intercreditor
Agreement between the Company, the  Purchasers  and  the  Bank. The Bank is
further described below under the heading "Bank Credit Facility".

The  Company  utilized $1.5 million of the proceeds from the  sale  of  the
Preferred Shares  to  redeem  its Series B Preferred Stock and the attached
warrants to purchase Common Shares.

Bank Credit Facility

In conjunction with the described equity transaction, on April 18, 1997 the
Company entered into an Agreement  with  the Bank.  The Agreement consisted
of two $5 million warehouse lines that were to convert to term loans within
six months after their respective effective  dates.   The  interest rate on
these  warehouse  lines  was the Bank's prime lending rate plus  100  basis
points, or LIBOR plus 300 basis points, at the option of the Company.  Upon
conversion to a term loan,  the  interest  rate  was to be either (1) prime
plus 125 basis points, (2) LIBOR plus 325 basis points,  or  (3)  the  U.S.
Treasury  rate  for similar maturities plus 325 basis points, at the option
of the Company.   The  term  loans were initially scheduled for thirty (30)
month maturities.

The warehouse lines required monthly  payments  of interest only.  The term
loans  require  monthly  payments  of  principal  and  interest,  with  the
principal portion based on a five-year level amortization.

During FY/98, the Company borrowed $4,906,000 against the initial term loan
and began tendering monthly principal payments of $89,200  plus interest on
December  20, 1997.  Additionally, the Company borrowed $4,799,000  against
the second  term  loan  and  began  tendering monthly principal payments of
$85,700 plus interest on August 20, 1998.   The  Company  has  entered into
interest rate swaps that will hedge the Company against interest  rate risk
on its floating rate term loans.

 On  September  29,  1998  the  Company  signed  an  agreement  for a third
warehouse  line  of $2.5 million with the Bank.  This agreement allows  the
Company to expand  the  availability  to $5.0 million at the Bank's option.
The Company will need to obtain additional  financing  during FY/99 to meet
the projected portfolio growth rate under its five-year financial plan.

Brokerage Activity

The Company also has agreements to sell leases on a non-recourse  basis  to
third  parties  from  time  to  time.   This  brokerage activity allows the
Company to recognize immediate income on brokered transactions and reinvest
the proceeds into new leases.  This activity also creates another source of
liquidity.   During  FY/98,  the  Company  closed three  transactions  with
third-party  lenders  resulting  in  booked gains.   It  is  the  Company's
intention to continue to pursue sales  of future leases to third parties as
part of the Company's overall financial plan.

The Company is already experiencing, and expects to continue to experience,
a  significant  increase  in  the  amount  of  funded  lease  transactions.
However,  with  its management team in place,  general  and  administrative
costs going forward  should  be  relatively  fixed, with the exception of a
limited number of personnel additions required by anticipated growth in the
Company's  lease  portfolio.   Therefore, the interest  spread  on  finance
receivables is expected to continue  to grow at a much faster pace than the
related general and administrative expenses.

Impact of Interest Rate Changes and the Restaurant Industry

The Company markets and funds fixed rate leases, and has attempted to raise
funds for investment in new leases at  fixed  interest  rates,  and similar
duration,   thus  virtually  eliminating  interest  rate  risk.   This  was
accomplished  in prior years with the five-year Series I and II Bond sales.
The Company's current  borrowings also allow the Company to manage exposure
to interest rate risk.   The  Subordinated  Notes  bear interest at a fixed
rate of 10%.  With the use of swaps in conjunction with  the  term loans in
the  Bank credit facility, the Company expects to be able to virtually  fix
the rate  of  interest  on  the term loans.  The first term loan utilized a
LIBOR based swap to effectively  fix  the rate for twenty-nine months at an
all-in rate of 9.37%.  The second term  loan utilized a similar LIBOR based
swap to effectively fix the rate for twenty-eight  months at an all-in rate
of 9.64%.  The Company's warehouse lines carry a variable rate of interest,
but  have  duration of only six months.  While a dramatic  rise  in  future
interest rates would not

have a direct impact on leases booked to date, it may have an impact on the
restaurant industry's  growth rate.  A rising interest rate environment may
also impact the Company's future gains on brokerage activities.

In the last ten years, the  franchise  restaurant  industry has experienced
rapid growth and the number of franchise units continues  to grow.  As some
concepts  begin  to reach a mature stage, and it becomes increasingly  more
difficult to sustain  a  high  level  of  growth  in  sales,  the market is
experiencing  a  significant  increase  in  the  number  of  new,  emerging
concepts.   Since  the  Company's target market includes the smaller chains
(from 100 to 300 units),  this  increase in new concepts should provide the
Company with an increase in prospective lease deals.  In addition, as large
metropolitan areas in some geographic  areas  begin  to  reach a saturation
point from the standpoint of restaurant locations, the Company is reviewing
more prospective lease deals in rural locations, which would tend to be the
smaller franchisee, which the Company targets.

Inflation has not had a material effect on the Company's operations.

Forward-looking Statements

The  statements  contained  in  this  filing  on Form 10-KSB that  are  not
historical facts are forward-looking statements  within  the meaning of the
Private Securities Litigation Reform Act.  Forward-looking  statements  are
made  based  upon  Management's current expectations and beliefs concerning
future developments  and  their  potential effects upon the Company.  There
can be no assurance that future developments  affecting the Company will be
those anticipated by Management.  Actual results may differ materially from
those  included in the forward-looking statements.   These  forward-looking
statements  involve  risks and uncertainties including, but not limited to,
the following:

* Changes in general economic  conditions,  including  changes  in interest
rates and spending on food prepared outside the home,
*  Competitive or regulatory changes that affect the cost of or demand  for
the Company's lease product, and
* The  availability  of funds or third-party financing sources to allow the
Company to purchase equipment and enter into new leases.

The Company's future results  also  could  be  adversely  affected if it is
unable to resolve the current defaults in its portfolio without significant
loss.

Reader's  are also directed to other risks and uncertainties  discussed  in
other documents  filed  by  the  Company  with  the Securities and Exchange
Commission.  The Company undertakes no obligation  to  update or revise any
forward-looking information, whether as a result of new information, future
developments or otherwise.


Year 2000 Readiness

The approach of the year 2000 presents potential problems  to  any business
that  utilizes  computers.   The  Company  relies  upon  computers for  its
communications and accounting requirements.  All computer  hardware will be
tested during FY/99 to determine Y2K compatibility. In addition it has been
determined  that  all  software  is  fully  compliant  except the Company's
network software.  The network software version owned by the Company is not
compliant  and  will be replaced to attain Y2K compliance.   The  Company's
costs related to Y2K compliance are estimated by Management to be less than
$10,000.  These costs  may  include  the  testing of equipment and software
programs, new equipment and software upgrades.   It is difficult to predict
such costs and additional funds may be needed.  The  Company's  failure  to
successfully  recognize  and  address  Y2K  issues could interfere with its
ability  to  operate  and could have an adverse  effect  on  its  financial
condition and results of operations.

ITEM 7.  FINANCIAL STATEMENTS

No  financial  data  is presented  with  this  filing.   See  "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
               AND FINANCIAL DISCLOSURE

There  have  been  no  changes  in  or  disagreements  with  the  Company's
independent accountants on accounting or financial disclosures.
PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
               COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The Board of Directors of the Company consists of Michael F. McCoy, Jerrold
B. Carrington, Thomas E.  Galuhn  and Salvatore F. Mulia.  Mr. McCoy serves
as Chairman of the Board and President;  none  of the other directors is an
officer of the Company.  William L. Wildman serves as Vice President of the
Company  and  Robert  W.  Johnson serves as Vice President,  Secretary  and
Treasurer  of  the  Company.   The  Company  has  no  other  officers.   In
connection with the issuance  of  the Series C Convertible Preferred Stock,
the Company entered into a Voting Agreement  with the Purchasers, Mr. McCoy
and  Mr.  Wildman.   Under  the Voting Agreement,  the  parties  agreed  to
cooperate to cause the Company's  Board  of  Directors  to  consist of five
members.   One  member  would  be  designated  by  Inroads,  Mesirow  would
designate  one  member,  one  member would be designated by the holders  of
two-thirds  of  the  voting  power   of  the  Company  exercisable  by  the
Purchasers, and two members would be designated  by  Mr.  McCoy.   There is
presently one vacancy on the Board of Directors.  The rights of the parties
to  designate  directors  terminate under certain circumstances.  Directors
are elected for a term of one  year  and until their successors are elected
and have qualified.  There is no family  relationship  between  any  of the
Directors or officers of the Company.

The  following  are  brief biographies of the Directors and officers of the
Company:

Michael F. McCoy  Mr.  McCoy  was  President,  Treasurer  and a Director of
United  Capital  Leasing  Corporation,  a  company  engaged  in  commercial
equipment leasing ("UCL"), from its inception in October 1990 until October
1993.   UCL specialized in restaurant equipment leasing and maintained  and
serviced  its  own portfolio.  From April 1978 to March 1991, Mr. McCoy was
Vice President of  Keystone  Leasing  Corporation, a company engaged in the
equipment  leasing business ("Keystone").   During  this  period  of  time,
Keystone originated  numerous  lease  transactions  for  equipment  used in
restaurant, industrial, office and manufacturing industries.  Substantially
all  of  the leases arranged by Keystone were brokered for the accounts  of
other institutions  and  were  full-payout,  triple-net leases with lessees
similar in credit experience to those targeted  by  the Company.  Mr. McCoy
received  a Bachelor of Science degree and a Master's  degree  in  Business
Administration with a concentration in Finance from Indiana University.  He
is 54 years  old.   Mr.  McCoy  has served as a Director and officer of the
Company since its inception.

Jerrold B. Carrington  For the last  six years, Mr. Carrington has been the
General Partner of Inroads Capital Partners,  L.P.  ("Inroads")  a  venture
capital  fund  that  invests in growing companies.  Inroads is one of three
venture capital funds  which  purchased  the Company's Series C Convertible
Preferred Stock and provided Subordinated  Debt  Financing.   He received a
Bachelors  of  Arts  degree  from  Connecticut  College  with  a  major  in
Government,   a   Masters   degree   in   Business  Administration  with  a
concentration in Finance from the University  of  Chicago  and a Law degree
from the UCLA Law School.  Mr. Carrington is 41 years old and was elected a
Director of the Company in March 1997.

Thomas  E.  Galuhn   For  the  last  six years, Mr. Galuhn has been  Senior
Managing Director of Mesirow Financial.   Mesirow  Financial is the general
partner of Mesirow Capital Partners VII, an Illinois  Limited  Partnership,
which  is  one  of three venture capital funds that purchased the Company's
Series  C  Convertible  Preferred  Stock  and  provided  Subordinated  Debt
Financing.  He received a Bachelors degree

at the University  of  Notre  Dame  with  a  major in Finance and a Masters
degree in Business Administration with a concentration  in Finance from the
University  of  Chicago.   Mr.  Galuhn  is 48 years old and was  elected  a
Director of the Company in March 1997.

Salvatore F. Mulia  Mr. Mulia has been a  Director and Secretary since 1993
of RTM Financial Services, Inc., a firm in which Mr. Mulia and his wife own
100%  of  the  common  stock.  RTM Financial Services  provides  investment
advisory  services  and  currently  provides  consulting  services  to  the
Company.  Prior to that time,  he  was  affiliated  with R.W. Pressprich, a
bond-trading  house, as Director of Equities from May  1994  to  May  1995.
From May 1993 to  January  1994,  he  was  Sr.  VP  of Marketing for L.S.I.
Financial Group, a mortgage and loan servicer.  From  1986  to May 1993, he
was a Sr. VP of GE Capital Markets.  Mr. Mulia received a Bachelors  degree
from  Brooklyn  College  with  a major in Economics and a Masters degree in
Marketing from Columbia University.   He  is  51  years old.  Mr. Mulia was
elected a Director of the Company in March 1997.

William  Wildman   Mr.  Wildman was self-employed as a  consultant  in  the
equipment leasing business  from  July  1990  until December 1993.  In such
capacity he provided marketing and other consulting  services  to  UCL  and
other firms.  From 1985 until June 1990, Mr. Wildman was associated with Ag
Services,  Inc.,  a  feed  mill,  originally  as  President  and  principal
shareholder  and,  after  the sale of the business to a third party, as  an
employee.  Mr. Wildman is 50  years  old.   Mr.  Wildman  has  served as an
officer of the Company since November 1993.

Robert  W.  Johnson   Mr.  Johnson  was  a  divisional  Vice  President  of
Countrymark Cooperative, an agricultural cooperative, from May 1996 to June
1998.   From  October  1992 to May 1996, he was the CFO of Premium Standard
Foods, a large pork production  and  processing  company. From June 1985 to
October 1992, he was the Director of Agribusiness  Lending  with Prudential
Insurance Company.  Mr. Johnson received a Bachelor of Science  degree from
Purdue University with a major in Agricultural Finance and a Masters degree
in  Business  Administration  with a concentration in Finance and Strategic
Management from Purdue University.   Mr.  Johnson  is 49 years old.  He has
served as an officer of the Company since October 1998.

Because none of the Company's securities are registered pursuant to Section
12  of the Securities Exchange Act of 1934, the reporting  requirements  of
Section 16(a) of such Act are not applicable.

ITEM 10.  EXECUTIVE COMPENSATION

The following  table  sets  forth a summary of the compensation paid by the
Company to the Company's President  for services rendered in all capacities
to the Company during each of the three most recent fiscal years.  No other
executive officer received in excess of $100,000 in salary and bonus in any
of those fiscal years.
SUMMARY COMPENSATION TABLE


Annual Compensation

Name and Principal Position

Year

Salary

Other Annual Compensation





    Michael F. McCoy, President
1998
$137,500

$ 12,469 (1)






1997
$122,750

$ 12,469 (1)






1996
$108,000

$ 12,469 (1)
_________________

(1)   Of the amount indicated, $9,600  represents  the  payment  of  a  car
allowance  and  $2,869  represents  the  payment  of  disability  insurance
premiums.

Certain  officers  receive  car  allowances  and are reimbursed for certain
expenses that they incur on behalf of the Company.   Although  the  Company
pays health insurance, life insurance and disability insurance

premiums  for certain of its officers, there are presently no stock option,
bonus, profit  sharing,  pension  or  similar  employee benefit plans.  The
Company may adopt such plans in the future.

Under  the  Securities  Purchase Agreement dated March  28,  1997,  if  the
Company terminates Mr. McCoy  or  Mr.  Wildman without cause, as defined in
the agreement, the Company will pay to the  individual  an  amount equal to
his  base salary for the Company's most recent fiscal year ended  prior  to
the date  of such termination less any severance or similar payment payable
by the Company  to such officer pursuant to any agreement entered into with
such officer after  the  date  of  the agreement.  In addition, each of Mr.
McCoy and Mr. Wildman has agreed that  at  all  times  during  which  he is
employed  by  the  Company  and  continuing  for an additional period of 24
months following the date of termination of such  employment  he  shall not
compete  against  the  Company  as  defined  in  the  agreement.  There are
currently no other employment or similar agreements between the Company and
its officers.

None  of  the directors receives any additional compensation  for  services
rendered as a Director.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table  sets  forth  certain  information  with  respect  to
beneficial  ownership  of  the  Company's  Common stock, Series A Preferred
Stock and Series C Convertible Preferred Stock  as  of December 31, 1998 by
each person or group of persons known by the Company to:

*  Own  beneficially  more  than  5%  of any class of the Company's  voting
securities, or
* be a Director or executive officer of  the  Company  who  owns  any  such
voting securities, or
* consist of all Directors and executive officers

Except  as otherwise noted, the persons named in the table have sole voting
and investment  power  with respect to all securities shown as beneficially
owned by them.  The Series  A  Preferred  Stock  has  no voting rights with
respect to the election of the Directors of the Company.



Series A
Series C Convertible

Common Stock
Preferred Stock
Preferred Stock

Name
Number of Shares
Percent
of Class (1)
Number of Shares
Percent
of Class
Number of Shares

Percent
of Class








Michael F. McCoy (2)
   540
13.2%
120
12.0%
---

---
Jerrold B. Carrington (3)
1,384.61538
33.9%
---
---
1,384.61538

46.2%
Thomas E. Galuhn (4)
807.69231
19.8%
---
---
807.69231

26.9%
Salvatore F. Mulia (5)
171.63
4.2%
50
5.0%
---

---
Inroads Capital Partners, L.P. (3)
1,384.61538
33.9%
---
---
1,384.61538

46.2%
Mesirow Capital Partners VII, an Illinois Limited Partnership (4)

807.69231

19.8%

---

---

807.69231


26.9%
Edgewater Private Equity Fund II, L.P. (6)

807.69231

19.8%

---

---

807.69231


26.9%
RTM Financial Services, Inc.(5)
          171.63
4.2%
250
25.0%
---

---
William L. Wildman (2)
               235
5.8%
200
20.0%
---

---
Robert W. Johnson (2)
---
---
---
---
---

---
All Directors and executive officers as a group

3,138.93769

76.9%

620

62.0%

2,192.30769



73.1%
______________

(1)  As of December 31, 1998, there were 1,066.63 shares  of  Common  Stock
outstanding.   The Series C Convertible Preferred Stock is convertible into
Common Stock at  any time (on a one-for-one basis as of December 31, 1998).
The  percentages  in  this  column  assume  the  conversion  of  all  3,000
outstanding shares  of  Series  C  Convertible  Preferred Stock into Common
Stock.

(2)  The address for Messrs. McCoy, Wildman and Johnson is 9265 Counselor's
Row, Suite 106, Indianapolis, IN 46240.

 (3) Inroads Capital Partners own all shares shown as beneficially owned by
Mr. Carrington of record, L.P. ("Inroads").  Mr.  Carrington is the General
Partner of Inroads.  The address for Mr. Carrington  and  Inroads  is  1603
Orrington Avenue, Suite 2050, Evanston, IL 60201.

(4)   All  shares  shown  as  beneficially owned by Mr. Galuhn are owned of
record by Mesirow Capital Partners  VII,  an  Illinois  Limited Partnership
("Mesirow").  Mr. Galuhn is Senior Managing Director of the general partner
of  Mesirow.   The  address for Mr. Galuhn and Mesirow is 350  North  Clark
Street, Chicago, IL  60610.

(5)  All shares shown  as  beneficially  owned  by  Mr.  Mulia are owned of
record by RTM Financial Services, Inc. ("RTM").  Mr. Mulia  and  his spouse
own all of the outstanding stock of RTM.  The address for Mr. Mulia and RTM
is 253 Post Road West, Westport, CT 06880.

(6)  The  address  for Edgewater Private Equity Fund II, L.P. is 900  North
Michigan Avenue, 14th Floor, Chicago, IL 60611

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In connection with the  Securities Purchase Agreement dated March 28, 1997,
the Company also entered  into  a  Voting  Agreement,  Registration  Rights
Agreement and an Executive Share Agreement.

On March 28, 1997, the Company entered into a Securities Purchase Agreement
(the "Purchase Agreement") with Inroads Capital Partners, L.P. ("Inroads"),
Mesirow Capital Partners VII, and Illinois Limited Partnership ("Mesirow"),
Edgewater  Private  Equity  Fund  II, L.P. (collectively, the "Purchasers")
Michael F. McCoy and William L. Wildman  pursuant  to  which the Purchasers
purchased from the Company a total of 3,000 shares of the  Company's Series
C Convertible Preferred Stock and $3,500,000 aggregate principal  amount of
10%  Subordinated  Notes  due  March 31, 2002 ("Subordinated Notes").   The
aggregate purchase price for the  Series  C Convertible Preferred Stock was
$3,000,000 and the aggregate purchase price for the Notes was $3,500,000.

The  Subordinated  Notes are subject to a Subordination  and  Intercreditor
Agreement  between  the   Company,   the  Purchasers  and  the  Bank.   The
Subordinated Notes are subordinate to the Bank's Credit Facility.  From the
period of inception through FY/98, the interest accrued on the Subordinated
Notes has been added to the principal  balance.   One-half of the principal
amount  of  the  Subordinated  Notes  is due on March 31,  2001,  with  the
remainder being due on March 31, 2002.

The Series C Convertible Preferred Stock  is convertible into Common Shares
of the Company at any time.  The conversion  ratio  is  one-for-one, but is
subject to adjustment under certain circumstances.  In general,  the Series
C Convertible Preferred Stock has full voting rights (voting together  with
the  Common  Shares)  on  all  actions submitted to a vote of the Company's
shareholders.   Each share of the  Series  C  Convertible  Preferred  Stock
entitles the holder  thereof  to one vote on each matter submitted, but the
number  of  votes  is  subject to adjustment  on  the  same  basis  as  the
conversion ratio.

The Company's outstanding  capital stock consists of 1,066.63 Common Shares
(with full voting rights), 540  which  are owned by Mr. McCoy, 1,000 shares
of Series A Preferred Stock (without full  voting rights), and the Series C
Convertible  Preferred Stock.  The Company utilized  $1.5  million  of  the
proceeds from  the  sale  of  the  Series  C Convertible Preferred Stock to
redeem its Series B Preferred Stock and related warrants.

After  the issuance of the Series C Convertible  Preferred  Stock  and  the
redemption  of the Series B Preferred Stock, the Purchases collectively are
entitled to exercise  73.5%  of  the  voting  power  of  the  Company under
ordinary circumstances.   Prior to the issuance of the Series C Convertible
Preferred

Stock, Mr. McCoy was entitled to exercise a majority of the voting power of
the Company under ordinary circumstances.

In  connection  with  the  issuance  of  the Series C Convertible Preferred
Stock,  the  Company  also  entered  into  a  Voting   Agreement  with  the
Purchasers,  Mr.  McCoy and Mr. Wildman.  Under the Voting  Agreement,  the
parties agreed to cooperate  to  cause  the Company's Board of Directors to
consist  of  five  members.  One member would  be  designated  by  Inroads,
Mesirow would designate one member, the holders of two-thirds of the voting
power  of  the Company  exercisable  would  designate  one  member  by  the
Purchasers,  and  two members would be designated by Mr. McCoy.  The rights
of   the   parties  to  designate   directors   terminate   under   certain
circumstances.

The Company  and  the  Purchasers  also  entered into a Registration Rights
Agreement entitling the Purchasers, under  certain circumstances, to demand
or  otherwise  participate in a public offering  of  the  Company's  equity
securities.

The Company, the  Purchasers  and  Mr. McCoy also entered into an Executive
Share Agreement pursuant to which the  Purchasers are obligated, subject to
certain  conditions,  to  transfer, for no  consideration  other  than  the
fulfillment of such conditions,  to  Mr.  McCoy and/or such other officers,
directors, employees or consultants of the  Company as he designates, up to
8% of the Series C Convertible Preferred Stock purchased by each Purchaser.

Holders of the Series A Preferred Stock are entitled  to  cumulative annual
dividends  of $40 per share payable quarterly, subject to the  approval  of
the board of  directors.   The  Series C Convertible Preferred Stock has no
dividend.  Unless full cumulative  dividends have been paid on the Series A
Preferred Stock, no dividends may be  paid  on  the  Common  Shares  and no
Common  Shares  may  be  redeemed,  purchased  or otherwise acquired by the
Company.  The terms of the Company's Series C Convertible  Preferred  Stock
provide  that  approval  by  the  holders  of  at  least  two-thirds of the
outstanding  shares  of  the  Series C Convertible Preferred Stock,  voting
separately as a series, is required prior to the purchase of, or payment of
any dividends or distributions  on any shares of stock of the Company other
than the Series C Convertible Preferred  Stock, except for dividends on the
common shares payable solely in the form of  additional  common  shares and
for regular quarterly dividends on the Series A Preferred Stock.

In the event of a liquidation of the Company, holders of the Series A and C
Preferred Stock will be entitled to receive the sum of $400 and $1,000  per
share,  respectively,  plus  accumulated  but  unpaid dividends, before any
payment or other distribution is made to the holders of Common Shares.  The
shares of Series A Preferred Stock may be redeemed  in  whole or in part at
any  time  by  the  Company  at  a price equal to $400 per share  plus  all
accumulated but unpaid dividends.   Except  as required by law, the holders
of the Series A Preferred Stock have no voting rights.

The Series C Convertible Preferred Stock holders may require the Company to
redeem  the  Series  C  Convertible Preferred Stock  at  $1,000  per  share
($3,000,000 total redemption  value)  after  March  28, 2002.  The Series C
Convertible  Preferred  Stock  are  also  to be redeemed in  the  following
circumstances, unless waived by 75% of the  Series  C Convertible Preferred
Stock holders:

1. The Company defaults on the Subordinated Notes or  any  covenant  of the
Purchase Agreement.
2. A representation or warranty of the Company under the Purchase Agreement
is found to be materially incorrect.
3. Chapter 7 or 11 bankruptcy is filed with respect to the Company, or  all
Company's assets are sold or disposed.

The  Company  also  has  certain  other transactions and relationships with
related parties.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

No exhibits were filed with this report.

(b)  Reports on Form 8-K

No reports on Form 8-K were filed during the quarter  ended  September  30,
1998

SUPPLEMENTAL  INFORMATION  TO  BE  FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS

The Company has not sent to its security  holders  (i)  an annual report to
security holders for the fiscal year ending September 30,  1998  or  (ii) a
proxy  statement,  form  of  proxy  or other proxy soliciting material with
respect to any annual or other meeting of security holders.

SIGNATURES

In accordance with Section 13 or 15(d)  of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned; thereunto
duly authorized, on the 13th day of January, 1999.

         MERIDIAN FINANCIAL CORPORATION




         By:  /s/ Michael F. McCoy
                             (Michael F. McCoy, President)




In accordance with the Exchange Act, this  report  has been signed below by
the following persons on behalf of the Registrant and in the capacities and
on the dates stated.

Signature
Title
Date






/s/ Michael F. McCoy
Michael F. McCoy
Chairman of the Board, President and Director
(Principal Executive Officer)
January 13, 1999






/s/ Robert W. Johnson
Robert W. Johnson
Vice President, Secretary
and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
January 13, 1999






/s/ Jerrold B. Carrington
Jerrold B. Carrington
Director
January 13, 1999






/s/ Thomas E. Galuhn
Thomas E. Galuhn
Director
January 13, 1999






/s/ Salvatore F. Mulia
Salvatore F. Mulia
Director
January 13, 1999












S-1