Exhibit 10.1

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

      This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is dated
as of December 31, 2002, between Gary C. Granoff ("Executive"), Ameritrans
Capital Corporation ("Ameritrans"), and Elk Associates Funding Corporation
("Elk") (collectively, Ameritrans and Elk are hereinafter referred to as the
"Employer").

      WHEREAS, Executive is presently employed by the Employer as President and
Chairman pursuant to an Employment Agreement dated July 1, 2001 (the "2001
Agreement"); and

      WHEREAS, the Employer and Executive desire to restate and amend certain
terms of the 2001 Agreement;

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

1.    Employment of Executive.

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

2.    Employment Period.

      Subject to the earlier termination as provided in section 5, the term of
Executive's employment under this Agreement shall commence as of the date of
execution (the "Effective Date"), and shall continue until July 1, 2008 (the
"Initial Employment Period"). Unless Employer gives notice of non-renewal at
least six (6) months prior to the expiration of the Initial Employment Period or
Executive gives notice of non-renewal at least six (6) months prior to the
expiration of the Initial Employment Period, the term of this Agreement shall be
extended for a five (5) year period beyond the end of the Initial Employment
Period on the same terms and conditions in effect under this Agreement at the
time of extension and providing for an annual base salary equal to the Base
Salary (as hereinafter defined) in effect at the time of renewal, plus an annual
increase each year thereafter during the renewal term of the greater of (i) four
percent (4%) or (ii) the increase in the Consumer Price Index during each such
year (the Initial Employment Period and any extension thereof is hereafter
referred to as the "Employment Period"). The parties agree that any Bonus (as
hereinafter defined) payable during any renewal period shall be paid solely in
the discretion of the Board of Directors of Employer (the "Board"). If either
Employer or Executive elects not to renew the Agreement by providing the other
party with a notice of non-renewal, then the Agreement shall terminate on June
30, 2008, and the consulting agreement between Employer and Executive in the
form attached hereto as Exhibit A (the "Consulting Agreement"), shall
automatically become effective.

3.    Duties and Responsibilities.

      3.1. General. During the Employment Period, Executive shall have the title
of Chairman and President of the Employer and shall have duties commensurate
with his office and title as the chief executive officer of each of Ameritrans
and Elk. Executive shall report directly to and take direction from the Board.
Executive understands that he will be required to work with and coordinate
certain business activities with other executives of the Employer in connection



with certain projects as directed by the Board. Executive shall devote all of
his business time and expend his best efforts, energies, and skills to the
Employer; provided, however, that (i) during the Employment Period, Executive
shall be permitted to establish and report to an office located in any state in
which a substantial amount of Employer's business is conducted, (ii) Executive
shall be allowed to devote such reasonable time as he deems necessary to his
personal and family business matters and to fulfill his duties as a member of
the Board of Trustees of George Washington University and as a member of the
Investment Committee of the Board of Trustees, (iii) Executive shall be allowed
to devote such reasonable time as he deems necessary to fulfill his duties as a
member of the Board of Trustees of the Parker Institute and any committees on
which Executive may serve, (iv) Employer acknowledges that Executive currently
is and may remain as a director and an officer or employee of Gemini Capital
Corporation, and (iv) Executive shall be permitted to serve as an officer and
director of, or as "of counsel" and shall devote only nominal time to Granoff,
Walker & Forlenza PC ("GW&F") so long as such time, attention, and duties in
(i), (ii), (iii), and (iv), above, do not (A) interfere with his duties and
responsibilities to Employer or (B) violate his obligations under Sections 7 and
8, herein, or any duty, consistent with his status with Employer, as he may be
assigned from time to time by the Board.

4.    Compensation and Related Matters.

      4.1. Base Salary. For each twelve-month period, commencing July 1, 2003,
during the Employment Period, (each such period, an "Employment Year"), Employer
shall pay to Executive a base salary equal to $296,500 for the first Employment
Year, $321,500 for the second Employment Year, $336,500 for the third Employment
Year, $348,900 for the fourth Employment Year, and $361,800 for the fifth
Employment Year (with respect to each Employment Year, the "Base Salary"). For
the interim period between the Effective Date and July 1, 2003, the Employer
shall pay to Executive a base salary equal to $255,000. The Base Salary shall be
payable in accordance with the normal payroll procedures of Employer.

      4.2. Annual Bonus. For each fiscal year during the Employment Period
(each, a "Bonus Year"), Executive shall be eligible to receive a bonus based on
the achievement of corporate and/or individual performance objectives set by the
Board for such Bonus Year (a "Bonus"), which Bonus shall not be less than
$15,000 for each Bonus Year during the Initial Employment Period, payable
monthly in arrears, and thereafter, if this Agreement is extended for another
five (5) year period, at the discretion of the Board. The Bonus for each Bonus
Year shall be payable promptly following the determination of the Board thereof,
but in no event later than 45 days after the end of such year.

      4.3. Other Benefits. During the Employment Period, subject to, and to the
extent Executive is eligible under their respective terms, Executive shall be
entitled to receive such benefits as are, or are from time to time hereafter,
generally provided by Employer to Employer's senior management employees
(including any executive vice president or chief financial officer) (other than
those provided under or pursuant to separately negotiated individual employment
agreements or arrangements) under any pension or retirement plan, disability
plan, or insurance, group life insurance, family medical and dental insurance,
accidental death and dismemberment insurance, travel accident insurance, or
other similar plan or program of Employer. In addition, during the Employment
Period, Employer shall (i) reimburse Executive for the cost of the annual
premiums (up to $5,000 per year) on term life insurance on Executive's life
equal to $500,000 of coverage under Executive's current life insurance policy
and (ii) assign to Executive upon termination of the Employment Period the
existing life insurance policies described on Exhibit B, hereto. During the
Employment Period, Employer shall also reimburse Executive for reasonable costs
with respect to the following: (i) the lease of a car (up to $900/month); (ii)
parking for



Executive's automobile in Manhattan (if Executive drives to work (up to
$450/month); (iii) tolls and gas for the automobile in connection with commuting
to work; (iv) automobile insurance for one car (up to $2,200/year); (v) use of a
cell phone and home telephone for business purposes (up to $300/month), (iv)
reimbursement of $5,500 per year for the premium on Executive's disability
policy, (vii) reimbursement of $5,000 toward Executive's country club dues,
(viii) make regular contributions to Executive's SEP IRA account of 15% of
Executive Base Salary and Bonus, subject to limitations under the plan, and (ix)
reimburse Executive for expenses incurred in connection with travel, meals, and
incidentals relating to activities as a trustee of the George Washington
University and The Parker Institute.

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

      4.5. Vacations. Executive shall be entitled to 30 business days vacation
for each calendar year during the Employment Period, which vacations shall be
taken at such time or times as shall not unreasonably interfere with Executive's
performance of his duties under this Agreement. Time spent on services performed
as a trustee shall be considered business-related.

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

      4.7. Office Space; Resources. Employer shall provide Executive with
sufficient office space, furnishings, equipment, computer resources, and
supplies considered reasonable and necessary for Executive to carry out his
duties.

5.    Termination of Employment Period.

      5.1. Termination Without Cause; Voluntary Termination by Executive.
Employer may, by notice to Executive at any time during the Employment Period,
terminate the Employment Period without Cause (as defined below). The effective
date of such termination of Executive from Employer shall be the date that is
thirty (30) days following the date on which such notice is given, except as
otherwise specifically provided herein. Executive may, by notice to Employer at
any time during the Employment Period, voluntarily resign from Employer and
terminate the Employment Period. The effective date of such termination of
Executive from Employer shall be the date that is thirty (30) days following the
date on which such notice is given.

      5.2. By Employer for Cause. Employer may, at any time during the
Employment Period, by notice to Executive, terminate the Employment Period for
"Cause." As used herein,



"Cause" shall mean (i) incompetence, fraud, personal dishonesty, defalcation, or
acts of gross negligence or gross misconduct on the part of Executive in the
course of his employment, (ii) substantial and continued failure by Executive to
perform his duties hereunder, (iii) use of alcohol by Executive or his illegal
use of drugs (including narcotics) which in either case is, or could reasonably
be expected to become, materially injurious to the reputation or business of
Employer or which impairs, or could reasonably be expected to impair, the
performance of Executive's duties hereunder, (iv) Executive's conviction by a
court of competent jurisdiction of, or pleading "guilty" or "no contest" to, (x)
a felony, or (y) any other criminal charge (other than minor traffic violations)
which has or could reasonably be expected to have a material adverse impact on
Employer's reputation and standing in the community, or (v) Executive's
violation of any of the provisions of Sections 7 or 8, herein. Any notice given
by Employer pursuant to this Section 5.2 shall specify in writing in reasonable
detail the event or the nature of Executive's action or inaction that is the
cause for giving such notice. Executive will have 30 days to cure, to the
reasonable satisfaction of Employer, any action or inaction charged by Employer
for Cause under (ii) or (v), above. In the event of a termination of the
Employment Period for Cause under (i), (iii), or (iv), above, the Employment
Period shall terminate immediately upon notice by Employer of termination for
Cause and the reason therefor, unless such actions or inactions can be cured and
Executive has satisfactorily cured such actions or inactions.

      5.3. By Executive for Good Reason.

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

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

      5.4. Disability. During the Employment Period, if, as a result of physical
or mental incapacity or infirmity, Executive shall be unable to perform his
duties under this Agreement for (i) a continuous period of at least 180 days, or
(ii) periods aggregating at least 180 days during



any period of 12 consecutive months (each, a "Disability Period"), and at the
end of the Disability Period there is no reasonable probability that Executive
can promptly resume his duties hereunder, Executive shall be deemed disabled
(the "Disability") and Employer, by notice to Executive, shall have the right to
terminate the Employment Period for Disability at, as of, or after the end of
the Disability Period. The existence of the Disability shall be determined by a
reputable, licensed physician selected by Executive in good faith, whose
determination shall be final and binding on the parties. Executive shall
cooperate in all reasonable respects to enable an examination to be made by such
physician.

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

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

6.    Termination Compensation.

      6.1. Termination Without Cause by Employer. If the Employment Period is
terminated by Employer without Cause pursuant to the provisions of Section 5.1
hereof, Employer will pay to Executive a lump-sum payment in an amount equal to
(i) Executive's Base Salary through the date of termination and an amount equal
to the sum of the Base Salary multiplied by the number of years (and fractional
portions thereof) remaining in the Employment Period, and (ii) an amount equal
to all of the consulting fees payable under the terms of the consulting
agreement entered into by and between Employee and Executive dated as of
December 31, 2002 (the "Consulting Agreement") (the sum of (i) and (ii),
collectively, shall hereinafter be referred to as the "Severance Payment");
provided, however, the Severance Payment shall not be less than an amount equal
to three (3) years of the Executive's Base Salary as in effect at the time this
Agreement is terminated as provided herein, plus the Bonus paid for the most
recent Bonus Year. In calculating the Severance Payment, such payment shall
include any adjustments in the Base Salary (as set forth in Section 4.1) that
would have occurred during the remainder of the Employment Period, had
Executive's employment not been terminated. Employer shall have the obligation
to continue the benefits provided for in Section 4 past the date of termination
through the balance of the Employment Period remaining at the time of
termination.

      6.2. Termination by Executive for Good Reason. If the Employment Period is
terminated by Executive for Good Reason pursuant to the provisions of Section
5.3, hereof, Employer will pay to Executive in a lump-sum the Severance Payment,
as set forth in Section 6.1, hereof; provided, however, the Severance Payment
shall not be less than an amount equal to three (3) years of the Executive's
Base Salary, as in effect at the time this Agreement is terminated as provided
herein, plus the Bonus for the most recent Bonus Year.

      6.3. Notice of Non-Renewal by either Employer or Executive; or Voluntary
Termination by Executive. If the Employment Period terminates due to (i) notice
of non-renewal from Employer or Executive prior to the expiration of the Initial
Employment Period or (ii) due to the voluntary resignation of Executive at any
time during the Employment Period, then upon the occurrence of such event, the
Consulting Agreement shall automatically become effective.

      6.4. Certain Other Terminations. If the Employment Period is terminated by
Employer on account of Executive's Disability pursuant to the provisions of
Section 5.4, or by death, pursuant to the provisions of Section 5.5, Employer
shall pay to Executive, within thirty (30) calendar days of the date of
termination, Executive's Base Salary through the date of



termination. Provided the date of termination under Section 5.4. or 5.5 is after
the end of a calendar year for which a Bonus is payable, but prior to the date
of payment, Employer shall also pay to Executive or Executive's representatives,
as the case may be, when due pursuant to provisions of Section 4.2 hereof, the
Bonus for such Bonus Year. In the event that the Employment Period is terminated
by Employer on account of Disability pursuant to the provisions of Section 5.4
or on account of death pursuant to the provisions of Section 5.5 and provided
Executive has been employed for at least six months during the Bonus Year of
termination, Employer shall also pay to Executive a portion of the Bonus for the
Bonus Year of termination prorated through the date of termination. Employer
shall have no obligation to continue any other benefits provided for in Section
4 past the date of termination.

      6.5. Payment; No Other Termination Compensation. Any payment pursuant to
this Section 6, with respect to which a payment date has not otherwise been
specified, shall be made in a lump sum within ten (10) business days following
the date of such termination.

7.    Confidentiality.

      Unless otherwise required by law or judicial process, Executive shall
retain in confidence during the Employment Period and after termination of
Executive's employment with Employer pursuant to this Agreement all confidential
information known to Executive concerning Employer and its businesses. The
obligations of Executive pursuant to this Section 7 shall survive the expiration
or termination of this Agreement.

8.    Noncompetition.

      During the Employment Period, Executive shall not directly or indirectly,
whether by way of employment, consulting, advising, ownership, partnership,
joint venture, or other method, engage in any Competitive Activity (as defined
below). "Competitive Activity" shall exclude those activities described in
Section 3.1, hereof, and shall include business activity which is the same as or
substantially similar to or is or would be competitive with the business
activity in which Employer is engaged.

9.    Nonsolicitation.

      During the Employment Period and for a period of one year thereafter (the
"Nonsolicitation Period"), Executive shall not directly or indirectly solicit to
enter into the employ of any other Entity, or hire, any of the employees of
Employer. During the Employment Period, and for a period of one year thereafter,
Executive shall not, directly or indirectly, solicit, hire, or take away or
attempt to solicit, hire, or take away (i) any customer or client of Employer or
(ii) any former customer or client (that is, any customer or client who ceased
to do business with Employer during the three (3) years immediately preceding
such date) of Employer or encourage any customer or client of Employer to
terminate its relationship with Employer without Employer's prior written
consent. The obligations of Executive pursuant to this Section 9 shall survive
the expiration or termination of this Agreement.

10.   Successors; Binding Agreement.

      This Agreement and all rights of Executive hereunder shall inure to the
benefit of and be enforceable by Executive and Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
divisees, and legatees. If Executive should die while any amounts would still be
payable to him hereunder if he had continued to live, all such



amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Executive's devisee, legatee, or other beneficiary
or, if there be no such beneficiary, to Executive's estate.

11.   Survivorship.

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

12.   Miscellaneous.

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

If to Employer:Ameritrans Capital Corporation
      Elk Associates Funding Corporation
      747 Third Avenue, 4th Floor
      New York, New York 10017
      Attn:

If to Executive: Mr. Gary Granoff
      2 Fir Drive
      Great Neck, New York 11024

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

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

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

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



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

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

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

      12.9. Termination of 2001 Agreement. The Employer and Executive hereby
acknowledge that this Agreement is an amendment and restatement of the 2001
Agreement, and as such, is a termination of the 2001 Agreement. Both Employer
and Executive hereby relinquish any and all rights they may have resulting from
the termination of the 2001 Agreement.

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

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

                                              AMERITRANS CAPITAL CORPORATION

                                              By:
                                                 /s/ Ellen M. Walker


                                              ELK ASSOCIATES FUNDING CORPORATION

                                              By:
                                                 /s/ Ellen M. Walker


                                                 /s/  Gary C. Granoff