8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 8-K

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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

December 22, 2009

Date of Report

(Date of Earliest Event Reported)

AMERITRANS CAPITAL CORPORATION

 (Exact Name of Registrant as Specified in Its Charter)

Delaware	333-63951	52-2102424
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

747 Third Avenue, 4th Floor

New York, New York 10017

(Address of Principal Executive Offices (Zip Code)

(212) 355-2449

 (Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[_]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[_]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)

[_]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On December 22, 2009, Ameritrans Capital Corporation (the “Company”) issued $2,025,000 aggregate principal amount of its 8.75% notes due December 2011 (the  “Notes”) in a private offering.  The notes bear interest at the rate of 8.75% per annum, payable quarterly, and mature in December 2011.   At the Company's option, the notes may be extended until December 2012 at a rate of 5.5%, plus the then current Prime Rate.   The Notes are redeemable by the Company at any time upon not less than thirty days' prior written notice to the holder.

The Company’s obligations under the Notes are not secured, but the Notes prohibit the Company from granting a security interest in any of its assets to secure the repayment of indebtedness for borrowed funds without the consent of the holders of the Notes.

The Company’s obligations under the Notes may be accelerated by the Note holders upon 30 days written notice to the Company that an Event of Default has occurred.  Pursuant to the Notes, an Event of Default may be declared if the Company (i) fails to make any payment due under the Notes and such failure continues unremedied for a period of fifteen (15) days following receipt of written notice thereof from the Note holder; (ii) grants a security interest in violation of the Notes; (iii) admits in writing its inability to pay its debts generally as they mature; (iv) makes a general assignment for the benefit of creditors; (v) is adjudicated a bankrupt or insolvent; (vi) files a voluntary petition in bankruptcy or a petition or an answer seeking an arrangement with creditors; (vii) takes advantage of any bankruptcy, insolvency or readjustment of debt law or statute or file an answer admitting the material allegations of a petition filed against it in any proceeding under any such law; (viii) applies for or consents to the appointment of a receiver, trustee or liquidator for all or substantially all of its assets; or (ix) has an involuntary case commenced against it under the Federal bankruptcy laws, which case is not dismissed or stayed within sixty (60) days.

Mr. Steven Etra, a member of the Company's Board of Directors, and certain entities affiliated with Mr. Etra, acquired a portion of the Notes in the offering.

The foregoing description of the Notes is only a summary and is qualified in its entirety by reference to the complete terms and provisions of the Notes.  The form of Note is attached hereto as Exhibit 10.1 and is incorporated herein by reference.  

Item 8.01.  Other Events.

On December 22, 2009, the Company issued the press release attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.	Description
10.1	Form of 8.75% Promissory Note Due December 2011
99.1	Press Release, dated December 22, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly authorized and caused the undersigned to sign this Report on the Registrant's behalf.

AMERITRANS CAPITAL CORPORATION

By:  /s/ Michael Feinsod                

Name:  Michael Feinsod

Title: Chief Executive Officer and President

Dated: December 23, 2009

Exhibit Index

Exhibit No.	Description
10.1	Form of 8.75% Promissory Note Due December 2011
99.1	Press Release, dated December 22, 2009.

EX-10.1

Exhibit 10.1

THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT FOR DISTRIBUTION AND MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF l933, AS AMENDED (THE “ACT”).

AMERITRANS CAPITAL CORPORATION

December 15, 2009

PROMISSORY NOTE

AMERITRANS CAPITAL CORPORATION, a Delaware corporation (the “Company”), for value received, hereby promises to pay to                                                                             or order (the “Holder”) on December 14, 2011 (the “Maturity Date”) at the offices of the Company, the principal sum of                                  &n bsp;                                         ($                    ) DOLLARS in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay interest on the outstanding principal sum at the rate of eight and three quarters percent (8.75%) per annum through the Maturity Date.  Interest on the principal balance of this Promissory Note (“Note”) from the date hereof (the “Issue Date”) shall be payable quarterly on March 14, 2010, June 14, 2010, September 14, 2010 and December 14, 2010 and on each March 14,  June 14, September 14  and December 14, thereafter un til all principal amounts hereunder have been satisfied; provided, however, that the Company may elect, in its discretion, by notice to the Holder at least 30 days before the Maturity Date to extend the Maturity Date to the third anniversary of the Issue Date, in which event the term “Maturity Date” shall refer to such date following such election.  If the Company exercises such  election, the Company shall pay interest on the outstanding principal sum quarterly as set forth above at the rate of the sum of (a) 5.50% plus (b) the rate announced by Citibank N.A. from time to time as its “prime rate”.

1.

Series of Notes.  This Note is one of a series of Promissory Notes, identical in form (the “Notes”), issued on or about the date hereof, in the aggregate principal amount of up to $3,000,000.  All Notes in such series shall rank equally and ratably without preference or priority of any said Notes over any others thereof.

2.

Registered Owner.  The Company may consider and treat the person in whose name this Note shall be registered as the absolute owner thereof for all purposes whatsoever (whether or not this Note shall be overdue) and the Company shall not be affected by any notice to the contrary.  Subject to the provisions hereof, the registered owner of this Note shall have the right to transfer it by assignment and the transferee thereof, upon its registration as owner of this Note, shall become vested with all the powers and rights of the transferor.  Registration of any new owner shall take place upon presentation of this Note to the Company at its offices together with the Note Assignment Form attached hereto duly executed.  In case of transfers by operation of law, the transferee shall notify the Company of such transfer and of its address, and shall submit appropriate evidence regarding the transfer so that this Note may be registered in the name of the transferee.  This Note is transferable only on the books of the Company by the Holder on the surrender hereof, duly endorsed. Communications sent to any registered owner shall be effective as against all holders or transferees of this Note not registered at the time of sending the communication.

3.

Consent Required.  Except with the prior written consent of the Holder, the Company shall not grant a security interest in any of its assets to secure the repayment of any indebtedness incurred by it for borrowed funds.

4.

Redemption.

4.1

Redemption Right. The Holder, by its acceptance of this Note, hereby acknowledges that, at any time, and from time to time, prior to the Maturity Date, the Company may, at its option, by written notice given to the Holder, elect to redeem and prepay all or any portion of the outstanding principal indebtedness evidenced by this Note, without premium or penalty.  Any such notice of the Company’s election to redeem and prepay as provided for hereinabove shall indicate the principal amount to be redeemed and prepaid (the “Redemption Amount”) and shall be given not less than thirty (30) days prior to the date fixed in such notice as the date for the redemption of this Note (the “Redemption Date”).

4.2

Interest.  In the event the Company so elects to redeem and prepay this Note, in whole or in part, pursuant to Section 4.1 hereof, it shall pay to the Holder, in addition to the Redemption Amount being prepaid, accrued interest thereon through the Redemption Date; provided, however, that, if the Redemption Date is prior to the six (6) month anniversary of the Issue Date, additional interest shall be payable hereunder such that the Holder receives an amount of interest on the Redemption Date equal to six (6) months interest on the Redemption Amount less any interest theretofore paid thereon.

4.3

Obligations.  On the Redemption Date, this Note shall be due and payable to the extent provided for in Sections 4.1 and 4.2 hereof and, if the remaining balance of the principal amount of this Note is payable on the Redemption Date, the Holder shall tender to the  Company this Note for cancellation.  Effective with the Redemption Date, with respect to the Redemption Amount, interest will cease to accrue, and the only right of the Holder shall be to receive the amount payable upon redemption.

5.

Events of Default.  If the Company shall (i) fail to make any payment due hereunder and such failure shall continue unremedied for a period of fifteen (15) days following receipt of written notice thereof from the Holder; (ii) violate the provisions of Section 3 hereof; (iii) admit in writing its inability to pay its debts generally as they mature; (iv) make a general assignment for the benefit of creditors; (v) be adjudicated a bankrupt or insolvent; (vi) file a voluntary petition in bankruptcy or a petition or an answer seeking an arrangement with creditors; (vii) take advantage of any bankruptcy, insolvency or readjustment of debt law or statute or file an answer admitting the material allegations of a petition filed against it in any proceeding under any such law; (viii) apply for or consent to the appointment of a receiver, trustee or liquidator for all or substantially all of its asse ts; or (ix) have an involuntary case commenced against it under the Federal bankruptcy laws, which case is not dismissed or stayed within sixty (60) days (each an “Event of Default”), then, at any time thereafter and unless such Event of Default shall have been cured or shall have been waived in writing by the Holder, the Holder may, by written notice to the Company, declare the entire unpaid principal amount of this Note then outstanding, together with accrued interest thereon, to be forthwith due and payable, whereupon the same shall become forthwith due and payable.  

6.

Investment Intent. The Holder, by its acceptance hereof, hereby represents and warrants that this Note is being acquired for investment purposes only and without a view to the distribution thereof, and may be transferred only in compliance with the Act.  

7.

Transfer to Comply with the Securities Act of l933.  This Note may not be sold or otherwise disposed of except as follows: (a) to a person or entity to whom this Note may legally be transferred without registration and without the delivery of a current prospectus under the Act with respect thereto or (b) to any person or entity upon delivery of a prospectus then meeting the require­ments of the Act relating to such securities and the offering thereof for such sale or disposition, and thereafter to all successive assignees.

8.

Costs of Collection.  In  the event the Company shall default in the payment of this Note when due, then the Company shall pay, in addition to unpaid principal and interest, all the costs and expenses incurred in effecting collection hereunder, including reasonable attorneys’ fees.

9.

Applicable Law.  This Note is issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of New York, excluding choice of law rules thereof.

10.

Notices.  Any notice required or permitted to be given pursuant to this Note shall be deemed to have been duly given when delivered by hand or sent by certified or registered mail, return receipt requested and postage prepaid, overnight mail or telecopier as follows:

If to the Holder, at address indicated on the last page of the Subscription Agreement between the Company and the Holder in respect of the purchase of this Note.

If to the Company:

747 Third Avenue

New York, NY  10017

Attention:  Michael Feinsod

or at such other address as the Holder or the Company shall designate by notice to the other given in accordance with this Section 10.

11.

Miscellaneous.  This Note evidences the entire obligation of the Company with respect to the repayment of the principal amount hereof and the other matters provided for herein.  No provision of this Note may be modified except by an instrument in writing signed by the Company and the Holder.  Payment of interest due under this Note prior to the Maturity Date or Redemption Date, as the case may be, shall be made to the registered Holder of this Note.  Payment of principal and interest due upon redemption or maturity shall be made to the registered Holder of this Note on or after the Redemption Date or Maturity Date, as the case may be, contemporaneous with and upon presentation of this Note for payment.  No interest shall be due on this Note for such period of time that may elapse between the Redemption Date or Maturity Date, as the case may be, and its presentation for payment.  Notwithstanding the foregoing, it shall not be necessary for the Holder to present this Note for payment in the event of a partial redemption of this Note.

 [Remainder of page intentionally left blank.  Signature page follows.]

IN WITNESS WHEREOF, the Company has caused this Note to be signed on its behalf, in its corporate name, by its duly authorized officer, all as of the day and year first above written.

AMERITRANS CAPITAL CORPORATION

By:                                                     

Name:

Title:

AMERITRANS CAPITAL CORPORATION

PROMISSORY NOTE

DUE DECEMBER 14, 2011

NOTE ASSIGNMENT FORM

FOR VALUE RECEIVED

The undersigned                                                              (please print or typewrite name of assignor) hereby sells, assigns and transfers unto                                                                                     & nbsp;                                                                     

(please print or typewrite name, address and social security or taxpayer identification number, if any, of assignee)  the within Promissory Note of Ameritrans Capital Corporation, dated December 15, 2009, in the original principal sum of $                       and hereby authorizes the Company  to transfer this Note on its books.

If the Holder is an individual:	If the Holder is not an individual:
Name(s) of Holder	Name of Holder
	By:
Signature of Holder		Signature of Authorized Representative
Signature, if jointly held	Name and Title of Authorized Representative
Date	Date

(Signature(s) guaranteed)

EX-99.1

Exhibit 99.1

Ameritrans Capital Corporation Announces $2.025 Million Debt Financing

NEW YORK, Dec 22, 2009 (BUSINESS WIRE) -- Ameritrans Capital Corporation (NASDAQ: AMTC, AMTCP) announced today the completion of a private placement debt financing for the Company. The financing consists of $2.025 million of 8.75-percent (8.75%) notes due in December 2011. At the Company's option, the notes may be extended until December 2012 at a rate of 5.5%, plus the then current Prime Rate. The notes pay interest quarterly and are redeemable by the Company at any time upon not less than thirty days' prior written notice to the holder. The notes were sold at par resulting in aggregate gross proceeds of approximately $2.025 million. Mr. Steven Etra, a member of the Company's Board, and certain entities affiliated with Mr. Etra, participated in the offering.

"The debt financing, together with the receipt of the Company's previously announced increase in SBA debenture financing strongly positions Ameritrans to take advantage of the current financing markets." commented Michael Feinsod, Ameritrans Capital Corporation's chief executive officer and president. "The proceeds from the note issuance will be used for general working capital and investment opportunities."

The notes are not convertible and have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

About Ameritrans

Ameritrans Capital Corporation is an internally managed, closed-end investment company that has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended. Ameritrans originates, structures and manages a portfolio of secured business loans and selected equity securities. Ameritrans' wholly owned subsidiary Elk Associates Funding Corporation was licensed by the United States Small Business Administration as a Small Business Investment Company (SBIC) in 1980.

This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presently anticipated or projected. Ameritrans Capital Corporation cautions investors not to place undue reliance on forward-looking statements, which speak only as to management's expectations on this date.

Ameritrans Capital Corporation

Michael Feinsod, 212-355-2449