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x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Maryland (State or Jurisdiction of Incorporation or Organization)		52-1081052 (IRS Employer Identification No.)

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PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		Consolidated Balance Sheet as of September 30, 2007 (unaudited) and December 31, 2006		1
		Consolidated Statement of Operations (unaudited) — For the Three and Nine Months Ended September 30, 2007 and 2006		2
		Consolidated Statement of Changes in Net Assets (unaudited) — For the Nine Months Ended September 30, 2007 and 2006		3
		Consolidated Statement of Cash Flows (unaudited) — For the Nine Months Ended September 30, 2007 and 2006		4
		Consolidated Statement of Investments as of September 30, 2007 (unaudited)		5
		Consolidated Statement of Investments as of December 31, 2006		16
		Notes to Consolidated Financial Statements		27
		Report of Independent Registered Public Accounting Firm		60
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			64
	Item 3. Quantitative and Qualitative Disclosures About Market Risk			102
	Item 4. Controls and Procedures			103
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings			104
	Item 1A. Risk Factors			105
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			112
	Item 3. Defaults Upon Senior Securities			113
	Item 4. Submission of Matters to a Vote of Security Holders			113
	Item 5. Other Information			113
	Item 6. Exhibits			114
	Signatures			118
EX-10.20(h)
EX-15
EX-31.1
EX-31.2
EX-32.2

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					September 30,				December 31,
					2007				2006
(in thousands, except per share amounts)					(unaudited)
ASSETS
Portfolio at value:
	Private finance
		Companies more than 25% owned (cost: 2007-$1,571,149; 2006-$1,578,822)			$	1,236,844			$	1,490,180
		Companies 5% to 25% owned (cost: 2007-$434,164; 2006-$438,560)				397,930				449,813
		Companies less than 5% owned (cost: 2007-$2,601,101; 2006-$2,479,981)				2,572,354				2,437,908
			Total private finance (cost: 2007-$4,606,414; 2006-$4,497,363)			4,207,128				4,377,901
	Commercial real estate finance (cost: 2007-$96,115; 2006-$103,546)					119,739				118,183
			Total portfolio at value (cost: 2007-$4,702,529; 2006-$4,600,909)			4,326,867				4,496,084
Investments in money market and other securities						291,069				202,210
Accrued interest and dividends receivable						74,829				64,566
Other assets						153,940				122,958
Cash						14,816				1,687
			Total assets		$	4,861,521			$	4,887,505
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
	Notes payable and debentures (maturing within one year: 2007-$153,000; 2006-$—)				$	1,922,370			$	1,691,394
	Revolving line of credit					—				207,750
	Accounts payable and other liabilities					173,368				147,117
			Total liabilities			2,095,738				2,046,261
Commitments and contingencies
Shareholders’ equity:
	Common stock, $0.0001 par value, 400,000 shares authorized; 154,506 and 148,575 shares issued and outstanding at September 30, 2007, and December 31, 2006, respectively					15				15
	Additional paid-in capital					2,594,406				2,493,335
	Common stock held in deferred compensation trust					(37,079	)			(28,335	)
	Notes receivable from sale of common stock					(2,708	)			(2,850	)
	Net unrealized appreciation (depreciation)					(395,216	)			(123,084	)
	Undistributed earnings					606,365				502,163
			Total shareholders’ equity			2,765,783				2,841,244
			Total liabilities and shareholders’ equity		$	4,861,521			$	4,887,505
Net asset value per common share					$	17.90			$	19.12

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					For the Three Months								For the Nine Months
					Ended September 30,								Ended September 30,
					2007				2006				2007				2006
(in thousands, except per share amounts)
					(unaudited)								(unaudited)
Interest and Related Portfolio Income:
	Interest and dividends
		Companies more than 25% owned			$	28,198			$	23,812			$	83,895			$	77,377
		Companies 5% to 25% owned				9,374				10,977				32,111				28,046
		Companies less than 5% owned				68,097				63,879				194,460				177,559
			Total interest and dividends			105,669				98,668				310,466				282,982
	Fees and other income
		Companies more than 25% owned				5,146				6,486				14,552				24,222
		Companies 5% to 25% owned				19				10				518				4,008
		Companies less than 5% owned				7,534				8,219				18,460				23,638
			Total fees and other income			12,699				14,715				33,530				51,868
			Total interest and related portfolio income			118,368				113,383				343,996				334,850
Expenses:
	Interest					33,744				26,109				98,368				72,455
	Employee					26,306				25,228				76,845				67,054
	Employee stock options					18,312				3,649				31,492				11,852
	Administrative					10,496				8,153				38,225				29,348
			Total operating expenses			88,858				63,139				244,930				180,709
Net investment income before income taxes						29,510				50,244				99,066				154,141
Income tax expense (benefit), including excise tax						11,192				1,586				16,073				13,988
Net investment income						18,318				48,658				82,993				140,153
Net Realized and Unrealized Gains (Losses):
	Net realized gains (losses)
		Companies more than 25% owned				201,582				394				267,359				528,793
		Companies 5% to 25% owned				(5,475	)			93				(5,171	)			(324	)
		Companies less than 5% owned				16,263				9,429				52,727				14,522
			Total net realized gains			212,370				9,916				314,915				542,991
	Net change in unrealized appreciation or depreciation					(327,156	)			19,312				(272,132	)			(471,942	)
			Total net gains (losses)			(114,786	)			29,228				42,783				71,049
Net increase (decrease) in net assets resulting from operations					$	(96,468	)		$	77,886			$	125,776			$	211,202
Basic earnings (loss) per common share					$	(0.63	)		$	0.54			$	0.83			$	1.50
Diluted earnings (loss) per common share					$	(0.62	)		$	0.53			$	0.81			$	1.47
Weighted average common shares outstanding — basic						154,025				144,163				151,979				141,002
Weighted average common shares outstanding — diluted						155,329				147,112				154,708				144,030

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				For the Nine Months
				Ended September 30,
				2007				2006
(in thousands, except per share amounts)
				(unaudited)
Operations:
	Net investment income			$	82,993			$	140,153
	Net realized gains				314,915				542,991
	Net change in unrealized appreciation or depreciation				(272,132	)			(471,942	)
		Net increase in net assets resulting from operations			125,776				211,202
Shareholder distributions:
	Common stock dividends				(293,706	)			(255,430	)
		Net decrease in net assets resulting from shareholder distributions			(293,706	)			(255,430	)
Capital share transactions:
	Sale of common stock				93,784				218,882
	Issuance of common stock in lieu of cash distributions				12,447				11,050
	Issuance of common stock upon the exercise of stock options				13,307				11,108
	Cash portion of option cancellation payment				(52,833	)			—
	Stock option expense				32,069				12,088
	Net decrease in notes receivable from sale of common stock				142				1,005
	Purchase of common stock held in deferred compensation trust				(9,272	)			(7,226	)
	Distribution of common stock held in deferred compensation trust				528				656
	Other				2,297				—
		Net increase in net assets resulting from capital share transactions			92,469				247,563
		Total increase (decrease) in net assets			(75,461	)			203,335
Net assets at beginning of period					2,841,244				2,620,546
Net assets at end of period				$	2,765,783			$	2,823,881
Net asset value per common share				$	17.90			$	19.38
Common shares outstanding at end of period					154,506				145,722

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					For the Nine Months Ended
					September 30,
					2007				2006
(in thousands)
					(unaudited)
Cash flows from operating activities:
	Net increase in net assets resulting from operations				$	125,776			$	211,202
	Adjustments:
		Portfolio investments				(1,236,671	)			(1,700,751	)
		Principal collections related to investment repayments or sales				1,086,513				885,872
		Change in accrued or reinvested interest and dividends				(22,812	)			1,820
		Net collection (amortization) of discounts and fees				(1,215	)			(3,644	)
		Redemption of (investments in) U.S. Treasury bills				—				(22,875	)
		Redemption of (investments in) money market securities				(82,219	)			7,581
		Stock option expense				32,069				12,088
		Changes in other assets and liabilities				13,943				33,897
		Depreciation and amortization				1,540				1,303
		Realized gains from the receipt of notes and other consideration from sale of investments, net of collections				(29,716	)			(209,049	)
		Realized losses				81,456				7,063
		Net change in unrealized (appreciation) or depreciation				272,132				471,942
			Net cash provided by (used in) operating activities			240,796				(303,551	)
Cash flows from financing activities:
	Sale of common stock					93,784				218,882
	Sale of common stock upon the exercise of stock options					13,307				11,108
	Collections of notes receivable from sale of common stock					142				1,005
	Borrowings under notes payable					230,000				450,000
	Repayments on notes payable and debentures					—				(53,500	)
	Net borrowings under (repayments on) revolving line of credit					(207,750	)			(91,750	)
	Cash portion of option cancellation payment					(52,833	)			—
	Purchase of common stock held in deferred compensation trust					(9,272	)			(7,226	)
	Other financing activities					(6,363	)			(4,674	)
	Common stock dividends and distributions paid					(288,682	)			(248,479	)
			Net cash provided by (used in) financing activities			(227,667	)			275,366
Net increase (decrease) in cash						13,129				(28,185	)
Cash at beginning of period						1,687				31,363
Cash at end of period					$	14,816			$	3,178

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					September 30, 2007
Private Finance
Portfolio Company					(unaudited)
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Companies More Than 25% Owned
Alaris Consulting, LLC			Senior Loan (16.5%, Due 12/05 – 12/07)(6)		$	27,055			$	26,987			$	—
	(Business Services)		Equity Interests							5,189				—
			Guaranty ($1,100)
AllBridge Financial, LLC			Equity Interests							2,300				2,300
	(Financial Services)		Standby Letter of Credit ($30,000)
Allied Capital Senior Debt Fund, L.P.(5)			Equity Interests (See Note 3)							19,080				19,535
	(Private Debt Fund)
Avborne, Inc.(7)			Preferred Stock (12,500 shares)							611				850
	(Business Services)		Common Stock (27,500 shares)							—				—
Avborne Heavy Maintenance, Inc.(7)			Preferred Stock (1,568 shares)							2,401				973
	(Business Services)		Common Stock (2,750 shares)							—				—
			Guaranty ($2,401)
Aviation Properties Corporation			Common Stock (100 shares)							65				—
	(Business Services)		Guaranty ($1,000)
Border Foods, Inc.			Preferred Stock (100,000 shares)							12,721				2,473
	(Consumer Products)		Common Stock (148,838 shares)							3,847				—
Business Loan Express, LLC (Financial Services)			Class A Equity Interests(25.0% — See Note 3)(6)			95,822				95,822				95,822
			Class B Equity Interests							119,436				40,888
			Class C Equity Interests							109,301				—
			Guaranty ($252,007 — See Note 3)
			Standby Letters of Credit ($19,000 —   See Note 3)
Calder Capital Partners, LLC(5)			Senior Loan (8.5%, Due 5/09)(6)			2,218				2,218				2,218
	(Financial Services)		Equity Interests							2,235				347
Callidus Capital Corporation			Subordinated Debt (18.0%, Due 10/08)			6,575				6,575				6,575
	(Financial Services)		Common Stock (100 shares)							2,067				42,640
Coverall North America, Inc.			Unitranche Debt (12.0%, Due 7/11)			35,054				34,914				34,914
	(Business Services)		Subordinated Debt (15.0%, Due 7/11)			6,000				5,977				5,977
			Common Stock (884,880 shares)							16,648				23,018
CR Holding, Inc.			Subordinated Debt (16.6%, Due 2/13)			40,602				40,452				40,452
	(Consumer Products)		Common Stock (37,200,551 shares)							33,321				41,034
Direct Capital Corporation			Subordinated Debt (16.0%, Due 3/13)			37,676				37,515				37,515
	(Financial Services)		Common Stock (2,097,234 shares)							19,250				6,923
Financial Pacific Company			Subordinated Debt (17.4%, Due 2/12 – 8/12)			72,668				72,475				72,475
	(Financial Services)		Preferred Stock (10,964 shares)							10,276				18,454
			Common Stock (14,735 shares)							14,819				47,022
ForeSite Towers, LLC			Equity Interest							—				881
	(Tower Leasing)

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(7)		Avborne, Inc. and Avborne Heavy Maintenance, Inc. are affiliated companies.

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					September 30, 2007
Private Finance
Portfolio Company					(unaudited)
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Global Communications, LLC			Senior Loan (10.7%, Due 9/02 – 11/07)(6)		$	15,957			$	15,957			$	7,576
	(Business Services)		Subordinated Debt (17.0%, Due 12/03 – 9/05)(6)			11,339				11,336				—
			Preferred Equity Interest							14,067				—
			Options							1,639				—
Gordian Group, Inc.			Senior Loan (10.0%, Due 12/08)(6)			2,625				2,625				—
	(Business Services)		Common Stock (1,000 shares)							6,942				—
Hot Stuff Foods, LLC			Senior Loan (8.6%, Due 2/11-2/12)			49,550				49,351				49,351
	(Consumer Products)		Subordinated Debt (13.8%, Due 8/12 – 2/13)			61,532				61,301				42,191
			Subordinated Debt (16.0%, Due 2/13)(6)			20,841				20,750				—
			Common Stock (1,147,453 shares)							56,187				—
Huddle House, Inc.			Subordinated Debt (15.0%, Due 12/12)			59,401				59,149				59,149
	(Retail)		Common Stock (415,328 shares)							41,533				44,262
Impact Innovations Group, LLC			Equity Interests in Affiliate							—				320
	(Business Services)
Insight Pharmaceuticals Corporation			Subordinated Debt (15.0%, Due 9/12)			44,257				44,129				44,804
	(Consumer Products)		Subordinated Debt (19.0%, Due 9/12)(6)			16,181				16,130				16,626
			Preferred Stock (25,000 shares)							25,000				1,845
			Common Stock (620,000 shares)							6,325				—
Jakel, Inc.			Subordinated Debt (15.5%, Due 3/08)(6)			1,575				1,575				1,575
	(Industrial Products)
Legacy Partners Group, Inc.			Senior Loan (14.0%, Due 5/09)(6)			3,843				3,843				3,843
	(Financial Services)		Equity Interests							4,261				1,271
Litterer Beteiligungs-GmbH(4)			Subordinated Debt (8.0%, Due 3/07)			748				748				748
	(Business Services)		Equity Interest							1,809				1,585
MVL Group, Inc.			Senior Loan (12.0%, Due 6/09 – 7/09)			30,674				30,633				30,633
	(Business Services)		Subordinated Debt (14.5%, Due 6/09 – 7/09)			39,937				39,651				39,651
			Common Stock (648,661 shares)							643				4,961
Old Orchard Brands, LLC			Subordinated Debt (18.0%, Due 7/14)			19,433				19,342				19,342
	(Consumer Products)		Equity Interests							18,767				19,602
Penn Detroit Diesel Allison, LLC			Subordinated Debt (15.5%, Due 8/13)			39,038				38,880				38,880
	(Business Services)		Equity Interests							21,128				28,795
Powell Plant Farms, Inc.			Senior Loan (15.0%, Due 12/07)(6)			1,350				1,350				1,350
	(Consumer Products)

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.

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					September 30, 2007
Private Finance					(unaudited)
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Service Champ, Inc.			Subordinated Debt (15.5%, Due 4/12)		$	28,262			$	28,165			$	28,165
	(Business Services)		Common Stock (63,888 shares)							13,662				26,355
Staffing Partners Holding
	Company, Inc.		Subordinated Debt (13.5%, Due 1/07)(6)			541				541				544
	(Business Services)
Startec Equity, LLC			Equity Interests							230				440
	(Telecommunications)
Sweet Traditions, Inc.			Senior Loan (9.0%, Due 9/08 – 8/11)(6)			39,692				36,052				36,673
	(Retail)		Preferred Stock (961 Shares)							950				—
			Common Stock (10,000 Shares)							50				—
Triview Investments, Inc.(8)			Senior Loan (10.0%, Due 12/07)			433				433				433
	(Broadcasting & Cable/Business		Subordinated Debt (12.9%, Due 1/10 – 6/17)			42,784				42,590				42,590
	Services/Consumer Products)		Subordinated Debt (12.5%, Due 11/07 – 3/08) (6)			1,400				1,400				1,534
			Common Stock (202 shares)							119,836				82,777
			Guaranty ($900)
			Standby Letter of Credit ($200)
Worldwide Express Operations, LLC			Subordinated Debt (14.0%, Due 2/14)			2,800				2,624				2,624
	(Business Services)		Equity Interests							12,900				12,900
			Warrants							163				163
Total companies more than 25% owned									$	1,571,149			$	1,236,844
Companies 5% to 25% Owned
Advantage Sales & Marketing, Inc.			Subordinated Debt (12.0%, Due 3/14)		$	154,642			$	154,041			$	154,041
	(Business Services)		Equity Interests							—				11,000
Air Medical Group Holdings LLC			Senior Loan (7.9%, Due 3/11)			1,920				1,866				1,866
	(Healthcare Services)		Equity Interests							3,470				10,800
Alpine ESP Holdings, Inc.			Preferred Stock (622 shares)							622				719
	(Business Services)		Common Stock (13,513 shares)							14				300
Amerex Group, LLC			Subordinated Debt (12.0%, Due 1/13)			8,400				8,400				8,400
	(Consumer Products)		Equity Interests							3,509				15,657
BB&T Capital Partners/Windsor
	Mezzanine Fund, LLC (5)		Equity Interests							5,873				5,607
	(Private Equity Fund)
Becker Underwood, Inc.			Subordinated Debt (14.5%, Due 8/12)			24,707				24,636				24,636
	(Industrial Products)		Common Stock(5,073 shares)							5,813				4,200
BI Incorporated			Subordinated Debt (13.5%, Due 2/14)			30,615				30,495				30,495
	(Business Services)		Common Stock (40,000 shares)							4,000				7,400

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(8)		Triview Investments, Inc. has a cost basis of $164.3 million and holds investments in Longview Cable & Data, LLC (Broadcasting & Cable) with a value of $6.9 million, Triax Holdings, LLC (Consumer Products) with a value of $62.2 million, and Crescent Hotels & Resorts, LLC and affiliates (Business Services) with a value of $58.2 million.

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					September 30, 2007
Private Finance
Portfolio Company					(unaudited)
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
CitiPostal, Inc. and Affiliates			Senior Loan (11.1%, Due 8/13-11/14)		$	22,208			$	22,115			$	22,115
	(Business Services)		Equity Interests							4,543				6,900
Creative Group, Inc.			Subordinated Debt (14.0%, Due 9/13)(6)			15,000				13,686				9,259
	(Business Services)		Warrant							1,387				—
Drew Foam Companies, Inc.			Preferred Stock (722 shares)							722				396
	(Business Services)		Common Stock (7,287 shares)							7				—
MedBridge Healthcare, LLC			Senior Loan (8.0%, Due 8/09)(6)			7,164				7,164				7,164
	(Healthcare Services)		Subordinated Debt (10.0%, Due 8/14)(6)			5,184				5,184				1,723
			Convertible Subordinated Debt (2.0%, Due 8/14)(6)			2,970				984				—
			Equity Interests							1,416				—
MHF Logistical Solutions, Inc.			Subordinated Debt (11.5%, Due 6/12)(6)			33,600				33,448				10,585
	(Business Services)		Subordinated Debt (18.0%, Due 6/13)(6)			11,211				11,154				—
			Common Stock (20,934 shares)(12)							20,942				—
			Warrants(12)							—				—
Multi-Ad Services, Inc.			Unitranche Debt (11.3%, Due 11/11)			19,850				19,748				19,748
	(Business Services)		Equity Interests							2,000				942
PresAir LLC			Senior Loan (7.5%, Due 12/10)(6)			5,702				5,384				800
	(Industrial Products)		Equity Interests							1,341				—
Progressive International
	Corporation		Subordinated Debt (16.0%, Due 12/09)			3,985				3,970				3,970
	(Consumer Products)		Preferred Stock (500 shares)							500				1,017
			Common Stock (197 shares)							13				5,100
			Warrants							—				—
Regency Healthcare Group, LLC			Senior Loan (11.1%, Due 6/12)			500				484				484
	(Healthcare Services)		Unitranche Debt (11.1%, Due 6/12)			12,000				11,953				11,953
			Equity Interests							1,500				1,685
SGT India Private Limited(4)			Common Stock (109,524 shares)							4,098				2,625
	(Business Services)
Soteria Imaging Services, LLC			Subordinated Debt (12.0%, Due 11/10)			14,500				13,702				13,702
	(Healthcare Services)		Equity Interests							2,170				2,641
Universal Environmental Services, LLC			Equity Interests							1,810				—
	(Business Services)
Total companies 5% to 25% owned									$	434,164			$	397,930
Companies Less Than 5% Owned
3SI Security Systems, Inc.			Subordinated Debt (14.5%, Due 8/13)		$	27,651			$	27,547			$	27,547
	(Consumer Products)
AgData, L.P.			Senior Loan (10.3%, Due 7/12)			526				496				496
	(Consumer Services)
Axium Healthcare Pharmacy, Inc.			Unitranche Debt (12.0%, Due 12/12)			10,950				10,877				10,877
	(Healthcare Services)		Common Stock (26,500 shares)							2,650				1,100
Baird Capital Partners IV Limited Partnership(5) (Private Equity Fund)			Limited Partnership Interest							1,967				1,856

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(12)		Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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Table of Contents

					September 30, 2007
Private Finance
Portfolio Company					(unaudited)
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
BenefitMall, Inc.			Unitranche Debt (13.3%, Due 8/12)		$	110,030			$	109,699			$	109,699
	(Business Services)		Common Stock (45,528,000 shares)(12)							45,528				60,376
			Warrants(12)							—				—
			Standby Letters of Credit ($7,986)
Broadcast Electronics, Inc.			Senior Loan (9.4%, Due 7/12)			4,925				4,897				4,897
	(Business Services)
Bushnell, Inc.			Subordinated Debt (12.3%, Due 2/14)			41,325				39,685				39,685
	(Consumer Products)
Callidus Debt Partners
	CDO Fund I, Ltd.(4)(10)		Class C Notes (12.9%, Due 12/13)			18,800				18,935				18,988
	(CDO/CLO)		Class D Notes (17.0%, Due 12/13)			9,400				9,467				9,494
Callidus Debt Partners
	CLO Fund III, Ltd. (4)(10)		Preferred Shares (23,600,000 shares,
	(CDO/CLO)		15.0%)(11)							21,980				20,702
Callidus Debt Partners
	CLO Fund IV, Ltd.(4)(10)		Income Notes (13.5%)(11)							12,373				10,758
	(CDO/CLO)
Callidus Debt Partners
	CLO Fund V, Ltd. (4)(10)		Income Notes (20.0%)(11)							13,988				14,649
	(CDO/CLO)
Callidus Debt Partners
	CLO Fund VI, Ltd.(4)(10)		Income Notes (19.8%)(11)							25,662				25,662
	(CDO/CLO)
Callidus MAPS CLO Fund I LLC(10)			Class E Notes (10.7%, Due 12/17)			17,000				17,000				16,401
	(CDO/CLO)		Income Notes (8.7%)(11)							50,090				41,673
Callidus MAPS CLO Fund II, Ltd. (4)(10)			Income Notes (14.8%)(11)							18,061				18,061
	(CDO/CLO)
Camden Partners Strategic Fund II,
	L.P.(5)		Limited Partnership Interest							997				2,382
	(Private Equity Fund)
Carlisle Wide Plank Floors, Inc.			Unitranche Debt (10.0%, Due 6/11)			3,161				3,123				3,123
	(Consumer Products)		Preferred Stock (400,000 Shares)							400				500
Catterton Partners V, L.P.(5)			Limited Partnership Interest							3,510				4,038
	(Private Equity Fund)
Catterton Partners VI, L.P.(5)			Limited Partnership Interest							1,795				1,656
	(Private Equity Fund)
Centre Capital Investors IV, LP(5)			Limited Partnership Interest							2,079				2,170
	(Private Equity Fund)

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(10)		The fund is managed by Callidus Capital, a portfolio company of Allied Capital.
(11)		Represents the effective interest yield earned on the cost basis of these preferred equity investments and income notes. The yield is included in interest income from companies less than 5% owned in the consolidated statement of operations.
(12)		Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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					September 30, 2007
Private Finance
Portfolio Company					(unaudited)
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
CK Franchising, Inc.			Senior Loan (11.0%, Due 7/12)		$	30,150			$	29,959			$	29,959
	(Consumer Services)		Subordinated Debt (15.0%, Due 7/17)			1,000				1,000				1,000
			Preferred Stock (1,486,004 shares)							1,486				1,486
			Common Stock (8,793,408 shares)							8,793				8,793
Commercial Credit Group, Inc.			Subordinated Debt (14.8%, Due 2/11)			12,000				12,025				12,025
	(Financial Services)		Preferred Stock (74,978 shares)							18,018				19,469
			Warrants							—				—
Community Education Centers, Inc.			Subordinated Debt (13.5%, Due 11/13)			34,878				34,800				34,800
	(Education Services)
Compass Group Diversified Holdings, LLC(3)			Senior Loan (8.0%, Due 11/11)			2,000				1,896				1,896
	(Financial Services)
Component Hardware Group, Inc.			Subordinated Debt (13.5%, Due 1/13)			18,363				18,290				18,290
	(Industrial Products)
Cook Inlet Alternative Risk, LLC			Unitranche Debt (10.8%, Due 4/13)			100,000				99,507				99,507
	(Business Services)		Equity Interests							640				1,700
Cortec Group Fund IV, L.P.(5)			Limited Partnership Interest							3,383				2,906
	(Private Equity)
CSAV, Inc.			Subordinated Debt (11.7%, Due 6/13)			37,500				37,500				37,500
	(Business Services)
Diversified Mercury
Communications, LLC			Senior Loan (9.0%, Due 3/13)			233				217				217
	(Business Services)
Digital VideoStream, LLC			Unitranche Debt (11.0%, Due 2/12)			17,677				17,586				17,586
	(Business Services)		Convertible Subordinated Debt
			(10.0%, Due 2/16)			4,017				4,003				4,100
Distant Lands Trading Co.			Senior Loan (10.3%, Due 11/11)			10,000				9,963				9,963
	(Consumer Products)		Unitranche Debt (11.0%, Due 11/11)			42,375				42,216				42,216
			Common Stock (4,000 shares)							4,000				2,652
Driven Brands, Inc.			Senior Loan (8.9%, Due 6/11)			36,070				35,942				35,942
	d/b/a Meineke and Econo Lube		Subordinated Debt (12.1%, Due 6/12 – 6/13)			83,000				82,736				82,736
	(Consumer Services)		Common Stock (11,675,331 shares)(12)							29,455				17,977
			Warrants(12)							—				—
Dynamic India Fund IV (4)(5)			Equity Interests							6,050				6,215
	(Private Equity Fund)
EarthColor, Inc.			Subordinated Debt (15.0%, Due 11/13)			127,000				126,440				126,440
	(Business Services)		Common Stock (73,540 shares)(12)							73,540				42,884
			Warrants(12)							—				—
eCentury Capital Partners, L.P.(5)			Limited Partnership Interest							6,899				2,615
	(Private Equity Fund)

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.
	(12)			Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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Table of Contents

					September 30, 2007
Private Finance
Portfolio Company					(unaudited)
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Elexis Beta GmbH(4)			Options						$	426			$	50
	(Industrial Products)
Farley’s & Sathers Candy Company, Inc.			Subordinated Debt (11.4%, Due 3/11)		$	8,000				7,978				7,978
	(Consumer Products)
FCP-BHI Holdings, LLC			Subordinated Debt (12.8%, Due 9/13)			24,000				23,882				23,882
	d/b/a Bojangles’		Equity Interests							1,000				1,000
	(Consumer Products)
Fidus Mezzanine Capital, L.P.(5)			Limited Partnership Interest							3,294				3,294
	(Private Equity Fund)
Frozen Specialties, Inc.			Warrants							435				230
	(Consumer Products)
Garden Ridge Corporation (Retail)			Subordinated Debt (7.0%, Due 5/12)(6)			20,500				20,500				20,500
Geotrace Technologies, Inc.			Subordinated Debt (10.0%, Due 6/09)			7,347				7,167				7,167
	(Energy Services)		Warrants							2,350				3,000
Grant Broadcasting Systems II			Subordinated Debt (5.0%, Due 6/11)			3,005				3,005				3,005
	(Broadcasting & Cable)
Grotech Partners, VI, L.P.(5)			Limited Partnership Interest							8,808				6,970
	(Private Equity Fund)
Havco Wood Products LLC			Senior Loan (9.9%, Due 8/11)			1,150				1,134				1,134
	(Industrial Products)		Unitranche Debt (11.5%, Due 8/11)			7,600				6,740				6,740
			Equity Interests							1,055				3,200
Haven Eldercare of New England, LLC			Subordinated Debt (12.0%, Due 8/09)			1,927				1,927				1,927
	(Healthcare Services)
HealthASPex Services Inc.			Senior Loan (8.0%, Due 7/08)(6)			500				500				133
	(Business Services)
Higginbotham Insurance Agency, Inc.			Senior Loan (7.9%, Due 8/12)			15,196				15,099				15,099
	(Business Services)		Subordinated Debt (13.6%, Due 8/13 – 8/14)			46,855				46,626				46,626
			Common Stock (28,277 shares)(12)							26,522				26,522
			Warrant(12)							—				—
The Hillman Companies, Inc.(3)			Subordinated Debt (10.0%, Due 9/11)			44,580				44,450				44,450
	(Consumer Products)
The Homax Group, Inc.			Senior Loan (9.1%, Due 10/12)			11,027				11,027				11,027
	(Consumer Products)		Subordinated Debt (12.0%, Due 4/14)			14,000				13,225				13,225
			Preferred Stock (89 shares)							89				74
			Common Stock (28 shares)							6				—
			Warrants							1,106				909
Ideal Snacks Corporation			Senior Loan (9.5%, Due 6/10)			35				35				35
	(Consumer Products)
Integrity Interactive Corporation			Unitranche Debt (10.5%, Due 2/12)			12,434				12,331				12,331
	(Business Services)
International Fiber Corporation			Subordinated Debt (14.0%, Due 6/12)			24,447				24,354				24,354
	(Industrial Products)		Preferred Stock (25,000 shares)							2,500				2,200

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.
	(12)			Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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Table of Contents

					September 30, 2007
Private Finance
Portfolio Company					(unaudited)
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Jones Stephens Corporation			Senior Loan (8.9%, Due 9/12)		$	5,558			$	5,545			$	5,545
	(Consumer Products)
K2 Advisors Subsidiary Holdings, LLC			Senior Loan (8.7%, Due 4/13)			9,836				9,836				9,836
	(Business Services)
Kodiak Fund LP(5)			Equity Interests							9,423				2,853
	(Private Equity Fund)
Line-X, Inc.			Senior Loan (12.0%, Due 8/11)			1,100				1,084				1,084
	(Consumer Products)		Unitranche Debt (12.0% Due 8/11)			48,355				48,185				48,185
			Standby Letter of Credit ($1,500)
MedAssets, Inc.			Preferred Stock (227,865 shares)							2,049				3,845
	(Business Services)		Common Stock (50,000 shares)							—				100
Mid-Atlantic Venture Fund IV, L.P. (5)			Limited Partnership Interest							6,975				2,861
	(Private Equity Fund)
NetShape Technologies, Inc.			Senior Loan (8.9%, Due 2/13)			5,661				5,630				5,630
	(Industrial Products)
Network Hardware Resale, Inc.			Unitranche Debt (10.5%, Due 12/11)			20,805				20,913				20,913
	(Business Services)		Convertible Subordinated Debt (9.8%, Due 12/15)			13,242				13,304				14,959
Norwesco, Inc.			Subordinated Debt (12.6%, Due 1/12 – 7/12)			82,812				82,546				82,546
	(Industrial Products)		Common Stock (559,603 shares)(12)							38,313				118,118
			Warrants(12)							—				—
Novak Biddle Venture Partners III, L.P.(5)			Limited Partnership Interest							1,910				1,983
	(Private Equity Fund)
Oahu Waste Services, Inc.			Stock Appreciation Rights							239				1,000
	(Business Services)
Odyssey Investment Partners Fund III, LP(5)			Limited Partnership Interest							1,542				2,162
	(Private Equity Fund)
Passport Health
	Communications, Inc.		Preferred Stock (651,381 shares)							2,000				2,398
	(Healthcare Services)		Common Stock (19,680 shares)							48				48
Pendum, Inc.			Subordinated Debt (17.0%, Due 1/11)(6)			34,028				34,028				—
	(Business Services)		Preferred Stock (82,715 shares)							—				—
			Warrants							—				—
Performant Financial Corporation			Common Stock (478,816 shares)							734				—
	(Business Services)

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.
	(12)			Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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					September 30, 2007
Private Finance
Portfolio Company					(unaudited)
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Postle Aluminum Company, LLC			Unitranche Debt (11.0%, Due 10/12)		$	61,750			$	61,489			$	61,489
	(Industrial Products)		Equity Interests							2,500				3,100
Pro Mach, Inc.			Subordinated Debt (13.0%, Due 6/12)			14,525				14,466				14,466
	(Industrial Products)		Equity Interests							1,500				1,600
Promo Works, LLC			Unitranche Debt (10.3%, Due 12/11)			26,215				25,995				25,995
	(Business Services)		Guaranty ($600)
S.B. Restaurant Company			Unitranche Debt (9.8%, Due 4/11)			29,001				28,739				28,739
	(Retail)		Preferred Stock (54,125 shares)							135				135
			Warrants							619				2,100
			Standby Letters of Credit ($2,540)
SBBUT, LLC			Equity Interests							—				—
	(Consumer Products)
Service Center Metals, LLC			Subordinated Debt (15.5%, Due 9/11)			5,000				4,980				4,980
	(Industrial Products)		Equity Interests							313				337
Snow Phipps Group, L.P.(5)			Limited Partnership Interest							2,317				2,317
	(Private Equity Fund)
SPP Mezzanine Funding, L.P.(5)			Limited Partnership Interest							2,364				2,928
	(Private Equity Fund)
SPP Mezzanine Funding II, L.P.(5)			Limited Partnership Interest							2,750				2,409
	(Private Equity Fund)
Stag-Parkway, Inc.			Unitranche Debt (10.8%, Due 7/12)			51,000				50,799				50,799
	(Business Services)
STS Operating, Inc.			Subordinated Debt (11.0%, Due 1/13)			30,386				30,268				30,268
	(Industrial Products)
Summit Energy Services, Inc.			Senior Loan (10.4%, Due 8/13)			60,000				59,824				59,824
	(Business Services)		Common Stock (89,406 shares)							2,000				2,000
Tappan Wire and Cable Inc.			Senior Loan (15.0%, Due 8/14)			24,100				23,970				23,970
	(Business Services)		Common Stock (15,000 shares)(12)							2,250				2,250
			Warrant(12)							—				—
The Step2 Company, LLC			Unitranche Debt (11.0%, Due 4/12)			96,041				95,672				95,672
	(Consumer Products)		Equity Interests							2,483				3,003
Tradesmen International, Inc.			Subordinated Debt (12.0%, Due 12/09)			9,136				8,668				8,668
	(Business Services)
TransAmerican Auto Parts, LLC			Subordinated Debt (14.0%, Due 11/12)			23,955				23,746				23,746
	(Consumer Products)		Equity Interests							1,198				1,016
Trover Solutions, Inc.			Senior Loan (11.3%, Due 5/12 – 11/12)			77,000				76,725				76,725
	(Business Services)
Universal Air Filter Company			Senior Loan (12.0%, Due 11/12)			14,875				14,810				14,810
	(Industrial Products)

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.
	(12)			Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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						September 30, 2007
Private Finance
Portfolio Company						(unaudited)
(in thousands, except number of shares)				Investment(1)(2)		Principal				Cost				Value
Updata Venture Partners II, L.P.(5)				Limited Partnership Interest						$	4,727			$	6,148
	(Private Equity Fund)
Venturehouse-Cibernet Investors, LLC				Equity Interest							—				54
	(Business Services)
Venturehouse Group, LLC(5)				Equity Interest							—				1,381
	(Private Equity Fund)
VICORP Restaurants, Inc.				Warrants							33				—
	(Retail)
Walker Investment Fund II, LLLP(5)				Limited Partnership Interest							1,330				358
	(Private Equity Fund)
WMA Equity Corporation and Affiliates				Subordinated Debt (13.6%, Due 4/13)		$	125,000				123,971				123,971
	d/b/a Wear Me Apparel			Subordinated Debt (9.0%, Due 4/14)(6)			13,033				13,033				13,033
	(Consumer Products)			Common Stock (100 shares)							46,046				14,428
Webster Capital II, L.P.(5)				Limited Partnership Interest							538				538
	(Private Equity Fund)
Woodstream Corporation				Subordinated Debt (12.0%,
	(Consumer Products)			Due 2/15)			90,000				89,560				89,560
				Common Stock (7,500 shares)							7,500				7,500
				Warrants							—				—
York Insurance Services Group, Inc.				Subordinated Debt (14.5%, Due 1/14)			44,916				44,734				44,734
	(Business Services)			Common Stock (15,000 shares)							1,500				2,000
Other companies				Other debt investments(6)			6,516				6,516				6,511
				Other equity investments							8				—
Total companies less than 5% owned										$	2,601,101			$	2,572,354
Total private finance (151 portfolio investments)										$	4,606,414			$	4,207,128

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.

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Commercial Real Estate Finance
(in thousands, except number of loans)

												September 30, 2007
				Interest				Number of				(unaudited)
				Rate Ranges				Loans				Cost				Value
Commercial Mortgage Loans
					Up to 6.99%				3			$	20,388			$	19,838
					7.00%–8.99%				8				21,623				21,623
					9.00%–10.99%				3				8,371				8,371
					11.00%–12.99%				1				10,453				10,453
				15.00% and above					2				3,970				3,970
		Total commercial mortgage loans(13)							17			$	64,805			$	64,255
Real Estate Owned												$	15,568			$	21,979
Equity Interests(2) — Companies more than 25% owned												$	15,742			$	33,505
	Guarantees ($6,871)
	Standby Letter of Credit ($1,295)
		Total commercial real estate finance										$	96,115			$	119,739
Total portfolio												$	4,702,529			$	4,326,867

				Yield				Cost				Value
Liquidity Portfolio(14)
	American Beacon Money Market Select FD Fund				5.4%			$	126,410			$	126,410
	American Beacon Money Market Fund				5.2%				40,102				40,102
	SEI Daily Income Tr Prime Obligation Fund				5.2%				34,151				34,151
		Total liquidity portfolio						$	200,663			$	200,663
Other Investments in Money Market Securities(14)
	Columbia Treasury Reserves Money Market Fund				5.3%			$	90,406			$	90,406

(1)       Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for             a single issuer. The maturity dates represent the earliest and the latest maturity dates.

(2)       Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.

(3)       Public company.

(4)       Non-U.S. company or principal place of business outside the U.S.

(5)       Non-registered investment company.

(13)       Commercial mortgage loans totaling $19.1 million at value were on non-accrual status and therefore were considered non-income producing.

(14)       Included in investments in money market and other securities on the accompanying Consolidated Balance Sheet.

15

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Table of Contents

					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Companies More Than 25% Owned
Alaris Consulting, LLC			Senior Loan (16.5%, Due 12/05 – 12/07)(6)		$	27,055			$	26,987			$	—
	(Business Services)		Equity Interests							5,305				—
			Guaranty ($1,100)
Avborne, Inc.(7)			Preferred Stock (12,500 shares)							610				918
	(Business Services)		Common Stock (27,500 shares)							—				—
Avborne Heavy Maintenance, Inc.(7)			Preferred Stock (1,568 shares)							2,401				—
	(Business Services)		Common Stock (2,750 shares)							—				—
			Guaranty ($2,401)
Border Foods, Inc.			Preferred Stock (100,000 shares)							12,721				—
	(Consumer Products)		Common Stock (148,838 shares)							3,848				—
Business Loan Express, LLC			Class A Equity Interests(25.0%)(6)			66,622				66,622				66,622
	(Financial Services)		Class B Equity Interests							119,436				79,139
			Class C Equity Interests							109,301				64,976
			Guaranty ($189,706 — See Note 3)
			Standby Letters of Credit ($25,000 —   See Note 3)
Calder Capital Partners, LLC(5)			Senior Loan (8.0%, Due 5/09)(6)			975				975				975
	(Financial Services)		Equity Interests							2,076				2,076
Callidus Capital Corporation			Subordinated Debt (18.0%, Due 10/08)			5,762				5,762				5,762
	(Financial Services)		Common Stock (100 shares)							2,058				22,550
Coverall North America, Inc.			Unitranche Debt (12.0%, Due 7/11)			36,500				36,333				36,333
	(Business Services)		Subordinated Debt (15.0%, Due 7/11)			6,000				5,972				5,972
			Common Stock (884,880 shares)							16,649				19,619
CR Brands, Inc.			Subordinated Debt (16.6%, Due 2/13)			39,573				39,401				39,401
	(Consumer Products)		Common Stock (37,200,551 shares)							33,321				25,738
Financial Pacific Company			Subordinated Debt (17.4%, Due 2/12 – 8/12)			71,589				71,362				71,362
	(Financial Services)		Preferred Stock (10,964 shares)							10,276				15,942
			Common Stock (14,735 shares)							14,819				65,186
ForeSite Towers, LLC			Equity Interests							7,620				12,290
	(Tower Leasing)
Global Communications, LLC			Senior Loan (10.7%, Due 9/02 – 11/07)(6)			15,957				15,957				15,957
	(Business Services)		Subordinated Debt (17.0%, Due 12/03 – 9/05)(6)			11,339				11,336				11,237
			Preferred Equity Interest							14,067				—
			Options							1,639				—
Gordian Group, Inc.			Senior Loan (10.0%, Due 6/06 – 12/08)(6)			11,792				11,803				—
	(Business Services)		Common Stock (1,000 shares)							6,762				—

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(7)		Avborne, Inc. and Avborne Heavy Maintenance, Inc. are affiliated companies.

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Table of Contents

					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Healthy Pet Corp.			Senior Loan (9.9%, Due 8/10)		$	27,038			$	27,038			$	27,038
	(Consumer Services)		Subordinated Debt (15.0%, Due 8/10)			43,720				43,579				43,579
			Common Stock (30,142 shares)							30,142				28,921
HMT, Inc.			Preferred Stock (554,052 shares)							2,637				2,637
	(Energy Services)		Common Stock (300,000 shares)							3,000				8,664
			Warrants							1,155				3,336
Huddle House, Inc.			Senior Loan (8.9%, Due 12/11)			19,950				19,950				19,950
	(Retail)		Subordinated Debt (15.0%, Due 12/12)			58,484				58,196				58,196
			Common Stock (415,328 shares)							41,662				41,662
Impact Innovations Group, LLC			Equity Interests in Affiliate							—				873
	(Business Services)
Insight Pharmaceuticals Corporation			Subordinated Debt (16.1%, Due 9/12)			60,049				59,850				59,850
	(Consumer Products)		Preferred Stock (25,000 shares)							25,000				7,845
			Common Stock (620,000 shares)							6,325				—
Jakel, Inc.			Subordinated Debt (15.5%, Due 3/08)(6)			15,192				15,192				6,655
	(Industrial Products)		Preferred Stock (6,460 shares)							6,460				—
			Common Stock (158,061 shares)							9,347				—
Legacy Partners Group, LLC			Senior Loan (14.0%, Due 5/09)(6)			7,646				7,646				4,843
	(Financial Services)		Subordinated Debt (18.0%, Due 5/09)(6)			2,952				2,952				—
			Equity Interests							4,248				—
Litterer Beteiligungs-GmbH(4)			Subordinated Debt (8.0%, Due 3/07)			692				692				692
	(Business Services)		Equity Interest							1,809				1,199
Mercury Air Centers, Inc.			Subordinated Debt (16.0%, Due 4/09 –
	(Business Services)		11/12)			49,358				49,217				49,217
			Common Stock (57,970 shares)							35,053				195,019
			Standby Letters of Credit ($1,581)
MVL Group, Inc.			Senior Loan (12.0%, Due 6/09 – 7/09)			27,299				27,245				27,245
	(Business Services)		Subordinated Debt (14.5%, Due 6/09)			35,846				35,478				35,478
			Common Stock (648,661 shares)							643				—
Penn Detroit Diesel Allison, LLC			Subordinated Debt (15.5%, Due 8/13)			38,173				37,994				37,994
	(Business Services)		Equity Interests							21,128				25,949
Powell Plant Farms, Inc.			Senior Loan (15.0%, Due 12/07)(6)			35,040				26,192				26,192
	(Consumer Products)		Subordinated Debt (20.0%, Due 6/03)(6)			19,291				19,223				962
			Preferred Stock (1,483 shares)							—				—
			Warrants							—				—
Service Champ, Inc.			Subordinated Debt (15.5%, Due 4/12)			27,733				27,619				27,619
	(Business Services)		Common Stock (63,888 shares)							13,662				16,786

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.

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Table of Contents

					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Staffing Partners Holding
	Company, Inc.		Subordinated Debt (13.5%, Due 1/07)(6)		$	540			$	540			$	486
	(Business Services)
Startec Global Communications
	Corporation		Senior Loan (10.0%, Due 5/07 – 5/09)			15,965				15,965				15,965
	(Telecommunications)		Common Stock (19,180,000 shares)							37,256				11,232
Sweet Traditions, LLC			Senior Loan (9.0%, Due 8/11)			39,022				35,172				35,172
	(Retail)		Equity Interests							450				450
			Standby Letter of Credit ($120)
Triview Investments, Inc.(8)			Senior Loan (9.6%, Due 6/07 – 12/07)			14,758				14,747				14,747
	(Broadcasting & Cable/Business		Subordinated Debt (16.0%, Due 9/11 – 7/12)			56,288				56,008				56,008
	Services/Consumer Products)		Subordinated Debt (7.9%, Due 11/07 – 7/08)(6)			4,327				4,327				4,342
			Common Stock (202 shares)							98,604				31,322
			Guaranty ($800)
			Standby Letter of Credit ($200)
Total companies more than 25% owned									$	1,578,822			$	1,490,180
Companies 5% to 25% Owned
Advantage Sales & Marketing, Inc.			Subordinated Debt (12.0%, Due 3/14)		$	152,320			$	151,648			$	151,648
	(Business Services)		Equity Interests							—				11,000
Air Medical Group Holdings LLC			Senior Loan (9.9%, Due 3/11)			1,828				1,763				1,763
	(Healthcare Services)		Subordinated Debt (14.0%, Due 11/12)			35,180				35,128				35,128
			Equity Interests							3,470				5,950
Alpine ESP Holdings, Inc.			Preferred Stock (622 shares)							622				602
	(Business Services)		Common Stock (13,513 shares)							14				—
Amerex Group, LLC			Subordinated Debt (12.0%, Due 1/13)			8,400				8,400				8,400
	(Consumer Products)		Equity Interests							3,546				13,823
BB&T Capital Partners/Windsor
	Mezzanine Fund, LLC (5)		Equity Interests							5,873				5,554
	(Private Equity Fund)
Becker Underwood, Inc.			Subordinated Debt (14.5%, Due 8/12)			24,244				24,163				24,163
	(Industrial Products)		Common Stock (5,073 shares)							5,813				3,700
BI Incorporated			Subordinated Debt (13.5%, Due 2/14)			30,269				30,135				30,135
	(Business Services)		Common Stock (40,000 shares)							4,000				4,100

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(8)		Triview Investments, Inc. holds investments in Longview Cable & Data, LLC (Broadcasting & Cable) with a cost of $67.3 million and a value of $7.5 million, Triax Holdings, LLC (Consumer Products) with a cost of $98.9 million and a value of $91.5 million, and Crescent Hotels & Resorts, LLC and affiliates (Business Services) with a cost of $7.5 million and a value of $7.3 million.

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Table of Contents

					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
CitiPostal, Inc. and Affiliates			Senior Loan (11.1%, Due 8/13-11/14)		$	20,670			$	20,569			$	20,569
	(Business Services)		Equity Interests							4,447				4,700
Creative Group, Inc.			Subordinated Debt (12.0%, Due 9/13)			15,000				13,656				13,656
	(Business Services)		Warrant							1,387				1,387
Drew Foam Companies, Inc.			Preferred Stock (722 shares)							722				722
	(Business Services)		Common Stock (7,287 shares)							7				7
MedBridge Healthcare, LLC			Senior Loan (6.0%, Due 8/09)(6)			7,164				7,164				7,164
	(Healthcare Services)		Subordinated Debt (10.0%, Due 8/14)(6)			5,184				5,184				1,813
			Convertible Subordinated Debt (2.0%, Due 8/14)(6)			2,970				984				—
			Equity Interests							1,306				—
Multi-Ad Services, Inc.			Unitranche Debt (11.3%, Due 11/11)			20,000				19,879				19,879
	(Business Services)		Equity Interests							2,000				2,000
Nexcel Synthetics, LLC			Subordinated Debt (14.5%, Due 6/09)			10,998				10,978				10,978
	(Consumer Products)		Equity Interests							1,755				1,486
PresAir LLC			Senior Loan (7.5%, Due 12/10)(6)			5,810				5,492				2,206
	(Industrial Products)		Equity Interests							1,336				—
Progressive International
	Corporation		Subordinated Debt (16.0%, Due 12/09)			7,553				7,533				7,533
	(Consumer Products)		Preferred Stock (500 shares)							500				1,024
			Common Stock (197 shares)							13				2,300
			Warrants							—				—
Regency Healthcare Group, LLC			Senior Loan (11.1%, Due 6/12)			1,250				1,232				1,232
	(Healthcare Services)		Unitranche Debt (11.1%, Due 6/12)			20,000				19,908				19,908
			Equity Interests							1,500				1,616
SGT India Private Limited(4)			Common Stock (109,524 shares)							3,944				3,346
	(Business Services)
Soteria Imaging Services, LLC			Subordinated Debt (11.6%, Due 11/10)			18,500				17,569				17,569
	(Healthcare Services)		Equity Interests							2,163				2,541
Universal Environmental Services, LLC			Unitranche Debt (14.5%, Due 2/09)			10,989				10,962				10,211
	(Business Services)		Equity Interests							1,795				—
Total companies 5% to 25% owned									$	438,560			$	449,813
Companies Less Than 5% Owned
3SI Security Systems, Inc.			Subordinated Debt (14.5%, Due 8/13)		$	26,857			$	26,740			$	26,740
	(Consumer Products)
AgData, L.P.			Unitranche Debt (10.3%, Due 7/12)			11,330				11,269				11,269
	(Consumer Services)
Anthony, Inc.			Subordinated Debt (13.3%, Due 8/11 –
	(Industrial Products)		9/12)			14,818				14,768				14,768
Axium Healthcare Pharmacy, Inc.			Senior Loan (12.0%, Due 12/12)			200				161				161
	(Healthcare Services)		Unitranche Debt (12.0%, Due 12/12)			9,000				8,956				8,956
			Common Stock (26,500 shares)							2,650				2,650
Baird Capital Partners IV Limited Partnership(5) (Private Equity Fund)			Limited Partnership Interest							876				876

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.

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					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Bantek West, Inc.			Subordinated Debt (11.6%, Due 1/11)(6)		$	30,000			$	30,000			$	21,463
	(Business Services)
Benchmark Medical, Inc.			Warrants							18				—
	(Healthcare Services)
BenefitMall, Inc.			Unitranche Debt (13.3%, Due 8/12)			110,030				109,648				109,648
	(Business Services)		Common Stock (45,528,000 shares)(11)							45,528				43,578
			Warrants(11)							—				—
			Standby Letters of Credit ($9,981)
Breeze-Eastern Corporation(3)			Senior Loan (10.1%, Due 5/11)			10,000				10,000				10,000
	(Industrial Products)
Broadcast Electronics, Inc.			Senior Loan (9.1%, Due 7/12)			4,963				4,930				4,930
	(Business Services)
C&K Market, Inc.			Subordinated Debt (14.0%, Due 12/08)			27,819				27,738				27,738
	(Retail)
Callidus Debt Partners
	CDO Fund I, Ltd. (4)(9)		Class C Notes (12.9%, Due 12/13)			18,800				18,951				18,951
	(CDO/CLO)		Class D Notes (17.0%, Due 12/13)			9,400				9,476				9,476
Callidus Debt Partners
	CLO Fund III, Ltd.(4)(9) (CDO/CLO)		Preferred Shares (23,600,000 shares, 12.7%) (12)							23,285				23,010
Callidus Debt Partners
	CLO Fund IV, Ltd. (4)(9)		Income Notes (13.8%)(12)							12,986				12,986
	(CDO/CLO)
Callidus Debt Partners
	CLO Fund V, Ltd.(4)(9)		Income Notes (15.8%)(12)							13,769				13,769
	(CDO/CLO)
Callidus MAPS CLO Fund I LLC(9)			Class E Notes (10.9%, Due 12/17)			17,000				17,000				17,155
	(CDO/CLO)		Income Notes (15.9%)(12)							50,960				47,421
Camden Partners Strategic Fund II,
	L.P.(5)		Limited Partnership Interest							2,141				2,873
	(Private Equity Fund)
Carlisle Wide Plank Floors, Inc.			Unitranche Debt (10.5%, Due 6/11)			14,000				13,900				13,900
	(Consumer Products)		Preferred Stock (400,000 Shares)							400				400
Catterton Partners V, L.P.(5)			Limited Partnership Interest							3,306				3,412
	(Private Equity Fund)
Catterton Partners VI, L.P.(5)			Limited Partnership Interest							531				531
	(Private Equity Fund)
Centre Capital Investors IV, LP(5)			Limited Partnership Interest							1,991				1,889
	(Private Equity Fund)

(1)		Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)		Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(3)		Public company.
(4)		Non-U.S. company or principal place of business outside the U.S.
(5)		Non-registered investment company.
(6)		Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(9)		The fund is managed by Callidus Capital, a portfolio company of Allied Capital.
(11)		Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.
(12)		Represents the effective yield earned on these preferred equity investments. The yield is included in interest income from companies less than 5% owned in the consolidated statement of operations.

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					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Commercial Credit Group, Inc.			Subordinated Debt (14.8%, Due 2/11)		$	5,000			$	4,959			$	4,959
	(Financial Services)		Preferred Stock (32,500 shares)							3,900				3,900
			Warrants							—				—
Community Education Centers, Inc.			Subordinated Debt (16.0%, Due 12/10)			34,158				34,067				34,067
	(Education Services)
Compass Group Diversified
	Holdings LLC(3)		Senior Loan (8.4%, Due 11/11)			8,500				8,375				8,375
	(Financial Services)
Component Hardware Group, Inc.			Subordinated Debt (13.5%, Due 1/13)			18,158				18,075				18,075
	(Industrial Products)
Cook Inlet Alternative Risk, LLC			Unitranche Debt (10.0%, Due 4/12)			67,500				67,146				67,146
	(Business Services)		Equity Interests							2,000				2,300
Cortec Group Fund IV, L.P.(5)			Limited Partnership Interest							1,137				1,137
	(Private Equity)
CSAV, Inc.			Subordinated Debt (11.9%, Due 6/13)			37,500				37,500				37,500
	(Business Services)
DCWV Acquisition Corporation			Senior Loan (8.9%, Due 7/12)			2,074				2,060				2,060
	(Consumer Products)		Unitranche Debt (11.0%, Due 7/12)			16,788				16,694				16,694
Deluxe Entertainment Services Group, Inc.			Subordinated Debt (13.6%, Due 7/11)			30,000				30,000				30,000
	(Business Services)
Distant Lands Trading Co.			Senior Loan (10.6%, Due 11/11)			2,700				2,656				2,656
	(Consumer Products)		Unitranche Debt (11.0%, Due 11/11)			54,375				54,130				54,130
			Common Stock (4,000 shares)							4,000				2,975
Drilltec Patents & Technologies
	Company, Inc.		Subordinated Debt (18.0%, Due 8/06)			4,119				4,119				4,119
	(Energy Services)		Subordinated Debt (16.5%, Due 8/06)(6)			10,994				10,918				9,121
Driven Brands, Inc.			Senior Loan (8.9%, Due 6/11)			37,070				36,918				36,918
	d/b/a Meineke and Econo Lube		Subordinated Debt (12.1%, Due 6/12 – 6/13)			83,000				82,684				82,684
	(Consumer Services)		Common Stock (11,675,331 shares)(11)							29,455				19,702
			Warrants(11)							—				—
Digital VideoStream, LLC			Unitranche Debt (11.0%, Due 2/12)			19,127				19,021				19,021
	(Business Services)		Convertible Subordinated Debt (10.0%, Due 2/16)			3,730				3,714				3,714
Dynamic India Fund IV(4)(5)			Equity Interests							3,850				3,850
	(Private Equity Fund)
EarthColor, Inc.			Senior Loan (7.4%, Due 11/11)			35,000				35,000				35,000
	(Business Services)		Subordinated Debt (15.0%, Due 11/13)			107,000				106,478				106,478
			Common Stock (53,540 shares)(11)							53,540				53,540
			Warrants(11)							—				—
eCentury Capital Partners, L.P.(5)			Limited Partnership Interest							6,274				2,090
	(Private Equity Fund)

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.
	(11)			Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Elexis Beta GmbH(4)			Options						$	426			$	50
	(Industrial Products)
Farley’s & Sathers Candy Company, Inc.			Subordinated Debt (11.4%, Due 3/11)		$	20,000				19,931				19,931
	(Consumer Products)
Frozen Specialties, Inc.			Warrants							435				320
	(Consumer Products)
Garden Ridge Corporation (Retail)			Subordinated Debt (7.0%, Due 5/12)(6)			22,500				22,500				22,500
Geotrace Technologies, Inc.			Subordinated Debt (10.0%, Due 6/09)			23,945				22,481				22,481
	(Energy Services)		Warrants							2,350				1,900
Ginsey Industries, Inc.			Subordinated Debt (12.5%, Due 3/07)			2,743				2,743				2,743
	(Consumer Products)
Grant Broadcasting Systems II			Subordinated Debt (5.0%, Due 6/11)			3,005				3,005				3,005
	(Broadcasting & Cable)
Grotech Partners, VI, L.P.(5)			Limited Partnership Interest							8,223				6,088
	(Private Equity Fund)
Havco Wood Products LLC			Unitranche Debt (11.1%, Due 8/11)			19,654				18,615				18,615
	(Industrial Products)		Equity Interests							1,049				3,000
Haven Eldercare of New England, LLC (10)			Subordinated Debt (12.0%, Due 8/09)			2,827				2,827				2,827
	(Healthcare Services)
Haven Healthcare Management, LLC(10)			Subordinated Debt (18.0%, Due 4/07)			140				140				140
	(Healthcare Services)
HealthASPex Services Inc.			Senior Loan (4.0%, Due 7/08)			500				500				500
	(Business Services)
The Hillman Companies, Inc.(3)			Subordinated Debt (10.0%, Due 9/11)			44,580				44,427				44,427
	(Consumer Products)
The Homax Group, Inc.			Senior Loan (9.2%, Due 10/12)			12,485				12,485				12,485
	(Consumer Products)		Subordinated Debt (12.0%, Due 4/14)			14,000				13,171				13,171
			Preferred Stock (89 shares)							89				89
			Common Stock (28 shares)							6				6
			Warrants							1,106				1,106
Hot Stuff Foods, LLC			Senior Loan (8.9%, Due 2/11-2/12)			48,580				48,351				48,351
	(Consumer Products)		Subordinated Debt (13.7%, Due 8/12 – 2/13)			60,606				60,353				60,353
			Subordinated Debt (16.0%, Due 2/13)(6)			20,841				20,749				8,460
			Common Stock (1,122,452 shares)(11)							56,186				—
			Warrants(11)							—				—
Ideal Snacks Corporation			Senior Loan (9.0%, Due 6/10)			5,850				5,815				5,815
	(Consumer Products)
Integrity Interactive Corporation			Unitranche Debt (10.5%, Due 2/12)			29,500				29,314				29,314
	(Business Services)
International Fiber Corporation			Subordinated Debt (14.0%, Due 6/12)			21,986				21,914				21,914
	(Industrial Products)		Preferred Stock (25,000 shares)							2,500				2,200

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.
	(10)			Haven Eldercare of New England, LLC and Haven Healthcare Management, LLC are affiliated companies.
	(11)			Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Kodiak Fund LP(5)			Equity Interests						$	4,700			$	4,656
	(Private Equity Fund)
Line-X, Inc.			Senior Loan (9.1%, Due 8/11)		$	2,000				1,981				1,981
	(Consumer Products)		Unitranche Debt (10.0% Due 8/11)			48,509				48,306				48,306
			Standby Letter of Credit ($1,500)
MedAssets, Inc.			Preferred Stock (227,865 shares)							2,049				3,623
	(Business Services)		Common Stock (50,000 shares)							—				250
MHF Logistical Solutions, Inc.			Subordinated Debt (11.5%, Due 6/12)			33,600				33,448				33,448
	(Business Services)		Subordinated Debt (18.0%, Due 6/13)(6)			11,211				11,155				8,719
			Common Stock (20,934 shares)(11)							20,942				—
			Warrants(11)							—				—
Mid-Atlantic Venture Fund IV, L.P.(5)			Limited Partnership Interest							6,974				3,221
	(Private Equity Fund)
Mogas Energy, LLC			Subordinated Debt (9.5%, Due 3/12 – 4/12)			16,336				15,100				16,318
	(Energy Services)		Warrants							1,774				6,250
Network Hardware Resale, Inc.			Unitranche Debt (10.5%, Due 12/11)			37,154				37,357				37,357
	(Business Services)		Convertible Subordinated Debt (9.8%, Due 12/15)			12,000				12,068				12,559
Norwesco, Inc.			Subordinated Debt (12.6%, Due 1/12 – 7/12)			82,486				82,172				82,172
	(Industrial Products)		Common Stock (559,603 shares)(11)							38,313				83,329
			Warrants(11)							—				—
Novak Biddle Venture Partners III, L.P.(5)			Limited Partnership Interest							1,834				1,947
	(Private Equity Fund)
Oahu Waste Services, Inc.			Stock Appreciation Rights							239				800
	(Business Services)
Odyssey Investment Partners Fund III,
	LP(5)		Limited Partnership Interest							1,883				1,744
	(Private Equity Fund)
Palm Coast Data, LLC			Senior Loan (8.9%, Due 8/10)			15,306				15,243				15,243
	(Business Services)		Subordinated Debt (15.5%, Due 8/12 – 8/15)			30,396				30,277				30,277
			Common Stock (21,743 shares)(11)							21,743				41,707
			Warrants(11)							—				—
Passport Health
	Communications, Inc.		Subordinated Debt (14.0%, Due 4/12)			10,145				10,101				10,101
	(Healthcare Services)		Preferred Stock (651,381 shares)							2,000				2,189
Performant Financial Corporation			Common Stock (478,816 shares)							734				—
	(Business Services)

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.
	(11)			Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.

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					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Postle Aluminum Company, LLC			Unitranche Debt (11.0%, Due 10/12)		$	57,500			$	57,189			$	57,189
	(Industrial Products)		Equity Interests							2,500				2,500
Pro Mach, Inc.			Subordinated Debt (12.5%, Due 6/12)			14,471				14,402				14,402
	(Industrial Products)		Equity Interests							1,500				2,200
Promo Works, LLC			Unitranche Debt (10.3%, Due 12/11)			31,000				30,727				30,727
	(Business Services)		Guaranty ($1,200)
S.B. Restaurant Company			Unitranche Debt (9.8%, Due 4/11)			41,501				41,094				41,094
	(Retail)		Preferred Stock (54,125 shares)							135				135
			Warrants							619				1,200
			Standby Letters of Credit ($2,611)
SBBUT, LLC			Equity Interests							—				—
	(Consumer Products)
Service Center Metals, LLC			Subordinated Debt (15.5%, Due 9/11)			5,000				4,976				4,976
	(Industrial Products)		Equity Interests							312				318
Soff-Cut Holdings, Inc.			Preferred Stock (300 shares)							300				300
	(Industrial Products)		Common Stock (2,000 shares)							200				180
SPP Mezzanine Funding, L.P.(5)			Limited Partnership Interest							2,551				2,825
	(Private Equity Fund)
SPP Mezzanine Funding II, L.P.(5)			Limited Partnership Interest							326				326
	(Private Equity Fund)
Stag-Parkway, Inc.			Unitranche Debt (10.8%, Due 7/12)			63,000				62,711				62,711
	(Business Services)
STS Operating, Inc.			Subordinated Debt (15.0%, Due 1/13)			30,156				30,021				30,021
	(Industrial Products)
The Step2 Company, LLC			Unitranche Debt (10.5%, Due 4/12)			67,898				67,457				67,457
	(Consumer Products)		Equity Interests							2,000				1,763
Tradesmen International, Inc.			Subordinated Debt (12.0%, Due 12/09)			15,000				14,468				14,468
	(Business Services)		Warrants							710				3,300
TransAmerican Auto Parts, LLC			Subordinated Debt (14.0%, Due 11/12)			12,947				12,892				12,892
	(Consumer Products)		Equity Interests							1,190				747
Universal Air Filter Company			Unitranche Debt (11.0%, Due 11/11)			19,117				19,026				19,026
	(Industrial Products)
Updata Venture Partners II, L.P.(5)			Limited Partnership Interest							5,477				5,158
	(Private Equity Fund)
Venturehouse-Cibernet Investors, LLC			Equity Interest							42				42
	(Business Services)
Venturehouse Group, LLC(5)			Equity Interest							598				365
	(Private Equity Fund)
VICORP Restaurants, Inc.			Warrants							33				—
	(Retail)

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.

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					December 31, 2006
Private Finance
Portfolio Company
(in thousands, except number of shares)			Investment(1)(2)		Principal				Cost				Value
Walker Investment Fund II, LLLP(5)			Limited Partnership Interest						$	1,329			$	458
	(Private Equity Fund)
Wear Me Apparel Corporation			Subordinated Debt (15.0%, Due 12/10)		$	40,000				39,407				39,407
	(Consumer Products)		Warrants							1,219				5,120
Wilton Industries, Inc.			Subordinated Debt (16.0%, Due 6/08)			2,400				2,400				2,400
	(Consumer Products)
Woodstream Corporation			Subordinated Debt (13.5%, Due 11/12 – 5/13)			53,114				52,989				52,989
	(Consumer Products)		Common Stock (180 shares)							673				3,885
			Warrants							—				2,815
York Insurance Services Group, Inc.			Subordinated Debt (14.5%, Due 1/14)			44,249				44,045				44,045
	(Business Services)		Common Stock (15,000 shares)							1,500				1,500
Other companies			Other debt investments(6)			223				223				218
			Other equity investments							8				—
Total companies less than 5% owned									$	2,479,981			$	2,437,908
Total private finance (145 portfolio investments)									$	4,497,363			$	4,377,901

	(1)			Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
	(2)			Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
	(3)			Public company.
	(4)			Non-U.S. company or principal place of business outside the U.S.
	(5)			Non-registered investment company.
	(6)			Loan or debt security is on non-accrual status and therefore is considered non-income producing.

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Commercial Real Estate Finance
(in thousands, except number of loans)

											December 31, 2006
			Interest				Number of
			Rate Ranges				Loans				Cost				Value
Commercial Mortgage Loans
				Up to 6.99%				3			$	20,470			$	19,692
				7.00%–8.99%				9				24,092				24,073
				9.00%–10.99%				4				24,117				24,117
			15.00% and above					2				3,970				3,970
	Total commercial mortgage loans(13)							18			$	72,649			$	71,852
Real Estate Owned											$	15,708			$	19,660
Equity Interests(2) — Companies more than 25% owned (Guarantees — $6,871)											$	15,189			$	26,671
	Total commercial real estate finance										$	103,546			$	118,183
Total portfolio											$	4,600,909			$	4,496,084

				Yield				Cost				Value
Liquidity Portfolio
	American Beacon Money Market Select FD Fund(14)				5.3%			$	85,672			$	85,672
	Certificate of Deposit (Due March 2007)(14)				5.6%				40,565				40,565
	American Beacon Money Market Fund(14)				5.2%				40,384				40,384
	SEI Daily Income Tr Prime Obligation Fund(14)				5.2%				34,671				34,671
	Blackrock Liquidity Funds(14)				5.2%				476				476
		Total liquidity portfolio						$	201,768			$	201,768
Other Investments in Money Market Securities(14)
	Columbia Treasury Reserves Money Market Fund				5.2%			$	441			$	441
	Columbia Money Market Reserves				5.2%			$	1			$	1

(1)       Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for             a single issuer. The maturity dates represent the earliest and the latest maturity dates.

(2)       Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.

(3)       Public company.

(4)       Non-U.S. company or principal place of business outside the U.S.

(5)       Non-registered investment company.

(13)       Commercial mortgage loans totaling $18.9 million at value were on non-accrual status and therefore were considered non-income producing.

(14)       Included in investments in money market and other securities on the accompanying Consolidated Balance Sheet.

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	Valuation of Portfolio Investments

	Loans and Debt Securities

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	Equity Securities

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	Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

	Fee Income

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	Guarantees

	Financing Costs

	Dividends to Shareholders

	Stock Compensation Plans

					For the Three								For the Nine
					Months								Months
					Ended								Ended
					September 30,								September 30,
					2007				2006				2007				2006
($ in millions, except per share amounts)
Employee Stock Option Expense:
	Options granted:
		Previously awarded, unvested options as of January 1, 2006			$	1.7			$	3.2			$	8.2			$	9.9
		Options granted on or after January 1, 2006				2.2				0.4				8.9				2.0
			Total options granted			3.9				3.6				17.1				11.9
	Options cancelled in connection with tender offer (see Note 9)					14.4				—				14.4				—
			Total employee stock option expense		$	18.3			$	3.6			$	31.5			$	11.9
		Per basic share			$	0.12			$	0.03			$	0.21			$	0.08
		Per diluted share			$	0.12			$	0.02			$	0.20			$	0.08

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		For the Three								For the Nine
		Months Ended								Months Ended
		September 30,								September 30,
		2007				2006				2007				2006
Expected term (in years)			5.0				5.0				5.0				5.0
Risk-free interest rate			4.6	%			4.7	%			4.6	%			4.8	%
Expected volatility			24.4	%			26.8	%			26.4	%			29.1	%
Dividend yield			8.9	%			9.0	%			8.9	%			9.0	%
Weighted average fair value per option		$	2.51			$	3.12			$	2.96			$	3.47

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	Federal and State Income Taxes and Excise Tax

	Per Share Information

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	Use of Estimates in the Preparation of Financial Statements

	Recent Accounting Pronouncements

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	Private Finance

				2007												2006
				Cost				Value				Yield(1)				Cost				Value				Yield(1)
($ in millions)
Loans and debt securities:
	Senior loans			$	523.9			$	481.6				9.3	%		$	450.0			$	405.2				8.4	%
	Unitranche debt(2)				698.1				698.1				11.5	%			800.0				799.2				11.2	%
	Subordinated debt				2,052.7				1,927.1				12.6	%			2,038.3				1,980.8				12.9	%
		Total loans and debt securities(3)			3,274.7				3,106.8				11.8	%			3,288.3				3,185.2				11.9	%
Equity securities:
	Preferred shares/income notes of CLOs (4)				142.2				131.5				15.1	%			101.1				97.2				15.5	%
	Other equity securities				1,189.5				968.8								1,108.0				1,095.5
		Total equity securities			1,331.7				1,100.3								1,209.1				1,192.7
		Total		$	4,606.4			$	4,207.1							$	4,497.4			$	4,377.9

(1)	The weighted average yield on loans and debt securities is computed as the (a) annual stated interest on accruing loans and debt securities plus the annual amortization of loan origination fees, original issue discount, and market discount on accruing loans and debt securities less the annual amortization of loan origination costs, divided by (b) total loans and debt securities at value. At September 30, 2007, and December 31, 2006, the cost and value of subordinated debt included the Class A equity interests in BLX and the guaranteed dividend yield on these equity interests, to the extent it was accrued, was included in interest income. During the fourth quarter of 2006, the Class A equity interests were placed on non-accrual status. The weighted average yield on the preferred shares/income notes of CLOs is calculated as the (a) effective interest yield on the preferred shares/income notes of CLOs, divided by (b) total preferred shares/income notes of CLOs at value. The weighted average yields are computed as of the balance sheet date. The yield on the CLO assets represents the yield used for recording interest income. The market yield used in the valuation of the CLO assets may be different than the interest yields.
(2)	Unitranche debt is a single debt investment that is a blend of senior and subordinated debt terms.
(3)	The total principal balance outstanding on loans and debt securities was $3,298.5 million and $3,322.3 million at September 30, 2007, and December 31, 2006, respectively. The difference between principal and cost is represented by unamortized loan origination fees and costs, original issue discounts, and market discounts totaling $23.8 million and $34.0 million at September 30, 2007, and December 31, 2006, respectively.
(4)	Investments in the preferred shares/income notes of CLOs earn a current return that is included in interest income in the accompanying consolidated statement of operations.

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			For the Three								For the Nine
			Months Ended								Months Ended
			September 30,								September 30,
			2007				2006				2007				2006
($ in millions)
Interest income on subordinated debt and Class A equity interests			$	—			$	4.1			$	—			$	11.9
Fees and other income				1.3				2.0				4.1				6.3
	Total interest and related portfolio income		$	1.3			$	6.1			$	4.1			$	18.2

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			For the Three								For the Nine
			Months Ended								Months Ended
			September 30,								September 30,
			2007				2006				2007				2006
($ in millions)
Interest income			$	1.0			$	2.0			$	5.1			$	7.3
Fees and other income				—				0.1				0.2				0.4
	Total interest and related portfolio income		$	1.0			$	2.1			$	5.3			$	7.7

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				2007												2006
				Cost				Value				Yield(1)				Cost				Value				Yield(1)
($ in millions)
Bonds(2):
Callidus Debt Partners CDO Fund I, Ltd.				$	28.4			$	28.5				14.2%			$	28.4			$	28.4				14.3%
Callidus MAPS CLO Fund I LLC					17.0				16.4				11.1%				17.0				17.2				10.8%
	Total bonds				45.4				44.9				13.1%				45.4				45.6				12.9%
Preferred Shares/ Income Notes(3):
Callidus Debt Partners CLO Fund III, Ltd.					22.0				20.7				15.9%				23.3				23.0				12.8%
Callidus Debt Partners CLO Fund IV, Ltd.					12.4				10.8				15.6%				13.0				13.0				13.8%
Callidus Debt Partners CLO Fund V, Ltd.					14.0				14.6				19.1%				13.8				13.8				15.8%
Callidus MAPS CLO Fund I LLC					50.1				41.7				10.4%				51.0				47.4				17.1%
Callidus MAPS CLO Fund II, Ltd.					18.0				18.0				14.8%				—				—				—
Callidus Debt Partners CLO Fund VI, Ltd.					25.7				25.7				19.8%				—				—				—
	Total preferred shares/ income notes				142.2				131.5				15.1%				101.1				97.2				15.5%
		Total		$	187.6			$	176.4							$	146.5			$	142.8

(1)	The yield on these debt and equity securities is included in interest income in the accompanying consolidated statement of operations. The weighted average yield is calculated as the (a) annual stated interest on the accruing bonds or the effective interest yield on the preferred shares/income notes, divided by (b) CLO and CDO assets at value. The market yield used in the valuation of the CLO and CDO assets may be different than the interest yields shown above.
(2)	These securities are included in private finance subordinated debt.
(3)	These securities are included in private finance equity securities.

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			2007				2006
($ in millions)
Bonds			$	273.3			$	245.4
Syndicated loans				2,471.8				1,769.9
Cash(1)				33.1				59.5
	Total underlying collateral assets		$	2,778.2			$	2,074.8

(1)	Includes undrawn liability amounts.

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				2007				2006
($ in millions)
Loans and debt securities in workout status
	Companies more than 25% owned			$	51.6			$	51.1
	Companies 5% to 25% owned				13.1				4.0
	Companies less than 5% owned				20.7				31.6
Loans and debt securities not in workout status
	Companies more than 25% owned				116.2				87.1
	Companies 5% to 25% owned				16.4				7.2
	Companies less than 5% owned				13.0				38.9
		Total		$	231.0			$	219.9

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			2007				2006
Industry
Business services				37	%			39	%
Consumer products				24				20
Industrial products				11				9
Financial services				10				9
Retail				5				6
Consumer services				4				6
CLO/CDO(1)				4				3
Healthcare services				2				3
Energy services				—				2
Other				3				3
	Total			100	%			100	%
Geographic Region(2)
Mid-Atlantic				36	%			31	%
Midwest				29				30
Southeast				19				18
West				14				17
Northeast				2				4
	Total			100	%			100	%

(1)	These funds invest in senior debt representing a variety of industries and are managed by Callidus Capital, a portfolio company of Allied Capital.
(2)	The geographic region for the private finance portfolio depicts the location of the headquarters for the Company’s portfolio companies. The portfolio companies may have a number of other locations in other geographic regions.

	Commercial Real Estate Finance

			2007												2006
			Cost				Value				Yield(1)				Cost				Value				Yield(1)
($ in millions)
Commercial mortgage loans			$	64.8			$	64.2				6.4%			$	72.6			$	71.9				7.5%
Real estate owned				15.6				22.0								15.7				19.6
Equity interests				15.7				33.5								15.2				26.7
	Total		$	96.1			$	119.7							$	103.5			$	118.2

(1)

The weighted average yield on the commercial mortgage loans is computed as the (a) annual stated interest on accruing loans plus the annual amortization of loan origination fees, original issue discount, and market discount on accruing loans less the annual amortization of origination costs, divided by (b) total interest-bearing investments at value. The weighted average yield is computed as of the balance sheet date.

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			2007				2006
Property Type
Hospitality				44	%			45	%
Office				21				20
Retail				19				19
Recreation				14				1
Housing				—				13
Other				2				2
	Total			100	%			100	%
Geographic Region
Southeast				36	%			36	%
Mid-Atlantic				31				35
Midwest				25				21
Northeast				8				8
West				—				—
	Total			100	%			100	%

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				2007												2006
												Annual												Annual
				Facility				Amount				Interest				Facility				Amount				Interest
				Amount				Drawn				Cost(1)				Amount				Drawn				Cost(1)
($ in millions)
Notes payable and debentures:
	Privately issued unsecured notes payable			$	1,042.4			$	1,042.4				6.1%				$1,041.4				$1,041.4				6.1%
	Publicly issued unsecured notes payable				880.0				880.0				6.7%				650.0				650.0				6.6%
		Total notes payable and debentures			1,922.4				1,922.4				6.4%				1,691.4				1,691.4				6.3%
Revolving line of credit(4)					922.5				—				—%	(2)			922.5				207.7				6.4%	(2)
	Total debt			$	2,844.9			$	1,922.4				6.6%	(3)			$2,613.9				$1,899.1				6.5%	(3)

(1)	The weighted average annual interest cost is computed as the (a) annual stated interest on the debt plus the annual amortization of commitment fees, other facility fees and amortization of debt financing costs that are recognized into interest expense over the contractual life of the respective borrowings, divided by (b) debt outstanding on the balance sheet date.
(2)	There were no amounts drawn on the revolving line of credit at September 30, 2007. The annual interest cost at December 31, 2006, reflects the interest rate payable for borrowings under the revolving line of credit. In addition to the current interest payable, there were annual costs of commitment fees, other facility fees and amortization of debt financing costs of $4.1 million and $3.9 million at September 30, 2007, and December 31, 2006, respectively.
(3)	The annual interest cost for total debt includes the annual cost of commitment fees, other facility fees and amortization of debt financing costs on the revolving line of credit regardless of the amount outstanding on the facility as of the balance sheet date.
(4)	At September 30, 2007, $859.0 million remained unused and available on the revolving line of credit, net of amounts committed for standby letters of credit of $63.5 million issued under the credit facility.

			Amount				Maturity Date
($ in millions)
6.625% Notes due 2011			$	400.0				July 15, 2011
6.000% Notes due 2012				250.0				April 1, 2012
6.875% Notes due 2047				230.0				April 15, 2047
	Total		$	880.0

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Year			Amount Maturing
			($ in millions)
2007			$	—
2008				153.0
2009				269.9
2010				408.0
2011				472.5
Thereafter				619.0
	Total		$	1,922.4

	Revolving Line of Credit

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	Covenant Compliance

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			Total				2007				2008				2009				2010				2011				After 2011
(in millions)
Guarantees			$	263.9			$	3.0			$	3.0			$	251.5			$	—			$	4.4			$	2.0
Standby letters of credit(1)				63.5				—				63.5				—				—				—				—
	Total(2)		$	327.4			$	3.0			$	66.5			$	251.5			$	—			$	4.4			$	2.0

(1)	Standby letters of credit are issued under the Company’s revolving line of credit that expires in September 2008. Therefore, unless a standby letter of credit is set to expire at an earlier date, it is assumed that the standby letters of credit will expire contemporaneously with the expiration of the Company’s line of credit in September 2008.
(2)	The Company’s most significant commitments relate to its investment in Business Loan Express, LLC (BLX), which commitments totaled $271.0 million at September 30, 2007. At September 30, 2007, the principal components of these guarantees included a guarantee of 60% of the outstanding total obligations on BLX’s revolving line of credit, which expires in March 2009, for a total guaranteed amount of $249.0 million and standby letters of credit totaling $19.0 million in connection with term securitizations completed by BLX. See Note 3.

			2007				2006
(in millions)
Number of common shares				3,325				8,175
Gross proceeds			$	97,256			$	229,804
Less costs, including underwriting fees				(3,472	)			(10,922	)
	Net proceeds		$	93,784			$	218,882

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		For the Nine
		Months Ended
		September 30,
		2007				2006
(in millions, except per share amounts)
Shares issued			0.4				0.4
Average price per share		$	30.05			$	29.95

		For the Three								For the Nine
		Months Ended								Months Ended
		September 30,								September 30,
		2007				2006				2007				2006
(in millions, except per share amounts)
Net increase (decrease) in net assets resulting from operations		$	(96.5	)		$	77.9			$	125.8			$	211.2
Weighted average common shares outstanding — basic			154.0				144.2				152.0				141.0
Dilutive options outstanding			1.3				2.9				2.7				3.0
Weighted average common shares outstanding — diluted			155.3				147.1				154.7				144.0
Basic earnings (loss) per common share		$	(0.63	)		$	0.54			$	0.83			$	1.50
Diluted earnings (loss) per common share		$	(0.62	)		$	0.53			$	0.81			$	1.47

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			For the Three								For the Nine
			Months Ended								Months Ended
			September 30,								September 30,
			2007				2006				2007				2006
($ in millions)
IPA contributions			$	2.4			$	2.1			$	7.4			$	6.0
IPA mark to market expense (benefit)				(2.0	)			1.2				(3.6	)			0.6
	Total IPA expense (benefit)		$	0.4			$	3.3			$	3.8			$	6.6

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						Weighted				Weighted
						Average				Average				Aggregate
						Exercise				Contractual				Intrinsic
						Price Per				Remaining				Value at
		Shares				Share				Term (Years)				September 30, 2007(1)
(in millions, except per share amounts)
Options outstanding at January 1, 2007			23.2			$	24.92
Granted			6.6			$	29.52
Exercised			(0.5	)		$	25.19
Cancelled in tender offer(2)			(10.3	)		$	21.50
Forfeited			(0.5	)		$	28.94
Options outstanding at September 30, 2007			18.5			$	28.36				6.82			$	21.2
Exercisable at September 30, 2007(3)			11.8			$	27.99				6.78			$	17.5
Exercisable and expected to be exercisable at September 30, 2007(4)			18.0			$	28.34				6.82			$	20.9

(1)	Represents the difference between the market value of the options at September 30, 2007, and the cost for the option holders to exercise the options.
(2)	See description of the tender offer above.
(3)	Represents vested options.
(4)	The amount of options expected to be exercisable at September 30, 2007, is calculated based on an estimate of expected forfeitures.

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				At and for the								At and for the
				Nine Months Ended								Year Ended
				September 30,								December 31,
				2007(1)				2006				2006
				(unaudited)
Per Common Share Data
Net asset value, beginning of period				$	19.12			$	19.17			$	19.17
	Net investment income(2)				0.54				0.97				1.30
	Net realized gains(2)(3)				2.03				3.77				3.66
		Net investment income plus net realized gains(2)			2.57				4.74				4.96
	Net change in unrealized appreciation or depreciation(2)(3)				(1.76	)			(3.27	)			(3.28	)
Net increase in net assets resulting from operations (2)					0.81				1.47				1.68
Decrease in net assets from shareholder distributions					(1.92	)			(1.80	)			(2.47	)
Net increase in net assets from capital share transactions(2)(4)					0.23				0.54				0.74
Decrease in net assets from the cash portion of the option cancellation payment(2)(5)					(0.34	)			—				—
Net asset value, end of period				$	17.90			$	19.38			$	19.12
Market value, end of period				$	29.39			$	30.21			$	32.68
Total return(6)					(4.2	)%			9.2	%			20.6	%
Ratios and Supplemental Data ($ and shares in thousands, except per share amounts)
Ending net assets				$	2,765.8			$	2,823.9			$	2,841.2
Common shares outstanding at end of period					154.5				145.7				148.6
Diluted weighted average common shares outstanding					154.7				144.0				145.6
Employee, employee stock option and administrative expenses/average net assets(7)					5.06	%			3.99	%			5.38	%
Total operating expenses/average net assets(7)					8.46	%			6.65	%			9.05	%
Net investment income/average net assets(7)					2.87	%			5.16	%			6.90	%
Net increase in net assets resulting from operations/average net assets(7)					4.35	%			7.78	%			8.94	%
Portfolio turnover rate(7)					24.43	%			23.61	%			27.05	%
Average debt outstanding				$	1,909.5			$	1,433.5			$	1,491.0
Average debt per share(2)				$	12.34			$	9.95			$	10.24

(1)	The results for the nine months ended September 30, 2007, are not necessarily indicative of the operating results to be expected for the full year.
(2)	Based on diluted weighted average number of common shares outstanding for the period.
(3)	Net realized gains and net change in unrealized appreciation or depreciation can fluctuate significantly from period to period. As a result, quarterly comparisons may not be meaningful.
(4)	Excludes capital share transactions related to the cash portion of the option cancellation payment.
(5)	See Notes 2 and 9 to the consolidated financial statements above for further discussion.
(6)	Total return assumes the reinvestment of all dividends paid for the periods presented.
(7)	The ratios for the nine months ended September 30, 2007 and 2006, do not represent annualized results.

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					Amount of Interest or
					Dividends
PRIVATE FINANCE													December 31,												September 30,
Portfolio Company					Credited								2006				Gross				Gross				2007
(in thousands)			Investment(1)		to Income(6)				Other(2)				Value				Additions(3)				Reductions(4)				Value
Companies More Than 25% Owned
Alaris Consulting, LLC			Senior Loan(5)										$	—			$	572			$	(572	)		$	—
	(Business Services)		Equity Interests											—				1,025				(1,025	)			—
AllBridge Financial, LLC			Equity Interests											—				2,300				—				2,300
	(Financial Services)
Allied Capital Senior Debt Fund, L.P.			Equity Interests											—				19,535				—				19,535
	(Private Debt Fund)
Avborne, Inc.			Preferred Stock											918				—				(68	)			850
	(Business Services)		Common Stock											—				—				—				—
Avborne Heavy Maintenance,   Inc.			Preferred Stock											—				973				—				973
	(Business Services)		Common Stock											—				—				—				—
Aviation Properties Corporation			Common Stock											—				65				(65	)			—
	(Business Services)
Border Foods, Inc.			Preferred Stock											—				2,473				—				2,473
	(Consumer Products)		Common Stock											—				—				—				—
Business Loan Express, LLC			Class A Equity
	(Financial Services)		Interests(5)											66,622				29,200				—				95,822
			Class B Equity Interests											79,139				—				(38,251	)			40,888
			Class C Equity Interests											64,976				—				(64,976	)			—
Calder Capital Partners, LLC			Senior Loan(5)						$	33				975				1,326				(83	)			2,218
	(Financial Services)		Equity Interests											2,076				159				(1,888	)			347
Callidus Capital Corporation			Senior Loan		$	42								—				2,100				(2,100	)			—
	(Financial Services)		Subordinated Debt			850								5,762				813				—				6,575
			Common Stock											22,550				20,090				—				42,640
Coverall North America, Inc.			Unitranche Debt			3,240								36,333				27				(1,446	)			34,914
	(Business Services)		Subordinated Debt			687								5,972				5				—				5,977
			Common Stock											19,619				3,399				—				23,018
CR Holding, Inc.			Subordinated Debt			5,092								39,401				1,051				—				40,452
	(Consumer Products)		Common Stock											25,738				15,296				—				41,034
Direct Capital Corporation			Subordinated Debt			3,451								—				37,515				—				37,515
	(Financial Services)		Common Stock											—				19,250				(12,327	)			6,923
Financial Pacific Company			Subordinated Debt			9,473								71,362				1,113				—				72,475
	(Financial Services)		Preferred Stock											15,942				2,512				—				18,454
			Common Stock											65,186				—				(18,164	)			47,022
ForeSite Towers, LLC			Equity Interest			1,269								12,290				—				(11,409	)			881
	(Tower Leasing)
Global Communications, LLC			Senior Loan(5)											15,957				—				(8,381	)			7,576
	(Business Services)		Subordinated Debt (5)											11,237				—				(11,237	)			—
			Preferred Equity
			Interest											—				—				—				—
			Options											—				—				—				—
Gordian Group, Inc.			Senior Loan(5)			(11	)							—				9,169				(9,169	)			—
	(Business Services)		Common Stock											—				—				—				—
Healthy Pet Corp.			Senior Loan			1,309								27,038				6,350				(33,388	)			—
	(Consumer Services)		Subordinated Debt			2,893								43,579				580				(44,159	)			—
			Common Stock											28,921				1,221				(30,142	)			—
HMT, Inc.			Preferred Stock											2,637				—				(2,637	)			—
	(Energy Services)		Common Stock											8,664				—				(8,664	)			—
			Warrants											3,336				—				(3,336	)			—
Hot Stuff Foods, LLC (7)			Senior Loan			3,106								—				49,681				(330	)			49,351
	(Consumer Products)		Subordinated Debt			5,601								—				61,302				(19,111	)			42,191
			Subordinated Debt (5)											—				8,461				(8,461	)			—
			Common Stock											—				—				—				—
Huddle House, Inc.			Senior Loan			426								19,950				—				(19,950	)			—
	(Retail)		Subordinated Debt			6,731								58,196				1,131				(178	)			59,149
			Common Stock											41,662				2,729				(129	)			44,262

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					Amount of Interest or
					Dividends
PRIVATE FINANCE													December 31,												September 30,
Portfolio Company					Credited								2006				Gross				Gross				2007
(in thousands)			Investment(1)		to Income(6)				Other(2)				Value				Additions(3)				Reductions(4)				Value
Impact Innovations Group, LLC			Equity Interests in
	(Business Services)		Affiliate										$	873				—				(553	)			320
Insight Pharmaceuticals			Subordinated Debt		$	4,406								43,884			$	920			$	—			$	44,804
	Corporation		Subordinated Debt (5)											15,966				660				—				16,626
	(Consumer Products)		Preferred Stock											7,845				—				(6,000	)			1,845
			Common Stock											—				—				—				—
Jakel, Inc.			Subordinated Debt (5)			1								6,655				9,037				(14,117	)			1,575
	(Industrial Products)		Preferred Stock											—				9,347				(9,347	)			—
			Common Stock											—				6,460				(6,460	)			—
Legacy Partners Group, Inc.			Senior Loan (5)											4,843				2,804				(3,804	)			3,843
			Subordinated Debt											—				2,952				(2,952	)			—
	(Financial Services)		Equity Interests											—				1,271				—				1,271
Litterer Beteiligungs-GmbH			Subordinated Debt			32								692				56				—				748
	(Business Services)		Equity Interest											1,199				386				—				1,585
Mercury Air Centers, Inc.			Subordinated Debt			5,054								49,217				1,654				(50,871	)			—
	(Business Services)		Common Stock											195,019				—				(195,019	)			—
MVL Group, Inc.			Senior Loan			2,743								27,245				3,388				—				30,633
	(Business Services)		Subordinated Debt			4,408								35,478				4,173				—				39,651
			Common Stock											—				4,961				—				4,961
Old Orchard Brands, LLC			Senior Loan			347								—				23,500				(23,500	)			—
	(Consumer Products)		Subordinated Debt			1,498								—				19,342				—				19,342
			Equity Interests											—				19,602				—				19,602
Penn Detroit Diesel Allison, LLC			Subordinated Debt			4,525								37,994				886				—				38,880
	(Business Services)		Equity Interests											25,949				2,846				—				28,795
Powell Plant Farms, Inc.			Senior Loan(5)											26,192				3,950				(28,792	)			1,350
	(Consumer Products)		Subordinated Debt (5)											962				18,261				(19,223	)			—
			Preferred Stock											—				—				—				—
			Warrants											—				—				—				—
Service Champ, Inc.			Subordinated Debt			3,317								27,619				546				—				28,165
	(Business Services)		Common Stock											16,786				9,569				—				26,355
Staffing Partners Holding
	Company, Inc.		Subordinated Debt (5)											486				58				—				544
	(Business Services)
Startec Global Communications
	Corporation		Senior Loan			723								15,965				—				(15,965	)			—
	(Telecommunications)		Common Stock											11,232				26,023				(37,255	)			—
Startec Equity, LLC			Equity Interests											—				440				—				440
	(Telecommunications)
Sweet Traditions, Inc.			Senior Loan(5)			1,088								35,172				1,501				—				36,673
	(Retail)		Preferred Stock											400				550				(950	)			—
			Common Stock											50				—				(50	)			—
Triview Investments, Inc.			Senior Loan			966								14,747				11				(14,325	)			433
	(Broadcasting & Cable/		Subordinated Debt			9,934								56,008				32,009				(45,427	)			42,590
	Business Services/		Subordinated Debt (5)			592								4,342				792				(3,600	)			1,534
	Consumer Products)		Common Stock			37								31,322				53,458				(2,003	)			82,777
Worldwide Express Operations, LLC			Subordinated Debt			65								—				2,800				(176	)			2,624
	(Business Services)		Equity Interests											—				12,900				—				12,900
			Warrants											—				163				—				163
Total companies more than 25% owned					$	83,895							$	1,490,180											$	1,236,844
Companies 5% to 25% Owned
Advantage Sales &
	Marketing, Inc.		Subordinated Debt		$	14,002							$	151,648			$	2,393			$	—			$	154,041
	(Business Services)		Equity Interests											11,000				—				—				11,000
Air Medical Group Holdings LLC			Senior Loan			167								1,763				5,233				(5,130	)			1,866
	(Healthcare Services)		Subordinated Debt			1,931								35,128				318				(35,446	)			—
			Equity Interests											5,950				4,850				—				10,800
Alpine ESP Holdings, Inc.			Preferred Stock											602				117				—				719
	(Business Services)		Common Stock											—				300				—				300
Amerex Group, LLC			Subordinated Debt			764								8,400				—				—				8,400
	(Consumer Products)		Equity Interests											13,823				1,872				(38	)			15,657

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					Amount of Interest or
					Dividends
PRIVATE FINANCE													December 31,												September 30,
Portfolio Company					Credited								2006				Gross				Gross				2007
(in thousands)			Investment(1)		to Income(6)				Other(2)				Value				Additions(3)				Reductions(4)				Value
BB&T Capital
	Partners/Windsor
	Mezzanine Fund, LLC		Equity Interests										$	5,554			$	53			$	—			$	5,607
	(Private Equity Fund)
Becker Underwood, Inc.			Subordinated Debt		$	2,711								24,163				473				—				24,636
	(Industrial Products)		Common Stock											3,700				500				—				4,200
BI Incorporated			Subordinated Debt			3,137								30,135				360				—				30,495
	(Business Services)		Common Stock											4,100				3,300				—				7,400
CitiPostal, Inc. and Affiliates			Senior Loan			1,754								20,569				2,326				(780	)			22,115
	(Business Services)		Equity Interests											4,700				2,287				(87	)			6,900
Creative Group, Inc.			Subordinated Debt (5)			480								13,656				30				(4,427	)			9,259
	(Business Services)		Warrant											1,387				—				(1,387	)			—
Drew Foam Companies, Inc.			Preferred Stock											722				—				(326	)			396
	(Business Services)		Common Stock											7				—				(7	)			—
MedBridge Healthcare, LLC			Senior Loan(5)											7,164				—				—				7,164
	(Healthcare Services)		Subordinated Debt (5)											1,813				—				(90	)			1,723
			Convertible
			Subordinated Debt (5)											—				—				—				—
			Equity Interests											—				110				(110	)			—
MHF Logistical Solutions,Inc(8)			Subordinated Debt (5)											—				27,518				(16,933	)			10,585
	(Business Services)		Subordinated Debt (5)											—				—				—				—
			Common Stock											—				—				—				—
			Warrants											—				—				—				—
Multi-Ad Services, Inc.			Unitranche Debt			1,716								19,879				19				(150	)			19,748
	(Business Services)		Equity Interests											2,000				—				(1,058	)			942
Nexcel Synthetics, LLC			Subordinated Debt			611								10,978				199				(11,177	)			—
	(Consumer Products)		Equity Interests											1,486				269				(1,755	)			—
PresAir LLC			Senior Loan(5)						$	27				2,206				—				(1,406	)			800
	(Industrial Products)		Equity Interests											—				5				(5	)			—
Progressive International
	Corporation		Subordinated Debt			842								7,533				121				(3,684	)			3,970
	(Consumer Products)		Preferred Stock											1,024				—				(7	)			1,017
			Common Stock											2,300				2,800				—				5,100
			Warrants											—				—				—				—
Regency Healthcare Group, LLC			Senior Loan			88								1,232				2				(750	)			484
	(Healthcare Services)		Unitranche Debt			1,448								19,908				45				(8,000	)			11,953
			Equity Interests											1,616				69				—				1,685
SGT India Private Limited			Common Stock											3,346				155				(876	)			2,625
	(Business Services)
Soteria Imaging Services, LLC			Subordinated Debt			1,645								17,569				1,133				(5,000	)			13,702
	(Healthcare Services)		Equity Interests											2,541				100				—				2,641
Universal Environmental
	Services, LLC		Unitranche Debt			815								10,211				777				(10,988	)			—
	(Business Services)		Equity Interests											—				15				(15	)			—
Total companies 5% to 25% owned					$	32,111							$	449,813											$	397,930

(1)	Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted. The principal amount for loans and debt securities and the number of shares of common stock and preferred stock is shown in the consolidated statement of investments as of September 30, 2007.
(2)	Other includes interest, dividend, or other income which was applied to the principal of the investment and therefore reduced the total investment. These reductions are also included in the Gross Reductions for the investment, as applicable.
(3)	Gross additions include increases in the cost basis of investments resulting from new portfolio investments, paid-in-kind interest or dividends, the amortization of discounts and closing fees, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.
(4)	Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.
(5)	Loan or debt security is on non-accrual status at September 30, 2007, and is therefore considered non-income producing. Loans or debt securities on non-accrual status at the end of the period may or may not have been on non-accrual status for the full period.
(6)	Represents the total amount of interest or dividends credited to income for the portion of the year an investment was included in the companies more than 25% owned or companies 5% to 25% owned categories, respectively.
(7)	In the first quarter of 2007, the Company exercised its option to acquire a majority of the voting securities of Hot Stuff Foods, LLC (Hot Stuff) at fair market value. Therefore, Hot Stuff was reclassified to companies more than 25% owned in the first quarter of 2007. At December 31, 2006, the Company’s investment in Hot Stuff was included in the companies less than 5% owned category.
(8)	In the second quarter of 2007, the Company obtained a seat on the board of directors of MHF Logistical Solutions, Inc. (MHF). Therefore, MHF was reclassified to companies 5% to 25% owned in the second quarter of 2007. At December 31, 2006, the Company’s investment in MHF was included in the companies less than 5% owned category.

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Item  2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

	•	changes in the economy and general economic conditions;
	•	risks associated with possible disruption in our operations due to terrorism;
	•	future changes in laws or regulations and conditions in our operating areas; and
	•	other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings.

		September 30,								December 31,
		2007				2006				2006
Private finance			97%				97%				97%
Commercial real estate finance			3%				3%				3%

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		At and for the								At and for the
		Three Months Ended								Nine Months Ended								At and for the
		September 30,								September 30,								Year Ended
																		December 31,
		2007				2006				2007				2006				2006
($ in millions)
Portfolio at value		$	4,326.9			$	4,119.6			$	4,326.9			$	4,119.6			$	4,496.1
Investments funded		$	577.5			$	629.5			$	1,236.7			$	1,880.8			$	2,437.8
Change in accrued or reinvested interest and dividends(1)		$	5.1			$	7.2			$	22.8			$	(1.8	)		$	11.3
Principal collections related to investment repayments or sales(2)		$	351.1			$	116.3			$	1,086.5			$	885.9			$	1,055.3
Yield on interest-bearing portfolio investments(3)			11.9	%			12.4	%			11.9	%			12.4	%			11.9	%

(1)	Includes changes in accrued or reinvested interest related to our investments in money market securities of $1.9 million and $1.3 million for the three months ended September 30, 2007 and 2006, respectively, and $6.6 million, $3.0 million, and $3.1 million for the nine months ended September 30, 2007 and 2006, and for the year ended December 31, 2006, respectively.
(2)	Principal collections related to investment repayments or sales for the three and nine months ended September 30, 2007, included collections of $14.8 million and $197.2 million, respectively, related to the sale of loans to the Allied Capital Senior Debt Fund, L.P. See discussion below.
(3)	The weighted average yield on interest-bearing investments is computed as the (a) annual stated interest on accruing loans and debt securities plus the annual amortization of loan origination fees, original issue discount, and market discount on accruing loans and debt securities less the annual amortization of loan origination costs, plus the effective interest yield on the preferred shares/ income notes of CLOs divided by (b) total interest-bearing investments at value. The weighted average yield is computed as of the balance sheet date.

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					At and for Three Months																At and for the Nine Months
					Ended September 30,																Ended September 30,																At and for the
																																					Year Ended
																																					December 31,
					2007								2006								2007								2006								2006
					Value				Yield(1)				Value				Yield(1)				Value				Yield(1)				Value				Yield(1)				Value				Yield(1)
($ in millions)
Portfolio at value:
	Loans and debt securities:
		Senior loans			$	481.6				9.3	%		$	342.4				8.7	%		$	481.6				9.3	%		$	342.4				8.7	%		$	405.2				8.4	%
		Unitranche debt				698.1				11.5	%			745.8				11.2	%			698.1				11.5	%			745.8				11.2	%			799.2				11.2	%
		Subordinated debt				1,927.1				12.6	%			1,817.0				13.7	%			1,927.1				12.6	%			1,817.0				13.7	%			1,980.8				12.9	%
			Total loans and debt securities			3,106.8				11.8	%			2,905.2				12.5	%			3,106.8				11.8	%			2,905.2				12.5	%			3,185.2				11.9	%
	Equity Securities:
		Preferred shares/income notes of CLOs(2)				131.5				15.1	%			87.7				13.7	%			131.5				15.1	%			87.7				13.7	%			97.2				15.5	%
		Other equity securities				968.8								994.9								968.8								994.9								1,095.5
			Total equity securities			1,100.3								1,082.6								1,100.3								1,082.6								1,192.7
Total portfolio					$	4,207.1							$	3,987.8							$	4,207.1							$	3,987.8							$	4,377.9
Investments funded(3)					$	576.1							$	629.2							$	1,219.9							$	1,866.6							$	2,423.4
Change in accrued or reinvested interest and dividends					$	4.4							$	5.8							$	17.3							$	(5.4	)						$	7.2
Principal collections related to investment repayments or sales(4)					$	346.2							$	115.6							$	1,063.3							$	868.0							$	1,015.4

(1)	The weighted average yield on loans and debt securities is computed as the (a) annual stated interest on accruing loans and debt securities plus the annual amortization of loan origination fees, original issue discount, and market discount on accruing loans and debt securities less the annual amortization of loan origination costs, divided by (b) total loans and debt securities at value. The weighted average yield on the preferred shares/income notes of CLOs is calculated as the (a) effective interest yield on the preferred shares/income notes of CLOs, divided by (b) preferred shares/income notes of CLOs at value. The weighted average yields are computed as of the balance sheet date.
(2)	Investments in the preferred shares/income notes of CLOs earn a current return that is included in interest income in the consolidated statement of operations.
(3)	Investments funded for the nine months ended September 30, 2006, and for the year ended December 31, 2006, included debt investments in certain portfolio companies received in conjunction with the sale of such companies. See “— Private Finance, Investments Funded” below.
(4)	Includes collections from the sale or repayment of senior loans totaling $312.6 million, $268.3 million, and $322.7 million for the nine months ended September 30, 2007 and 2006, and for the year ended December 31, 2006, respectively.

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			For the Nine Months Ended September 30, 2007
			Debt Investments								Buyout Investments								Total
			Amount				Yield(1)				Amount				Yield(1)				Amount				Yield(1)
($ in millions)
Loans and debt securities:
	Senior loans		$	285.6				10.3	%		$	83.0				10.7	%		$	368.6				10.4	%
	Unitranche debt(2)			104.0				10.8	%			—				—				104.0				10.8	%
	Subordinated debt			279.0				12.4	%			186.3				12.1	%			465.3				12.3	%
Total loans and debt securities				668.6				11.3	%			269.3				11.7	%			937.9				11.4	%
Equity				155.2	(4)(5)							126.8								282.0
	Total		$	823.8							$	396.1							$	1,219.9

			For the Nine Months Ended September 30, 2006
			Debt Investments								Buyout Investments								Total
			Amount				Yield(1)				Amount				Yield(1)				Amount				Yield(1)
($ in millions)
Loans and debt securities:
	Senior loans		$	202.4				9.4	%		$	167.3				8.8	%		$	369.7				9.1	%
	Unitranche debt(2)			348.7				10.6	%			146.5				12.9	%			495.2				11.3	%
	Subordinated debt(3)			508.0				13.1	%			250.8				13.9	%			758.8				13.3	%
Total loans and debt securities				1,059.1				11.5	%			564.6				12.1	%			1,623.7				11.8	%
Equity				62.9	(4)							180.0								242.9
	Total		$	1,122.0							$	744.6							$	1,866.6

			For the Year Ended December 31, 2006
			Debt Investments								Buyout Investments								Total
			Amount				Yield(1)				Amount				Yield(1)				Amount				Yield(1)
($ in millions)
Loans and debt securities:
	Senior loans		$	245.4				9.4	%		$	239.8				8.9	%		$	485.2				9.2	%
	Unitranche debt(2)			471.7				10.7	%			146.5				12.9	%			618.2				11.3	%
	Subordinated debt(3)			510.7				13.0	%			423.8				14.4	%			934.5				13.6	%
Total loans and debt securities				1,227.8				11.4	%			810.1				12.5	%			2,037.9				11.9	%
Equity				91.4	(4)							294.1								385.5
	Total		$	1,319.2							$	1,104.2							$	2,423.4

(1)	The weighted average yield on interest-bearing investments is computed as the (a) annual stated interest on accruing interest-bearing investments, divided by (b) total interest-bearing investments funded.
(2)	Unitranche debt is a single debt investment that is a blend of senior and subordinated debt terms. The yield on a unitranche investment reflects the blended yield of senior and subordinated debt.
(3)	Debt investments funded for the nine months ended September 30, 2006, and for the year ended December 31, 2006, included a $150 million subordinated debt investment in Advantage Sales & Marketing, Inc. received in conjunction with the sale of Advantage and a $30 million subordinated debt investment in STS Operating, Inc. received in conjunction with the sale of STS.
(4)	Equity investments for the nine months ended September 30, 2007 and 2006, and for the year ended December 31, 2006, included $42.4 million, $12.5 million, and $26.1 million, respectively, in investments in the preferred shares/income notes of collateralized loan obligations (CLOs) that are managed by Callidus Capital Corporation, a portfolio company controlled by us. These CLOs primarily invest in senior debt.
(5)	Equity investments for the nine months ended September 30, 2007, included $19.1 million invested in the Allied Capital Senior Debt Fund, L.P. See discussion below.

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			Companies				Companies				Companies
			More Than				5% to 25%				Less Than
			25% Owned(1)				Owned				5% Owned				Total
($ in millions)
Senior loans			$	12.4			$	15.0			$	123.0			$	150.4	(2)
Unitranche debt				—				—				45.4				45.4
Subordinated debt				18.0				0.1				—				18.1
	Total loans and debt securities			30.4				15.1				168.4				213.9
Equity securities				118.5				16.1				78.1				212.7	(3)
	Total		$	148.9			$	31.2			$	246.5			$	426.6

	(1)	Includes various commitments to Callidus Capital Corporation (Callidus), a portfolio company controlled by us, which owns 80% (subject to dilution) of Callidus Capital Management, LLC, an asset management company that structures and manages collateralized debt obligations (CDOs), collateralized loan obligations (CLOs), and other related investments, as follows:

											Amount
			Committed				Amount				Available
			Amount				Drawn				to be Drawn
($ in millions)
Revolving line of credit for working capital			$	4.0			$	—			$	4.0
Subordinated debt to support warehouse facilities & warehousing activities(*)				18.0				—				18.0
Purchase of preferred equity in future CLO transactions (**)				—				—				—
	Total		$	22.0			$	—			$	22.0

	(*)	Callidus has a synthetic credit facility with a third party for up to approximately $66 million. We have agreed to designate our subordinated debt commitment for Callidus to draw upon to provide first loss capital as needed to support this facility.

	(**)	Subsequent to September 30, 2007, we made an additional commitment to Callidus to purchase preferred equity in future CLO transactions of $27.5 million.

	(2)	Includes $133.6 million in the form of revolving senior debt facilities to 31 portfolio companies.
	(3)	Includes $94.2 million to 21 private equity and venture capital funds, including $4.3 million in co-investment commitments to one private equity fund, and $12.7 million committed to the Allied Capital Senior Debt Fund, L.P. (see discussion above).

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			2007				2006
($ in millions)
Interest income on subordinated debt and Class A equity interests			$	—			$	11.9
Fees and other income				4.1				6.3
	Total interest and related portfolio income		$	4.1			$	18.2

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			2007				2006
($ in millions)
Interest income			$	5.1			$	7.3
Fees and other income				0.2				0.4
	Total interest and related portfolio income		$	5.3			$	7.7

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			At and for the Three Months																At and for the Nine Months
			Ended September 30,																Ended September 30,																At and for the
																																			Year Ended
																																			December 31,
			2007								2006								2007								2006								2006
			Value				Yield(1)				Value				Yield(1)				Value				Yield(1)				Value				Yield(1)				Value				Yield(1)
($ in millions)
Portfolio at value:
	Commercial mortgage loans		$	64.2				6.4%			$	94.4				7.7%			$	64.2				6.4%			$	94.4				7.7%			$	71.9				7.5%
	Real estate owned			22.0								15.3								22.0								15.3								19.6
	Equity interests			33.5								22.1								33.5								22.1								26.7
Total portfolio			$	119.7							$	131.8							$	119.7							$	131.8							$	118.2
Investments funded			$	1.4							$	0.3							$	16.8							$	14.2							$	14.4
Change in accrued or reinvested interest			$	(1.2	)						$	0.1								(1.1	)						$	0.6							$	1.0
Principal collections related to investment repayments or sales			$	4.9							$	0.7							$	23.2							$	17.9							$	39.9

(1)

The weighted average yield on the interest-bearing investments is computed as the (a) annual stated interest on accruing loans plus the annual amortization of loan origination fees, original issue discount, and market discount on accruing interest-bearing investments less the annual amortization of origination costs, divided by (b) total interest-bearing investments at value. The weighted average yield is computed as of the balance sheet date. Interest-bearing investments for the commercial real estate finance portfolio include all investments except for real estate owned and equity interests.

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		2007								2006
		Portfolio				Percentage of				Portfolio				Percentage of
Grade		at Value				Total Portfolio				at Value				Total Portfolio
($ in millions)
1		$	1,605.3				37.1	%		$	1,307.3				29.1	%
2			2,320.6				53.6				2,672.3				59.4
3			258.1				6.0				308.1				6.9
4			90.5				2.1				84.2				1.9
5			52.4				1.2				124.2				2.7
		$	4,326.9				100.0	%		$	4,496.1				100.0	%

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				2007				2006
($ in millions)
Loans and debt securities in workout status (classified as Grade 4 or 5)(1)
	Private finance
		Companies more than 25% owned		$	51.6			$	51.1
		Companies 5% to 25% owned			13.1				4.0
		Companies less than 5% owned			20.7				31.6
	Commercial real estate finance				12.4				12.2
Loans and debt securities not in workout status
	Private finance
		Companies more than 25% owned			116.2				87.1
		Companies 5% to 25% owned			16.4				7.2
		Companies less than 5% owned			13.0				38.9
	Commercial real estate finance				6.7				6.7
		Total		$	250.1			$	238.8
		Percentage of total portfolio			5.8	%			5.3	%

(1)	Workout loans and debt securities exclude equity securities that are included in the total Grade 4 and 5 assets above.

			2007				2006
($ in millions)
Private finance			$	160.8			$	46.5
Commercial mortgage loans				1.9				1.9
	Total		$	162.7			$	48.4
	Percentage of total portfolio			3.8	%			1.1	%

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				For the Three Months Ended September 30,																For the Nine Months Ended September 30,
																Percent																Percent
(in thousands, except per share				2007				2006				Change				Change				2007				2006				Change				Change
amounts)
Interest and Related Portfolio Income:
	Interest and dividends			$	105,669			$	98,668			$	7,001				7	%		$	310,466			$	282,982			$	27,484				10	%
	Fees and other income				12,699				14,715				(2,016	)			(14	%)			33,530				51,868				(18,338	)			(35	%)
		Total interest and related portfolio income			118,368				113,383				4,985				4	%			343,996				334,850				9,146				3	%
Expenses:
	Interest				33,744				26,109				7,635				29	%			98,368				72,455				25,913				36	%
	Employee				26,306				25,228				1,078				4	%			76,845				67,054				9,791				15	%
	Employee stock options				18,312				3,649				14,663				402	%			31,492				11,852				19,640				166	%
	Administrative				10,496				8,153				2,343				29	%			38,225				29,348				8,877				30	%
		Total operating expenses			88,858				63,139				25,719				41	%			244,930				180,709				64,221				36	%
		Net investment income before income taxes			29,510				50,244				(20,734	)			(41	%)			99,066				154,141				(55,075	)			(36	%)
	Income tax expense (benefit), including excise tax				11,192				1,586				9,606				606	%			16,073				13,988				2,085				15	%
		Net investment income			18,318				48,658				(30,340	)			(62	%)			82,993				140,153				(57,160	)			(41	%)
Net Realized and Unrealized Gains (Losses):
	Net realized gains				212,370				9,916				202,454				*				314,915				542,991				(228,076	)			*
	Net change in unrealized appreciation or depreciation				(327,156	)			19,312				(346,468	)			*				(272,132	)			(471,942	)			199,810				*
	Total net gains (losses)				(114,786	)			29,228				(144,014	)			*				42,783				71,049				(28,266	)			*
		Net income (loss)		$	(96,468	)		$	77,886			$	(174,354	)			(224	%)		$	125,776			$	211,202			$	(85,426	)			(40	%)
Diluted earnings (loss) per common share				$	(0.62	)		$	0.53			$	(1.15	)			(217	%)		$	0.81			$	1.47			$	(0.66	)			(45	%)
Weighted average common shares outstanding — diluted					155,329				147,112				8,217				6	%			154,708				144,030				10,678				7	%

*	Net change in unrealized appreciation or depreciation and net gains (losses) can fluctuate significantly from period to period. As a result, comparisons may not be meaningful.

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				For the Three								For the Nine
				Months Ended								Months Ended
				September 30,								September 30,
				2007				2006				2007				2006
($ in millions)
Interest:
	Private finance loans and debt securities			$	94.1			$	87.9			$	280.4			$	253.8
	Preferred shares/income notes of CLOs				4.3				3.0				11.5				8.3
	Commercial mortgage loans				1.1				1.7				4.9				6.5
	Cash, U.S. Treasury bills, money market and other securities				5.6				5.0				11.8				10.9
		Total interest			105.1				97.6				308.6				279.5
Dividends					0.6				1.1				1.9				3.5
		Total interest and dividends		$	105.7			$	98.7			$	310.5			$	283.0

				2007								2006
($ in millions)
				Value				Yield(1)				Value				Yield(1)
Loans and debt securities:
	Private finance			$	3,106.8				11.8	%		$	2,905.2				12.5	%
	Commercial mortgage loans				64.2				6.4	%			94.4				7.7	%
		Total loans and debt securities			3,171.0				11.7	%			2,999.6				12.3	%
Equity securities:
	Preferred shares/income notes of CLOs				131.5				15.1	%			87.7				13.7	%
		Total interest bearing securities		$	3,302.5				11.9	%		$	3,087.3				12.4	%

(1)

The weighted average yield on loans and debt securities is computed as the (a) annual stated interest on accruing loans and debt securities plus the annual amortization of loan origination fees, original issue discount, and market discount on accruing loans and debt securities less the annual amortization of loan origination costs, divided by (b) total interest-bearing investments at value. The weighted average yield on the preferred shares/income notes of CLOs is calculated as the (a) effective interest yield on the preferred shares/income notes of CLOs, divided by (b) preferred shares/income notes of CLOs at value. The weighted average yields are computed as of the balance sheet date.

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			For the Three								For the Nine
			Months Ended								Months Ended
			September 30,								September 30,
			2007				2006				2007				2006
($ in millions)
Structuring and diligence			$	7.3			$	9.3			$	15.3			$	28.4
Management, consulting and other services provided to portfolio companies(1)				3.2				2.6				7.3				9.1
Commitment, guaranty and other fees from portfolio companies(2)				2.0				2.1				7.0				6.7
Loan prepayment premiums				0.1				0.7				3.7				7.7
Other income				0.1				—				0.2				—
	Total fees and other income		$	12.7			$	14.7			$	33.5			$	51.9

(1)	The nine months ended September 30, 2006, includes $1.8 million in management fees from Advantage prior to its sale on March 29, 2006. See “— Portfolio and Investment Activity” above for further discussion. The three and nine months ended September 30, 2006, included management fees from BLX of $0.5 million and $1.7 million, respectively. We have not charged BLX management fees in 2007. See “— Private Finance, Business Loan Express, LLC” above.
(2)	Includes guaranty and other fees from BLX of $1.3 million and $1.5 million for the three months ended September 30, 2007 and 2006, respectively, and $4.1 million and $4.6 million for the nine months ended September 30, 2007 and 2006, respectively. See “— Private Finance, Business Loan Express, LLC” above.

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		For the Three								For the Nine
		Months Ended								Months Ended
		September 30,								September 30,
		2007				2006				2007				2006
($ in millions)
Mercury		$	1.0			$	2.1			$	5.3			$	7.7
BLX		$	1.3			$	6.1			$	4.1			$	18.2

		At and for the Three								At and for the Nine
		Months Ended								Months Ended
		September 30,								September 30,
		2007				2006				2007				2006
($ in millions)
Total outstanding debt		$	1,922.4			$	1,590.7			$	1,922.4			$	1,590.7
Average outstanding debt		$	1,921.1			$	1,507.5			$	1,909.5			$	1,433.5
Weighted average cost(1)			6.6	%			6.6	%			6.6	%			6.6	%

(1)	The weighted average annual interest cost is computed as the (a) annual stated interest rate on the debt plus the annual amortization of commitment fees, other facility fees and debt financing costs that are recognized into interest expense over the contractual life of the respective borrowings, divided by (b) debt outstanding on the balance sheet date.

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			For the Three								For the Nine
			Months Ended								Months Ended
			September 30,								September 30,
			2007				2006				2007				2006
($ in millions)
Salaries and employee benefits			$	23.3			$	19.6			$	65.9			$	54.6
Individual performance award (IPA)				2.4				2.1				7.4				6.0
IPA mark to market expense (benefit)				(2.0	)			1.2				(3.6	)			0.6
Individual performance bonus (IPB)				2.6				2.3				7.1				5.9
	Total employee expense		$	26.3			$	25.2			$	76.8			$	67.1
Number of employees at end of period				178				168				178				168

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					For the Three								For the Nine
					Months Ended								Months Ended
					September 30,								September 30,
					2007				2006				2007				2006
($ in millions)
Employee Stock Option Expense:
	Options granted:
		Previously awarded, unvested options as of January 1, 2006			$	1.7			$	3.2			$	8.2			$	9.9
		Options granted on or after January 1, 2006				2.2				0.4				8.9				2.0
			Total options granted			3.9				3.6				17.1				11.9
	Options cancelled in connection with tender offer (see below)					14.4				—				14.4				—
			Total employee stock option expense		$	18.3			$	3.6			$	31.5			$	11.9

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			For the Three								For the Nine
			Months Ending								Months Ending
			September 30,								September 30,
			2007				2006				2007				2006
($ in millions)
Administrative expenses			$	9.7			$	7.6			$	33.2			$	25.3
Investigation and litigation costs				0.8				0.6				5.0				4.0
	Total administrative expenses		$	10.5			$	8.2			$	38.2			$	29.3

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			For the Three								For the Nine
			Months Ended								Months Ending
			September 30,								September 30,
			2007				2006				2007				2006
($ in millions)
Income tax expense (benefit)			$	2.2			$	(0.6	)		$	(0.5	)		$	0.2
Excise tax expense				9.0				2.2				16.6				13.8
	Income tax expense (benefit), including excise tax		$	11.2			$	1.6			$	16.1			$	14.0

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		For the Three								For the Nine
		Months Ended								Months Ended
		September 30,								September 30,
		2007				2006				2007				2006
($ in millions)
Realized gains		$	275.8			$	12.6			$	396.4			$	550.1
Realized losses			(63.4	)			(2.7	)			(81.5	)			(7.1	)
Net realized gains		$	212.4			$	9.9			$	314.9			$	543.0

			For the Three								For the Nine
			Months Ended								Months Ended
			September 30,								September 30,
($ in millions)			2007				2006				2007				2006
Reversal of previously recorded net unrealized appreciation associated with realized gains			$	(243.9	)		$	(10.2	)		$	(330.9	)		$	(499.4	)
Reversal of previously recorded net unrealized depreciation associated with realized losses				65.8				2.2				88.1				5.4
	Total reversal		$	(178.1	)		$	(8.0	)		$	(242.8	)		$	(494.0	)

2007
Portfolio Company		Amount
Private Finance:
Mercury Air Centers, Inc.		$	259.5
Woodstream Corporation			14.6
Mogas Energy, LLC			1.2
Other			0.5
Total realized gains		$	275.8

2006
Portfolio Company		Amount
Private Finance:
Oriental Trading Company, Inc.		$	8.9
Component Hardware Group, Inc.			2.8
Advantage Sales & Marketing, Inc.			0.7
Other			0.2
Total realized gains		$	12.6

2007
Portfolio Company		Amount
Private Finance:
Jakel, Inc.		$	24.8
Startec Global Communications Corporation			20.2
Gordian Group, Inc.			9.7
Universal Environmental Services, LLC			8.6
Other			0.1
Total realized losses		$	63.4

2006
Portfolio Company		Amount
Private Finance:
Cooper Natural Resources, Inc.		$	2.2
Other			0.5
Total realized losses		$	2.7

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2007
Portfolio Company		Amount
Private Finance:
Mercury Air Centers, Inc.		$	259.5
HMT, Inc.			39.9
Healthy Pet Corp.			36.6
Palm Coast Data, LLC			20.0
Woodstream Corporation			14.6
Wear Me Apparel Corporation			6.1
Mogas Energy, LLC			5.7
Tradesmen International, Inc.			3.8
ForeSite Towers, LLC			3.8
Advantage Sales & Marketing, Inc.			3.1
Geotrace Technologies, Inc.			1.1
Other			2.2
Total realized gains		$	396.4

2006
Portfolio Company			Amount
Private Finance:
Advantage Sales & Marketing, Inc.			$	434.4
STS Operating, Inc.				94.8
Oriental Trading Company, Inc.				8.9
United Site Services, Inc.				3.3
Component Hardware Group, Inc.				2.8
Nobel Learning Communities, Inc.				1.5
MHF Logisitical Solutions, Inc.				1.2
The Debt Exchange, Inc.				1.1
Other				1.5
	Total private finance			549.5
Commercial Real Estate:
Other				0.6
	Total commercial real estate			0.6
Total realized gains			$	550.1

2007
Portfolio Company		Amount
Private Finance:
Jakel, Inc.		$	24.8
Startec Global Communications, Inc.			20.2
Powell Plant Farms, Inc.			11.6
Gordian Group, Inc.			9.7
Universal Environmental Services, LLC			8.6
Legacy Partners Group, LLC			5.8
Other			0.8
Total realized losses		$	81.5

2006
Portfolio Company			Amount
Private Finance:
Cooper Natural Resources, Inc.			$	2.2
Aspen Pet Products, Inc.				1.6
Nobel Learning Communities, Inc.				1.4
Other				1.0
	Total private finance			6.2
Commercial Real Estate:
Other				0.9
	Total commercial real estate			0.9
Total realized losses			$	7.1

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		2007												2006
		Q1				Q2				Q3				Q1				Q2				Q3
Number of private finance portfolio companies reviewed			88				92				135				78				78				105
Percentage of private finance portfolio reviewed at value			91.8	%			92.1	%			92.1	%			87.0	%			89.6	%			86.5	%

			For the Three								For the Nine
			Months Ended								Months Ended
			September 30,								September 30,
			2007(1)				2006(1)				2007(1)				2006(1)
($ in millions)
Net unrealized appreciation (depreciation)			$	(149.1	)		$	27.3			$	(29.3	)		$	22.1
Reversal of previously recorded unrealized appreciation associated with realized gains				(243.9	)			(10.2	)			(330.9	)			(499.4	)
Reversal of previously recorded unrealized depreciation associated with realized losses				65.8				2.2				88.1				5.4
	Net change in unrealized appreciation or depreciation		$	(327.2	)		$	19.3			$	(272.1	)		$	(471.9	)

(1)	The net change in unrealized appreciation or depreciation can fluctuate significantly from period to period. As a result, comparisons may not be meaningful.

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		2007				2006
($ in millions)
Liquidity portfolio (includes money market and other securities)		$	200.7			$	201.8
Cash and investments in money market securities (including money market and other securities: 2007-$90.4; 2006-$0.4)		$	105.2			$	2.1
Total assets		$	4,861.5			$	4,887.5
Total debt outstanding		$	1,922.4			$	1,899.1
Total shareholders’ equity		$	2,765.8			$	2,841.2
Debt to equity ratio(1)			0.70				0.67
Asset coverage ratio(2)			244	%			250	%

(1)	The debt to equity ratio adjusted for the liquidity portfolio and cash and investments in money market securities was 0.58 and 0.60 at September 30, 2007, and December 31, 2006, respectively, which is calculated as (a) total debt less the value of the liquidity portfolio divided by (b) total shareholders’ equity.
(2)	As a business development company, we are generally required to maintain a minimum ratio of 200% of total assets to total borrowings.

			2007				2006
($ in millions)
Net cash provided by (used in) operating activities			$	240.8			$	(303.6	)
Add: portfolio investments funded				1,236.7				1,700.8
	Total cash provided by operating activities before new investments		$	1,477.5			$	1,397.2

			2007								2006
			Value				Yield				Value				Yield
($ in millions)
Money market securities			$	200.7				5.3	%		$	161.2				5.3	%
Certificate of deposit				—				—				40.6				5.6	%
	Total		$	200.7				5.3	%		$	201.8				5.3	%

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				2007												2006
												Annual												Annual
				Facility				Amount				Interest				Facility				Amount				Interest
				Amount				Outstanding				Cost(1)				Amount				Outstanding				Cost(1)
($ in millions)
Notes payable and debentures:
	Privately issued unsecured notes payable			$	1,042.4			$	1,042.4				6.1	%		$	1,041.4			$	1,041.4				6.1	%
	Publicly issued unsecured notes payable				880.0				880.0				6.7	%			650.0				650.0				6.6	%
		Total notes payable and debentures			1,922.4				1,922.4				6.4	%			1,691.4				1,691.4				6.3	%
Revolving line of credit(4)					922.5				—				—	%(2)			922.5				207.7				6.4	%(2)
		Total debt		$	2,844.9			$	1,922.4				6.6	%(3)		$	2,613.9			$	1,899.1				6.5	% (3)

(1)	The weighted average annual interest cost is computed as the (a) annual stated interest on the debt plus the annual amortization of commitment fees, other facility fees and the amortization of debt financing costs that are recognized into interest expense over the contractual life of the respective borrowings, divided by (b) debt outstanding on the balance sheet date.
(2)	There were no amounts drawn on the revolving line of credit at September 30, 2007. The annual interest cost at December 31, 2006, reflects the interest rate payable for borrowings under the revolving line of credit. In addition to the current interest rate payable, there were annual costs of commitment fees, other facility fees and amortization of debt financing costs of $4.1 million and $3.9 million at September 30, 2007, and December 31, 2006, respectively.
(3)	The annual interest cost for total debt includes the annual cost of commitment fees and the amortization of debt financing costs on the revolving line of credit and other facility fees regardless of the amount outstanding on the facility as of the balance sheet date.
(4)	At September 30, 2007, $859.0 million remained unused and available on the revolving line of credit, net of amounts committed for standby letters of credit of $63.5 million issued under the credit facility.

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			Amount				Maturity Date
($ in millions)
6.625% Notes due 2011			$	400.0				July 15, 2011
6.000% Notes due 2012				250.0				April 1, 2012
6.875% Notes due 2047				230.0				April 15, 2047
	Total		$	880.0

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							Payments Due By Year
																											After
			Total				2007				2008				2009				2010				2011				2011
($ in millions)
Unsecured notes payable			$	1,922.4			$	—			$	153.0			$	269.9			$	408.0			$	472.5			$	619.0
Revolving line of credit(1)				—				—				—				—				—				—				—
Operating leases				21.3				1.1				4.4				4.6				4.5				1.8				4.9
	Total contractual obligations		$	1,943.7			$	1.1			$	157.4			$	274.5			$	412.5			$	474.3			$	623.9

(1)	At September 30, 2007, $859.0 million remained unused and available on the revolving line of credit, net of amounts committed for standby letters of credit of $63.5 million issued under the credit facility.

							Amount of Commitment Expiration Per Year
																											After
			Total				2007				2008				2009				2010				2011				2011
($ in millions)
Guarantees			$	263.9			$	3.0			$	3.0			$	251.5			$	—			$	4.4			$	2.0
Standby letters of credit(1)				63.5				—				63.5				—				—				—				—
	Total commitments(2)		$	327.4			$	3.0			$	66.5			$	251.5			$	—			$	4.4			$	2.0

(1)	Standby letters of credit are issued under our revolving line of credit that expires in September 2008. Therefore, unless a standby letter of credit is set to expire at an earlier date, we have assumed that the standby letters of credit will expire contemporaneously with the expiration of our line of credit in September 2008.
(2)	Our most significant commitments relate to our investment in Business Loan Express, LLC (BLX), which commitments totaled $271.0 million at September 30, 2007. At September 30, 2007, the principal components of these guarantees included a guarantee of 60% of the outstanding total obligations on BLX’s revolving line of credit, which expires in March 2009, for a total guaranteed amount of $249.0 million and standby letters of credit totaling $19.0 million in connection with term securitizations completed by BLX. See “— Private Finance, Business Loan Express, LLC” above for further discussion.

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	•	price and volume fluctuations in the overall stock market from time to time;
	•	significant volatility in the market price and trading volume of securities of business development companies or other financial services companies;
	•	volatility resulting from trading in derivative securities related to our common stock including puts, calls, long-term equity anticipation securities, or LEAPs, or short trading positions;
	•	changes in laws or regulatory policies or tax guidelines with respect to business development companies or regulated investment companies;
	•	actual or anticipated changes in our earnings or fluctuations in our operating results or changes in the expectations of securities analysts;
	•	general economic conditions and trends;
	•	loss of a major funding source; or
	•	departures of key personnel.

	•	the time remaining to the maturity of these debt securities;
	•	the outstanding principal amount of debt securities with terms identical to these debt securities;

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	•	the supply of debt securities trading in the secondary market, if any;
	•	the redemption or repayment features, if any, of these debt securities;
	•	the level, direction and volatility of market interest rates generally; and
	•	market rates of interest higher or lower than rates borne by the debt securities.

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			Total Number
			of Shares				Average Price
			Purchased				Paid Per Share
2005 DCP I(1)
	7/1/2007 to 7/31/2007			105			$	31.37
	8/1/2007 to 8/31/2007			—			$	—
	9/1/2007 to 9/30/2007			—			$	—
2005 DCP II(2)
	7/1/2007 to 7/31/2007			22,814			$	31.37
	8/1/2007 to 8/31/2007			—			$	—
	9/1/2007 to 9/30/2007			83,250			$	28.67
Total				106,169			$	29.25

(1)	The 2005 DCP I is an unfunded plan, as defined by the Internal Revenue Code of 1986, that provides for the deferral of compensation by our directors, employees, and consultants. In addition, we may make contributions to 2005 DCP I on compensation deemed ineligible for a 401(k) contribution. Our directors, employees, or consultants are eligible to participate in the plan at such time and for such period as designated by the Board of Directors. The 2005 DCP I is managed through a trust by a third-party trustee, and we fund this plan through cash contributions. Directors may choose to defer director’s fees through the 2005 DCP I, and may choose to invest such deferred income in shares of our common stock. To the extent a director elects to invest in our common stock, the trustee of the 2005 DCP I will be required to use such deferred director’s fees to purchase shares of our common stock in the market.
(2)	We have established a long-term incentive compensation program whereby we will generally determine an individual performance award for certain officers annually at the beginning of each year. The Compensation Committee may adjust the individual performance awards as needed, or make new awards as new officers are hired. In conjunction with the program, we instituted the 2005 DCP II, which is an unfunded plan as defined by the Internal Revenue Code of 1986 that is managed through a trust by a third-party trustee. The individual performance awards are deposited in the trust in four equal installments, generally on a quarterly basis in the form of cash and the 2005 DCP II requires the trustee to use the cash exclusively to purchase shares of our common stock in the market. In addition, dividends received on the Allied Capital shares held in the trust are reinvested in our common stock.

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Exhibit
Number				Description
	3	.1		Restated Articles of Incorporation. (Incorporated by reference to Exhibit a.2 filed with Allied Capital’s Post-Effective Amendment No. 1 to registration statement on Form N-2 (File No. 333-141847) filed on June 1, 2007).
	3	.2		Amended and Restated Bylaws. (Incorporated by reference to Exhibit 3.1. filed with Allied Capital’s Form 8-K on July 30, 2007).
	4	.1		Specimen Certificate of Allied Capital’s Common Stock, par value $0.0001 per share. (Incorporated by reference to Exhibit d. filed with Allied Capital’s registration statement on Form N-2 (File No. 333-51899) filed on May 6, 1998).
	4	.3		Form of Note under the Indenture relating to the issuance of debt securities. (Contained in Exhibit 4.4). (Incorporated by reference to Exhibit d.1 filed with Allied Capital’s registration statement on Form N-2/ A (File No. 333-133755) filed on June 21, 2006).
	4	.4		Indenture by and between Allied Capital Corporation and The Bank of New York, dated June 16, 2006. (Incorporated by reference to Exhibit d.2 filed with Allied Capital’s registration statement on Form N-2/ A (File No. 333-133755) filed on June 21, 2006).
	4	.5		Statement of Eligibility of Trustee on Form T-1. (Incorporated by reference to Exhibit d.3 filed with Allied Capital’s registration statement on Form N-2 (File No. 333-133755) filed on May 3, 2006).
	4	.6		Form of First Supplemental Indenture by and between Allied Capital Corporation and the Bank of New York, dated as of July 25, 2006.(Incorporated by reference to Exhibit d.4 filed with Allied Capital’s Post-Effective Amendment No. 1 to the registration statement on Form N-2/A (File No. 333-133755) filed on July 25, 2006).
	4	.7		Form of 6.625% Note due 2011. (Incorporated by reference to Exhibit d.5 filed with Allied Capital’s Post-Effective Amendment No. 1 to the registration statement on Form N-2/A (File No. 333-133755) filed on July 25, 2006).
	4	.8		Form of Second Supplemental Indenture by and between Allied Capital Corporation and The Bank of New York, dated as of December 8, 2006. (Incorporated by reference to Exhibit d.6 filed with Allied Capital’s Post-Effective Amendment No. 2 to the registration statement on Form N-2/A (File No. 333-133755) filed on December 8, 2006).
	4	.9		Form of 6.000% Notes due 2012. (Incorporated by reference to Exhibit d.7 filed with Allied Capital’s Post-Effective Amendment No. 2 to the registration statement on Form N-2/A (File No. 333-133755) filed on December 8, 2006).
	4	.10		Form of Third Supplemental Indenture by and between Allied Capital Corporation and The Bank of New York, dated as of March 28, 2007.(Incorporated by reference to Exhibit d.8 filed with Allied Capital’s Post-Effective Amendment No. 3 to the registration statement on Form N-2/A (File No. 333-133755) filed on March 28, 2007).
	4	.11		Form of 6.875% Notes due 2047. (Incorporated by reference to Exhibit d.9 filed with Allied Capital’s Post-Effective Amendment No. 3 to the registration statement on Form N-2/A (File No. 333-133755) filed on March 28, 2007).
	4	.11(a)		Form of 6.875% Notes due 2047. (Incorporated by reference to Exhibit d.9(a) filed with Allied Capital’s Post-Effective Amendment No. 4 to the registration statement on Form N-2/A (File No. 333-133755) filed on April 2, 2007).

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Exhibit
Number				Description
	10	.1		Dividend Reinvestment Plan, as amended. (Incorporated by reference to Exhibit e. filed with Allied Capital’s registration statement on Form N-2 (File No. 333-87862) filed on May 8, 2002).
	10	.2		Credit Agreement, dated September 30, 2005. (Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K on October 3, 2005).
	10	.2(a)		First Amendment to Credit Agreement, dated November 4, 2005. (Incorporated by reference to Exhibit 10.2(a) filed with Allied Capital’s Form 10-Q for the period ended September 30, 2005).
	10	.2(b)		Second Amendment to Credit Agreement, dated May 11, 2006.(Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K filed on May 12, 2006).
	10	.2(c)		Third Amendment to Credit Agreement, dated May 19, 2006. (Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K filed on May 23, 2006).
	10	.3		Note Agreement, dated October 13, 2005. (Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K on October 14, 2005).
	10	.4		Note Agreement, dated May 1, 2006. (Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K on May 1, 2006).
	10	.15		Control Investor Guaranty Agreement, dated as of March 17, 2006, between Allied Capital and CitiBank, N.A. and Business Loan Express, LLC (Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K filed on March 23, 2006).
	10	.17		The 2005 Allied Capital Corporation Non-Qualified Deferred Compensation Plan II. (Incorporated by reference to Exhibit 10.2 filed with Allied Capital’s Form 8-K filed on December 21, 2005).
	10	.17(a)		Amendment to The 2005 Allied Capital Corporation Non-Qualified Deferred Compensation Plan II, dated January 20, 2006. (Incorporated by reference to Exhibit 10.17(a) filed with Allied Capital’s Form 10-K for the year ended December 31, 2005).
	10	.18		The 2005 Allied Capital Corporation Non-Qualified Deferred Compensation Plan. (Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K filed on December 21, 2005).
	10	.18(a)		Amendment to The 2005 Allied Capital Corporation Non-Qualified Deferred Compensation Plan, dated January 20, 2006. (Incorporated by reference to Exhibit 10.18(a) filed with Allied Capital’s Form 10-K for the year ended December 31, 2005).
	10	.19		Amended Stock Option Plan. (Incorporated by reference to Appendix B of Allied Capital’s definitive proxy statement for Allied Capital’s 2007 Annual Meeting of Stockholders filed on April 3, 2007).
	10	.20(a)		Allied Capital Corporation 401(k) Plan, dated September 1, 1999. (Incorporated by reference to Exhibit 4.4 filed with Allied Capital’s registration statement on Form S-8 (File No. 333-88681) filed on October 8, 1999).
	10	.20(b)		Amendment to Allied Capital Corporation 401(k) Plan, dated April 15, 2004. (Incorporated by reference to Exhibit 10.20(b) filed with Allied Capital’s Form 10-Q for the period ended June 30, 2004).
	10	.20(c)		Amendment to Allied Capital Corporation 401(k) plan, dated November 1, 2005. (Incorporated by reference to Exhibit 10.20(c) filed with Allied Capital’s Form 10-Q for the quarter ended September 30, 2005).

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Exhibit
Number				Description
	10	.20(d)		Amendment to Allied Capital Corporation 401(k) plan, dated April 21, 2006. (Incorporated by reference to Exhibit i.4(c) filed with Allied Capital’s Form N-2 (File No. 333-133755) filed on May 3, 2006).
	10	.20(e)		Amendment to Allied Capital Corporation 401(k) plan, adopted December 18, 2006. (Incorporated by reference to Exhibit 10.20(e) filed with Allied Capital’s Form 10-K for the year ended December 31, 2006).
	10	.20(f)		Amendment to Allied Capital Corporation 401(k) plan, dated June 21, 2007. (Incorporated by reference to Exhibit 10.20(f) filed with Allied Capital’s Form 10-Q for the quarter ended June 30, 2007).
	10	.20(g)		Amendment to Allied Capital Corporation 401(k) plan, dated June 21, 2007. (Incorporated by reference to Exhibit 10.20(g) filed with Allied Capital’s Form 10-Q for the quarter ended June 30, 2007).
	10	.20(h)*		Amendment to Allied Capital Corporation 401(k) plan, dated September 14, 2007, with an effective date of January 1, 2008.
	10	.21		Employment Agreement, dated January 1, 2004, between Allied Capital and William L. Walton. (Incorporated by reference to Exhibit 10.21 filed with Allied Capital’s Form 10-K for the year ended December 31, 2003).
	10	.21(a)		Amendment to Employment Agreement, dated March 29, 2007, between Allied Capital and William L. Walton. (Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K filed on April 3, 2007).
	10	.22		Employment Agreement, dated January 1, 2004, between Allied Capital and Joan M. Sweeney. (Incorporated by reference to Exhibit 10.22 filed with Allied Capital’s Form 10-K for the year ended December 31, 2003).
	10	.22(a)		Amendment to Employment Agreement, dated March 29, 2007, between Allied Capital and Joan M. Sweeney. (Incorporated by reference to Exhibit 10.2 filed with Allied Capital’s Form 8-K filed on April 3, 2007).
	10	.23		Employment Agreement, dated January 1, 2004, between Allied Capital and Penelope F. Roll. (Incorporated by reference to Exhibit 10.23 filed with Allied Capital’s Form 10-K for the year ended December 31, 2006).
	10	.23(a)		Amendment to Employment Agreement, dated March 29, 2007, between Allied Capital and Penelope F. Roll. (Incorporated by reference to Exhibit 10.3 filed with Allied Capital’s Form 8-K filed on April 3, 2007).
	10	.25		Form of Custody Agreement with Riggs Bank N.A., which was assumed by PNC Bank through merger. (Incorporated by reference to Exhibit j.1 filed with Allied Capital’s registration statement on Form N-2 (File No. 333-51899) filed on May 6, 1998).
	10	.26		Custodian Agreement with Chevy Chase Trust. (Incorporated by reference to Exhibit 10.26 filed with Allied Capital’s Form 10-K for the year ended December 31, 2005).
	10	.27		Custodian Agreement with Bank of America. (Incorporated by reference to Exhibit 10.27 filed with Allied Capital’s Form 10-K for the year ended December 31, 2005).
	10	.28		Code of Ethics. (Incorporated by reference to Exhibit 10.28 filed with Allied Capital’s Form 10-K for the year ended December 31, 2006).
	10	.29		Custodian Agreement with Union Bank of California. (Incorporated by reference to Exhibit 10.29 filed with Allied Capital’s Form 10-Q for the quarter ended June 30, 2006).
	10	.30		Custodian Agreement with M&T Bank. (Incorporated by reference to Exhibit 10.30 filed with Allied Capital’s Form 10-Q for the quarter ended June 30, 2006).

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Exhibit
Number				Description
	10	.31		Note Agreement, dated as of May 14, 2003. (Incorporated by reference to Exhibit 10.31 filed with Allied Capital’s Form 10-Q for the quarter ended March 31, 2003).
	10	.37		Form of Indemnification Agreement between Allied Capital and its directors and certain officers. (Incorporated by reference to Exhibit 10.37 filed with Allied Capital’s Form 10-K for the year ended December 31, 2003).
	10	.38		Note Agreement, dated as of March 25, 2004. (Incorporated by reference to Exhibit 10.38 filed with Allied Capital’s Form 10-Q for the period ended March 31, 2004.)
	10	.39		Note Agreement, dated as of November 15, 2004. (Incorporated by reference to Exhibit 99.1 filed with Allied Capital’s current report on Form 8-K filed on November 18, 2004.)
	10	.40		Real Estate Securities Purchase Agreement. (Incorporated by reference to Exhibit 2.1 filed with Allied Capital’s Form 8-K filed on May 4, 2005.)
	10	.41		Platform Assets Purchase Agreement. (Incorporated by reference to Exhibit 2.2 filed with Allied Capital’s Form 8-K filed on May 4, 2005.)
	10	.42		Transition Services Agreement. (Incorporated by reference to Exhibit 10.1 filed with Allied Capital’s Form 8-K filed on May 4, 2005.)
	11			Statement regarding computation of per share earnings is included in Note 7 to Allied Capital’s Notes to the Consolidated Financial Statements.
	15	*		Letter regarding Unaudited Interim Financial Information.
	31	.1*		Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
	31	.2*		Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
	32	.1*		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
	32	.2*		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

*	Filed herewith.

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	ALLIED CAPITAL CORPORATION
	(Registrant)

Dated: November 8, 2007		/s/ William L. Walton   William L. Walton Chairman and Chief Executive Officer
		/s/ Penni F. Roll   Penni F. Roll Chief Financial Officer

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Exhibit
Number				Description
	10	.20(h)*		Amendment to Allied Capital Corporation 401(k) plan, dated September 14, 2007, with an effective date of January 1, 2008.
	15			Letter regarding Unaudited Interim Financial Information.
	31	.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
	31	.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
	32	.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
	32	.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

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