Unitranche Fund LLC Invests $64 Million of Unitranche Debt in Leading Distributor of Supplies and Equipment to the Oil & Gas Industry

Unitranche Fund LLC, co-managed by affiliates of Allied Capital and GE Commercial Finance, has provided $64 million of unitranche debt to finance the recapitalization of Industrial Air Tool (“IAT”), led by Allied Capital, ZS Fund and company management. Founded in 1966, IAT is a leading distributor of tools, consumable supplies and equipment for offshore oil & gas drillers and refiners. The company is also the largest distributor of Ingersoll-Rand winches and hoists worldwide.

Unitranche Fund LLC was formed in December 2007 by affiliates of GE Commercial Finance and Allied Capital to deliver a reliable, single-source unitranche loan product to companies with EBITDA of $15 - $90 million.

“We are delighted to have worked with ZS Fund and the management team of Industrial Air Tool to complete this transaction,” said Dan Russell, Managing Director of Allied Capital. “Together with GE, we were also able to deliver a unitranche loan and provide a one-stop debt solution to the transaction with speed, simplicity and certainty to close.”

About Unitranche Fund LLC

Unitranche Fund LLC (the “Fund”) was formed in December 2007 by Allied Capital and GE Commercial Finance. The Fund can invest up to $270 million for a single borrower, while Allied Capital and GE Commercial Finance will jointly underwrite amounts above that, up to $500 million in total debt financing. The Fund targets investments in a wide range of industry sectors, including business services, healthcare, media, energy, aerospace and transportation. A unitranche loan blends senior and junior debt pricing and terms into a single first lien debt facility, and provides a simple, attractive alternative to traditional senior/subordinated debt structures. Borrowers benefit from simplified documentation through a single credit agreement, greater certainty of execution, and reduced decision-making complexity throughout the life of the loan.

About Allied Capital

Allied Capital (NYSE:ALD) is a leading business development company (BDC) in the U.S. that invests long-term debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital is celebrating 50 years of investing in the U.S. entrepreneurial economy. With $5 billion in total balance sheet assets at March 31, 2008, Allied Capital is among the largest BDCs with a diverse portfolio of investments in 124 companies across a variety of industries. These companies generate aggregate revenues of over $13 billion and employ more than 98,000 people. In addition to its own balance sheet assets, Allied Capital manages private funds with committed capital totaling $5 billion, and has investments in portfolio companies that manage assets totaling approximately $6 billion. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com.

About GE Commercial Finance, Global Sponsor Finance

With over $14 billion in assets, and offices in Boston, Chicago, Dallas, London, Los Angeles, New York, and San Francisco, GE Commercial Finance, Global Sponsor Finance represents a “one-stop” source for the comprehensive range of GE’s lending and other structured financial services offered to the private equity sponsor market. For more information, please visit www.gegsf.com.

About GE

GE is a diversified global infrastructure, finance and media company that is built to meet essential world needs. From energy, water, transportation and health to access to money and information, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com. GE is Imagination at Work.

About ZS Fund L.P.

ZS Fund is a private equity firm engaged in making long-term investments in successful middle market companies. Through its current and prior private equity funds, ZS has invested in more than forty companies in transactions with an aggregate value of approximately $2.0 billion. For more information, please visit www.zsfundlp.com.

Forward-Looking Statements

The information contained in this press release includes forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in Allied Capital’s filings with the Securities and Exchange Commission. This press release should be read in conjunction with the company’s recent SEC filings.