OFFERING SUMMARY

Allied Capital Midwest, LLC

The Company:	Allied Capital Midwest LLC (the "Company") is organized as a Delaware limited liability company, and will operate as an investment fund. The company will invest primarily in and lend to small privately owned businesses in the Midwest (defined below). The Company's investments will be managed by Allied capital Advisers, Inc. (the "Adviser"), a registered investment adviser.

Investment:	The Company has recently been organized and currently has no operations.

Present	$25 million Wisconsin Retirement Fund

Commitments:	$25 million Michigan Retirement Fund

Possible investment from Northwestern Mutual

Expected	15-20%. However, such return is not stated in

Return:	private offering memorandum

Strategy/	Once operations begin, the Company's investment

Objective:	objective will be to seek to achieve long-term growth in the value of its net assets, capital gains and current income primarily by providing equity and debt capital for small, privately owned businesses which are headquartered or have a major presence in the following Midwestern states: Michigan, Wisconsin, Illinois, Indiana and Ohio (the "Midwest"). The Company will pursue its investment objective principally by utilizing equity and debt capital for the financing of small businesses across a broad range of industries in the Midwest which may have some difficulty in obtaining conventional financing from banks or other financial institutions.

The Company believes that small businesses are frequently overlooked by most financial institutions. Most large businesses raise significant amounts of capital from the sale of shares, issuance of long-term debt or other capital market methods. However, these methods are generally not available to small businesses, and, accordingly, the Company believes that many small businesses are at a competitive disadvantage with larger businesses in raising capital.

The Company perceives significant advantages in investing in small businesses, a sector of the economy which is generally credited with the creation of a large percentage of the new jobs established in the United States during the last twenty years. The Company intends to invest in small businesses that it believes will deliver long-term returns on investments which are commensurate with the risk of investing in such businesses. The Company will offer accredited investors the opportunity to invest in small, privately owned businesses.

The Offering:	The Company is offering up to 6,675,000 of its common membership shares ("Shares") at a price of $15 per Share, for a maximum aggregate offering price of approximately $100,125,000.

Investment/	Subject to the supervision and control of its

Adviser:	Board, the Company's investments will be managed by the Adviser, a publicly owned (Nasdaq symbol " ALLA ") investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. The Adviser also is a party to investment advisory agreements with Allied Capital Corporation ("allied I"), Allied Capital Corporation II ("Allied II") and Allied Capital Lending Corporation ("Allied Lending"), each a business development company (" BDC "), and two privately funded limited partnerships that co-invest with Allied I and Allied II. In addition, the Adviser is the investment manager of Allied Capital Commercial Corporation ("Allied Commercial"), a publicly held real estate investment trust, and Allied Capital Mortgage LLC ("Allied Mortgage"), a Delaware limited liability company, and co- manager of Business Mortgage Investors, Inc. (" BMI "), a privately held real estate investment trust. At September 30, 1996, total assets under the Adviser's management were approximately $755 million. All of the funds advised or managed by the Adviser are oriented toward small businesses.

Advisory Fees:	The Company intends to enter into an investment advisory agreement with the Adviser (the "Advisory Agreement") pursuant to which the Company will pay to the Adviser an investment advisory fee equal to (a) 0.625% per quarter (2.5% per year) of the quarter-end values of its total assets other than temporary investments and cash and (b) 0.125% per quarter (0.5% per annum) of the quarter-end values of its temporary investments and cash. Such fees are substantially higher than those paid by most investment companies because of the efforts and resources devoted by the Adviser to identifying, structuring, closing and monitoring the types of private investments in which the Company will specialize.

Compensation:	The Company will pay each Manager who would not be an "interested person" of the Company under the 1940 Act (a "disinterested Manager") a fee for each meeting ($1,000) of the Board or Committee thereof that such Manager attends. None of the Company's officers are compensated by the Company; instead, all of their compensation will be paid by the Adviser. It is contemplated, however, that certain persons may be awarded incentive compensation, in the form of options to purchase Shares, under the Company's Incentive Compensation Plan.

Use of	The net proceeds will be invested initially in

Proceeds:	temporary investments (see "The Company--Interim Investments"), but as soon as practicable thereafter will be invested in new small business loans and investments.

Expenses:	The Company will pay the expenses in connection with this offering ($110,000). The Company will continue to pay all of its operating expenses, except those specifically required to be borne by the Adviser.

Risk Factors:	The Shares offered hereby should be considered a speculative investment involving a high degree of risk, suitable only for investors willing to assume, and capable of accepting, the risks attendant to an illiquid , speculative investment. In particular, prospective investors should consider the fact that the Company's investments consist exclusively of loans to, and investments in, small businesses, which involve a high rate of risk.

Exit Strategy:	If Company has not completed a public offering of its Shares by January 1, 2007, then the Company will automatically dissolve unless 2/3 of members vote to continue.

Allocations &	Members generally will share in the profits and

Distributions:	losses of the Company based on their ownership of Shares. In addition, except for distributions upon liquidation, members generally will receive distributions of cash based on their ownership of Shares.

Distributions:	The Company intends to distribute substantially all of its net investment income and net realized short-term capital gains to the members quarterly.

Tax Status:	Possible UBTI , but does not appear to be a major problem.

Observations/	1.	The Allied Capital "Family" provides the

Comments:	discipline and system to evaluate and monitor the Company's investments. Allied Capital is a Washington based firm that has specialized for almost forty years in providing financing throughout the U.S. to normally forgotten low- tech small businesses. The corporate family includes seven entities, including four public funds. The first fund was established in 1958, has a 17.5% compounded return over its 38-year life and a 21% compounded return for the last 15 years. The default rate of all the funds for the last 15 years is approximately 1% of assets.

2.	Per Monica Jacknig -- State of Wisconsin Investment Board (WIB)

a.	WIB views $25 million commitment as a true investment with expected 15-20% returns

b.	Provides ability for WIB to invest in a market segment that is under-served and one they do not have the resources to make direct investments

c.	Very impressed with Allied Capital and its CEO, David Gladstone

d.	Relying on Allied Advisers to implement effective evaluation and monitoring procedures

e.	Motivated that investments are to be concentrated in five state Midwestern area