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[MATTHEWS, CARTER AND BOYCE LETTERHEAD]
Board of Directors
Allied Capital Corporation
1666 K Street, N.W., Suite 901
Washington, D.C. 20006
In compliance with Rule 17f-2 promulgated under the Investment Company Act
of 1940, we have made an examination of the investment accounts shown by the
books and records of Allied Capital SBLC Corporation as of May 31, 1997
(Investment Company Act File Number 814-138). Our examination was made in
accordance with generally accepted auditing standards.
Securities owned as of the close of business on May 31, 1997, shown by the
books and records examined by us which were accounted for by count, inspection,
or confirmation, except for those which related to recently disbursed loans or
which were out for transfer on that date, which were accounted for by other
means.
/s/ MATTHEWS, CARTER AND BOYCE
January 15, 1998
