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012 A000001 FIRSTAR TRUST COMPANY
012 B000001 85-410
012 C010001 MILWAUKEE
012 C020001 WI
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012 C040001 2077
013 A000001 PRICE WATERHOUSE
013 B010001 MILWAUKEE
013 B020001 WI
013 B030001 53202
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079 010001 811-7526
079 020001 BANDO MCGLOCKLIN SMALL BUSINESS INVESTMENT
079 010002 811-8566
079 020002 BANDO MCGLOCKLIN SMALL BUSINESS LENDING CORP
080 A000000 FIDELITY AND DEPOSIT COMPANY OF MARYLAND
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<PAGE> PAGE 8
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SIGNATURE GEORGE R. SCHONATH
TITLE CHIEF EXEC. OFFICER
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 78,720
<INVESTMENTS-AT-VALUE> 75,237
<RECEIVABLES> 1,370
<ASSETS-OTHER> 2,492
<OTHER-ITEMS-ASSETS> 350
<TOTAL-ASSETS> 79,449
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 6,667
<OTHER-ITEMS-LIABILITIES> 38,300
<TOTAL-LIABILITIES> 44,967
<SENIOR-EQUITY> 16,908
<PAID-IN-CAPITAL-COMMON> 21,035
<SHARES-COMMON-STOCK> 3,689
<SHARES-COMMON-PRIOR> 3,689
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (2,423)
<ACCUMULATED-NET-GAINS> (2,032)
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<PER-SHARE-NAV-BEGIN> 5.07
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</TABLE>
Price Waterhouse LLP
To the Board of Directors of
Bando McGlocklin Capital Corporation
In planning and performing our audit of the consolidated financial statements
of Bando McGlocklin Capital Corporation and its subsidiaries (the "Company")
for the six months ended December 31, 1996, we considered its internal
control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purposes of expressing
our opinion on the financial statements and to comply with the requirements
of Form N-SAR, and not to provide assurance on the internal control structure.
The management of the Company is responsible for establishing and maintaining
an internal control structure. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of internal control structure policies and procedures. Two of
the objectives of an internal control structure are to provide management
with reasonable, but not absolute, assurance that assets are appropriately
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization
and recorded properly to permit preparation of financial statements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the effective-
ness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material witness is a condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements being audited
may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as defined
above as of December 31, 1996.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
PRICE WATERHOUSE LLP
February 19, 1997
EXHIBIT 77C
SUBMISSION OF MATTERS
TO A VOTE OF SECURITYHOLDERS
In answer to Sub-Item 77c of Form N-SAR for Bando McGlocklin
Capital Corporation (the "Company") for the six months ended December 31,
1996, the Company's Notice of Annual Meeting of Shareholders and Proxy
Statement for the Annual Meeting of Shareholders on December 17, 1996,
which was filed with the Securities and Exchange Commission via the EDGAR
System on November 18, 1996 under form type DEFR14A, File No. 811-3787, is
incorporated herein by reference, except for the following
sections: "Board of Directors", "Executive Officers", "Executive
Compensation", "Principal Shareholders", "Shareholder Proposals" and
"Miscellaneous".
At the Company's Annual Meeting on December 17, 1996, the
holders of Common Stock and Preferred Stock voted as follows:
<TABLE>
COMMON STOCK
<CAPTION>
Votes
Votes Cast Votes Broker
Proposal Cast For Against Withheld Abstentions Nonvotes
<S> <C> <C> <C> <C> <C>
1. Election of Directors
George R. Schonath 3,333,088 30,375
Jon McGlocklin 3,333,206 29,257
Salvator L. Bando 3,333,206 29,257
Peter A. Fischer 3,332,087 30,376
Albert O. Nicholas 3,332,417 30,046
2. Selection of Price
Waterhouse LLP as
auditors 3,275,574 10,254 76,635
3. Deregistration of the
Company as an
investment company 2,460,125 51,399 149,539 701,400
4. Deregistration of Bando
McGlocklin Small
Business Investment
Corporation ("BMSBIC")
as an investment
company 2,459,789 51,771 149,503 701,400
5. Rescission of
fundamental investment
policies of the Company
and BMSBIC 2,457,744 53,886 149,433 701,400
6. Amendments to the
Company's articles of
incorporation to
eliminate the
Investment Company Act
of 1940 restrictions on
future issuances of the
Company's preferred
stock 2,453,338 62,311 145,414 701,400
7. Amendments to the
Company's articles of
incorporation to
eliminate the
Investment Company Act
of 1940 restrictions on
the acquisition of
shares by the Company 2,455,254 54,425 151,384 701,400
8. Amendments to the
Company's articles of
incorporation to
eliminate certain
preferred stock voting
rights required under
the Investment Company
Act of 1940 2,458,086 54,241 148,736 701,400
9. Amendments to the
Company's articles of
incorporation to
eliminate the preferred
stock leverage
restrictions 2,434,551 70,447 156,065 701,400
<CAPTION>
PREFERRED STOCK
Votes
Votes Cast Votes Broker
Proposal Cast For Against Withheld Abstentions Nonvotes
<S> <C> <C> <C> <C> <C>
1. Election of Directors
George R. Schonath 631,967 12,635
Jon McGlocklin 631,967 12,635
Salvator L. Bando 631,967 12,635
Peter A. Fischer 632,467 12,135
Albert O. Nicholas 632,467 12,135
Robert A. Cooper 631,967 12,635
David A. Geraldson 632,467 12,135
2. Selection of Price
Waterhouse LLP as
auditors 640,912 1,910 1,780
3. Deregistration of the
Company as an
investment company 354,414 20,525 7,470 262,193
4. Deregistration of Bando
McGlocklin Small
Business Investment
Corporation ("BMSBIC")
as an investment
company 354,414 20,625 7,370 262,193
5. Rescission of
fundamental investment
policies of the Company
and BMSBIC 350,474 22,775 9,160 262,193
6. Amendments to the
Company's articles of
incorporation to
eliminate the
Investment Company Act
of 1940 restrictions on
future issuances of the
Company's preferred
stock 347,904 22,625 11,880 262,193
7. Amendments to the
Company's articles of
incorporation to
eliminate the
Investment Company Act
of 1940 restrictions on
the acquisition of
shares by the Company 349,129 20,525 12,755 262,193
8. Amendments to the
Company's articles of
incorporation to
eliminate certain
preferred stock voting
rights required under
the Investment Company
Act of 1940 345,669 22,865 13,875 262,193
9. Amendments to the
Company's articles of
incorporation to
eliminate the preferred
stock leverage
restrictions 346,844 21,535 14,030 262,193
</TABLE>
For Period ending 12/31/96 Attachment 77.P.
File Number 811-3787
Per Bando McGlocklin Capital Corporation's et al. exemptive order received
on November 10, 1992 (Release Nos. 19092) as amended by exemptive orders
received on August 17, 1993 (Release No. 19636) and May 25, 1994 (Release
No. 20317), Bando McGlocklin Capital Corporation is permitted to file on
behalf of itself, Bando McGlocklin Small Business Investment Corporation
(File No. 811-7526) and Bando McGlocklin Small Business Lending Corporation
(File No. 811-8655), its wholly owned subsidiaries, semi-annual reports on
Form N-SAR containing information with respect to parent and the subsidiaries
on a consolidated basis only. As a result of this order, all responses have
been answered on a consolidated basis.
