SCHEDULE 14A INFORMATION
                Proxy Statement Pursuant to Section 14(a) of 
                     the Securities Exchange Act of 1934
                               (Amendment No. __)

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        240.14a-12

                      BANDO McGLOCKLIN CAPITAL CORPORATION
                (Name of Registrant as Specified in its Charter)

                      BANDO McGLOCKLIN CAPITAL CORPORATION
                   (Name of person(s) Filing Proxy Statement)

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                [Bando McGlocklin Capital Corporation Letterhead]


                                November 27, 1996


   To the Shareholders of
   Bando McGlocklin Capital Corporation:

             You should have received recently a Proxy Statement and Proxy
   for the 1996 Annual Meeting of the Company, which will be held on
   December 17, 1996.  This meeting will address several issues of great
   importance to the future of the Company.  I strongly urge you to sign,
   date and return the enclosed Proxy if you have not already returned the
   Proxy that was sent with your Proxy Statement.

             At the Annual Meeting, the shareholders of the Company will
   consider proposals to (i) elect directors, (ii) ratify the selection of
   auditors, (iii) deregister the Company and its wholly owned subsidiary
   Bando McGlocklin Small Business Investment Corporation ("BMSBIC") as
   investment companies, (iv) rescind the fundamental investment policies of
   the Company and BMSBIC, and (v) amend the articles of incorporation of the
   Company to eliminate all provisions relating to its status as an
   investment company.

             Your Board of Directors has carefully considered these proposals
   and believes that these proposals are in the best interests of the Company
   and its shareholders.  Therefore, the Board recommends that you vote "FOR"
   each of the items on the enclosed Proxy.

                                      Very truly yours,

                                      /s/ George Schonath

                                      George R. Schonath
                                      Chairman of the Board and
                                      Chief Executive Officer