EXHIBIT 10.35

                       U.S. SMALL BUSINESS ADMINISTRATION
                             WASHINGTON, D.C. 20416


                                                          License No. 02/02-5393



Alvin Murstein
Chairman of Board of Directors
 and Chief Executive Officer
Medallion Funding Corp.
205 East 42nd Street, Suite 2020
New York, New York 10017

Dear Mr. Murstein:

We have reviewed the request recently submitted, by facsimile, by William A.
Kirk of Reid & Priest, LLP on behalf of Medallion Funding Corp. ("Licensee") for
approval to amend Licensee's Articles of Incorporation.  The amendment would
allow the Licensee to invest in small businesses other than Disadvantaged
Businesses (as defined in 13 CFR (S)107.50).  It has been determined that the
amendment, as presented, is acceptable.

Prior to the filing of this amendment, with the Secretary of State's Office in
New York, the licensee is required to agree and accept the following terms and
conditions of SBA's approval of Licensee's request.  By countersigning this
letter, Licensee hereby agrees to each such term and condition.  All capitalized
terms used but not defined herein shall have the meanings assigned to such terms
in 13 CFR Part 107.

     1.   Immediately prior to making any investment in a small business other
          than a Disadvantaged Business (a "Non-Disadvantaged Business
          Financing"), Licensee must have, in its portfolio, investments in
          Disadvantaged Businesses with an aggregate cost basis at least equal
          to the value of SBA's remaining Liquidating Interest (as defined in
          Licensee's 3% Preferred Stock Repurchase Agreement with SBA) measured
          at the time of the Non-Disadvantaged Business Financing.

     2.   For each Non-Disadvantaged Business Financing, Licensee must prepare
          and maintain in the portfolio concern financing files, a supplemental
          worksheet demonstrating Licensee's compliance with Item #1 above.

This letter agreement, if countersigned by Licensee, will constitute a written
agreement with SBA and any failure to comply with any of the terms hereof will
constitute nonperformance of this agreement under 13 CFR (S) 107.507(a).  Once
executed by Licensee and SBA, this letter agreement shall be in full force and
effect until such time as both parties agree in

 
writing to its termination or modification.

Please indicate your approval and acceptance of this letter agreement by having
an authorized officer execute both copies of this letter, affix the corporate
seal, and return both copies to SBA.  A signed copy will be returned to you.
Upon receipt of the signed copy, Licensee may file the amendment with the
appropriate State office and may begin making Non-Disadvantaged Business
Financings in accordance with this letter agreement.  Licensee should submit a
certified copy of the filed amendment to SBA.

Sincerely,

/s/ Don A. Christensen

Don A. Christensen
Associate Administrator
for Investment

Enclosure

Approved and accepted this 21 day of February, 1997.


                              Medallion Funding Corp.


                              By: /s/ Alvin Murstein
                                 ----------------------
                                 Name:  Alvin Murstein
                                 Title:  Chairman

Corporate Seal


Attested /s/ Marie Russo
        -----------------
             Secretary


cc:  Daniel F. Baker
     Treasurer and Chief Financial Officer
     Medallion Funding Corp.