Re: Line Letter for $352,000.00 Line of Credit

Exhibit 10.1

April 30, 2009

Gary Granoff, President

Elk Associates Funding Corp.

747 Third Avenue

New York, NY  10017

Re:

Line Letter for $352,000.00 Line of Credit

Dear Mr. Granoff::

Israel Discount Bank of New York (“IDB”) is pleased to advise you that it is prepared to renew its existing line of credit to Elk Associates Funding Corp. (the “Borrower”), a corporation organized and in good standing under the laws of the State of New York, an uncommitted discretionary demand line of credit (“Line” or “Credit Facility”) in the maximum principal amount of $352,000.00, as part of a co-lending facility with Bank Leumi (and junior indebtedness extended by the Small Business Administration (“SBA”)), subject to the following terms and conditions of this line letter agreement (“Line Letter”) used forth below:

Borrower may utilize this Line until October 31, 2009 (the “Expiration Date”);  provided, however, that Borrower acknowledges the continuing availability of this Line is at all times subject to IDB’s sole and absolute discretion, and nothing in this Line Letter, the Note (as defined below) or any other documents relating to this Line Letter, or the enumeration in this Line Letter or the Note of specific events of default, conditions and/or covenants shall be construed to qualify, define or otherwise limit IDB's right, power, or ability, at any time, under applicable law, to (a) cancel this Line without prior notice, (b) demand payment of the entire outstanding principal amount, accrued interest and other fees and expenses due under this Line and the Note or (c) deny any extension of credit under this Line.  Borrower agrees that Borrower's breach of or default under any enumerated obligations or conditions is not the only basis for demand to be made or for a request for an extension of credit to be denied, as Borrower's obligation to make payment shall at all times remain a demand obligation. Notwithstanding anything in this Line Letter to the contrary, this Line Letter does not create a commitment or obligation to lend by IDB and Borrower acknowledges that IDB has no obligation to lend.

Credit Facility:

IDB establishes for the benefit of the Borrower the uncommitted Credit Facility pursuant to which IDB may, in its sole discretion and pursuant to the Borrower’s requests, make advances under a revolving credit line (“Revolving Credit Line” as further described below in subparagraph (a)) in the aggregate amount of the lesser of: (i) $352,000.00; or (ii) IDB’s pro rata share of the Borrowing Base (“Maximum Credit Amount”).  Subject to such availability, such extensions of credit shall be available under the Line and limited to the following sublimits:

(a)

Revolving Credit Line.  Advances under the Revolving Credit Line shall be evidenced by IDB’s Demand Grid Promissory Note (the “Note”) in the principal amount of $352,000.00.  Any advance under the Line made at the discretion of IDB shall be in an amount not less than $100,000.00.  

Purpose :

The purpose of the Credit Facility shall be for working capital.

Interest and

Interest.

Principal

Payments:

(a)

Rate .  Each advance under the Revolving Credit Line shall bear interest at a rate of interest established by IDB as its prime rate of interest, as determined by IDB from (the “Prime Rate”), plus a margin of 100 basis points. Any change in the Prime Rate shall take effect on the date of the change in the Prime Rate; or

(b)

Interest Payments .  Interest on the unpaid principal balance of the Note from time to time outstanding shall be payable monthly pursuant to the terms of the Note.

(c)

Interest Rate Floor .  There shall be an interest rate floor

  of 4.50% for all borrowings under the Credit Facility.

Principal.

Prior to the Expiration Date and further provided that no Event of Default has occurred, the unpaid principal amount due under the Line may be repaid and reborrowed in accordance with and pursuant to the terms of the Note.

All amounts of interest, principal and other fees and other charges shall be payable no later than the Expiration Date, or upon the occurrence and continuation of an Event of Default.

Borrowing Base:

As noted above, the Maximum Credit Amount for the Credit Facility shall be the lesser of: (i) $352,000.00; or (ii) IDB’s pro rata share of the Borrowing Base.  The Borrowing Base shall mean that amount of Bank debt plus SBA debt not to exceed:

a)

80% of eligible receivables (less than 90 days past due) taxi loans, and diversified loans, or assets acquired, excluding all bank syndicated loans, plus

b)

70% of ineligible taxi loans where such loans are less than 70%

of medallion values, plus

c)

50% of delinquent diversified loans secured by first liens, real

estate owned equity investments or leased assets acquired,   plus

d)

30% of other assets, and loans with second mortgages on real

estate, plus

e)

60% of all bank syndicated loans.

Fees and

Charges:

Other fees and charges applicable to the Credit Facility are set forth on Schedule 1 .  Additionally, other fees may be applicable to deposit accounts and other financial products and services offered by IDB, which are set forth in separate account agreements and schedules applicable to such accounts and products, and are subject to change.

Collateral:

The Credit Facility shall be secured by (i) a perfected first priority security interest in all assets and personal property of the Borrower, whether now owned or hereafter acquired, pursuant to IDB’s General Security Agreement, duly filed UCC financing statements and such other and further documentation as IDB determines necessary in its discretion and (ii) an assignment of that certain time deposit designated to account no.     5045755    in the name of Borrower (“Time Deposit”). /s/KL

Guarantees:

The following guarantors (each, a “Guarantor”, collectively, “Guarantors”) shall guarantee the full and prompt repayment of all loans, extensions of credit and financial accommodations provided under the Credit Facility together with interest and costs thereon pursuant to IDB’s Guaranty Agreement (the “Guarantee”). In addition, the Line shall be guaranteed by all subsidiaries hereafter formed or acquired by the Borrower and each such new subsidiary shall execute a Guarantee promptly after the Bank’s request therefore.

Covenants and

Conditions:

The Credit Facility is subject to the following financial covenants and conditions:

1.

No Change of Name .  The Borrower shall not change its name without the prior written consent of IDB.

2.

Compliance; Existence .  The Borrower shall comply with laws and contractual obligations, payment of obligations and preserve its existence.

3.

Time Deposit .  From and after May 31, 2009, the value of the Time Deposit shall at all times equal at least 100% of the principal, interest, fees and other charges outstanding to IDB under the Credit Facility at the time in question (the “Minimum Value”).  If at any time, or from time to time, the Time