<PAGE>   1

As filed with the Securities and Exchange Commission on December 13, 1996

                                                      Registration No. 333-     
                                                                           -----

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM S-8
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                         Allied Capital Advisers, Inc.
             (Exact name of registrant as specified in its charter)

          Maryland                                           52-0812307 
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)         

       1666 K Street, N.W.
         Washington, D.C.                                20006              
---------------------------------            ----------------------------
(Address of principal executive offices)          (Zip Code)

           Allied Capital Advisers, Inc. Incentive Stock Option Plan
                            (Full title of the plan)

                                David Gladstone
                              1666 K Street, N.W.
                             Washington, D.C. 20006
                    (Name and address of agent for service)
                                 (202) 331-1112
         (Telephone number, including area code, of agent for service)

                        Calculation of Registration Fee

<TABLE>
<CAPTION>
=====================================================================================================
                                           Proposed          Proposed Maximum
       Title of         Amount to           Maximum              Aggregate            Amount of
    Securitiesto be         be        Offering Price Per       Offering Price     Registration Fee
      Registered        Registered           Unit
-----------------------------------------------------------------------------------------------------
 <S>                    <C>                 <C>                  <C>                   <C>
 common stock           1,999,580           $5.5625             $11,122,663.75*        $3,370.50
=====================================================================================================
</TABLE>

*Included solely for the purpose of calculating the registration fee.  Such
estimate has been calculated in accordance with Rule 457(h) and Rule 457(c)
under the Securities Act of 1933 and are based upon the average of the high and
low price per share of Allied Capital Advisers, Inc. Common Stock on the Nasdaq
National Market System on December 10, 1996.

In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan(s) described herein.
<PAGE>   2
PROSPECTUS
                                1,844,852 SHARES

                         ALLIED CAPITAL ADVISERS, INC.

                                  COMMON STOCK
                          (PAR VALUE $.001 PER SHARE)

      Allied Capital Advisers, Inc., a Maryland corporation ("Advisers" or the
"Company"), is an investment adviser registered under the Investment Advisers
Act of 1940, as amended (the "Advisers Act").  Its principal business is acting
as investment adviser to public and private investment companies and real
estate investment trusts that specialize in investing in, and lending to, small
businesses.  The Company's principal office is located at 1666 K Street, N.W.,
Suite 901, Washington, D.C. 20006.  Its telephone number is (202) 331-1112.

      The 1,844,852  shares of Advisers common stock (the "Shares") covered by
this Prospectus have been or will be acquired upon exercise of options granted
under the Allied Capital Advisers, Inc. Incentive Stock Option Plan (the
"Plan") and may be offered for sale on behalf of the stockholders named herein
(the "Selling Stockholders") from time to time on any securities exchange on
which the Company's shares are listed, in the over-the-counter market or
otherwise at market prices and on terms then prevailing, in negotiated
transactions at prices then obtainable, or otherwise.  Shares may be sold in
regular brokerage transactions or may be sold directly to brokers, dealers and
others buying for their own account.  Advisers common stock is listed on the
Nasdaq National Market under the symbol "ALLA."

      FOR A DISCUSSION OF THE RISKS RELATING TO AN INVESTMENT IN THE SHARES,
SEE "INVESTMENT CONSIDERATIONS."

      Although the Company has received or will receive proceeds from the
exercise of options granted under the Plan, the Company will not receive any of
the proceeds from the sale of the Shares by the Selling Stockholders. The
expenses of preparing this Prospectus are being paid by the Company, but
brokerage fees and other expenses of sales hereunder will be borne by the
appropriate Selling Stockholders.

      Certain of the persons who sell or distribute securities covered by this
Prospectus may be deemed to be underwriters within the meaning of the
Securities Act of 1933, as amended (the "1933 Act").  It is expected that the
securities offered hereby will be available for sale from time to time
commencing on or about December 13, 1996.

      No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offer contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company.  This Prospectus does not constitute an offer to
sell or the solicitation of an offer to buy any of the securities offered
hereby in any state to any person to whom or from whom it is unlawful to make
such offer or solicitation.  Neither the delivery of this Prospectus nor any
sales made hereunder shall under any circumstances create any implication that
there has been no change in the information contained herein since the date
hereof.

                                ---------------

         THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
           SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
            PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
           ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

               The date of this prospectus is December 13, 1996





                                      - 2 -
<PAGE>   3
                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----
<S>                                                                                                     <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
Investment Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
The Offering  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Determination of Offering Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Incorporation of Certain Documents By Reference . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Indemnification of Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
</TABLE>

                             AVAILABLE INFORMATION

         The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission").  All reports, proxy
statements and other information filed by the Company can be inspected and
copied at the Commission's public reference facilities at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549 and at the following Regional Offices:
Midwest Regional Office: 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and Northeast Regional Office: 7 World Trade Center, Suite 1300,
New York, New York 10048.  Copies of these materials may also be obtained free
of charge by accessing the EDGAR archives at the Commission's Internet home
page at www.sec.gov.  They may also be obtained from the Commission at the
prescribed rates by mailing a request to: Public Reference Branch, Securities
and Exchange Commission, Washington, D.C. 20549.

         The Company's common stock is listed on the Nasdaq National Market,
and reports, proxy statements and other information concerning the Company can
be inspected at the offices of the National Association of Securities Dealers,
Inc. located at 1735 K Street, N.W., Washington, D.C. 20006.

         Certain documents filed with the Commission are incorporated by
reference in this Prospectus.  The Company hereby undertakes to provide,
without charge, to each person, including any beneficial owner of Advisers
common stock, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
incorporated by reference in this Prospectus (excluding exhibits to any
documents incorporated by reference, unless such exhibits have specifically
been incorporated by reference), but not delivered with it.  Such requests
should be made to Suzanne Sparrow, Allied Capital Advisers, Inc., 1666 K Street
N.W., 9th Floor, Washington, D.C. 20006 (telephone: (202) 331-1112).


                           INVESTMENT CONSIDERATIONS

         LIMITED OPERATING HISTORY AS AN INDEPENDENT COMPANY.  Until December
31, 1990, the Company operated as a wholly owned subsidiary and, in effect, a
division of Allied Capital Corporation ("Allied I").  On December 31, 1990,
pursuant to the terms of certain exemptive relief granted by the Commission to
the Company and Allied I, all of the shares of the Company were distributed to
the shareholders of Allied I on a one-for-one basis. At the time of that
distribution, the Company did not have any substantial tangible assets or net
worth and had approximately $259 million under management.  Since that
distribution, the Company has increased its total assets under management by
192% to approximately $755 million (as of September 30, 1996) and has been
profitable during every year of its operations, except for the year ended
December 31, 1992, in which the Company reported a net loss of approximately
$0.07 per share.  Such loss was largely the result of the foregone investment
management fees waived that year for Allied Capital Commercial Corporation
("Allied Commercial"), a fund organized by




                                    - 3 -
<PAGE>   4
Advisers in 1992 for which Advisers agreed to waive the investment management
fee for its first six months of operations.  Although the Company generally has
been profitable during the early stages of its operations, there can be no
assurance that the Company will continue to be profitable or that its assets
under management will increase in the future.

         DEPENDENCE ON MANAGEMENT.  The Company believes that the past
performance of its advisee companies is attributable largely to the experience
and ability of David Gladstone, its Chairman and Chief Executive Officer, who
has been associated with Allied I since 1974.  With respect to the more recent
performance of its advisee companies, the Company has depended increasingly on
the efforts of its senior executive officers, including Katherine E. Marien,
John M. Scheurer and G. Cabell Williams, III.  In addition, the Company relies
increasingly on the significant contributions of its President, Joan M.
Sweeney.  While the Company's officers spend all their available work hours in
activities for the Company and its advisee companies, the Company does not have
employment contracts with any of its officers.  The loss of one or more of
these officers could have a material adverse effect on the Company's future
performance.  The Company carries insurance to the extent of $1 million  on the
life of Mr. Gladstone.

         MARKET FOR SHARES.  Prior to August 1995, the Company's shares were
listed on Nasdaq's Small-Cap Market.  Since that date, however, the Company's
shares have been quoted on Nasdaq's National Market.  As of November 1, 1996,
the Company had approximately ten market makers.  There can be no assurance
that market makers will continue to make a market in the Company's stock or
that the Company's shares will continue to be listed on the Nasdaq National
Market.

         DEPENDENCE ON ADVISORY FEES.  The prices at which the Company's
outstanding shares have been quoted in the over-the-counter market or at which
the Shares offered hereby are being offered do not necessarily bear a direct
relationship to the Company's net worth or historical earnings.  Such prices
may be based on anticipated revenues that the Company is expected to earn from
fees payable under its advisory and management agreements. Such fees, however,
are based on the value and composition from time to time of the advisee
companies' assets. The value of such assets are subject to fluctuations based
on investment performance and the accounting treatment relating to certain
investments; the composition of such assets will change depending upon the
Company's ability to invest assets in accordance with the advisee company's
investment objective.  Moreover, because most of the advisee companies are
closed-end investment companies or real estate investment trusts, increases in
asset size of such companies (other than performance-related increases)
generally occur only when such companies make offerings of debt or equity
securities.  For a variety of reasons, there can be no guarantee that such
companies will make such offerings or, if made, that such offerings will raise
a sufficient amount of capital to allow the Company to benefit from economies
of scale.  In addition, the agreements themselves are subject to periodic
reapproval or renegotiation and to termination at any time on short notice by
the advisee companies' board of directors or shareholders, in the case of
Allied Capital Corporation, Allied Capital Corporation II, and Allied Capital
Lending Corporation, and under certain circumstances by the limited partners,
in the case of Allied Venture and Allied Technology, or by the shareholders in
the case of Allied Capital Commercial Corporation  and Business Mortgage
Investors, Inc.  There can be no assurance that such agreements will remain in
effect, although the Company has no reason to believe that any such agreement
is likely to be terminated in the foreseeable future.

         NATURE OF INVESTMENTS.  The portfolios of the Company's advisee
companies consist primarily of securities issued by small and developing,
privately held companies.  There is generally little or no publicly available
information about such companies.  Typically, such companies depend for their
success on the management talents and efforts of one person or a small group of
persons, so that the death, disability or resignation of such person or persons
could have a materially adverse impact on them.  Moreover, small companies
frequently have narrower product lines and smaller market shares than larger
companies and therefore may be more vulnerable to competitors' actions and
market conditions, as well as general economic downturns.  Because these
companies will generally have highly leveraged capital structures, reduced cash
flow resulting from an adverse competitive development, shift in customer
preferences or an economic downturn may adversely affect the return on, or the





                                    - 4 -
<PAGE>   5
recovery of, the Company's investment in them.  Investment in such companies,
therefore, involves a high degree of business and financial risk, which could
result in substantial losses and should therefore be considered speculative.
Accordingly, any loss in assets by the Company's investment advisee companies
could adversely affect the Company's ability to generate revenue, or continue
to increase assets under management.

         COMPETITION.  The asset management industry is highly competitive and,
having relatively few barriers to entry, continues to attract new competitors.
As a result, the Company must compete with thousands of other institutions,
including banks, insurance companies and registered investment advisers, when
attempting to attract new investment dollars to manage.  Many of these
competitors have more assets under management and greater resources (e.g., more
advisory personnel) than the Company, which may make it easier for such
competitors to take advantage of investment opportunities as they arise.
Moreover, many of the Company's competitors have greater access to public
investors (and, correspondingly, to assets to manage) because such competitors
advise open-end investment companies that are engaged in continuous offerings
of securities; in contrast, the Company to date has attracted new investment
dollars only through periodic offerings of securities by the entities advised
by the Company or through borrowings under various lines of credit available to
such entities.  While this factor insulates the Company from decreases in asset
size and certain liquidity needs related to redemptions of investment company
shares, the Company may not be able to benefit from economies of scale
resulting from increases in asset size to the same extent that certain of its
competitors may be.  In addition, while the Company believes that its focus on
investments in small businesses sets it apart from most other investment
advisers, there can be no assurance that its investment strategies will be
successful or that public investors will continue to invest in that market
sector.

         LIQUIDITY OF INVESTMENTS.  All of the companies managed or advised by
Advisers are engaged in various aspects of making loans to, or investments in,
small businesses.  These loans and investments are generally made in a large
number of relatively small, individually structured transactions.  As a result,
such loans and investments are relatively illiquid.  Thus, there can be no
guarantee that the Company will be able to lock in profits, or avoid losses, on
the investments made by the companies it advises, which could affect both the
performance of the companies advised or managed by Advisers and the fees it
receives.

         PERSONNEL-INTENSIVE BUSINESS.  The Company's activities are highly
personnel-intensive and opportunities for economies of scale are limited.  As
discussed above, loans and investments are generally made in a large number of
relatively small, individually structured transactions.  Once a loan or
investment has been made, it must be carefully monitored on a continuing basis
until final realization or disposition.  In particular, during difficult
periods in the economy, additional work may be required to assist portfolio
companies in the management of their businesses, to assist in the restructuring
of loans made to such companies and to take other steps to preserve value for
the investing entity's shareholders, which may require the addition of more
personnel without any immediately realizable financial benefit to the Company.
Similarly, increases in funds under management, which may require immediate
additions to personnel, generally do not result in commensurate immediate
increases in fee revenue because of the structure of the Company's investment
advisory and management agreements, under which fees on uninvested assets are
relatively modest and rise to a profitable level only after funds become
invested in accordance with the several portfolios' investment objectives.

         REGULATION.  The Company is registered with the Commission as an
investment adviser under the Advisers Act and is subject to the reporting
requirements of the 1934 Act.  In addition, certain of the companies for which
the Company acts as investment adviser are registered with the Commission under
the Investment Company Act of 1940, as amended (the "1940 Act") and have
elected to be regulated as business development companies; another is operated
as a real estate investment trust ("REIT").  Each of the foregoing companies
are also subject to the reporting requirements of the 1934 Act.  The shares of
the Company and of certain of the entities advised or managed by the Company
are qualified for sale in various states.  As a result, virtually all aspects
of the Company's investment advisory activities, and the operation of the
investment companies advised by the Company, are subject to various federal and
state laws and regulations.  These laws and regulations are primarily intended
to benefit investment advisory and investment company shareholders and
generally grant broad administrative powers to





                                    - 5 -
<PAGE>   6
supervisory agencies, including the ability to limit or restrict the carrying
on of business for failure to comply with such laws and regulations.  While the
Company closely monitors compliance with applicable laws and regulations and
believes that it and the entities it manages or advises are in compliance with
such laws and regulations, in the event the Company is found to have violated
any such laws or regulations, the possible sanctions which may be imposed
include the suspension of individual employees, limitations on the activities
in which the investment adviser may engage, suspension or revocation of the
investment adviser's registration as an adviser, censure and fines.

         SBA REGULATION.  The business of one of the Company's investment
advisee companies, Allied Lending, is largely dependent upon two
government-sponsored, SBA-administered Loan Programs, the Section 7(a) Loan
Program and the Section 504 Loan Program. The Section 7(a) and 504 Loan
Programs are regulated by the SBA pursuant to laws passed by Congress. There is
no assurance that the government appropriations for these programs or for the
operations of the SBA will be continued.   In addition, two of the Company's
investment advisee companies, Allied I and Allied II, have subsidiaries that
are SBA-licensed small business investment companies (SBICs) and specialized
small business investment companies (SSBICs), and as such rely on SBA funding
for a portion of their leverage capital. There is no assurance that the
government appropriations for these programs will be continued, or that such
funding will be available in the future.  These programs are subject to changes
in law or regulation at any time, which changes could have an adverse impact on
the investment advisee companies' operations with regard to these programs, and
any such adverse impacts could materially affect the Company's ability to
generate additional investment advisory revenue from such investment advisee
companies.

         GRADUATED FEES.  Under its investment advisory or management
agreements with its existing advisee companies, the Company is, and under its
anticipated agreements with future entities expects to be, entitled to receive
investment advisory or management fees generally at the rate of 2.5% per annum
on the value of the respective entity's "invested assets"; with respect to one
advisee company, Allied Commercial, Advisers has agreed to receive fees ranging
from 1% to 3.5% per annum on certain of its invested assets, subject to a
quarterly cap, at the rate of  2.5% per annum.  With respect to such entities'
cash and cash equivalents ("interim investments"), fees are receivable at
substantially lower levels, generally at the rate of 0.5% per annum.  "Invested
assets" means investments made in accordance with the respective entity's
investment objectives, such as investments made in, and loans made to, small
business concerns, in the case of Allied I, Allied II, and Allied Lending, and
acquired mortgage loans to small businesses in the case of Allied Commercial
and BMI.  When an entity is first organized, its assets are usually comprised
entirely of interim investments and cash and it may take several years before
such cash and the proceeds of such interim investments can be invested
predominantly in invested assets.  Achieving investment in invested assets
requires substantial effort and expense on the part of the Company, for which
the Company is not adequately compensated until such investment is actually
achieved.  The foregoing fee structures were in place as of November 1, 1996.
There can be no assurance that, in the case of one or the other of the entities
for which the Company currently acts or in the future may act as investment
adviser or manager, this type of fee structure will be used or retained,
substantially full investment in invested assets will ever be achieved or, if
it is achieved, that the value of such assets will not decline, or that the
2.5% per annum fee thereon (or any other applicable fee) will not be
renegotiated downward.





                                    - 6 -
<PAGE>   7

         CONFLICTS OF INTEREST.  Under the 1940 Act, the Company has a
fiduciary duty with respect to the receipt of compensation for services that
the Company may charge to the investment companies for which it acts as
investment adviser and may be deemed to have a similar duty to the other
companies that it manages.  Accordingly, in advising the board of directors of
the entities advised or managed by the Company (a majority of the members of
which is independent of the Company) as to the desirability of making or
disposing of loans or investments, the officers of the Company who are also
directors of the managed entities are required to put the interests of such
entities ahead of the Company's interest in collecting fees.


                                  THE OFFERING

         This Prospectus is intended for use in connection with resales of the
Shares by the Selling Stockholders, some of whom may be considered "affiliates"
of the Company (as that term is defined in rules of the Commission). The
1,844,852 Shares covered by this Prospectus include: (i) 192,425 shares of
Advisers common stock previously issued to certain officers and directors of
the Company upon exercise of stock options granted under the Allied Capital
Advisers, Inc. Incentive Stock Option Plan (the "Plan"); and (ii) 1,652,427
shares of common stock that may be issued to certain officers and directors of
the Company upon exercise of stock options granted under the Plan. The Shares
already issued under the Plan were issued in reliance upon exemptions from
registration under the 1933 Act for private transactions.  Certain of those
Shares were subsequently resold to certain of the Selling Stockholders. The
Shares that may be issued in the future upon the exercise of options granted
under the Plan are being simultaneously registered with the Commission on Form
S-8.  As described below, use of this Prospectus is not the exclusive way
Shares may be resold by Selling Stockholders.

         The Shares covered by this Prospectus may be sold from time to time by
the Selling Stockholders on any securities exchange on which the Shares are
listed, in the over-the-counter market or otherwise, at market prices and on
terms then prevailing or in negotiated transactions at prices then obtainable,
or otherwise.  Shares may be sold in regular brokerage transactions or may be
sold directly to brokers, dealers and others buying for their own accounts. In
addition, any Shares covered by this Prospectus which qualify for sale pursuant
to Rule 144 under the 1933 Act ("Rule 144") may be sold under Rule 144 rather
than pursuant to this Prospectus.  The Selling Stockholders also may pledge the
shares registered hereunder to a broker, dealer or other entity, and upon a
default the broker, dealer or other entity may effect sales of the pledged
shares pursuant to Rule 144.

         Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholders in amounts to
be negotiated in connection with the sale.  Such brokers, dealers and any other
participating in the resales of the Shares may be deemed to be "underwriters"
within the meaning of the 1933 Act in connection with such sales, and any such
commission, discount or concession may be deemed to be underwriting discounts
or commissions under the 1933 Act.

         All costs, expenses and fees in connection with the registration of
the Shares will be borne by the Company.  Commissions and discounts, if any,
attributable to the sales of the Shares by the Selling Stockholders will be
borne by the Selling Stockholders.  The Selling Stockholders may agree to
indemnify any broker, dealer or agent that participates in transactions
involving sales of the Shares against certain liabilities, including
liabilities arising under the 1933 Act.





                                      - 7 -
<PAGE>   8
                             SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the Selling
Stockholders, the number of shares of the Company's common stock beneficially
owned by each on September 30, 1996 and the number of shares of Company's
common stock which may be acquired upon the exercise of options granted under
the Plan.
<TABLE>
<CAPTION>
                                                                       Maximum                                   
                                                                      number of                                  
                                                                      shares of       Shares and % of            
                                 Positions and         Shares of     common stock      common stock              
                                    material         common stock    which may be   beneficially owned           
                               relationships with    beneficially    offered for    if all shares that           
                               the Company during     owned as of   sale pursuant  may be sold pursuant          
                                      last           September 30,     to this      to this Prospectus           
    Name and Address              three years*           1996         Prospectus         are sold                
----------------------------------------------------------------------------------------------------------       
                                                                                       Shares    Percent         
                                                                                       ------    -------         
 <S>                         <C>                          <C>             <C>       <C>          <C>             
 Allied Employee Stock       Greater than 10% Holder                                                                        
 Ownership Trust                                          1,481,265        46,364   1,481,265      16.5%         

 Harry T.  Brill, Jr.        Former employee                247,604        36,364     247,604      2.75%         
                                                                                                                 
 Brooks H.  Browne           Director                        76,728        13,333      76,728      0.85%         

 Jon A. DeLuca               Executive Vice                  20,941        55,000      61,941      0.68%         
                             President, Chief                                                                    
                             Financial Office and                                                                
                             Treasurer                                                                           
                                                                                                                 
 William F. Dunbar           Executive Vice                 243,682       146,030     243,682      2.67%         
                             President                                                                           
                                                                                                                 
 David Gladstone             Chairman and Chief             924,995       774,943   1,273,993     13.05%         
                             Executive Officer                                                                   

 Robert E. Long              Director                        34,329        13,333      34,329      0.38%         
                                                                                                                 
 Katherine C. Marien         Executive Vice                  39,099        26,667      51,099      0.57%         
                             President                                                                           

 Kathleen T. Ryan            Former employee                 55,043        10,000      55,043      0.61%         
                                                                                                                 
 John M. Scheurer            Executive Vice                  93,428        56,364      99,428      1.10%         
                             President                                                                           
                                                                                                                 
 Dianna L. Seaborn           Former employee                 23,677        10,000      23,677      0.26%         

 George Stelljes II          Executive Vice                 103,683        43,364     103,683      1.15%         
                             President                                                                           
                                                                                                                 
 Jack A. Sullivan **         Greater than 5% Holder         484,904        89,697     484,904      5.39%         

 Joan M. Sweeney             President or                    93,098       210,000     221,618      2.41%         
                             Executive Vice                                                                      
                             President                                                                           
                                                                                                                 
 William L. Walton           Director                        21,145        13,333      21,145      0.23%         
                                                                                                                 
 G. Cabell Williams III      Executive Vice                 325,279       157,030     325,279      3.56%         
                             President                                                                           

 George C. Williams          Director or Vice               312,550       143,030     312,550      3.42%         
                             Chairman                                                                            
</TABLE>


* Certain Selling Stockholders also serve as officers and/or directors of
certain other companies advised by Advisers.
** An amendment to this registration statement may be filed at a later date to
identify the successor individual, estate or trust to the shares herein
registered in the name of Jack A. Sullivan





                                    - 8 -
<PAGE>   9
         The Plan was approved by the Company's shareholders on October 24,
1991 and adopted by its Board of Directors (the "Board") on October 30, 1991;
it was subsequently amended by the Board on February 17, 1994, and such
amendment was approved by the Company's shareholders on June 8, 1994.  Another
amendment to the Plan was approved by the Board on February 13, 1996 and by
the Company's shareholders on May 23, 1996.  The original effective date of the
Plan was October 30, 1991.


                                USE OF PROCEEDS

         Although the Company has received or will receive proceeds from the
exercise of options granted under the Plan, none of the proceeds from the sale
by the Selling Stockholders of the Shares offered hereby will be received by
the Company.

                              LEGAL PROCEEDINGS

         The Company is a party to litigation in the normal course of its
business.  At this time, management of the Company is unable to estimate any
loss that may be associated with such litigation; however, management does not
believe that the resolution of this litigation will materially affect the
financial position or liquidity of the Company.

                        DETERMINATION OF OFFERING PRICE

         The Shares covered by this Prospectus may be sold from time to time by
the Selling Stockholders on any securities exchange on which the Shares are
listed, in the over-the-counter market or otherwise, at market prices and on
terms then prevailing or in negotiated transactions at prices then obtainable,
or otherwise.  Currently, shares of the Company's common stock are quoted on
the Nasdaq National Market.


                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The following documents are incorporated by reference herein:

         (a)  The Company's Annual Report on Form 10-K filed pursuant to
              Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
              amended (the "1934 Act") for the fiscal year ended December 31,
              1995;

         (b)  All other reports of the Company filed pursuant to Section 13(a)
              or 15(d) of the 1934 Act since December 31, 1995; and
 
         (c)  The description of the Company's common stock contained in the
              registration statement on Form 10 filed by Advisers on September
              20, 1990, including the amendments filed on November 13, 1990 and
              December 6, 1990 for the purpose of updating that description.

         All reports and documents subsequently filed with the Commission by
the Company subsequent to the date of this Prospectus pursuant to Section
13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the termination of this
offering shall be deemed to be incorporated by reference into this Prospectus
and to be part hereof from the date of filing of those documents.  The Company
will deliver without charge, upon written or oral request, a copy of any and
all information that is incorporated herein by reference.  Such request should
be made to Suzanne Sparrow, Vice President, Director of Investor Relations, at
(202) 331-1112.

                   INDEMNIFICATION OF OFFICERS AND DIRECTORS

         The corporation law of the State of Maryland, under which Advisers is
incorporated, permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, subject to specified
restrictions.  The law does not, however, allow the liability of directors and
officers to the corporation or its stockholders to be limited to the extent
that (1) it is proved that the person actually received an improper benefit or
profit from the transactions or matter at issue; (2) a judgment or other final
adjudication is entered in a proceeding based on a finding that the person's
action, or failure





                                    - 9 -
<PAGE>   10
to act, was the result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding.  The Amended and Restated
Articles of Incorporation of Advisers contain a provision limiting the
liability of its directors and officers to Advisers and its shareholders to the
fullest extent permitted from time to time by the laws of Maryland.

         The Maryland corporation law also permits a corporation to indemnify
its directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection
with any proceeding to which they have been or may be made a party by reason of
their service in those or other capacities unless it is established that the
act or omissions of the director or officer was material to the matter giving
rise to the proceeding and was committed in bad faith or was the result of
active and deliberate dishonesty, or the director or officer actually received
an improper personal benefit, or, in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission
was unlawful.  Advisers' Amended and Restated Articles of Incorporation require
Advisers to indemnify its directors and officers to the fullest extent
permitted from time to time by the laws of Maryland.

         Such indemnification may apply to claims arising under the 1933 Act.
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to directors, officers, or persons controlling Advisers pursuant to
the foregoing provisions, Advisers has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in that Act and therefore unenforceable.


                                    PART II

Form S-8.

Item 3.  Incorporation of Documents by Reference

         The Registrant, Allied Capital Advisers, Inc. ("Advisers" or the
"Company"), and the Allied Capital Advisers, Inc.  Incentive Stock Option Plan
(the "Plan") incorporate herein by reference the documents listed in (a)
through (c) below:

         (a)  Advisers' Annual Report on Form 10-K filed pursuant to Section
              13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
              (the "1934 Act") for the fiscal year ended December 31, 1995;

         (b)  All other reports of Advisers and the Plan filed pursuant to
              Section 13(a) or 15(d) of the 1934 Act since December 31, 1995;
              and

         (c)  The description of Advisers common stock contained in the
              registration statement on Form 10 filed by Advisers on September
              20, 1990, as amended on November 13, 1990 and December 6, 1990.

         All reports and documents subsequently filed with the Securities and
Exchange Commission (the "Commission") by Advisers and the Plan subsequent to
the date of this registration statement pursuant to Section 13(a), 13(c), 14
and 15(d) of the 1934 Act prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be part hereof from the date
of filing of those documents.  Advisers will deliver without charge, upon





                                    - 10 -
<PAGE>   11
written or oral request, a copy of any and all information that is incorporated
herein by reference.  Such request should be made to Suzanne Sparrow.

Item 4.  Description of Securities

         The securities being registered are shares of the Company's common
stock.

Item 5.  Interests of Named Experts and Counsel

         Not applicable.

Item 6.  Indemnification of Directors and Officers

         The corporation law of the State of Maryland, under which Advisers is
incorporated, permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to a corporation
and its stockholders for money damages, subject to specified restrictions.  The
law does not, however, allow the liability of directors and officers to a
corporation or its stockholders to be limited to the extent that (1) it is
proved that the person actually received an improper benefit or profit from the
transactions or matter at issue; (2) a judgment or other final adjudication is
entered in a proceeding based on a finding that the person's action, or failure
to act, was the result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding.  The Amended and Restated
Articles of Incorporation of Advisers contain a provision limiting the
liability of its directors and officers to Advisers and its shareholders to the
fullest extent permitted from time to time by the laws of Maryland.

         The Maryland corporation law also permits a corporation to indemnify
its directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection
with any proceeding to which they have been or may be made a party by reason of
their service in those or other capacities unless it is established that the
act or omissions of the director or officer was material to the matter giving
rise to the proceeding and was committed in bad faith or was the result of
active and deliberate dishonesty, or the director or officer actually received
an improper personal benefit, or, in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission
was unlawful.  Advisers' Amended and Restated Articles of Incorporation require
Advisers to indemnify its directors and officers to the fullest extent
permitted from time to time by the laws of Maryland.

Item 7.  Exemption from Registration Claimed

         Sales of Company Common Stock under the Plan prior to the date hereof
were made to officers and directors of the Company in reliance on the exemption
from registration under Section 4(2) of the 1933 Act for transactions not
involving a public offering.

Item 8.  Exhibits

         See Exhibit Index.





                                    - 11 -
<PAGE>   12
Item 9. Undertakings

         (a)  Rule 415 Offering.  The undersigned registrant hereby undertakes:

              (1)  To file, during any period in which offers or sales are
                   being made, a post-effective amendment to this registration
                   statement:

                   (i)     To include any prospectus required by section
                           10(a)(3) of the Securities Act of 1933;

                   (ii)    To reflect in the prospectus any facts or events
                           arising after the effective date of the registration
                           statement (or the most recent post-effective
                           amendment thereof) which, individually or in the
                           aggregate, represent a fundamental change in the
                           information set forth in the registration statement;
                           and

                   (iii)   To include any material information with respect to
                           the plan of distribution not previously disclosed in
                           the registration statement or any material change to
                           such information in the registration statement;

                   provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
                   do not apply if the information required to be included in a
                   post-effective amendment by those paragraphs is contained in
                   periodic reports filed or furnished to the Commission by the
                   registrant pursuant to Section 13 or 15(d) of the Securities
                   Exchange Act of 1934 that are incorporated by reference in
                   the registration statement.

              (2)  That, for the purpose of determining any liability under the
                   Securities Act of 1933, each such post-effective amendment
                   shall be deemed to be a new registration statement relating
                   to the securities offered therein, and the offering of such
                   securities at that time shall be deemed to be the initial
                   bona fide offering thereof.

              (3)  To remove from registration by means of a post-effective
                   amendment any of the securities being registered which
                   remain unsold at the termination of the offering.

         (b)  The undersigned registrant hereby undertakes that, for purposes
              of determining any liability under the Securities Act of 1933,
              each filing of the registrant's annual report pursuant to Section
              13(a) or 15(d) of the Securities Exchange Act of 1934 (and each
              filing of the Plan's annual report pursuant to section 15(d) of
              the Securities Exchange Act of 1934) that is incorporated by
              reference in the registration statement shall be deemed to be a
              new registration statement relating to the securities offered
              therein, and the offering of such securities at that time shall
              be deemed to be the initial bona fide offering thereof.





                                    - 12 -
<PAGE>   13
         (h)  Insofar as indemnification for liabilities arising under the
              Securities Act of 1933 may be permitted to directors, officers
              and controlling persons of the registrant pursuant to the
              foregoing provisions, or otherwise, the registrant has been
              advised that in the opinion of the Securities and Exchange
              Commission such indemnification is against public policy as
              expressed in the Act and is, therefore, unenforceable. In the
              event that a claim for indemnification against such liabilities
              (other than the payment by the registrant of expenses incurred or
              paid by a director, officer or controlling person of the
              registrant in the successful defense of any action, suit or
              proceeding) is asserted by such director, officer or controlling
              person in connection with the securities being registered, the
              registrant will, unless in the opinion of its counsel the matter
              has been settled by controlling precedent, submit to a court of
              appropriate jurisdiction the question whether such
              indemnification by it is against public policy as expressed in
              the Act and will be governed by the final adjudication of such
              issue.

                               POWERS OF ATTORNEY

         LET IT BE KNOWN that each officer or director whose signature appears
in paragraph (b) under "SIGNATURES" below appoints Joan M. Sweeney and Jon A.
DeLuca, jointly and severally, his/her attorneys-in-fact, with power of
substitution, for him/her in all capacities, to sign amendments and
post-effective amendments to the Registration Statement of the Allied Capital
Advisers, Inc.  Incentive Stock Option Plan and to file such amendments with
exhibits with the Securities and Exchange Commission, hereby ratifying all that
each attorney-in-fact may do or cause to be done by virtue of this power.





                                    - 13 -
<PAGE>   14
                                   SIGNATURES

         (a)  THE REGISTRANT.  Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Washington, District of
Columbia, on the 11th day of December, 1996.

                                ALLIED CAPITAL ADVISERS, INC.
                            
                                By: /s/ Joan M. Sweeney       
                                    --------------------------
                                    Name: Joan M. Sweeney
                                    Title: President

         (b)  Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<S>                                        <C>                               <C>
 /s/ David Gladstone                       Chairman and                      December 11, 1996
--------------------------------------     Chief Executive Officer                          
David Gladstone                            (Principal Executive Officer)


 /s/ George C. Williams                    Vice Chairman of the Board        December 11, 1996
--------------------------------------                                            
George C. Williams


 /s/ Brooks H. Browne                      Director                          December 11, 1996
--------------------------------------                                            
Brooks H. Browne


 /s/ Robert E. Long                        Director                          December 11, 1996
--------------------------------------                                             
Robert E. Long


 /s/ William L. Walton                     Director                          December 11, 1996
--------------------------------------                                            
William L. Walton


 /s/ Joan M. Sweeney                       Director, President,              December 11, 1996
--------------------------------------     and Chief Operating                     
Joan M. Sweeney                            Officer                   
                                           


 /s/ Jon A. DeLuca                         Executive Vice President          December 11, 1996
--------------------------------------     and Chief Financial                     
Jon A. DeLuca                              Officer (Principal               
                                           Financial and Accounting Officer)
                                                                            
</TABLE>





                                    - 14 -
<PAGE>   15
                                   SIGNATURES

         THE PLAN.  Pursuant to the requirements of the Securities Act of 1933,
the Compensation Committee of the Company's Board of Directors has duly caused
this Registration Statement to be signed by the undersigned on behalf of the
Allied Capital Advisers, Inc.  Incentive Stock Option Plan, thereunto duly
authorized in the City of Washington, District of Columbia, on the 11th day of
December, 1996.

                          Allied Capital Advisers, Inc. Incentive
                          Stock Option Plan
                          
                          
                          By: /s/ Robert E. Long      
                             -------------------------
                          Robert E. Long,  Chairman of Allied Capital Advisers
                          Compensation Committee
                              




                                    - 15 -
<PAGE>   16

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Number                                     Exhibit Name
         <S>                               <C>
         4                                 Allied Capital Advisers, Inc. Incentive Stock Option Plan

         5                                 Opinion of Sutherland Asbill & Brennan, L.L.P.

         15                                Omitted -- Not applicable

         23                                (a)  Consent of Arthur Andersen LLP
                                           (b)  Consent of Counsel -- See Exhibit 5.

         24                                Powers of Attorney
                                           These documents form part of the
                                           Signature Pages.
</TABLE>





                                      - 16 -
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{"company-data": {"conformed-name": "ALLIED CAPITAL ADVISERS INC", "cik": "0000868207", "assigned-sic": "6282", "irs-number": "520812307", "state-of-incorporation": "MD", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-17885", "film-number": "96680841"}, "business-address": {"street1": "1666 K ST N W STE 901", "city": "WASHINGTON", "state": "DC", "zip": "20006", "phone": "2023311112"}, "mail-address": {"street1": "1666 K ST NW", "street2": "9TH FL", "city": "WASHINGTON", "state": "DC", "zip": "20006"}, "former-company": {"former-conformed-name": "ALLIED ADVISORY INC /MD/", "date-changed": "19600201"}}
1

As filed with the Securities and Exchange Commission on December 13, 1996

                                                      Registration No. 333-     
                                                                           -----

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM S-8
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                         Allied Capital Advisers, Inc.
             (Exact name of registrant as specified in its charter)

          Maryland                                           52-0812307 
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)         

       1666 K Street, N.W.
         Washington, D.C.                                20006              
---------------------------------            ----------------------------
(Address of principal executive offices)          (Zip Code)

           Allied Capital Advisers, Inc. Incentive Stock Option Plan
                            (Full title of the plan)

                                David Gladstone
                              1666 K Street, N.W.
                             Washington, D.C. 20006
                    (Name and address of agent for service)
                                 (202) 331-1112
         (Telephone number, including area code, of agent for service)

                        Calculation of Registration Fee
=====================================================================================================
                                           Proposed          Proposed Maximum
       Title of         Amount to           Maximum              Aggregate            Amount of
    Securitiesto be         be        Offering Price Per       Offering Price     Registration Fee
      Registered        Registered           Unit
-----------------------------------------------------------------------------------------------------
common stock           1,999,580           $5.5625             $11,122,663.75*        $3,370.50
=====================================================================================================
*Included solely for the purpose of calculating the registration fee.  Such
estimate has been calculated in accordance with Rule 457(h) and Rule 457(c)
under the Securities Act of 1933 and are based upon the average of the high and
low price per share of Allied Capital Advisers, Inc. Common Stock on the Nasdaq
National Market System on December 10, 1996.

In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan(s) described herein.
2
PROSPECTUS
                                1,844,852 SHARES

                         ALLIED CAPITAL ADVISERS, INC.

                                  COMMON STOCK
                          (PAR VALUE $.001 PER SHARE)

      Allied Capital Advisers, Inc., a Maryland corporation ("Advisers" or the
"Company"), is an investment adviser registered under the Investment Advisers
Act of 1940, as amended (the "Advisers Act").  Its principal business is acting
as investment adviser to public and private investment companies and real
estate investment trusts that specialize in investing in, and lending to, small
businesses.  The Company's principal office is located at 1666 K Street, N.W.,
Suite 901, Washington, D.C. 20006.  Its telephone number is (202) 331-1112.

      The 1,844,852  shares of Advisers common stock (the "Shares") covered by
this Prospectus have been or will be acquired upon exercise of options granted
under the Allied Capital Advisers, Inc. Incentive Stock Option Plan (the
"Plan") and may be offered for sale on behalf of the stockholders named herein
(the "Selling Stockholders") from time to time on any securities exchange on
which the Company's shares are listed, in the over-the-counter market or
otherwise at market prices and on terms then prevailing, in negotiated
transactions at prices then obtainable, or otherwise.  Shares may be sold in
regular brokerage transactions or may be sold directly to brokers, dealers and
others buying for their own account.  Advisers common stock is listed on the
Nasdaq National Market under the symbol "ALLA."

      FOR A DISCUSSION OF THE RISKS RELATING TO AN INVESTMENT IN THE SHARES,
SEE "INVESTMENT CONSIDERATIONS."

      Although the Company has received or will receive proceeds from the
exercise of options granted under the Plan, the Company will not receive any of
the proceeds from the sale of the Shares by the Selling Stockholders. The
expenses of preparing this Prospectus are being paid by the Company, but
brokerage fees and other expenses of sales hereunder will be borne by the
appropriate Selling Stockholders.

      Certain of the persons who sell or distribute securities covered by this
Prospectus may be deemed to be underwriters within the meaning of the
Securities Act of 1933, as amended (the "1933 Act").  It is expected that the
securities offered hereby will be available for sale from time to time
commencing on or about December 13, 1996.

      No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offer contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company.  This Prospectus does not constitute an offer to
sell or the solicitation of an offer to buy any of the securities offered
hereby in any state to any person to whom or from whom it is unlawful to make
such offer or solicitation.  Neither the delivery of this Prospectus nor any
sales made hereunder shall under any circumstances create any implication that
there has been no change in the information contained herein since the date
hereof.

                                ---------------

         THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
           SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
            PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
           ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

               The date of this prospectus is December 13, 1996

                                      - 2 -
3
                               TABLE OF CONTENTS
Page
                                                                                                      ----
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
Investment Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
The Offering  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Determination of Offering Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Incorporation of Certain Documents By Reference . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Indemnification of Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
AVAILABLE INFORMATION

         The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission").  All reports, proxy
statements and other information filed by the Company can be inspected and
copied at the Commission's public reference facilities at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549 and at the following Regional Offices:
Midwest Regional Office: 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and Northeast Regional Office: 7 World Trade Center, Suite 1300,
New York, New York 10048.  Copies of these materials may also be obtained free
of charge by accessing the EDGAR archives at the Commission's Internet home
page at www.sec.gov.  They may also be obtained from the Commission at the
prescribed rates by mailing a request to: Public Reference Branch, Securities
and Exchange Commission, Washington, D.C. 20549.

         The Company's common stock is listed on the Nasdaq National Market,
and reports, proxy statements and other information concerning the Company can
be inspected at the offices of the National Association of Securities Dealers,
Inc. located at 1735 K Street, N.W., Washington, D.C. 20006.

         Certain documents filed with the Commission are incorporated by
reference in this Prospectus.  The Company hereby undertakes to provide,
without charge, to each person, including any beneficial owner of Advisers
common stock, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
incorporated by reference in this Prospectus (excluding exhibits to any
documents incorporated by reference, unless such exhibits have specifically
been incorporated by reference), but not delivered with it.  Such requests
should be made to Suzanne Sparrow, Allied Capital Advisers, Inc., 1666 K Street
N.W., 9th Floor, Washington, D.C. 20006 (telephone: (202) 331-1112).

                           INVESTMENT CONSIDERATIONS

         LIMITED OPERATING HISTORY AS AN INDEPENDENT COMPANY.  Until December
31, 1990, the Company operated as a wholly owned subsidiary and, in effect, a
division of Allied Capital Corporation ("Allied I").  On December 31, 1990,
pursuant to the terms of certain exemptive relief granted by the Commission to
the Company and Allied I, all of the shares of the Company were distributed to
the shareholders of Allied I on a one-for-one basis. At the time of that
distribution, the Company did not have any substantial tangible assets or net
worth and had approximately $259 million under management.  Since that
distribution, the Company has increased its total assets under management by
192% to approximately $755 million (as of September 30, 1996) and has been
profitable during every year of its operations, except for the year ended
December 31, 1992, in which the Company reported a net loss of approximately
$0.07 per share.  Such loss was largely the result of the foregone investment
management fees waived that year for Allied Capital Commercial Corporation
("Allied Commercial"), a fund organized by

                                    - 3 -
4
Advisers in 1992 for which Advisers agreed to waive the investment management
fee for its first six months of operations.  Although the Company generally has
been profitable during the early stages of its operations, there can be no
assurance that the Company will continue to be profitable or that its assets
under management will increase in the future.

         DEPENDENCE ON MANAGEMENT.  The Company believes that the past
performance of its advisee companies is attributable largely to the experience
and ability of David Gladstone, its Chairman and Chief Executive Officer, who
has been associated with Allied I since 1974.  With respect to the more recent
performance of its advisee companies, the Company has depended increasingly on
the efforts of its senior executive officers, including Katherine E. Marien,
John M. Scheurer and G. Cabell Williams, III.  In addition, the Company relies
increasingly on the significant contributions of its President, Joan M.
Sweeney.  While the Company's officers spend all their available work hours in
activities for the Company and its advisee companies, the Company does not have
employment contracts with any of its officers.  The loss of one or more of
these officers could have a material adverse effect on the Company's future
performance.  The Company carries insurance to the extent of $1 million  on the
life of Mr. Gladstone.

         MARKET FOR SHARES.  Prior to August 1995, the Company's shares were
listed on Nasdaq's Small-Cap Market.  Since that date, however, the Company's
shares have been quoted on Nasdaq's National Market.  As of November 1, 1996,
the Company had approximately ten market makers.  There can be no assurance
that market makers will continue to make a market in the Company's stock or
that the Company's shares will continue to be listed on the Nasdaq National
Market.

         DEPENDENCE ON ADVISORY FEES.  The prices at which the Company's
outstanding shares have been quoted in the over-the-counter market or at which
the Shares offered hereby are being offered do not necessarily bear a direct
relationship to the Company's net worth or historical earnings.  Such prices
may be based on anticipated revenues that the Company is expected to earn from
fees payable under its advisory and management agreements. Such fees, however,
are based on the value and composition from time to time of the advisee
companies' assets. The value of such assets are subject to fluctuations based
on investment performance and the accounting treatment relating to certain
investments; the composition of such assets will change depending upon the
Company's ability to invest assets in accordance with the advisee company's
investment objective.  Moreover, because most of the advisee companies are
closed-end investment companies or real estate investment trusts, increases in
asset size of such companies (other than performance-related increases)
generally occur only when such companies make offerings of debt or equity
securities.  For a variety of reasons, there can be no guarantee that such
companies will make such offerings or, if made, that such offerings will raise
a sufficient amount of capital to allow the Company to benefit from economies
of scale.  In addition, the agreements themselves are subject to periodic
reapproval or renegotiation and to termination at any time on short notice by
the advisee companies' board of directors or shareholders, in the case of
Allied Capital Corporation, Allied Capital Corporation II, and Allied Capital
Lending Corporation, and under certain circumstances by the limited partners,
in the case of Allied Venture and Allied Technology, or by the shareholders in
the case of Allied Capital Commercial Corporation  and Business Mortgage
Investors, Inc.  There can be no assurance that such agreements will remain in
effect, although the Company has no reason to believe that any such agreement
is likely to be terminated in the foreseeable future.

         NATURE OF INVESTMENTS.  The portfolios of the Company's advisee
companies consist primarily of securities issued by small and developing,
privately held companies.  There is generally little or no publicly available
information about such companies.  Typically, such companies depend for their
success on the management talents and efforts of one person or a small group of
persons, so that the death, disability or resignation of such person or persons
could have a materially adverse impact on them.  Moreover, small companies
frequently have narrower product lines and smaller market shares than larger
companies and therefore may be more vulnerable to competitors' actions and
market conditions, as well as general economic downturns.  Because these
companies will generally have highly leveraged capital structures, reduced cash
flow resulting from an adverse competitive development, shift in customer
preferences or an economic downturn may adversely affect the return on, or the

                                    - 4 -
5
recovery of, the Company's investment in them.  Investment in such companies,
therefore, involves a high degree of business and financial risk, which could
result in substantial losses and should therefore be considered speculative.
Accordingly, any loss in assets by the Company's investment advisee companies
could adversely affect the Company's ability to generate revenue, or continue
to increase assets under management.

         COMPETITION.  The asset management industry is highly competitive and,
having relatively few barriers to entry, continues to attract new competitors.
As a result, the Company must compete with thousands of other institutions,
including banks, insurance companies and registered investment advisers, when
attempting to attract new investment dollars to manage.  Many of these
competitors have more assets under management and greater resources (e.g., more
advisory personnel) than the Company, which may make it easier for such
competitors to take advantage of investment opportunities as they arise.
Moreover, many of the Company's competitors have greater access to public
investors (and, correspondingly, to assets to manage) because such competitors
advise open-end investment companies that are engaged in continuous offerings
of securities; in contrast, the Company to date has attracted new investment
dollars only through periodic offerings of securities by the entities advised
by the Company or through borrowings under various lines of credit available to
such entities.  While this factor insulates the Company from decreases in asset
size and certain liquidity needs related to redemptions of investment company
shares, the Company may not be able to benefit from economies of scale
resulting from increases in asset size to the same extent that certain of its
competitors may be.  In addition, while the Company believes that its focus on
investments in small businesses sets it apart from most other investment
advisers, there can be no assurance that its investment strategies will be
successful or that public investors will continue to invest in that market
sector.

         LIQUIDITY OF INVESTMENTS.  All of the companies managed or advised by
Advisers are engaged in various aspects of making loans to, or investments in,
small businesses.  These loans and investments are generally made in a large
number of relatively small, individually structured transactions.  As a result,
such loans and investments are relatively illiquid.  Thus, there can be no
guarantee that the Company will be able to lock in profits, or avoid losses, on
the investments made by the companies it advises, which could affect both the
performance of the companies advised or managed by Advisers and the fees it
receives.

         PERSONNEL-INTENSIVE BUSINESS.  The Company's activities are highly
personnel-intensive and opportunities for economies of scale are limited.  As
discussed above, loans and investments are generally made in a large number of
relatively small, individually structured transactions.  Once a loan or
investment has been made, it must be carefully monitored on a continuing basis
until final realization or disposition.  In particular, during difficult
periods in the economy, additional work may be required to assist portfolio
companies in the management of their businesses, to assist in the restructuring
of loans made to such companies and to take other steps to preserve value for
the investing entity's shareholders, which may require the addition of more
personnel without any immediately realizable financial benefit to the Company.
Similarly, increases in funds under management, which may require immediate
additions to personnel, generally do not result in commensurate immediate
increases in fee revenue because of the structure of the Company's investment
advisory and management agreements, under which fees on uninvested assets are
relatively modest and rise to a profitable level only after funds become
invested in accordance with the several portfolios' investment objectives.

         REGULATION.  The Company is registered with the Commission as an
investment adviser under the Advisers Act and is subject to the reporting
requirements of the 1934 Act.  In addition, certain of the companies for which
the Company acts as investment adviser are registered with the Commission under
the Investment Company Act of 1940, as amended (the "1940 Act") and have
elected to be regulated as business development companies; another is operated
as a real estate investment trust ("REIT").  Each of the foregoing companies
are also subject to the reporting requirements of the 1934 Act.  The shares of
the Company and of certain of the entities advised or managed by the Company
are qualified for sale in various states.  As a result, virtually all aspects
of the Company's investment advisory activities, and the operation of the
investment companies advised by the Company, are subject to various federal and
state laws and regulations.  These laws and regulations are primarily intended
to benefit investment advisory and investment company shareholders and
generally grant broad administrative powers to

                                    - 5 -
6
supervisory agencies, including the ability to limit or restrict the carrying
on of business for failure to comply with such laws and regulations.  While the
Company closely monitors compliance with applicable laws and regulations and
believes that it and the entities it manages or advises are in compliance with
such laws and regulations, in the event the Company is found to have violated
any such laws or regulations, the possible sanctions which may be imposed
include the suspension of individual employees, limitations on the activities
in which the investment adviser may engage, suspension or revocation of the
investment adviser's registration as an adviser, censure and fines.

         SBA REGULATION.  The business of one of the Company's investment
advisee companies, Allied Lending, is largely dependent upon two
government-sponsored, SBA-administered Loan Programs, the Section 7(a) Loan
Program and the Section 504 Loan Program. The Section 7(a) and 504 Loan
Programs are regulated by the SBA pursuant to laws passed by Congress. There is
no assurance that the government appropriations for these programs or for the
operations of the SBA will be continued.   In addition, two of the Company's
investment advisee companies, Allied I and Allied II, have subsidiaries that
are SBA-licensed small business investment companies (SBICs) and specialized
small business investment companies (SSBICs), and as such rely on SBA funding
for a portion of their leverage capital. There is no assurance that the
government appropriations for these programs will be continued, or that such
funding will be available in the future.  These programs are subject to changes
in law or regulation at any time, which changes could have an adverse impact on
the investment advisee companies' operations with regard to these programs, and
any such adverse impacts could materially affect the Company's ability to
generate additional investment advisory revenue from such investment advisee
companies.

         GRADUATED FEES.  Under its investment advisory or management
agreements with its existing advisee companies, the Company is, and under its
anticipated agreements with future entities expects to be, entitled to receive
investment advisory or management fees generally at the rate of 2.5% per annum
on the value of the respective entity's "invested assets"; with respect to one
advisee company, Allied Commercial, Advisers has agreed to receive fees ranging
from 1% to 3.5% per annum on certain of its invested assets, subject to a
quarterly cap, at the rate of  2.5% per annum.  With respect to such entities'
cash and cash equivalents ("interim investments"), fees are receivable at
substantially lower levels, generally at the rate of 0.5% per annum.  "Invested
assets" means investments made in accordance with the respective entity's
investment objectives, such as investments made in, and loans made to, small
business concerns, in the case of Allied I, Allied II, and Allied Lending, and
acquired mortgage loans to small businesses in the case of Allied Commercial
and BMI.  When an entity is first organized, its assets are usually comprised
entirely of interim investments and cash and it may take several years before
such cash and the proceeds of such interim investments can be invested
predominantly in invested assets.  Achieving investment in invested assets
requires substantial effort and expense on the part of the Company, for which
the Company is not adequately compensated until such investment is actually
achieved.  The foregoing fee structures were in place as of November 1, 1996.
There can be no assurance that, in the case of one or the other of the entities
for which the Company currently acts or in the future may act as investment
adviser or manager, this type of fee structure will be used or retained,
substantially full investment in invested assets will ever be achieved or, if
it is achieved, that the value of such assets will not decline, or that the
2.5% per annum fee thereon (or any other applicable fee) will not be
renegotiated downward.

                                    - 6 -
7

         CONFLICTS OF INTEREST.  Under the 1940 Act, the Company has a
fiduciary duty with respect to the receipt of compensation for services that
the Company may charge to the investment companies for which it acts as
investment adviser and may be deemed to have a similar duty to the other
companies that it manages.  Accordingly, in advising the board of directors of
the entities advised or managed by the Company (a majority of the members of
which is independent of the Company) as to the desirability of making or
disposing of loans or investments, the officers of the Company who are also
directors of the managed entities are required to put the interests of such
entities ahead of the Company's interest in collecting fees.

                                  THE OFFERING

         This Prospectus is intended for use in connection with resales of the
Shares by the Selling Stockholders, some of whom may be considered "affiliates"
of the Company (as that term is defined in rules of the Commission). The
1,844,852 Shares covered by this Prospectus include: (i) 192,425 shares of
Advisers common stock previously issued to certain officers and directors of
the Company upon exercise of stock options granted under the Allied Capital
Advisers, Inc. Incentive Stock Option Plan (the "Plan"); and (ii) 1,652,427
shares of common stock that may be issued to certain officers and directors of
the Company upon exercise of stock options granted under the Plan. The Shares
already issued under the Plan were issued in reliance upon exemptions from
registration under the 1933 Act for private transactions.  Certain of those
Shares were subsequently resold to certain of the Selling Stockholders. The
Shares that may be issued in the future upon the exercise of options granted
under the Plan are being simultaneously registered with the Commission on Form
S-8.  As described below, use of this Prospectus is not the exclusive way
Shares may be resold by Selling Stockholders.

         The Shares covered by this Prospectus may be sold from time to time by
the Selling Stockholders on any securities exchange on which the Shares are
listed, in the over-the-counter market or otherwise, at market prices and on
terms then prevailing or in negotiated transactions at prices then obtainable,
or otherwise.  Shares may be sold in regular brokerage transactions or may be
sold directly to brokers, dealers and others buying for their own accounts. In
addition, any Shares covered by this Prospectus which qualify for sale pursuant
to Rule 144 under the 1933 Act ("Rule 144") may be sold under Rule 144 rather
than pursuant to this Prospectus.  The Selling Stockholders also may pledge the
shares registered hereunder to a broker, dealer or other entity, and upon a
default the broker, dealer or other entity may effect sales of the pledged
shares pursuant to Rule 144.

         Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholders in amounts to
be negotiated in connection with the sale.  Such brokers, dealers and any other
participating in the resales of the Shares may be deemed to be "underwriters"
within the meaning of the 1933 Act in connection with such sales, and any such
commission, discount or concession may be deemed to be underwriting discounts
or commissions under the 1933 Act.

         All costs, expenses and fees in connection with the registration of
the Shares will be borne by the Company.  Commissions and discounts, if any,
attributable to the sales of the Shares by the Selling Stockholders will be
borne by the Selling Stockholders.  The Selling Stockholders may agree to
indemnify any broker, dealer or agent that participates in transactions
involving sales of the Shares against certain liabilities, including
liabilities arising under the 1933 Act.

                                      - 7 -
8
                             SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the Selling
Stockholders, the number of shares of the Company's common stock beneficially
owned by each on September 30, 1996 and the number of shares of Company's
common stock which may be acquired upon the exercise of options granted under
the Plan.
Maximum                                   
                                                                      number of                                  
                                                                      shares of       Shares and % of            
                                 Positions and         Shares of     common stock      common stock              
                                    material         common stock    which may be   beneficially owned           
                               relationships with    beneficially    offered for    if all shares that           
                               the Company during     owned as of   sale pursuant  may be sold pursuant          
                                      last           September 30,     to this      to this Prospectus           
    Name and Address              three years*           1996         Prospectus         are sold                
----------------------------------------------------------------------------------------------------------       
                                                                                       Shares    Percent         
                                                                                       ------    -------
Allied Employee Stock       Greater than 10% Holder                                                                        
 Ownership Trust                                          1,481,265        46,364   1,481,265      16.5%         

 Harry T.  Brill, Jr.        Former employee                247,604        36,364     247,604      2.75%         
                                                                                                                 
 Brooks H.  Browne           Director                        76,728        13,333      76,728      0.85%         

 Jon A. DeLuca               Executive Vice                  20,941        55,000      61,941      0.68%         
                             President, Chief                                                                    
                             Financial Office and                                                                
                             Treasurer                                                                           
                                                                                                                 
 William F. Dunbar           Executive Vice                 243,682       146,030     243,682      2.67%         
                             President                                                                           
                                                                                                                 
 David Gladstone             Chairman and Chief             924,995       774,943   1,273,993     13.05%         
                             Executive Officer                                                                   

 Robert E. Long              Director                        34,329        13,333      34,329      0.38%         
                                                                                                                 
 Katherine C. Marien         Executive Vice                  39,099        26,667      51,099      0.57%         
                             President                                                                           

 Kathleen T. Ryan            Former employee                 55,043        10,000      55,043      0.61%         
                                                                                                                 
 John M. Scheurer            Executive Vice                  93,428        56,364      99,428      1.10%         
                             President                                                                           
                                                                                                                 
 Dianna L. Seaborn           Former employee                 23,677        10,000      23,677      0.26%         

 George Stelljes II          Executive Vice                 103,683        43,364     103,683      1.15%         
                             President                                                                           
                                                                                                                 
 Jack A. Sullivan **         Greater than 5% Holder         484,904        89,697     484,904      5.39%         

 Joan M. Sweeney             President or                    93,098       210,000     221,618      2.41%         
                             Executive Vice                                                                      
                             President                                                                           
                                                                                                                 
 William L. Walton           Director                        21,145        13,333      21,145      0.23%         
                                                                                                                 
 G. Cabell Williams III      Executive Vice                 325,279       157,030     325,279      3.56%         
                             President                                                                           

 George C. Williams          Director or Vice               312,550       143,030     312,550      3.42%         
                             Chairman
* Certain Selling Stockholders also serve as officers and/or directors of
certain other companies advised by Advisers.
** An amendment to this registration statement may be filed at a later date to
identify the successor individual, estate or trust to the shares herein
registered in the name of Jack A. Sullivan

                                    - 8 -
9
         The Plan was approved by the Company's shareholders on October 24,
1991 and adopted by its Board of Directors (the "Board") on October 30, 1991;
it was subsequently amended by the Board on February 17, 1994, and such
amendment was approved by the Company's shareholders on June 8, 1994.  Another
amendment to the Plan was approved by the Board on February 13, 1996 and by
the Company's shareholders on May 23, 1996.  The original effective date of the
Plan was October 30, 1991.

                                USE OF PROCEEDS

         Although the Company has received or will receive proceeds from the
exercise of options granted under the Plan, none of the proceeds from the sale
by the Selling Stockholders of the Shares offered hereby will be received by
the Company.

                              LEGAL PROCEEDINGS

         The Company is a party to litigation in the normal course of its
business.  At this time, management of the Company is unable to estimate any
loss that may be associated with such litigation; however, management does not
believe that the resolution of this litigation will materially affect the
financial position or liquidity of the Company.

                        DETERMINATION OF OFFERING PRICE

         The Shares covered by this Prospectus may be sold from time to time by
the Selling Stockholders on any securities exchange on which the Shares are
listed, in the over-the-counter market or otherwise, at market prices and on
terms then prevailing or in negotiated transactions at prices then obtainable,
or otherwise.  Currently, shares of the Company's common stock are quoted on
the Nasdaq National Market.

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The following documents are incorporated by reference herein:

         (a)  The Company's Annual Report on Form 10-K filed pursuant to
              Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
              amended (the "1934 Act") for the fiscal year ended December 31,
              1995;

         (b)  All other reports of the Company filed pursuant to Section 13(a)
              or 15(d) of the 1934 Act since December 31, 1995; and
 
         (c)  The description of the Company's common stock contained in the
              registration statement on Form 10 filed by Advisers on September
              20, 1990, including the amendments filed on November 13, 1990 and
              December 6, 1990 for the purpose of updating that description.

         All reports and documents subsequently filed with the Commission by
the Company subsequent to the date of this Prospectus pursuant to Section
13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the termination of this
offering shall be deemed to be incorporated by reference into this Prospectus
and to be part hereof from the date of filing of those documents.  The Company
will deliver without charge, upon written or oral request, a copy of any and
all information that is incorporated herein by reference.  Such request should
be made to Suzanne Sparrow, Vice President, Director of Investor Relations, at
(202) 331-1112.

                   INDEMNIFICATION OF OFFICERS AND DIRECTORS

         The corporation law of the State of Maryland, under which Advisers is
incorporated, permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, subject to specified
restrictions.  The law does not, however, allow the liability of directors and
officers to the corporation or its stockholders to be limited to the extent
that (1) it is proved that the person actually received an improper benefit or
profit from the transactions or matter at issue; (2) a judgment or other final
adjudication is entered in a proceeding based on a finding that the person's
action, or failure

                                    - 9 -
10
to act, was the result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding.  The Amended and Restated
Articles of Incorporation of Advisers contain a provision limiting the
liability of its directors and officers to Advisers and its shareholders to the
fullest extent permitted from time to time by the laws of Maryland.

         The Maryland corporation law also permits a corporation to indemnify
its directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection
with any proceeding to which they have been or may be made a party by reason of
their service in those or other capacities unless it is established that the
act or omissions of the director or officer was material to the matter giving
rise to the proceeding and was committed in bad faith or was the result of
active and deliberate dishonesty, or the director or officer actually received
an improper personal benefit, or, in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission
was unlawful.  Advisers' Amended and Restated Articles of Incorporation require
Advisers to indemnify its directors and officers to the fullest extent
permitted from time to time by the laws of Maryland.

         Such indemnification may apply to claims arising under the 1933 Act.
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to directors, officers, or persons controlling Advisers pursuant to
the foregoing provisions, Advisers has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in that Act and therefore unenforceable.

                                    PART II

Form S-8.

Item 3.  Incorporation of Documents by Reference

         The Registrant, Allied Capital Advisers, Inc. ("Advisers" or the
"Company"), and the Allied Capital Advisers, Inc.  Incentive Stock Option Plan
(the "Plan") incorporate herein by reference the documents listed in (a)
through (c) below:

         (a)  Advisers' Annual Report on Form 10-K filed pursuant to Section
              13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
              (the "1934 Act") for the fiscal year ended December 31, 1995;

         (b)  All other reports of Advisers and the Plan filed pursuant to
              Section 13(a) or 15(d) of the 1934 Act since December 31, 1995;
              and

         (c)  The description of Advisers common stock contained in the
              registration statement on Form 10 filed by Advisers on September
              20, 1990, as amended on November 13, 1990 and December 6, 1990.

         All reports and documents subsequently filed with the Securities and
Exchange Commission (the "Commission") by Advisers and the Plan subsequent to
the date of this registration statement pursuant to Section 13(a), 13(c), 14
and 15(d) of the 1934 Act prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be part hereof from the date
of filing of those documents.  Advisers will deliver without charge, upon

                                    - 10 -
11
written or oral request, a copy of any and all information that is incorporated
herein by reference.  Such request should be made to Suzanne Sparrow.

Item 4.  Description of Securities

         The securities being registered are shares of the Company's common
stock.

Item 5.  Interests of Named Experts and Counsel

         Not applicable.

Item 6.  Indemnification of Directors and Officers

         The corporation law of the State of Maryland, under which Advisers is
incorporated, permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to a corporation
and its stockholders for money damages, subject to specified restrictions.  The
law does not, however, allow the liability of directors and officers to a
corporation or its stockholders to be limited to the extent that (1) it is
proved that the person actually received an improper benefit or profit from the
transactions or matter at issue; (2) a judgment or other final adjudication is
entered in a proceeding based on a finding that the person's action, or failure
to act, was the result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding.  The Amended and Restated
Articles of Incorporation of Advisers contain a provision limiting the
liability of its directors and officers to Advisers and its shareholders to the
fullest extent permitted from time to time by the laws of Maryland.

         The Maryland corporation law also permits a corporation to indemnify
its directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection
with any proceeding to which they have been or may be made a party by reason of
their service in those or other capacities unless it is established that the
act or omissions of the director or officer was material to the matter giving
rise to the proceeding and was committed in bad faith or was the result of
active and deliberate dishonesty, or the director or officer actually received
an improper personal benefit, or, in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission
was unlawful.  Advisers' Amended and Restated Articles of Incorporation require
Advisers to indemnify its directors and officers to the fullest extent
permitted from time to time by the laws of Maryland.

Item 7.  Exemption from Registration Claimed

         Sales of Company Common Stock under the Plan prior to the date hereof
were made to officers and directors of the Company in reliance on the exemption
from registration under Section 4(2) of the 1933 Act for transactions not
involving a public offering.

Item 8.  Exhibits

         See Exhibit Index.

                                    - 11 -
12
Item 9. Undertakings

         (a)  Rule 415 Offering.  The undersigned registrant hereby undertakes:

              (1)  To file, during any period in which offers or sales are
                   being made, a post-effective amendment to this registration
                   statement:

                   (i)     To include any prospectus required by section
                           10(a)(3) of the Securities Act of 1933;

                   (ii)    To reflect in the prospectus any facts or events
                           arising after the effective date of the registration
                           statement (or the most recent post-effective
                           amendment thereof) which, individually or in the
                           aggregate, represent a fundamental change in the
                           information set forth in the registration statement;
                           and

                   (iii)   To include any material information with respect to
                           the plan of distribution not previously disclosed in
                           the registration statement or any material change to
                           such information in the registration statement;

                   provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
                   do not apply if the information required to be included in a
                   post-effective amendment by those paragraphs is contained in
                   periodic reports filed or furnished to the Commission by the
                   registrant pursuant to Section 13 or 15(d) of the Securities
                   Exchange Act of 1934 that are incorporated by reference in
                   the registration statement.

              (2)  That, for the purpose of determining any liability under the
                   Securities Act of 1933, each such post-effective amendment
                   shall be deemed to be a new registration statement relating
                   to the securities offered therein, and the offering of such
                   securities at that time shall be deemed to be the initial
                   bona fide offering thereof.

              (3)  To remove from registration by means of a post-effective
                   amendment any of the securities being registered which
                   remain unsold at the termination of the offering.

         (b)  The undersigned registrant hereby undertakes that, for purposes
              of determining any liability under the Securities Act of 1933,
              each filing of the registrant's annual report pursuant to Section
              13(a) or 15(d) of the Securities Exchange Act of 1934 (and each
              filing of the Plan's annual report pursuant to section 15(d) of
              the Securities Exchange Act of 1934) that is incorporated by
              reference in the registration statement shall be deemed to be a
              new registration statement relating to the securities offered
              therein, and the offering of such securities at that time shall
              be deemed to be the initial bona fide offering thereof.

                                    - 12 -
13
         (h)  Insofar as indemnification for liabilities arising under the
              Securities Act of 1933 may be permitted to directors, officers
              and controlling persons of the registrant pursuant to the
              foregoing provisions, or otherwise, the registrant has been
              advised that in the opinion of the Securities and Exchange
              Commission such indemnification is against public policy as
              expressed in the Act and is, therefore, unenforceable. In the
              event that a claim for indemnification against such liabilities
              (other than the payment by the registrant of expenses incurred or
              paid by a director, officer or controlling person of the
              registrant in the successful defense of any action, suit or
              proceeding) is asserted by such director, officer or controlling
              person in connection with the securities being registered, the
              registrant will, unless in the opinion of its counsel the matter
              has been settled by controlling precedent, submit to a court of
              appropriate jurisdiction the question whether such
              indemnification by it is against public policy as expressed in
              the Act and will be governed by the final adjudication of such
              issue.

                               POWERS OF ATTORNEY

         LET IT BE KNOWN that each officer or director whose signature appears
in paragraph (b) under "SIGNATURES" below appoints Joan M. Sweeney and Jon A.
DeLuca, jointly and severally, his/her attorneys-in-fact, with power of
substitution, for him/her in all capacities, to sign amendments and
post-effective amendments to the Registration Statement of the Allied Capital
Advisers, Inc.  Incentive Stock Option Plan and to file such amendments with
exhibits with the Securities and Exchange Commission, hereby ratifying all that
each attorney-in-fact may do or cause to be done by virtue of this power.

                                    - 13 -
14
                                   SIGNATURES

         (a)  THE REGISTRANT.  Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Washington, District of
Columbia, on the 11th day of December, 1996.

                                ALLIED CAPITAL ADVISERS, INC.
                            
                                By: /s/ Joan M. Sweeney       
                                    --------------------------
                                    Name: Joan M. Sweeney
                                    Title: President

         (b)  Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
/s/ David Gladstone                       Chairman and                      December 11, 1996
--------------------------------------     Chief Executive Officer                          
David Gladstone                            (Principal Executive Officer)

 /s/ George C. Williams                    Vice Chairman of the Board        December 11, 1996
--------------------------------------                                            
George C. Williams

 /s/ Brooks H. Browne                      Director                          December 11, 1996
--------------------------------------                                            
Brooks H. Browne

 /s/ Robert E. Long                        Director                          December 11, 1996
--------------------------------------                                             
Robert E. Long

 /s/ William L. Walton                     Director                          December 11, 1996
--------------------------------------                                            
William L. Walton

 /s/ Joan M. Sweeney                       Director, President,              December 11, 1996
--------------------------------------     and Chief Operating                     
Joan M. Sweeney                            Officer                   
                                           

 /s/ Jon A. DeLuca                         Executive Vice President          December 11, 1996
--------------------------------------     and Chief Financial                     
Jon A. DeLuca                              Officer (Principal               
                                           Financial and Accounting Officer)
- 14 -
15
                                   SIGNATURES

         THE PLAN.  Pursuant to the requirements of the Securities Act of 1933,
the Compensation Committee of the Company's Board of Directors has duly caused
this Registration Statement to be signed by the undersigned on behalf of the
Allied Capital Advisers, Inc.  Incentive Stock Option Plan, thereunto duly
authorized in the City of Washington, District of Columbia, on the 11th day of
December, 1996.

                          Allied Capital Advisers, Inc. Incentive
                          Stock Option Plan
                          
                          
                          By: /s/ Robert E. Long      
                             -------------------------
                          Robert E. Long,  Chairman of Allied Capital Advisers
                          Compensation Committee
                              

                                    - 15 -
16

                                 EXHIBIT INDEX
Exhibit Number                                     Exhibit Name
4                                 Allied Capital Advisers, Inc. Incentive Stock Option Plan

         5                                 Opinion of Sutherland Asbill & Brennan, L.L.P.

         15                                Omitted -- Not applicable

         23                                (a)  Consent of Arthur Andersen LLP
                                           (b)  Consent of Counsel -- See Exhibit 5.

         24                                Powers of Attorney
                                           These documents form part of the
                                           Signature Pages.
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