<SUBMISSION>
<ACCESSION-NUMBER>0001181431-08-062685
<TYPE>4
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20081001
<FILING-DATE>20081118
<DATE-OF-FILING-DATE-CHANGE>20081118
<ISSUER>
<COMPANY-DATA>
<CONFORMED-NAME>CAPSOURCE FINANCIAL INC
<CIK>0001173359
<ASSIGNED-SIC>7350
<IRS-NUMBER>841334453
<STATE-OF-INCORPORATION>CO
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<BUSINESS-ADDRESS>
<STREET1>2305 CANYON BLVD
<STREET2>STE 103
<CITY>BOULDER
<STATE>CO
<ZIP>80302
<PHONE>3032450515
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2305 CANYON BLVD STE 103
<CITY>BOULDER
<STATE>CO
<ZIP>80302
</MAIL-ADDRESS>
</ISSUER>
<REPORTING-OWNER>
<OWNER-DATA>
<CONFORMED-NAME>WHITEBOX INTERMARKET PARTNERS LP
<CIK>0001296973
</OWNER-DATA>
<FILING-VALUES>
<FORM-TYPE>4
<ACT>34
<FILE-NUMBER>001-31730
<FILM-NUMBER>081199354
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>TRIDENT CHAMBERS
<STREET2>PO BOX 146 WATERFRONT
<CITY>WICKHAMS CAY
<STATE>D8
<ZIP>00000
<PHONE>2844942434
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>TRIDENT CHAMBERS
<STREET2>PO BOX 146 WATERFRONT
<CITY>WICKHAMS CAY
<STATE>D8
<ZIP>00000
</MAIL-ADDRESS>
</REPORTING-OWNER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd223965.xml
<DESCRIPTION>FORM 4
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2008-10-01</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001173359</issuerCik>
        <issuerName>CAPSOURCE FINANCIAL INC</issuerName>
        <issuerTradingSymbol>CPSO</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001296973</rptOwnerCik>
            <rptOwnerName>WHITEBOX INTERMARKET PARTNERS LP</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>3033 EXCELSIOR BOULEVARD, SUITE 300</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>MINNEAPOLIS</rptOwnerCity>
            <rptOwnerState>MN</rptOwnerState>
            <rptOwnerZipCode>55416</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>1</isOther>
            <otherText>See Remarks below</otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common stock</value>
            </securityTitle>
            <transactionDate>
                <value>2008-10-01</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>10000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>.20</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2860000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F3"/>
                    <footnoteId id="F4"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common stock</value>
            </securityTitle>
            <transactionDate>
                <value>2008-10-02</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>5000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>.15</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2855000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F3"/>
                    <footnoteId id="F4"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common stock</value>
            </securityTitle>
            <transactionDate>
                <value>2008-10-03</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>30000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>.10</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2825000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F3"/>
                    <footnoteId id="F4"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common stock</value>
            </securityTitle>
            <transactionDate>
                <value>2008-10-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>5000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>.04</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2820000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F3"/>
                    <footnoteId id="F4"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common stock</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <transactionDate>
                <value>2008-11-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>2820000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>187500</value>
                    <footnoteId id="F2"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F3"/>
                    <footnoteId id="F4"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Common Stock Warrant</value>
                <footnoteId id="F5"/>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>.90</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2008-11-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>2500000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2006-05-01</value>
            </exerciseDate>
            <expirationDate>
                <value>2011-05-01</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>2500000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F3"/>
                    <footnoteId id="F4"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Warrants to purchase Common Stock</value>
                <footnoteId id="F5"/>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>.90</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2008-11-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>375000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2006-10-30</value>
            </exerciseDate>
            <expirationDate>
                <value>2011-10-30</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>375000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F3"/>
                    <footnoteId id="F4"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">The Common Stock was sold in connection with a private transaction.</footnote>
        <footnote id="F2">Represents aggregate sales price of Common Stock.</footnote>
        <footnote id="F3">The general partner of the reporting person is Whitebox Intermarket Advisors, LLC (&quot;WIA&quot;), which manages accounts for the benefit of the reporting person, Whitebox Intermarket Partners, L.P. (&quot;WIP&quot;) and Whitebox Intermarket Fund, Ltd. (&quot;WIFLTD&quot;).  The managing member and controlling owner of the reporting person is Whitebox Advisors, LLC (&quot;Whitebox Advisors&quot;).</footnote>
        <footnote id="F4">Based on the relationships described herein, these entities may be deemed to constitute a group (also see &quot;Remarks&quot; section herein) within the meaning of Rule 13D-5(b)(1) under the Securities and Exchange Act of 1934.  The filing of this statement shall not be construed as an admission that Whitebox Advisors, WIA, WIP and WIFLTD are a group or have agreed to act as a group.  Each of the identified entities each disclaim beneficial ownership of such shares of common stock except to the extent of their pecuniary interest in such shares.</footnote>
        <footnote id="F5">This warrant was sold in connection with a private transaction for the sale of Common Stock reported in Table I.</footnote>
    </footnotes>

    <remarks>The reporting person is a member of a Section 13(d) &quot;group&quot; with one other shareholder of the Issuer, as further described in the Schedule 13D Amendment No. 2 filed by Whitebox Advisors, LLC with the Securities Exchange Commission on November 18, 2008.</remarks>

    <ownerSignature>
        <signatureName>/s/ Jonathan D. Wood, Chief Operating Officer, General Partner, Whitebox Intermarket Advisors, LLC for WHITEBOX INTERMARKET PARTNERS, L.P.</signatureName>
        <signatureDate>2008-11-18</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SUBMISSION>
