<PAGE>
 
                                 EXHIBIT 10.37

                                THIRD AMENDMENT
                                       TO
                          LOAN AND SECURITY AGREEMENT


     THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment")
is dated as of February 23, 1998, and entered into by and between BANKAMERICA
BUSINESS CREDIT, INC. ("Lender"), a Delaware corporation with offices at 55
South Lake Avenue, Suite 900, Pasadena, California 91101, and NATIONAL HOME
CENTERS, INC. ("Borrower"), an Arkansas corporation, with offices at P. 0. Box
789, Highway 265 North, Springdale, Arkansas 72765.

     WHEREAS, Lender and Borrower have entered into a Loan and Security
Agreement dated as of December 19, 1995 (as amended by that certain First
Amendment to Loan and Security Agreement as of May 20, 1996 and that certain
Second Amendment to Loan and Security Agreement and Waiver of Defaults dated as
of April 30, 1997, the "Agreement");

     WHEREAS, the Borrower desires that the Lender amend the Loan Agreement
in certain respects; and

     WHEREAS, the Lender is willing to amend the Agreement subject to the
terms and conditions contained herein;

     NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Agreement and this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:

                                   ARTICLE I
                                        
                                  Definitions
                                        
     Section 1.01. Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.

     Section 1.02. Definition of "Maximum Revolving Credit Line."  The
definition of "Maximum Revolving Credit Line" is hereby amended in its entirety
to read as follows:

     "Maximum Revolving Credit Line" means Twenty-Five Million and No/100 
     Dollars ($25,000,000.00).

     Section 1.03. Definition of "Availability". The definition of
"Availability" is hereby amended in its entirety to read as follows:

     "Availability" means at any time the lesser of:

     A.   The amount of Twenty-Five Million and No/100
          Dollars ($25,000,000) or

     B.   The sum of
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               (1) up to eighty-five percent (85%) of the value of Eligible
                   Accounts, plus

               (2) the lesser of

                   (a) (i) $14,000,000 through May 31, 1998 and (ii)
                   $12,500,000 from June 1, 1998 until the Stated Termination
                   Date; or

                   (b)  the Inventory Advance Rate.

provided, however, that at all times Availability shall be reduced by the sum
of:

     (i)   the unpaid balance of Revolving Loans at that time;

     (ii)  the aggregate undrawn face amount of all outstanding Letters or
Credit and the aggregate outstanding amount of all acceptances which the Lender
has, or has caused to be, issued or obtained for the Borrower's account;

     (iii) reserves for accrued interest on the Revolving Loans;

     (iv)  the Environmental Compliance Reserve;

     (v)   reserves, to be established at Lender's sole discretion, for the
accounts payable to any supplier of consigned and floor-planned Inventory;

     (vi)  the ACH Settlement Risk Reserve; and

     (vii) all other reserves which the Lender in its reasonable discretion
deems necessary or desirable to maintain with respect to the Borrower's account,
including, without limitation, any amounts which the Lender may be obligated to
pay in the future for the account the Borrower."

     Section 1.04. Definition of "Inventory Advance Rate". The definition of
"Inventory Advance Rate" is hereby amended in its entirety to read as follows:

             "Inventory Advance Rate" means up to sixty-five percent (65%) of
     the value of Eligible Inventory until the earlier to occur of (a) the sale
     of any of Borrower's Real Property by Borrower, or (b) June 30, 1998, and
     thereafter up to fifty-five percent (55%) of the value of Eligible
     Inventory; provided, that, if Borrower does not sell any of its Real
     Property on or before June 30, 1998 the Inventory Advance Rate shall be
     decreased to fifty-five percent (55%) in accordance with the following
     schedule:

              Dates                         Inventory Advance Rate
              -----                         ----------------------

July 1, 1998 through July 15, 1998         sixty-three percent (63%)

July 16, 1998 through July 30, 1998        sixty-one percent (61%)

July 31, 1998 through August 14, 1998      fifty-nine percent (59%)
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August 15, 1998 through August 29, 1998    fifty-seven percent (57%)

August 30, 1998 until the Stated
Termination Date                           fifty-five percent (55%)



                                   ARTICLE II

     Section 2.01. Amendment to Section 3.1(a) of the Agreement. Section 3.1(a)
of the Agreement is hereby amended in its entirety to read as follows:


     "3.1.(a) Interest Rates. Except as otherwise provided herein, the
     Obligations shall bear interest on the unpaid principal amount thereof from
     the date made until paid in full in cash at a fluctuating per annum rate
     equal to the Reference Rate plus one percent (1%) (the "Applicable Interest
     Rate").  Each change in the Reference Rate shall be reflected in the
     interest rate described above as of the effective date of such change.  All
     interest charges shall be computed on the basis of a year of three hundred
     sixty (360) days and actual days elapsed and will be payable in arrears on
     the first day of each month hereafter."

     Section 2.02. Deletions from Section 3 of the Agreement.  Section 3.2 and
Section 3.3 are hereby deleted in their entirety and replaced with the word
"RESERVED".

     Section 2.03. Amendment to Section 4.3 of the Agreement. Section 4.3 is
hereby amended in its entirety to read as follows:

     "4.3 Apportionment, Application and Reversal of Payments. Except as
     otherwise expressly provided hereunder, the Lender shall determine in its
     discretion the order and manner in which proceeds and other payments that
     the Lender receives are applied to the Revolving Loans, interest thereon,
     and the other Obligations, and the Borrower hereby irrevocably waives the
     right to direct the application of any payment or proceeds. The Lender
     shall have the continuing and exclusive right to apply and reverse and
     reapply any and all such proceeds and payments to any portion of the
     Obligations."



                                  ARTICLE III

                 RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

     Section 3.01. Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and, except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement, including, without
limitation, all financial covenants contained therein, are ratified and
confirmed and shall continue in full force and effect. Lender and Borrower agree
that the Agreement as amended hereby shall continue to be legal, valid, binding
and enforceable in accordance with its terms.

     Section 3.02. Representations and Warranties. Borrower hereby represents
and warrants to Lender that the execution, delivery and performance of this
Amendment and all other loan documents 
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to which Borrower is or is to be a party hereunder (hereinafter referred to
collectively as the "Loan Documents") executed and/or delivered in connection
herewith, have been authorized by all requisite corporate action on the part of
Borrower and will not violate the Articles of Incorporation or Bylaws of
Borrower.


                                   ARTICLE IV

                              CONDITIONS PRECEDENT

     Section 4.01. Conditions. The effectiveness of this Amendment is subject to
the satisfaction of the following conditions precedent (unless specifically
waived in writing by the Lender):

          (a) In Addition to this Amendment, Lender shall have received all of
     the following, each dated (unless otherwise indicated) as of the date of
     this Amendment, in form and substance satisfactory to Lender in its sole
     discretion:

               (i)   Company General Certificate. A certificate executed by the
          Secretary or Assistant Secretary of Borrower certifying (A) that
          Borrower's Board of Directors has met and adopted, approved, consented
          to and ratified the resolutions attached thereto which authorize the
          execution, delivery and performance by Borrower of the Amendment and
          the Loan Documents, (B) the names of the officers of Borrower
          authorized to sign this Amendment and each of the Loan Documents to
          which Borrower is to be a party hereunder, (C) the specimen signatures
          of such officers, (D) that neither the Articles of Incorporation nor
          Bylaws of Borrower have been amended since the date of the Agreement,
          and (E) other matters;

               (ii)  Deed of Trust. An executed Deed of Trust on Borrower's real
          property located in Fayetteville, Arkansas;

               (iii) No Material Adverse Change.  There shall have occurred no
          material adverse change in the business, operations, financial
          condition, profits or prospects of Borrower, or in the Collateral, and
          the Lender shall have received a certificate of Borrower's chief
          executive officer to such effect; and

               (iv)  Other Documents. Borrower shall have executed and delivered
          such other documents and instruments as Lender may require.

          (b)  All corporate proceedings taken in connection with the
     transactions contemplated by this Amendment and all documents, instruments
     and other legal matters incident thereto shall be satisfactory to Lender
     and its legal counsel, Jenkens & Gilchrist, a Professional Corporation.

          (c)  Borrower shall have paid to Lender the amount of $30,000 as an
     accommodation fee.
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                                   ARTICLE V

                                 MISCELLANEOUS

     Section 5.01. Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other document or
documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation by
Lender or any closing shall affect the representations and warranties or the
right of Lender to rely thereon.

     Section 5.02. Reference to Agreement. The Agreement, each of the Loan
Documents, and any and all other agreements, documents or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Agreement as amended hereby, are hereby amended so that any
reference therein to the Agreement shall mean a reference to the Agreement as
amended hereby.

     Section 5.03. Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

     Section 5.04. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE
IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.

     Section 5.05. Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Lender and Borrower and their respective
successors and assigns; provided, however, that Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of Lender. Lender may assign any or all of its rights or obligations
hereunder without the prior consent of Borrower.

     Section 5.06. Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

     Section 5.07. Effect of Waiver. No consent or waiver, express or implied,
by Lender to or of any breach of or deviation from any covenant or condition of
the Agreement or duty shall be deemed a consent or waiver to or of any other
breach of or deviation from the same or any other covenant, condition or duty.
No failure on the part of Lender to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power, or privilege under this
Amendment, the Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power, or
privilege under this Amendment, the Agreement or any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. The rights and remedies provided for in the
Agreement and the other Loan Documents are cumulative and not exclusive of any
rights and remedies provided by law.
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     Section 5.08. Heading. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

     Section 5.09. Releases. As a material inducement to Lender to enter into
this Amendment, Borrower hereby represents and warrants that there are no claims
or offsets against, or defenses or counterclaims to, the terms and provisions of
and the other obligations created or evidenced by the Agreement or the other
Loan Documents. Borrower hereby releases, acquits, and forever discharges
Lender, and its successors, assigns, and predecessors in interest, their
parents, subsidiaries and affiliated organizations, and the officers, employees,
attorneys, and agents of each of the foregoing (all of whom are herein jointly
and severally referred to as the "Released Parties") from any and all liability,
damages, losses, obligations, costs, expenses, suits, claims, demands, causes of
action for damages or any other relief, whether or not now known or suspected,
of any kind, nature, or character, at law or in equity, which Borrower now has
or may have ever had against any of the Released Parties, including, but not
limited to, those relating to (a) usury or penalties or damages therefor, (b)
allegations that a partnership existed between Borrower and the Released
Parties, (c) allegations of unconscionable acts, deceptive trade practices, lack
of good faith or fair dealing, lack of commercial reasonableness or special
relationships, such as fiduciary, trust or confidential relationships, (d)
allegations of dominion, control, alter ego, instrumentality, fraud,
misrepresentation, duress, coercion, undue influence, interference or
negligence, (e) allegations of tortuous interference with present or prospective
business relationships or of antitrust, or (f) slander, libel or damage to
reputation (hereinafter being collectively referred to as the "Claims"), all of
which Claims are hereby waived.

     Section 5.10. Expenses of Lender. Borrower agrees to pay on demand (i) all
costs and expenses reasonably incurred by Lender in connection with the
preparation, negotiation and execution of this Amendment and the other Loan
Documents executed pursuant hereto and any and all subsequent amendments,
modifications, and supplements hereto or thereto, including, without limitation,
the costs and fees of Lender's legal counsel and the allocated cost of staff
counsel and (ii) all costs and expenses reasonably incurred by Lender in
connection with the enforcement or preservation of any rights under the
Agreement, this Amendment and/or other Loan Documents, including, without
limitation, the costs and fees of Lender's legal counsel and the allocated cost
of staff counsel.

     Section 5.11. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN LENDER AND
BORROWER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN LENDER AND BORROWER.
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     IN WITNESS WHEREOF, the parties have executed this Amendment under seal on
the date first above written.

                                       "BORROWER"



ATTEST:                                NATIONAL HOME CENTERS, INC.



                                       By: /s/ Brent A. Hanby
----------------------------------        --------------------------------------
Secretary                              Name:
(Corporate Seal)                            ------------------------------------
                                       Title:
                                             -----------------------------------


     AGREED AND ACCEPTED as of the date first written above.

                                       "LENDER"

                                       BANKAMERICA BUSINESS CREDIT, INC.


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------