EXHIBIT 10.2

                            [FORM OF LOAN AGREEMENT]
                        SPARTA COMMERCIAL SERVICES, INC.


      This Loan  Agreement  states the terms and  conditions  upon which  Sparta
Commercial  Services,  Inc., a Nevada corporation  ("Borrower" or the "Company")
may obtain loan(s) from various lenders,  including the undersigned  ("Lender"),
for  Borrower's  general  corporate  and  business  purposes  upon the terms and
conditions referred to herein.

      1.    Loans.  Lender  shall  make a loan to  Borrower  in an amount as set
forth on the signature page hereto.

            Lender shall tender to the Company an executed Loan  Agreement  with
the loan  amount by wire  transfer,  check,  bank draft or money order in United
States dollars made payable to the order of SPARTA COMMERCIAL SERVICES, INC.

      Company address:               Sparta Commercial Services, Inc.
                                     462 Seventh Ave., 20th Floor
                                     New York, NY 10018

      Wire transfer instructions:    Northfork Bank
                                     185 Broadway
                                     New York, NY 11211
                                     ABA No. __________
                                     A/C No. __________
                                     For the account of Sparta Commercial
                                     Services, Inc.

The loan is a part of a loan  financing of up to  approximately  $400,000 in the
aggregate.  The terms of  repayment  of the loan are more fully set forth in the
Promissory Note, annexed hereto as Exhibit A.

      2.    Equity  Kicker.  In  consideration  for the  loan,  Lender  shall be
entitled to an "Equity  Kicker." The Equity  Kicker  shall  consist of shares of
Borrower's common stock.

            Lender  is  informed   by  the   Borrower   that  the   Borrower  is
contemplating  a  private  placement  offering  of  its  securities,  through  a
placement  agent,  and that the terms of such private  placement  are  presently
undergoing  final  negotiation  (the  "Private  Placement").  Provided  that any
portion of the Private  Placement is conducted  and closed prior to the Maturity
Date of the  Promissory  Note with gross  proceeds to the  Borrower in excess of
$1,000,000,  the Lender  shall be entitled to an Equity  Kicker  equal to 40,000
shares of the  Borrower's  common stock for each $100,000 loan, or any pro rated
portion  thereof.  For purposes of illustration  only,  assuming that the Lender
loans $150,000  pursuant to this Loan  Agreement and the Borrower  closes upon a
Private  Placement in excess of  $1,000,000;  then,  the Equity  Kicker shall be
equal to 60,000 shares of the Borrower's common stock.

      3.    Representations  and  Warranties.  The Lender  hereby  acknowledges,
represents, warrants and agrees as follows:

            (a)   The Lender is an "accredited investor" as that term in defined
in the  federal  securities  laws.  The  Lender  has  accurately  completed  the
Confidential Accredited Person Questionnaire annexed hereto as Exhibit B.

            (b)   The Lender  represents and warrants to and agrees with Company
as follows:

                  (i)   the  Lender  has  the  financial  ability  to  bear  the
substantial  economic risk of the Lender's  investment in the Company (including
its possible  entire  loss),  has adequate  means for providing for the Lender's
current needs and personal  contingencies,  and has no need for  liquidity  with
respect to such investment;


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<PAGE>

                  (ii)  the  Lender   represents   that  the  Lender's   overall
commitment   to   investments   which  are  not   readily   marketable   is  not
disproportionate  to the  Lender's net worth,  and that the Lender's  investment
will not cause such overall commitment to become excessive;

                  (iii) the  Lender  has  such   knowledge  and   experience  in
financial  and business  matters as to be capable of  evaluating  the merits and
risks  of an  investment  in the  Company,  and has  obtained,  in the  Lender's
judgment,  sufficient  information  to  evaluate  the  merits  and  risks  of an
investment in the Company and to make an informed investment decision; and

                  (iv)  the Lender has significant prior investment  experience,
and the Lender is knowledgeable about investment  considerations in investing in
"start-up"  companies  that have  little or no  operating  history,  that have a
history of losses,  that have an extremely low market stock price, and that need
to raise substantial additional capital to operate its business.

            (c)   The Lender is entering  this Loan  Agreement  for the Lender's
own account,  with the intention of holding the  Promissory  Note and associated
rights for  investment  purposes and not with a view towards  distribution.  The
Lender  has no  present  intention  to sell the  Promissory  Note or  associated
rights. The Lender has no present  arrangement  (whether or not legally binding)
at any time to sell the Promissory  Note or associated  rights to or through any
person or entity, and shall not make any sale,  transfer or other disposition of
the Promissory Note or associated rights.

            (d)   The Lender and the Lender's  attorney,  accountant  and/or tax
advisor,  if any  (collectively,  the "Advisors")  have conducted an independent
investigation  of the Company,  received all documents  requested by the Lender,
have carefully  reviewed them and understand the information  contained therein,
and the Lender  and the  Advisors,  if any,  have had access to the same kind of
information  which would be available in a registration  statement  filed by the
Company under the Securities  Act. The Lender  acknowledges  that all documents,
records and books  pertaining  to the  investment  have been made  available for
inspection by the Lender and the Advisors,  if any. The Lender has been given no
oral  or  written   representations  or  assurances  from  the  Company  or  any
representative  of the  Company  except as stated  in this  Loan  Agreement.  In
evaluating the  suitability of an investment in the Company,  the Lender has not
relied upon any representation or other information (oral or written) other than
as stated in this Loan Agreement or as contained in documents or written answers
to questions so furnished to the Lender or the Advisors by the Company.

            (e)   The  Lender  together  with  the  Advisors,  if any,  has such
knowledge  and  experience  in  financial,  tax, and business  matters,  and, in
particular, investments in securities, so as to enable the Lender to utilize the
information  made available to the Lender in connection with this Loan Agreement
to evaluate the merits and risks of an  investment in the Company and to make an
informed investment decision with respect thereto.  The Lender is not relying on
the Company or any of its  employees or agents with  respect to the legal,  tax,
economic,  business and related  considerations of an investment in the Company,
and the Lender has relied on the  advice of, or has  consulted  with,  only such
Lender's own Advisors.

            (f)   The Lender  acknowledges  and understands  that any securities
issued  pursuant to this Loan  Agreement  are  "restricted  securities"  and the
certificates  evidencing  such  securities  will  bear a  restrictive  legend in
substantially  the  following  form,  and  such  other  legends  concerning  any
restrictions  on the transfer of the  certificate  as may be required  under the
securities  laws of any state:  THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE
HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF 1933. THE SECURITIES MAY
NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT  UNDER  THE  SECURITIES  ACT OF 1933 OR AN  OPINION  OF THE  COMPANY'S
COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

            (g)   The Lender  acknowledges  and  understands  that  neither  the
Securities  and Exchange  Commission  nor any state  securities  commission  has
approved  the  Promissory  Note or passed  upon or  endorsed  the  merits of any
offering by the Company or confirmed the accuracy or determined  the adequacy of
this Loan  Agreement.  This Loan Agreement has not been reviewed by any federal,
state or other regulatory authority.


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<PAGE>

      4.    Indemnification.  The Lender  agrees to indemnify  and hold harmless
the Company,  its managers,  officers,  directors,  employees,  agents,  control
persons, members and affiliates against all losses liabilities, claims, damages,
and  expenses  whatsoever  including,  but not limited to, any and all  expenses
incurred in  investigating,  preparing,  or  defending  against  any  litigation
commenced  or  threatened,  based upon or  arising  out of any actual or alleged
false  acknowledgment,  representation  or  warranty,  or  misrepresentation  or
omission to state a material  fact,  or breach by the Lender of any  covenant or
agreement  made by the  Lender  herein or in any  other  document  delivered  in
connection with this Loan Agreement.

      5.    Irrevocability;  Binding Effect. The Lender hereby  acknowledges and
agrees that this Loan Agreement  hereunder is irrevocable by the Lender,  except
as required by applicable  law, and that this Loan  Agreement  shall survive the
death or  disability  of the Lender  and shall be binding  upon and inure to the
benefit of the parties and their heirs, executors,  administrators,  successors,
legal representatives and permitted assigns.

      6.    Modification.  This Loan  Agreement  shall not be modified or waived
except by an  instrument  in writing  signed by the party  against whom any such
modification or waiver is sought.

      7.    Assignability.  This Loan  Agreement  and the rights,  interests and
obligations hereunder are not transferable or assignable by the Lender except in
accordance with applicable law.

      8.    Applicable Law. This Loan Agreement shall be construed in accordance
with and governed by the laws of the State of New York  applicable  to contracts
made and to be performed entirely therein, without giving effect to its conflict
of law  principles.  The parties  hereby agree that any dispute  which may arise
between them arising out of or in connection  with this Loan Agreement  shall be
adjudicated  before a court  located in New York  County,  State of New York and
they hereby submit to the exclusive jurisdiction of the state and federal courts
located  in New York  County,  State of New York with  respect  to any action or
legal  proceeding  commenced by any party,  and irrevocably  waive any objection
they now or  hereafter  may have  respecting  the  venue of any such  action  or
proceeding  brought in such a court or respecting the fact that such court is an
inconvenient  forum,  relating to or arising out of this Loan  Agreement  or any
acts or omissions relating to the sale of the securities hereunder,  and consent
to the  service of process in any such  action or legal  proceeding  by means of
registered or certified mail, return receipt  requested,  in care of the address
set forth below or such other  address as the Lender shall furnish in writing to
the Company.  THE LENDER AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION  BASED  UPON OR  ARISING  OUT OF THIS LOAN  AGREEMENT  OR ANY
DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.

THE COMPANY WILL NOT ACCEPT LOAN AGREEMENTS AND FUNDS RECEIVED AFTER JANUARY 31,
2006.

                            [signature page follows]


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<PAGE>

                                 SIGNATURE PAGE
                                       TO
                                 LOAN AGREEMENT


LENDER:

LOAN AMOUNT:  $_____________________


                                             Residence Address (if an
                                             individual)
                                             Business Address (if an entity):



-------------------------------------------  -----------------------------------
Type or Print Name of Lender                 Street Address


-------------------------------------------  -----------------------------------
Type or Print Name of Authorized Signatory   City         State         Zip Code


-------------------------------------------  -----------------------------------
Signature of Lender or Authorized Signatory  Home Telephone Number


-------------------------------------------  -----------------------------------
Social Security Number or Tax ID number      Business Telephone Number


-------------------------------------------
Date


THE COMPANY:

Sparta Commercial Services, Inc.


By:
   ----------------------------------------
   Anthony L. Havens, President
   and Chief Executive Officer


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<PAGE>

                                                                       EXHIBIT A

                            [FORM OF PROMISSORY NOTE]


[$___________]                                             [__________ __, 2005]


      FOR VALUE RECEIVED, SPARTA COMMERCIAL SERVICES, INC., a Nevada corporation
("Borrower"), hereby promises to pay to  _________________________________  (the
"Holder"),  without  demand,  the sum of  $___________  on March  31,  2006 (the
"Maturity  Date"),  together with simple  interest at the rate of 10% per annum.
Whenever  any payment to be made  hereunder  falls due on a Saturday,  Sunday or
business  holiday in New York,  New York,  such  payment may be made on the next
succeeding  business  day and such  extension  of time will,  in such  case,  be
included in computing interest, if any, in connection with such payment.

      In the event that the Borrower  hereafter raises at least in $1,000,000 in
gross proceeds through equity  financing  (excluding funds received through this
and similar Promissory Notes) prior to the Maturity Date, then the Maturity Date
shall be the fifth  business day  following  the closing and  clearance of funds
received pursuant to such equity financing.

      Borrower may prepay this Promissory Note at any time, in whole or in part,
with  accrued  interest  to the date of  prepayment,  and without  penalty.  All
payments  on this  Promissory  Note  shall be  applied  first to the  payment of
accrued interest and the balance shall be applied to principal.

      In the event of default on  repayment  by the  Borrower,  as penalty,  the
simple interest rate on the unpaid principal shall be increased to a rate of 20%
per annum commencing from the date of default.

      Additionally,  in the event of default on repayment by the  Borrower,  the
Equity  Kicker (as defined in the Loan  Agreement)  to be issued to the Borrower
shall be  increased  by 50% for each month that such default has not been cured.
For purposes of  illustration  only,  assuming  that the Equity Kicker is 40,000
shares of the Borrower's  common stock, upon an event of default on repayment by
the  Borrower,  the Equity  Kicker shall be  increased  by 20,000  shares of the
Borrower's common stock for each month that such default is not cured.

      Additionally,  as penalty,  the repayment after default of this Promissory
Note shall be  collateralized  by a Security  Interest.  Such Security  Interest
shall mean a continuing  security interest in, a lien upon and a right of setoff
against,  all present  and future (i)  Accounts  (defined  as all of  Borrower's
present and future  accounts,  contract  rights,  general  intangibles,  chattel
paper,  documents  and  instruments,  as such terms are  defined in the New York
Uniform Commercial Code ("UCC"), including,  without limitation, all obligations
for the  payment  of money  arising  out of our sale of  goods or  rendition  of
services),  (ii) moneys, securities and other property and the proceeds thereof,
now or  hereafter  held or  received  by, or in transit  to,  Lender from or for
Borrower, whether for safekeeping, pledge, custody, transmission,  collection or
otherwise,  and all of Borrower's deposits (general or special),  balances, sums
and credits with Lender at any time  existing,  (iii) all of  Borrower's  right,
title and interest, and all of Borrower's rights, remedies,  security and liens,
in, to and in respect of the Accounts,  including, without limitation, rights of
stoppage in transit, replevin, repossession and reclamation and other rights and
remedies  of an  unpaid  vendor,  lien or  secured  party,  guaranties  or other
contracts of suretyship with respect to the Accounts, deposits or other security
for the obligation of any Account Debtor,  and credit and other insurance,  (iv)
all of Borrower's  right,  title and interest in, to and in respect of all goods
relating to, or which by sale have  resulted in,  Accounts,  including,  without
limitation,  all goods  described in invoices or other  documents or instruments
with respect to, or otherwise  representing  or evidencing,  any Account and all
returned,  retained or repossessed goods, (v) all deposit accounts, as such term
is defined in the UCC, (vi) all books, records,  ledger cards, computer programs
and other property and general intangibles at any time evidencing or relating to
the Accounts ("Records"),  (vii) all other general intangibles of every kind and
description,  including (without  limitation) trade names and trademarks and the
goodwill of the business  symbolized thereby,  and Federal,  State and local tax
refund  claims of all kinds,  and (viii) all proceeds of the  foregoing,  in any
form, including,  without limitation,  any claims against third parties for loss
or  damage  to or  destruction  of any or all  of the  foregoing.  The  Security
Interest  shall be  subordinate  to the rights of any lending  institution,  any
asset-based  lending  agreement,  and any rights and preferences of investors in
the Private Placement.


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<PAGE>

As of the date hereof,  Borrower  has not granted any  security  interest to any
person.  Except  pursuant to agreements,  terms and conditions  with any lending
institution,  any asset-based  lending agreement,  any rights and preferences of
investors  in the Private  Placement,  and in the  ordinary  course of business,
Borrower  agrees not to grant to any person any security  interest  prior to the
Maturity Date.

      Any notice  herein  required or  permitted to be given shall be in writing
and sent by means of  certified  or  registered  mail,  express  mail,  or other
overnight  delivery  service,  hand  delivery  confirmed  by signed  receipt  or
facsimile  transmission (followed by prompt transmission of the original of such
notice  by any of the  foregoing  means) in each case  proper  postage  or other
charges  pre-paid and  addressed or directed to the Holder or to the Borrower as
set forth below:

                           If to the Borrower:
                           Sparta Commercial Services, Inc.
                           462 Seventh Ave., 20th Floor
                           New York, NY 10018
                           Attn.:  President
                           Fax:  212-239-2666

                           If to the Holder:
                           The  address set forth in the  Signature  Page to the
Loan Agreement.

Such notice shall be deemed given when  actually  received.  Both the Holder and
Borrower  may change the address and fax number for notices by service of notice
to the other as herein provided.

      This Promissory Note shall not be assignable.

      Borrower  waives demand for payment,  notice of  nonpayment,  presentment,
notice of dishonor, protest, and notice of protest.

      This  Promissory  Note shall be governed by the internal laws of the State
of New York,  without regard to the principles of conflict of laws, and shall be
enforced in the courts located in New York County in the State of New York.

      This  Promissory  Note,  together with the Loan  Agreement,  is the entire
agreement  between  the  parties  and  neither  party is relying on any prior or
contemporaneous  representation or promise,  or any omission of any information,
in entering into this Promissory Note.

      IN WITNESS WHEREOF,  Borrower has caused this Promissory Note to be signed
in its name by its duly authorized representative on the date first written.

                                           SPARTA COMMERCIAL SERVICES, INC.

                                           By:
                                             -----------------------------------
                                             Anthony L. Havens, President
                                             and Chief Executive Officer


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