<PAGE>   1
                                                                   EXHIBIT 10.46


                      SECOND AMENDMENT TO LOAN INSTRUMENTS

         This SECOND AMENDMENT TO LOAN INSTRUMENTS (this "SECOND AMENDMENT"),
dated as of March 10, 2000, is among SECURITY ASSOCIATES INTERNATIONAL, INC., a
Delaware corporation ("BORROWER"), CITIZENS BANK OF MASSACHUSETTS ("CITIZENS
BANK"), and FINOVA CAPITAL CORPORATION, a Delaware corporation ("FINOVA"), in
its individual capacity and as agent for all the financial institutions from
time to time parties to the Loan Agreement defined below. Capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Loan
Agreement.


                                 R E C I T A L S

         A. Borrower, State Street Bank and Trust Company ("STATE STREET"), and
FINOVA entered into a Second Amended and Restated Loan Agreement dated as of
September 30, 1999 (the "ORIGINAL LOAN AGREEMENT"), which was amended by a First
Amendment to Loan Instruments dated as of February 11, 2000 (the "FIRST
AMENDMENT") among Borrower, Citizens Bank, as successor in interest to State
Street, and FINOVA. The Original Loan Agreement, as amended by the First
Amendment and as the same may be further amended, restated, supplemented or
modified from time to time hereafter, is referred to herein as the "LOAN
AGREEMENT." Pursuant to the Loan Agreement, Citizens Bank and FINOVA have agreed
to make the Loan and other financial accommodations to Borrower.

         B. Borrower has requested that the Loan Agreement be further amended in
certain respects.

         C. Subject to the terms and conditions of this Second Amendment,
Lenders are willing to agree to the requests of Borrower.

         NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions hereof, Borrower and Lenders
agree as follows:

         1. INCORPORATION OF RECITALS. The Recitals set forth above are
incorporated herein, are acknowledged by Borrower to be true and correct and are
made a part hereof.

         2. DEFINITIONS. All capitalized terms used but not defined herein shall
have the respective meanings ascribed to such terms in the Loan Agreement, as
amended by this Second Amendment.

         3. AMENDMENTS TO LOAN AGREEMENT. The Loan Instruments are amended as
set forth below:

                  (a) SECTION 1.1 - ADDITIONAL DEFINITIONS. Section 1.1 of the
         Loan Agreement is amended by adding the following definitions in the
         appropriate alphabetical order:



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                           Additional Portion Advance: a disbursement of any
                  portion of the Capital Expenditure Portion, SAFE Attrition
                  Guaranty Portion or SAFE Debt Portion.

                           Capital Expenditure Portion: a portion of the Loan in
                  the amount of $1,000,000.

                           Capital Expenditure Portion Advance: a disbursement
                  of any portion of the Capital Expenditure Portion.

                           SAFE Attrition Guaranty Portion: a portion of the
                  Loan in the amount of $2,000,000.

                           SAFE Attrition Guaranty Portion Advance: a
                  disbursement of any portion of the SAFE Attrition Guaranty
                  Portion Advance.

                           SAFE Debt Portion: a portion of the Loan in an amount
                  not to exceed the amount of the SAFE Debt as of the Funding
                  Date of the SAFE Debt Portion Portion.

                           SAFE Debt Portion Advance: a disbursement of the SAFE
                  Debt Portion.

                  (B) SECTION 1.1 - AMENDED DEFINITION. Section 1.1 of the Loan
         Agreement is amended by deleting the current versions of the following
         definitions contained therein and substituting therefor the following
         versions of such definitions in the appropriate alphabetical order:

                           Acquisition Portion: a portion of the Loan equal to
                  $35,000,000 minus the SAFE Debt Portion.

                           Adjusted Total Debt: as of any Funding Date, the
                  Total Debt as of such date plus the requested Advance or
                  Additional Portion Advance, as applicable.

                           Funding Date: the date of the disbursement of an
                  Advance or Additional Portion Advance.

                  (C) SUBSECTION 2.1.4 - USE OF PROCEEDS. Subsection 2.1.4 of
         the Loan Agreement is deleted in its entirety and the following is
         substituted therefor:

                           "2.1.4 USE OF PROCEEDS. The proceeds of the Initial
                  Portion were used (i) to pay transaction costs and (ii) for
                  working capital. The proceeds of the Acquisition Portion shall
                  be used to (i) consummate Acquisitions and (ii) to pay
                  transaction costs in connection therewith. The proceeds of the
                  Capital Expenditure Portion shall be used to reimburse
                  Borrower for certain Capital Expenditures permitted hereunder.
                  The proceeds of the SAFE Attrition Guaranty Portion shall be
                  used to repay certain


                                       2


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                  obligations to SAFE (i) in connection with the reprogramming
                  of account telephone lines and (ii) arising under the SAFE
                  Attrition Guaranty. The proceeds of the SAFE Debt Portion
                  shall be used to repay the SAFE Debt."

                  (D) SUBSECTION 2.1.7 - FUNDING PROCEDURES. Section 2.1.7 of
         the Loan Agreement is deleted in its entirety and the following is
         substituted therefor:

                           "2.1.7 FUNDING PROCEDURES. Agent shall give each
                  Lender prompt notice by telephone or facsimile transmission of
                  a Notice of Borrowing that is received by it. Each applicable
                  Lender shall make available to Agent, no later than 1:00 p.m.
                  Eastern Time on the applicable Funding Date set forth in the
                  Notice of Borrowing, for deposit into such account as Borrower
                  may direct, its Pro Rata Share of such Advance or Additional
                  Portion Advance in immediately available funds in Dollars,
                  provided that (i) all of the conditions set forth in Sections
                  4.1 and 4.3 have been satisfied with respect to an Advance
                  requested in such Notice of Borrowing and (ii) all of the
                  conditions set forth in Sections 4.1 and 4.4 have been
                  satisfied with respect to a Additional Portion Advance
                  requested in such Notice of Borrowing.

                           "Unless Agent receives contrary written notice prior
                  to any such Advance or Additional Portion Advance, it is
                  entitled to assume that each applicable Lender will make
                  available its Pro Rata Share of the Advance or Additional
                  Portion Advance and in reliance upon that assumption, but
                  without any obligation to do so, may advance such Pro Rata
                  Share on behalf of the applicable Lender, without the
                  necessity of giving daily notice to such Lender of the receipt
                  of a Notice of Borrowing. If the applicable amount is not in
                  fact made available to Agent by such Lender, Agent shall be
                  entitled to recover such amount on demand from such Lender
                  together with interest thereon, for each day from such Funding
                  Date until the date such amount is paid to Agent, at the Base
                  Rate. If such Lender pays such amount to Agent, then such
                  amount shall constitute such Lender's Pro Rata Share of the
                  applicable Advance or Additional Portion Advance. If such
                  Lender does not pay such corresponding amount forthwith upon
                  Agent's demand therefor, Agent shall promptly notify the
                  Borrower and the Borrower shall immediately pay such
                  corresponding amount to Agent together with interest thereon,
                  for each day from such Funding Date until the date such amount
                  is paid to Agent, at the rate payable under this Loan
                  Agreement for the Base Rate Portion.

                           "Nothing in this subsection 2.1.7 shall be deemed to
                  relieve any Lender from its obligation to fulfill its
                  Commitments hereunder or to prejudice any rights that Borrower
                  may have against any Lender as a result of any default by such
                  Lender hereunder. It is understood and agreed that no Lender
                  shall be responsible for any default by any other Lender in
                  that other Lender's obligation to make an Advance or
                  Additional Portion Advance requested hereunder



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                  nor shall the Commitment of any Lender to make the particular
                  type of Advance or Additional Portion Advance requested be
                  increased or decreased as a result of a default by any other
                  Lender in that other Lender's obligation to make an Advance or
                  Additional Portion Advance requested hereunder."

                  (E) SUBSECTION 2.1.8 - ADDITIONAL PORTION ADVANCES. Section
         2.1 of the Loan Agreement is amended by adding the following subsection
         2.1.8 immediately following subsection 2.1.7:

                           "2.1.8 ADDITIONAL PORTION ADVANCES. Each Lender
                  severally agrees to disburse its Pro Rata Share of Additional
                  Portion Advances to or as directed by Borrower from time to
                  time prior to December 31, 2000 provided all of the terms and
                  conditions set forth in Sections 4.1 and 4.4, to the extent
                  applicable, have been satisfied."

                  (F) SUBSECTION 2.2.5 - INTEREST HEDGE CONTRACTS. Section 2.2.5
         of the Loan Agreement is deleted in its entirety and the following is
         substituted therefor:

                           "2.2.5 INTEREST HEDGE CONTRACTS. Borrower shall enter
                  into an Interest Hedge Contract reasonably acceptable to the
                  Required Lenders, to provide protection to Borrower against
                  fluctuations in interest rates, and deliver to Agent the
                  Assignment of Interest Hedge Contract, (i) in a face amount
                  equal to 75% of the aggregate Principal Balance within 15 days
                  after any disbursement of the Loan which would result in an
                  aggregate outstanding Principal Balance equal to or greater
                  than $20,000,000 (the "Threshold Amount") and (ii) in a face
                  amount equal to 75% of any increase in the aggregate
                  outstanding Principal Balance over the Threshold Amount within
                  15 days after a disbursement of the Loan which would result in
                  an increase in the aggregate outstanding Principal Balance
                  equal to or greater than $5,000,000 since the delivery of the
                  most recent previous Assignment of Interest Hedge Contract."

                  (G) SUBSECTION 2.6.2 - NON-UTILIZATION FEE. Section 2.6.2 of
         the Loan Agreement is deleted in its entirety and the following is
         substituted therefor:

                           "2.6.2 NON-UTILIZATION FEE. Borrower shall pay to
                  Agent, for the benefit of Lenders, for each month through
                  March, 2001, a fee in the amount of one-half of one percent
                  (.50%) per annum (the "NON-UTILIZATION FEE") on the remainder
                  of (i) $38,000,000 minus (ii) the aggregate amount of all
                  prior Advances of the Acquisition Portion as of the last day
                  of such month minus (iii) the aggregate amount of all prior
                  Additional Portion Advances as of the last day of such month.
                  The Non-Utilization Fee shall be payable monthly in arrears on
                  the first Business Day of each month."


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                  (H) SECTION 4.4 - CONDITIONS FOR ADDITIONAL PORTION ADVANCES.
         Article IV of the Loan Agreement is amended by adding the following
         Section 4.4 immediately following Section 4.3:

                           "4.4 CONDITIONS FOR ADDITIONAL PORTION ADVANCES. The
                  obligation of Lenders to disburse Additional Portion Advances
                  shall be subject to the satisfaction or waiver of all of the
                  following conditions on or before the Funding Date with
                  respect to any requested Additional Portion Advance, in a
                  manner, form and substance satisfactory to the Required
                  Lenders:

                                    "4.4.1 MAXIMUM FACILITY CASH FLOW LEVERAGE
                           RATIO. Borrower shall demonstrate to the satisfaction
                           of Agent that, assuming the requested Additional
                           Portion Advance had been disbursed on the last day of
                           the second month prior to the month in which the
                           applicable Funding Date is to occur, the Facility
                           Cash Flow Leverage Ratio as of such last day would
                           not exceed 3.5.

                                    "4.4.2 AMOUNT AND FREQUENCY OF ADDITIONAL
                           PORTION ADVANCES. Any requested SAFE Attrition
                           Guaranty Portion Advance or Capital Expenditure
                           Portion Advance shall be in a minimum amount of
                           $75,000 or integral multiples of $25,000 in excess
                           thereof. Any requested SAFE Debt Portion Advance
                           shall be in a single disbursement in an amount not to
                           exceed the amount of the SAFE Debt outstanding as of
                           the Funding Date of the SAFE Debt Portion Advance.
                           The amount of the requested SAFE Attrition Guaranty
                           Portion Advance shall not exceed $2,000,000 when
                           added to the aggregate amount of all prior SAFE
                           Attrition Guaranty Portion Advances and the amount of
                           the requested Capital Expenditure Portion Advance
                           shall not exceed $1,000,000 when added to the
                           aggregate amount of all prior Capital Expenditure
                           Portion Advances. No more than two (2) Additional
                           Portion Advances shall be made in any month.

                                    "4.4.3 NOTICE OF BORROWING. Agent shall have
                           received a Notice of Borrowing from Borrower respect
                           to each Additional Portion Advance no later than
                           12:00 p.m., Chicago time, at least three (3) Business
                           Days prior to the proposed Funding Date with respect
                           to such Additional Portion Advance, which shall be on
                           a Business Day.

                                    "4.4.4 EVIDENCE OF PAYMENT OF SAFE DEBT.
                           With respect to a SAFE Debt Portion Advance, Agent
                           shall have received (i) a pay-off letter from SAFE in
                           form and substance satisfactory to Agent setting
                           forth a pay-off amount of the SAFE Debt as of the
                           proposed Funding Date with respect to such Additional
                           Portion Advance, (ii) such UCC-3 termination
                           statements and other Lien releases as Agent may
                           require, and (iii) evidence that the SAFE

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                           Debt shall be paid in full concurrently with the
                           disbursement of the SAFE Debt Portion.

                                    "4.4.5 EVIDENCE OF PAYMENT OF INDEBTEDNESS
                           FOR BORROWED MONEY OWING UNDER THE SAFE ATTRITION
                           GUARANTY. With respect to a SAFE Attrition Guaranty
                           Portion Advance, Agent shall have received evidence
                           satisfactory to Agent that the disbursement made in
                           connection with such SAFE Attrition Guaranty Portion
                           Advance shall be used to satisfy Indebtedness for
                           Borrowed Money due and payable by Borrower to SAFE
                           pursuant to the SAFE Asset Purchase Agreement."

                  (I) SECTION 6.16 - TRIAL BALANCE REPORTS. Article VI of the
         Loan Agreement is amended by adding the following Section 6.16
         immediately following Section 6.15:

                           "6.16 TRIAL BALANCE REPORTS. Within 30 days of each
                  Funding Date with respect to a Capital Expenditure Portion
                  Advance, furnish each Lender with a trial balance report in
                  sufficient detail to demonstrate to the reasonable
                  satisfaction of Agent the amount of each payment and the
                  vendor paid with respect to each Capital Expenditure which is
                  the subject of each such Capital Expenditure Portion Advance."

                  (J) EXHIBITS TO LOAN AGREEMENT. Exhibits 1.1(G) and 7.6 to the
         Loan Agreement are deleted in their entirety and Amended Exhibit 1.1(G)
         and Amended Exhibit 7.6, each attached to this Second Amendment, are
         substituted therefor.

         4. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Second
Amendment shall be subject to the satisfaction of all of the following
conditions in a manner, form and substance satisfactory to FINOVA:

                  (A) DELIVERY OF DOCUMENTS. The following shall have been
         delivered to FINOVA, each duly authorized and executed and each in form
         and substance satisfactory to FINOVA:

                           (1) this Second Amendment;

                           (2) a copy, certified by the corporate secretary of
                  Borrower, of resolutions adopted by the Board of Directors of
                  Borrower authorizing the execution of this Second Amendment;

                           (3) such other instruments, documents, certificates,
                  consents, waivers and opinions as FINOVA reasonably may
                  request.

                  (B) PERFORMANCE; NO DEFAULT. Borrower shall have performed and
         complied with all agreements and conditions contained in the Loan
         Instruments to be performed by or complied with by it, and no Event of
         Default or Incipient Default shall exist.


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<PAGE>   7

                  (C) MATERIAL ADVERSE CHANGE. No event shall have occurred
         since December 31, 1999 which has had or could have a Material Adverse
         Effect.

         The date on which all of the conditions set forth in this Paragraph 4
have been satisfied is referred to herein as the "Effective Date."

         5. REFERENCES. From and after the Effective Date, all terms used in the
Loan Instruments which are defined in the Loan Agreement shall be deemed to
refer to such terms as amended by this Second Amendment.

         6. REPRESENTATIONS AND WARRANTIES. Borrower hereby confirms to Agent
and Lenders that the representations and warranties set forth in the Loan
Instruments, as amended by this Second Amendment, are true and correct in all
material respects as of the date hereof, and shall be deemed to be remade as of
the date hereof. Borrower represents and warrants to Agent and Lenders that (i)
Borrower has full power and authority to execute and deliver this Second
Amendment and to perform its obligations hereunder, (ii) upon the execution and
delivery hereof, this Second Amendment will be valid, binding and enforceable
upon Borrower in accordance with its terms, (iii) the execution and delivery of
this Second Amendment does not and will not contravene, conflict with, violate
or constitute a default under (A) the articles of incorporation or by-laws of
Borrower or (B) any applicable law, rule, regulation, judgment, decree or order
or any agreement, indenture or instrument to which Borrower is a party or is
bound or which is binding upon or applicable to all or any portion of Borrower's
Property and (iv) as of the date hereof no Incipient Default or Event of Default
exists.

         7. COSTS AND EXPENSES. Borrower agrees to reimburse Agent for all fees
and expenses incurred in the preparation, negotiation and execution of this
Second Amendment and the consummation of the transactions contemplated hereby,
including, without limitation, the fees and expenses of counsel for Agent.

         8. NO FURTHER AMENDMENTS; RATIFICATION OF LIABILITY. Except as amended
hereby, the Loan Agreement and each of the other Loan Instruments shall remain
in full force and effect in accordance with its respective terms. Borrower
hereby ratifies and confirms its liabilities, obligations and agreements under
the Loan Agreement and the other Loan Instruments, all as amended by this Second
Amendment, and the Liens created thereby, and acknowledges that (i) it has no
defenses, claims or set-offs to the enforcement by Agent and Lenders of such
liabilities, obligations and agreements, (ii) Agent and Lenders have fully
performed all obligations to Borrower which any such Person may have had or has
on and as of the date hereof and (iii) other than as specifically set forth
herein, neither Agent nor any Lender waives, diminishes or limits any term or
condition contained in the Loan Agreement or the other Loan Instruments. Agent
and Lenders' agreement to the terms of this Second Amendment or any other
amendment of the Loan Agreement shall not be deemed to establish or create a
custom or course of dealing among Agent, Lenders and Borrower. The Loan
Instruments, as amended by this Second Amendment, contain the entire agreement
among Agent, Lenders and Borrower with respect to the transactions contemplated
hereby.


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         9. COUNTERPARTS. This Second Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument.

         10. FURTHER ASSURANCES. Borrower covenants and agrees that it will at
any time and from time to time do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as reasonably may be required by Agent and Lenders in
order to effectuate fully the intent of this Second Amendment.

         11. SEVERABILITY. If any term or provision of this Second Amendment or
the application thereof to any party or circumstance shall be held to be
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, the validity, legality and enforceability of the remaining terms
and provisions of this Second Amendment shall not in any way be affected or
impaired thereby, and the affected term or provision shall be modified to the
minimum extent permitted by law so as most fully to achieve the intention of
this Second Amendment.

         12. CAPTIONS. The captions in this Second Amendment are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Second Amendment or any of the provisions hereof.

                [remainder of this page intentionally left blank]


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<PAGE>   9




         IN WITNESS WHEREOF, this Second Amendment has been executed and
delivered by each of the parties hereto by a duly authorized officer of each
such party on the date first set forth above.

                                              SECURITY ASSOCIATES INTERNATIONAL,
                                              INC., a Delaware corporation


                                              By:
                                                 -------------------------------
                                                 James S. Brannen
                                                 President


                                              FINOVA CAPITAL CORPORATION, a
                                              Delaware corporation, in its
                                              individual capacity as a Lender
                                              and as Agent for all Lenders


                                              By:
                                                 -------------------------------
                                                 Andrew J. Pluta
                                                 Vice President


                                              CITIZENS BANK OF MASSACHUSETTS, as
                                              Lender


                                              By:
                                                 -------------------------------
                                                 Wendy M. Andrus
                                                 Vice President


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                             AMENDED EXHIBIT 1.1(G)

                                       to

               LOAN AGREEMENT, as Amended by the Second Amendment

                           Form of Notice of Borrowing

                                  See attached.


Second Amendment to Loan Instruments

                                       10
<PAGE>   11



                    NOTICE OF BORROWING/DISBURSEMENT REQUEST

                              ---------- --, -----

FINOVA Capital Corporation, as Agent
1850 North Central Avenue
Phoenix, Arizona 85004
Attn:    Vice President
         Operations Management

Ladies and Gentlemen:

         Reference is made to that certain Second Amended and Restated Loan
Agreement, dated as of September 30, 1999 (the "Original Loan Agreement"), among
SECURITY ASSOCIATES INTERNATIONAL, INC., a Delaware corporation ("Borrower"),
FINOVA CAPITAL CORPORATION, a Delaware corporation ("FINOVA"), in its individual
capacity and as agent for the financial institutions from time to time parties
hereto, STATE STREET BANK AND TRUST COMPANY ("State Street"), and the other
financial institutions from time to time parties hereto, as amended by that
certain First Amendment to Loan Instruments, dated as of February 11, 2000 (the
"First Amendment") among Borrower, FINOVA and CITIZENS BANK OF MASSACHUSETTS
("Citizens Bank"), as successor in interest to State Street, and that certain
Second Amendment to Loan Instruments, dated as of March __, 2000 (the "Second
Amendment") among Borrower, FINOVA and Citizens Bank. The Original Loan
Agreement, as amended by the First Amendment and the Second Amendment, is
referred to herein as the "Loan Agreement"). All capitalized terms used but not
elsewhere defined herein shall have the respective meanings ascribed to such
terms in the Loan Agreement.

         Borrower hereby notifies Agent that on the date hereof, Borrower
desires to borrow [$_________ of the Acquisition Portion] [$____________ of the
Capital Expenditure Portion] [$_________________ of the SAFE Attrition Guaranty
Portion] [$____________ of the SAFE Debt Portion] and Borrower hereby directs
Agent to disburse such principal amount in accordance with the payment
instructions attached hereto as EXHIBIT A. Borrower acknowledges and agrees that
even though a portion of the disbursements described on EXHIBIT A are directed
to entities other than Borrower, receipt of such disbursements by the applicable
payees shall constitute receipt of such disbursements by Borrower.

         Borrower acknowledges that this Notice of Borrowing/Disbursement
Request and acceptance by Borrower of the proceeds of the disbursements
contemplated hereby constitute a representation and warranty that the conditions
contained in SECTIONS 4.1 AND [4.3] [4.4] of the Loan Agreement have been
satisfied in all material respects.


Second Amendment to Loan Instruments

<PAGE>   12




                                              Very truly yours,

                                              SECURITY ASSOCIATES INTERNATIONAL,
                                              INC., a Delaware corporation

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


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Second Amendment to Loan Instruments

<PAGE>   13



                                    EXHIBIT A


ENTITY, PAYMENT INSTRUCTIONS                                       AMOUNT



1.
  -------------------------                                  $
                                                              -----------------

         By Wire Transfer to:

         Bank Name:
                   ----------------------------------
         Bank Address:
                      -------------------------------


         ABA No.:
                 ------------------------------------
         Acct. No.:
                   ----------------------------------
         Acct. Name:
                    ---------------------------------
         Attention:
                   ----------------------------------
         Telephone:
                   ----------------------------------

2.-------------------------                                  $
                                                              -----------------

         By Wire Transfer to:

         Bank Name:
                   ----------------------------------
         Bank Address:
                      -------------------------------


         ABA No.:
                 ------------------------------------
         Acct. No.:
                   ----------------------------------
         Acct. Name:
                    ---------------------------------
         Attention:
                   ----------------------------------
         Telephone:
                   ----------------------------------



         TOTAL DISBURSEMENTS                                 $
                                                              -----------------



Second Amendment to Loan Instruments

<PAGE>   14



                               AMENDED EXHIBIT 7.6

                                       to

               LOAN AGREEMENT, as Amended by the Second Amendment

                              Capital Expenditures




                Year                                  Amount
                ----                                  ------

                2000                               $ 1,250,000
                Each year thereafter               $   500,000

Second Amendment to Loan Instruments

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