<PAGE>
 
                          LOAN AND SECURITY AGREEMENT
                              dated July 12, 1994


                                    between


                       BANKAMERICA BUSINESS CREDIT, INC.

                                      and

                           COLE TAYLOR FINANCE CO.,
                    RELIANCE ACCEPTANCE CORP. OF COLORADO,
                     RELIANCE ACCEPTANCE CORP. OF FLORIDA,
                     RELIANCE ACCEPTANCE CORP. OF GEORGIA,
                     RELIANCE ACCEPTANCE CORP. OF INDIANA,
                    RELIANCE ACCEPTANCE CORP. OF LOUISIANA,
                   RELIANCE ACCEPTANCE CORP. OF NEW MEXICO,
                      RELIANCE ACCEPTANCE CORP. OF OHIO,
                   RELIANCE ACCEPTANCE CORP. OF TEXAS, AND 
                    RELIANCE ACCEPTANCE CORP. OF TENNESSEE
<PAGE>
 
<TABLE> 
<S>                                                                  <C>  
ARTICLE ONE - DEFINITIONS

     Terms Defined..................................................  1
     Adjusted LIBOR.................................................  1
     Adjusted LIBOR Loans...........................................  1
     Adjusted Net Earnings from Operations..........................  1
     Adjusted Tangible Assets.......................................  2
     Adjusted Tangible Net Worth....................................  2
     Advance........................................................  2
     Advance Rate...................................................  2
     Affiliate......................................................  3
     Availability...................................................  3
     Bank...........................................................  4
     Borrowing Base.................................................  4
     Business Day...................................................  4
     Closing Date...................................................  4
     Code...........................................................  4
     Collateral.....................................................  4
     Collateral Report..............................................  5
     Collection Account Agreement...................................  5
     Conversion Date................................................  5
     Contract Debtor................................................  5
     Contract.......................................................  5
     Dealer.........................................................  6
     Dealer Reserve.................................................  6
     Dealer Agreement...............................................  6
     Debt...........................................................  6
     Default........................................................  6
     Delinquency Rate...............................................  6
     Distribution...................................................  7
     Dollars and the symbol "$" ....................................  7
     Eligible Contracts.............................................  7
     ERISA..........................................................  9
     Excess Availability............................................  9
     Facility Fee...................................................  9
     Fiscal Year....................................................  9
     GAAP...........................................................  9
     Goods..........................................................  9
     Gross Contract Payments........................................  9
     Instruments.................................................... 10
     Intercompany Management Fees................................... 10
     Interest Payment Due Date...................................... 10
     Interest Period................................................ 10
     Interest Rate Determination Date............................... 10
     Interest Rate Option........................................... 10
     Lender's Expenses.............................................. 11
     LIBOR.......................................................... 11
     LIBOR Reserve Percentage....................................... 12
     Lien........................................................... 12
     Loan........................................................... 12
     Loan Documents................................................. 12
</TABLE> 

                                   (2)     
<PAGE>
 
<TABLE>
<S>                                                                      <C>
     London Business Day................................................ 12
     Loss Reserve Percentage............................................ 12
     Modified Contract.................................................. 13
     Net Charge Offs.................................................... 13
     Net Contract Payments.............................................. 13
     Notice of Interest Rate Election................................... 13
     Obligations........................................................ 13
     Old Auto Contracts................................................. 13
     Participant........................................................ 13
     PBGC............................................................... 14
     Permitted Liens.................................................... 14
     Person............................................................. 14
     Plan............................................................... 14
     Property........................................................... 15
     Reference Rate..................................................... 15
     Reference Rate Loans............................................... 15
     Reportable Event................................................... 15
     Restricted Investment.............................................. 15
     Rules.............................................................. 16
     Security Documents................................................. 16
     Subordinated Debt.................................................. 16
     Subsidiary......................................................... 16
     Total Credit Facility.............................................. 16
     Unused Line Fee.................................................... 16

ARTICLE TWO - LOAN

     Loan............................................................... 16
     Monthly Statements Conclusive...................................... 17

ARTICLE THREE - INTEREST AND OTHER CHARGES

     Interest Rate Option............................................... 18
     Conversion, or Continuation, or Draw Down.......................... 18
     Interest Periods................................................... 19
     Interest Calculation............................................... 20
     Payment of Interest................................................ 20
     Adjusted LIBOR..................................................... 21
     Funding Losses..................................................... 23
     Facility Fee....................................................... 24
     Unused Line Fee.................................................... 24
     Default Interest Rate.............................................. 24
     Maximum Interest Rate.............................................. 25
     Capital Adequacy................................................... 25

ARTICLE FOUR - TERM

     Term of Agreement and Loan Repayment............................... 26
     Application of Payments............................................ 26
     Termination of Security Interests.................................. 27
</TABLE>

                                      (3)
<PAGE>
 
<TABLE> 
<S>                                                                                             <C> 
ARTICLE FIVE - SECURITY INTEREST IN COLLATERAL

     Creation of Security Interest in Collateral..............................................  27
     Financing Statements.....................................................................  27
     Location of Collateral...................................................................  28
     Delivery and Marking of Collateral.......................................................  28
     Protection of Collateral; Reimbursement..................................................  29
     Monthly Reports Re Collateral............................................................  29
     Inspection...............................................................................  30
     Verification.............................................................................  30

ARTICLE SIX - RECORDS AND SERVICING OF CONTRACTS

     Records of Contracts.....................................................................  30
     Servicing of Contracts...................................................................  31
     Termination of Collection Rights.........................................................  31
     Collection Account.......................................................................  31

ARTICLE SEVEN - REPRESENTATIONS, WARRANTIES AND COVENANTS

     Representations and Warranties Reaffirmed................................................  32
     Warranties and Representations Re Contracts..............................................  32
     Warranties and Representations Re Collateral Generally...................................  33
     Contract and Security Document Forms.....................................................  34
     Solvent Financial Condition..............................................................  34
     Credit Guidelines........................................................................  34
     Organization, Authority, and Capital Structure...........................................  34
     Financial Statements.....................................................................  34
     Full Disclosure..........................................................................  35
     Pending Litigation.......................................................................  35
     Title to Properties......................................................................  35
     Transaction is Legal and Authorized......................................................  35
     Taxes....................................................................................  35
     Compliance with Law......................................................................  36
     Borrower's Office........................................................................  36
     ERISA....................................................................................  36
     Name Changes.............................................................................  36

ARTICLE EIGHT - FINANCIAL AND OTHER COVENANTS

     Payment of Taxes and Claims..............................................................  37
     Uniform Commercial Code Financing Statements and
       Assignments of Contracts...............................................................  37
     Maintenance of Properties and Existence..................................................  37
     Offices; FTC; Warranties.................................................................  37
     Guaranties...............................................................................  38
     Total Debt Ratio.........................................................................  38
     Minimum Interest Coverage................................................................  38
     Prohibition on Distributions; Equity Capital Changes.....................................  38
     Loss Reserves............................................................................  39
     Limitation on Amounts Paid to Dealers....................................................  39
     Unsubordinated Debt to Borrowing Base....................................................  39
</TABLE> 

                                      (4)
 

<PAGE>

<TABLE> 
<S>                                                                        <C> 
     Charge-Off Policy.................................................... 39
     Minimum Adjusted Tangible Net Worth.................................. 40
     Subordinated Obligations............................................. 40
     Intercompany Management Fees......................................... 40
     New Subsidiaries..................................................... 40
     Dealer Agreement Forms............................................... 40
     Debt................................................................. 41
     Further Assurances................................................... 41
     Merger; Liquidation.................................................. 41
     Change in Business................................................... 41
     Lender's Expenses.................................................... 41
     Liens................................................................ 41
     ERISA................................................................ 42
     Restricted Investments Prohibition................................... 42

ARTICLE NINE - INFORMATION AS TO BORROWER

     Financial Statements................................................. 42
          Monthly and Annual Statements................................... 42
          Projections..................................................... 43
          Audit Reports................................................... 43
          Requested Information........................................... 43
          Notices......................................................... 43

ARTICLE TEN - CLOSING CONDITIONS

     Representations and Warranties; Covenants; Defaults.................. 44
     Delivery of Documents................................................ 44
     Termination of Liens................................................. 44
     Facility Fees........................................................ 45
     Payment of Fees and Expenses......................................... 45
     Required Approvals................................................... 45
     No Material Adverse Change........................................... 45

ARTICLE ELEVEN - EVENTS OF DEFAULT:  REMEDIES

     Events of Default.................................................... 45
          Interest or Principal........................................... 45
          Payment of Other Sums........................................... 45
          Warranties or Representations................................... 45
          Breach of Certain Covenants..................................... 45
          Breach of Other Covenants....................................... 46
          Material Adverse Change......................................... 46
          Bankruptcy, Etc................................................. 46
          Attachment, Judgment, Tax Liens................................. 46
          Default in Other Agreements..................................... 47
          Assignment of Agreement......................................... 47
          Payment of Subordinated Debt.................................... 47
          Breach of Collection Account Agreement.......................... 47
     Default Remedies..................................................... 47
     Remedies Cumulative.................................................. 49
     Waiver of Right of Offset............................................ 50
</TABLE> 

                                      (5)
<PAGE>
 
ARTICLE TWELVE - GENERAL 

     Invalidated Payments.............................................. 50
     Application of Code to Agreement.................................. 50
     Parties, Successors and Assigns................................... 50
     Notices........................................................... 52
     Accounting Principles............................................. 53
     Total Agreement................................................... 53
     Governing Law..................................................... 53
     Survival.......................................................... 53
     Time of the Essence............................................... 53
     Power of Attorney................................................. 53
     Arbitration....................................................... 54
     Litigation........................................................ 55
     Severability...................................................... 55
     Participant's Security Interests.................................. 55
     Jury Trial Waiver, Etc............................................ 56
<PAGE>
 
                          LOAN AND SECURITY AGREEMENT

     This Loan and Security Agreement ("Agreement") is made and entered into as 
of July 12, 1994, between BankAmerica Business Credit, Inc., a Delaware 
corporation ("Lender"), doing business as "BA Business Credit, Inc.," having an 
address at 200 Lake Drive East, Suite 201, Cherry Hill, New Jersey 08002, and 
Cole Taylor Finance Co., a Delaware corporation ("Parent Borrower"); Reliance 
Acceptance Corp. of Colorado, a Delaware corporation; Reliance Acceptance Corp. 
of Georgia, a Delaware corporation; Reliance Acceptance Corp. of Florida, a
Delaware corporation; Reliance Acceptance Corp. of Indiana, a Delaware
corporation; Reliance Acceptance Corp. of New Mexico, a Delaware corporation;
Reliance Acceptance Corp. of Ohio, an Ohio corporation; Reliance Acceptance
Corp. of Louisiana, a Louisiana corporation; Reliance Acceptance Corp. of Texas,
a Texas corporation; and Reliance Acceptance Corp. of Tennessee, a Delaware
corporation (collectively, "Subsidiary Borrowers"), whose the chief executive
offices are located at 350 East Dundee Road, Suite 203, Wheeling, Illinois
60090. (Parent Borrower and Subsidiary Borrowers are hereinafter collectively
referred to as "Borrower").

     In consideration of the mutual covenants contained herein, the parties 
agree as follows:

                           ARTICLE ONE - DEFINITIONS
                           -------------------------

     1.   Terms Defined. As used in this Agreement, the listed terms are defined
          -------------
as follows:

     1.1  Adjusted LIBOR shall mean the LIBOR adjusted and determined with 
          --------------
respect to the following formula:

                    *    [LIBOR]
     Adjusted LIBOR  =   ________________________________
                         [1.00-LIBOR Reserve Percentage]

     *    The amounts in brackets being rounded upwards if necessary, to the 
          next higher 1/100 of one percent.

     1.2  Adjusted LIBOR Loans shall mean the applicable portions of the Loan
          --------------------
bearing interest, during the Interest Period applicable to such Loan or portion
thereof, at a fixed rate determined with reference to the Adjusted LIBOR.

     1.3  Adjusted Net Earnings from Operations shall mean, with respect to any 
          -------------------------------------
fiscal period of Borrower, Borrower's consolidated net income after provision 
for income taxes for such fiscal period, as determined in accordance with GAAP 
and reported on the financial 

                                       1
<PAGE>
 
statements for such period, less any and all of the following included in such
net income: (a) gain arising from the sale of capital assets; (b) gain arising
from any write-up in the book value of any asset; (c) earnings of any
corporation, substantially all the assets of which have been acquired by
Borrower in any manner, to the extent realized by such other corporation prior
to the date of acquisition; (d) earnings of any business entity in which
Borrower has an ownership interest unless (and only to the extent) such earnings
shall actually have been received by Borrower in the form of cash distributions;
(e) earnings of any Person (other than a Subsidiary Borrower) to which assets of
Borrower shall have been sold, transferred or disposed of, or into which
Borrower shall have been merged or which has been a party with Borrower to any
consolidation or other form of reorganization, prior to the date of such
transaction; (f) gain arising from the acquisition of any debt or equity
security of Borrower or from cancellation or forgiveness of debt; and (g) gain
arising from extraordinary items, as determined in accordance with GAAP, or from
any other nonrecurring transaction.

     1.4  Adjusted Tangible Assets shall mean all assets except: (a) trademarks,
          ------------------------
trade names, franchises, goodwill, and other similar intangibles (except the 
unamortized portion of the Facility Fee shall be treated as a tangible asset for
purposes of this calculation); (b) assets located and notes and receivables due 
from obligors domiciled outside the United States of America, Puerto Rico, or 
Canada; and (c) accounts, notes, and other receivables due from Affiliates or 
employees.

     1.5  Adjusted Tangible Assets Net Worth shall mean the remainder of (a)
          ----------------------------------
net book value (after deducting related depreciation, obsolescence,
amortization, valuation, and other proper reserves) of the Adjusted Tangible
Assets of Borrower, but excluding any amounts arising from write-ups of assets,
minus (b) the amount at which its liabilities (other than capital stock,
surplus, and retained earnings) would be shown on such balance sheet, and
including as liabilities all reserves for contingencies and other potential
liabilities.

     1.6  Advance shall mean the proceeds of the Loan advanced from time to time
          -------
by Lender to Borrower in accordance with the terms of this Agreement.

     1.7  Advance Rate shall mean, as of any date of calculation, 83 percent, 
          ------------
minus, if applicable, the greater of:
-----

          a.   In the event that the Delinquency Rate for Borrower, computed on
a consolidated basis, exceeds 11 percent, then one whole percent for each whole
percent by which the Delinquency Rate exceeds 11 percent. (For example, if
Borrower's Collateral Reports for the month of March, delivered to Lender on
April 15, reflect

                                       2

<PAGE>
 
that the Delinquency Rate for the Borrower on a consolidated basis, was 17.5 
percent as of March 31, then the Advance Rate will immediately thereupon be 77 
percent (calculated by subtracting 6 from 83 and if, as a result of such 
calculation, an Over Advance was determined to have existed as of April 15, 
based on an Advance Rate of 77 percent, then Borrower shall be required to pay 
down the Loan accordingly.); or

          b.   In the event that the Delinquency Rate for more than half of the 
Subsidiary Borrowers exceeds 12 percent, then one whole percent for each whole 
percent by which the Delinquency Rate for such Subsidiary Borrowers, taken as a 
whole, exceeds 12 percent. (For example, using the Collateral Reports described 
above, if there were a total of seven subsidiary Borrowers and four had a 
Delinquency Rate of more than 12 percent, this subtraction would apply. In such 
event, a Delinquency Rate for the four Subsidiary Borrowers would be computed on
a consolidated basis and the appropriate Advance Rate reduction calculated on a 
similar basis to that described in subsection 1.7 a. above.)

     The date of calculation of the Advance Rate and the date any change therein
shall become effective is the date Borrower actually delivers to Lender its most
recent Collateral Report reflecting the Delinquency Rates for all of the 
Subsidiary Borrowers. The Advance Rate, as so calculated shall remain in effect 
until Borrower delivers to Lender its next most recent report reflecting the 
Delinquency Rates for the Subsidiary Borrowers.

     1.8  Affiliate shall mean: (a) any Person which directly or indirectly, 
          ---------
controls, is controlled by or is under common control with, Borrower; (b) any 
Person which beneficially owns or holds, directly, five percent or more of any 
class of voting stock of Borrower; or (c) any Person, five percent or more of 
any class of the voting stock (or if such Person is not a corporation, five 
percent or more of the equity interest) of which is beneficially owned or held, 
directly or indirectly, by Borrower. The term "control" (including the terms 
"controlled by" and "under common control with") means the possession, directly 
or indirectly, of the power to direct or cause the direction of the management 
or/and policies of the Person in question.

     1.9  Availability shall mean, as of any date of calculation, the Advance 
          ------------
Rate multiplied by the remainder of (a) aggregate amount of all Net Contract 
Payments to be made under all Eligible Contracts, minus (b) the sum of (i) 50 
                                                  -----
percent of the Dealer Reserve, plus (ii) Commercial Paper Indebtedness; 
                               ----
provided, however, that (a) the Net Contract Payments due under Old Auto 
-----------------
Contracts included in the Availability shall at no time exceed five percent of 
all Net Contract Payments, and (b) in the event Borrower, after the date of this
Agreement, changes its method of accounting for the Dealer Reserve which has the
effect of 

                                       3
<PAGE>
 
accelerating the rate at which such reserve is recognized as income, then Lender
may increase the percentage rate applicable to the Dealer Reserve in order that 
the Dealer Reserve deduction from Availability is the same as it would have been
had Borrower not changed such accounting method.

     1.10 Bank shall mean Bank of America, N.T. & S.A., San Francisco, 
          ----
California.

     1.11 Borrowing Base shall mean the sum of the Adjusted Tangible Net Worth 
          --------------
of Borrower, plus all Subordinated Debt of Borrower.

     1.12 Business Day shall mean any day that is not a Sunday or Saturday or 
          ------------
any day on which banks in California are required or permitted to close.

     1.13 Closing Date shall mean the date of this Agreement.
          ------------

     1.14 Code shall mean the Uniform Commercial Code as adopted and in force in
          ----
the state of New Jersey as from time to time in effect and the Uniform 
Commercial Code of any other jurisdiction as required under New Jersey Statues 
Annotated, Section 12A:9-103.

     1.15 Collateral shall mean all of the following, now owned and hereafter 
          ----------
acquired:

          a.   all of Borrower's Contracts, including all returned or 
repossessed Goods relating to such Contracts;

          b.   Security Documents relating to the Contracts, together with 
Borrower's rights in the Property covered thereby;

          c.   all payments under the Contracts, in whatever form, including 
cash, checks, notes, drafts, and other instruments for the payment of money;

          d.   all of Borrower's books and records relating to the Contracts 
(including, without limitation, all computer records, computer programs, and 
computer source codes, but excluding any computer or software licenses which 
terminate or are terminable upon assignment);

          e.   all of Borrower's rights, but not its obligations, under all 
Dealer Agreements, including all rights to require a dealer to repurchase a 
Contract acquired from such dealer;

          f.   all proceeds of insurance including, without limitation, property
and casualty insurance, affecting the Contracts, and the Property subject 
thereto;

                                       4
<PAGE>
 
          g.   all proceeds, proceeds of proceeds, property, property rights, 
privileges and benefits arising out of, from the enforcement of, or in 
connection with the Contracts and Security Documents, the property rights and 
the policies of insurance referred to above, all credit balances in favor of 
Borrower on Lender's books, and all other general intangibles relating to or 
arising out of the Contracts;

          h.   the collection accounts at Cole Taylor Bank into which proceeds
of the Contracts are swept on a daily basis;

          i.   any assets of Borrower in which Lender receives a security 
interest or which thereafter come into Lender's possession, custody, or control;
and 

          j.   all of Borrower's general intangibles.

     1.16 Collateral Report shall mean a Loan Statement, Collateral Report, and 
          -----------------
Assignment on forms provided by Lender (or on such other form as approved by 
Lender) in which Borrower has computed its Availability, the amount of the 
requested Advance, and provided the other information requested therein.

     1.17 Collection Account Agreement shall mean that certain Collection 
          ----------------------------
Account Agreement substantially in the form attached hereto as Exhibit 1.17 and 
incorporated herein.

     1.18 Commercial Paper Indebtedness shall mean, as of any date of 
          -----------------------------
calculation, all Debt of Borrower owing under any commercial paper then 
outstanding.

     1.19 Conversion Date shall mean the Business Day on which a portion of the 
          ---------------
Loan is converted to, continued as, or drawn down as an Adjusted LIBOR Loan.

     1.20 Contract Debtor shall mean each Person who is obligated to Borrower to
          ---------------
perform any duty under or to make any payment pursuant to the terms of a 
Contract.

     1.21 Contract shall mean all of Borrower's right, title, and interest in 
          --------
and to each presently existing and hereafter arising loan account, account, 
installment sale contract, contract right, Instrument, note, document, chattel 
paper, general intangible, and all other forms of obligations owing to Borrower,
all rights of Borrower to receive payment thereof, together with all other 
rights of Borrower obtained in connection therewith, and any collateral 
therefor, including all rights under any and all Security Documents related to 
the Contract.

                                       5
<PAGE>
 
     1.22 Dealer shall mean a dealer that has sold Goods to a Contract Debtor 
          ------
pursuant to a Contract which Contract has been sold to Borrower.

     1.23 Dealer Reserve shall mean, as of any date of calculation, the 
          --------------
aggregate Dollar amount held or owed by Borrower to Dealer which is subject to 
the provisions of applicable Dealer Agreements between Borrower and its Dealers.

     1.24 Dealer Agreement shall mean an agreement between Borrower and a Dealer
          ----------------
that governs the sale or assignment of Contracts from such Dealer to Borrower, 
including any provisions for assignment (whether with or without recourse, a 
repurchase obligation by the Dealer or a guaranty by such Dealer) contained in 
such Contract or related Security Documents with respect thereto.

     1.25 Debt shall mean (without duplication) all liabilities, obligations, 
          ----
and indebtedness of Borrower to any Person, of any kind or nature, now or 
hereafter owing, arising, due or payable, howsoever evidenced, created, 
incurred, acquired, or owing, whether primary, secondary, direct or indirect, 
contingent, fixed, or otherwise, and including, without in any way limiting the 
generality of the foregoing: (i) Borrower's liabilities and obligations to trade
creditors; (ii) all Obligations; (iii) all obligations and liabilities to any 
Person secured by a Lien on Borrower's Property, even though Borrower shall not 
have assumed or become liable for the payment thereof; provided, however, that 
                                                       -----------------
all such obligations and liabilities which are limited in recourse to such 
Property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of Borrower prepared in accordance
with GAAP; (iv) all obligations and liabilities created or arising under any 
lease or conditional sale or other title retention agreement with respect to 
Property used or acquired by Borrower, even if the rights and remedies of the 
lessor, seller, or lender thereunder are limited to repossession of such 
Property; provided, however, that all such obligations and liabilities which are
          -----------------
limited in recourse to such Property shall be included in Debt only to the 
extent of the book value of such property as would be shown on a balance sheet 
of Borrower prepared in accordance with GAAP; (v) all accrued pension fund and 
other employee benefit plan obligations and liabilities; (vi) all obligations 
and liabilities under each Guaranty; (vii) Subordinated Debt; and (viii) 
deferred taxes.

     1.26 Default shall mean an event or condition the occurrence of which 
          -------
would, with a lapse of time or the giving of notice or both, become an Event of 
Default.

     1.27 Delinquency Rate shall mean, as of any date of calculation, the 
          ----------------
percentage determined by dividing (a) the aggregate amount of the Gross Contract
Payments to be made under

                                       6
<PAGE>
 
Contracts with respect to which any payment due thereunder is 60 or more days 
contractually delinquent, by (b) the aggregate amount of the Gross Contract 
Payments to be made under all Contracts.

     1.28 Distribution shall mean, in respect of any corporation (a) payment or
          ------------
making of any dividend or other distribution of property in respect to the 
capital stock of such corporation, other than distributions in capital stock of 
the same class; or (b) the redemption or other acquisition of any capital stock 
of such corporation.

     1.29 Dollars and the symbol "$" shall mean lawful money of the United 
          --------------------------
States of America.

     1.30 Eligible Contracts shall mean only such Contracts which Lender, in its
          ------------------
reasonable discretion deems eligible, and without limiting Lender's 
discretionary rights, satisfy at all times all of the following requirements as 
determined by Lender, in its reasonable discretion:

          a.   the Contract is a bona fide, valid, and binding obligation of the
Contract Debtor, enforceable in accordance with its terms;

          b.   the Contract and related Security Documents are free of any claim
for credit, deduction, allowance, defense (including the defense of usury), 
dispute, counterclaim or setoff;

          c.   the Contract is free of any prior assignment or Lien in favor of 
any Person other than Lender;

          d.   the Contract correctly sets forth the terms thereof between 
Borrower and the Contract Debtor, including the interest rate applicable 
thereto;

          e.   the Security Documents correctly describe the Goods subject 
thereto.

          f.   the signatures of all Contract Debtors are genuine and each 
Contract Debtor had the legal capacity to enter into and execute such documents 
on the date thereof;

          g.   the Contract strictly complies with all of Borrower's warranties 
and representations contained herein with respect to Contracts;

          h.   the Contract Debtor under such Contract is not more than 60 days 
contractually delinquent in making a payment scheduled thereunder, except as 
specifically provided in subsection 1.30 j.;

                                       7
<PAGE>
 
          i.   except as provided in subsection 1.30 h., neither Borrower nor 
the Contract Debtor is in material default under the terms of the Contract 
(e.g., the Property subject thereto is subject to repossession or has been sold 
 ----
and the proceeds thereof applied to the Contract balance (the latter sometimes 
being referred to as a "deficiency balance" Contract));

          j.   Borrower has not within any 12-month period granted to the 
Contract Debtor more than two extensions of time (each not longer than one 
month) for the payment of any sum due under the Contract;

          k.   repayment of the Contract is secured by a first Lien on Goods; 

          l.   the terms of the Contract and Security Documents and all related 
documents and instruments comply in all material respects with all applicable 
laws;

          m.   all documents relating to the Contract, including those between 
Borrower and the Contract Debtor, have been executed, are reasonably 
satisfactory to Lender, and have been delivered to Lender or originals are 
                                                          --
readily available to Lender in the files of Parent Borrower or each Subsidiary 
Borrower, all as required under the terms of this Agreement;

          n.   the Contract Debtor is not an Affiliate of Borrower;

          o.   the Contract Debtor is a lawful resident of the continental 
United States;

          p.   the creditworthiness of the Contract Debtor is reasonably
acceptable to Lender. Without limiting the generality of the foregoing, the 
Contract Debtor's creditworthiness and the terms of the Contract shall conform 
to Borrower's credit guidelines;

          q.   to the extent that the Contract balance includes sums 
representing the financing of so-called "extended warranty plans," such plans 
are (i) in substantial compliance with all applicable consumer credit laws, 
including any and all special insurance laws relating thereto, and (ii) 
underwritten by (x) a major automobile manufacturer, or an affiliate thereof, or
(y) an independent reputable and financially sound insurance company;

          r.   the original term of the Contract, together with any and all 
extensions thereof, shall not exceed the number of months indicated opposite the
age of the Goods which are the subject of the Contract at the time the Contract 
is originated;

                                       8
<PAGE>
 
<TABLE> 
<CAPTION> 
     Age of Goods (Model Years)             Maximum Monthly Term
     --------------------------             --------------------
     <S>                                    <C> 
          6 and more                               36
          4 or 5                                   42
          3 or less                                54
</TABLE> 

          s.   the Contract is not a Modified Contract;

          t.   the Contract is chattel paper and has been stamped in accordance 
with subsection 5.4 (b); and

          u.   the Contract Debtor is not subject to a bankruptcy proceeding.

     1.31 ERISA shall mean the Employee Retirement Income Security Act of 1974, 
          -----
as amended.

     1.32 Event of Default shall have the meaning given to that term in section 
          ----------------
11.1.

     1.33 Excess Availability shall mean, as of the date of determination, the 
          -------------------
remainder of Availability minus the unpaid balance of the Loan outstanding.
                          -----

     1.34 Facility Fee shall have the meaning given to that term in subsection 
          ------------
3.9.

     1.35 Fiscal Year shall mean Borrower's fiscal year for accounting purposes.
          -----------
The current fiscal year of Borrower will end on December 31, 1994.

     1.36 GAAP shall mean at any particular time, with respect to Borrower, 
          ----
generally accepted accounting principles as in effect at such time, consistently
applied; provided, however, that if employment of more than one principle shall 
be permissible at such time in respect of a particular accounting matter, "GAAP"
shall refer to the principle which is then employed by Borrower with the 
concurrence of its independent certified public accountants, who are reasonably 
acceptable to Lender.

     1.37 Goods shall mean any new or used motor vehicles, including equipment 
          -----
sold or financed in connection therewith, each being intended principally for 
personal or family use by consumers, sold under a Contract.

     1.38 Gross Contract Payments shall mean, as of any date of calculation, (a)
          -----------------------
with respect to a Contract as to which interest is calculated on a precomputed 
basis, all remaining unpaid, noncancelable payments to be made thereunder, and 
(b) with respect

                                       9


<PAGE>
 
to interest bearing Contracts, the remaining unpaid principal balance thereof, 
together with all accrued but unpaid interest thereon.

     1.39 Guaranty shall mean all obligations of a Person which in any manner 
          --------
directly or indirectly guarantees or assures, or in effect guarantees or 
assures, the payment or performance of any indebtedness, dividend or other 
obligation of any other Person (the "guaranteed obligations"), or to assure or 
in effect assure the holder of the guaranteed obligations against loss in 
respect thereof, including, without limitation, any such obligations incurred 
through an agreement, contingent or otherwise: (a) to purchase the guaranteed 
obligations or any Property constituting security therefor; (b) to advance or 
supply funds for the purchase or payment of the guaranteed obligations or to 
maintain a working capital or other balance sheet condition; or (c) to lease 
Property or to purchase any debt or equity securities or other Property or 
services.

     1.40 Instruments shall have the same meaning as given to that term in the 
          ----------- 
Code, and shall include all negotiable instruments, notes secured by mortgages
or trust deeds, and any other writing which evidences a right to the payment of
money and is not itself a security agreement or lease, and is of a type which
is, in the ordinary course of business, transferred by delivery with any
necessary endorsement or assignment. The term "Instruments" shall not include
chattel paper.

     1.41 Intercompany Management Fees shall mean all fees or other Debt due 
          ----------------------------
from Borrower to any Affiliate for services rendered or facilities provided to 
Borrower by such Affiliate.

     1.42 Interest Payment Due Date shall have the meaning given to that term in
          -------------------------
section 3.5.

     1.43 Interest Period shall mean that period of time applicable to an 
          ---------------
Adjusted LIBOR Loan, as determined pursuant to section 3.3 hereof.

     1.44 Interest Rate Determination Date shall mean each date for determining 
          --------------------------------
the Adjusted LIBOR with respect to an Interest Period. The Interest Rate 
Determination Date shall be the second London Business Day prior to the first 
day of the related Interest Period for each Adjusted LIBOR Loan.

     1.45 Interest Rate Option shall mean the Reference Rate or the Adjusted 
          --------------------
LIBOR selected by Borrower for all or any part of the Loan, as permitted by this
Agreement.

                                      10
<PAGE>
 
     1.46  Lender's Expenses shall mean:
           ----------------- 
           a.  All reasonable expenses incurred by Lender in the preparation of
this Agreement and any and all amendments thereto, including its outside
attorney's fees and internally allocated costs of in-house counsel of Lender;

           b.  Except as otherwise expressly provided herein, all reasonable 
out-of-pocket expenses incurred by Lender in the administration of this
Agreement and the Loan (excluding, however, any expenses incurred by Lender
which relate to the administration of any agreement between Lender and any
Participant), including but not limited to mailing costs and accounting fees;

           c.  All taxes levied against or paid by Lender (other than taxes on,
or measured by, the income of Lender) and all filing and recording fees, costs,
and reasonable expenses which may be incurred by Lender in respect to the filing
and/or recording of any document or instrument relating to the transactions
described in this Agreement;

          d.   All reasonable costs and expenses (including all allocated costs
of in-house counsel of Lender) incurred by Lender to collect the Collateral
(with or without suit), correct any Default or Event of Default, enforce any
provision of this Agreement, or gain possession of, maintain, handle, preserve,
store, ship, prepare for sale, and/or advertise to sell the Collateral, whether
or not the sale is consummated and collecting the Collateral with or without
suit; and

           e.  All reasonable costs, attorney's fees, and expenses of any kind
(including all allocated costs of in-house counsel of Lender) incurred in the
enforcement of this Agreement or the defense of legal proceedings involving any
claim made against Lender arising out of this Agreement or the protection of the
Collateral; provided, however, this provision shall not include any costs, fees,
            -----------------
and expenses incurred by Lender in connection with any proceeding, claim, or
other matter relating solely to any claim or dispute between a Participant and
Lender.

     1.47  LIBOR shall mean, relative to any Interest Period, the rate of
           -----  
interest determined by Bank to be the rate per annum at which Dollar deposits in
immediately available funds are offered to Bank by prime banks in the London
Eurodollar interbank market at or about 11:00 a.m. London time, two London
Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period in an amount approximately equal to the
principal amount requested to be drawn down, converted to, or continued as an
Adjusted LIBOR Loan, and for a period equal to such Interest Period.

                                      11
<PAGE>
 
     1.48  LIBOR Reserve Percentage shall mean, relative to any Interest Period,
           ------------------------
a percentage (expressed as a decimal) equal to the daily average during such
Interest Period of the percentages in effect on each day of such Interest
Period, as prescribed by the Federal Reserve System Board of Governors, for
determining the maximum aggregate reserve requirements (including any emergency,
supplemental, or other marginal reserve requirement) applicable to "Eurocurrency
Liabilities" pursuant to Regulation D or any other applicable regulation issued
from time to time by the Federal Reserve System Board of Governors which
prescribes reserve requirements applicable to "Eurocurrency Liabilities" as
currently defined in Regulation D having a term approximately equal to or
comparable to such Interest Period.

     1.49  Lien shall mean: (a) any interest in Property securing an obligation
           ----
owed to, or a claim of a Person other than the owner of the Property, whether
such interest is based on common law, statute, or contract, and including
without limitation, a security interest, charge, claim, or lien arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
arrangement, agreement, security agreement, conditional sale contract, trust
receipt, or lease, consignment or bailment for security purposes; and (b) to the
extent not included under clause "(a)," any reservation, exception,
encroachment, easement, right-of-way, covenant, condition, restrictment, lease,
or other title exception or encumbrance affecting Property.

     1.50  Loan shall mean the aggregate amount of all unpaid Advances, together
           ----
with all accrued and unpaid interest thereon, at any time owing by Borrower to
Lender.

     1.51  Loan Account shall have the meaning given to that term in subsection
           ------------
12.4 g.

     1.52  Loan Documents shall mean this Agreement and all other agreements,
           --------------
instruments, and documents heretofore, now or hereafter evidencing, securing,
guaranteeing or otherwise relating to the Obligations, the Collateral (but
excluding the Collateral itself), Lender's security interests, or any other
aspect of the transactions contemplated by this Agreement.

     1.53  London Business Day shall mean any Business Day on which commercial
           -------------------
banks are open for international business (including dealings in Dollar
deposits) in London and San Francisco.

     1.54  Loss Reserve Percentage shall mean, as of the date of calculation,
           -----------------------
the greater of (a) 4 percent, or (b) the percentage calculated by dividing (i)
the aggregate amount of all Net Charge-Off's during each of the 12 calendar
months immediately preceding the date of calculation (numerator), by (ii) the
average monthly

                                      12
<PAGE>
 
amount of Net Contract Payments outstanding as of the last day of each of those 
12 months (denominator).

     1.55  Maturity Date shall have the meaning given to that term in section
           -------------
4.1.

     1.56  Modified Contract shall mean a Contract which, at any time, (a) was
           -----------------
in default for failure to pay for more than 60 days after its original
contractual due date any payment due thereunder and such payment default was
cured by adjusting or amending the Contract terms, or accepting a reduced
payment or otherwise, or (b) is a refinance or renewal of a prior Contract with
the Contract Debtor to accomplish any of the foregoing.

     1.57  Net Charge Offs for any period shall mean the aggregate amount of all
           ---------------
payments due under Contracts which have been charged off during such period, as
reduced by the amount of cash actually received by Borrower during such period
on Contracts which had been charged off during previous periods or such period.

     1.58  Net Contract Payments shall mean, as of any date of determination,
           ---------------------
the remainder of (a) the aggregate amount of the Gross Contract Payments due
under Contracts which have not been charged off by Borrower, minus (b) the
                                                             -----  
aggregate amount of all unearned finance charges, unearned fees, and unearned 
insurance premium income applicable thereto or included therein, as appropriate.

     1.59  Notice of Interest Rate Election shall mean, with respect to Adjusted
           --------------------------------
LIBOR Loans, a notice substantially in the form attached hereto as Exhibit 1.59
and made a part hereof.

     1.60  Obligations shall mean all present and future Loans, advances,
           -----------
liabilities, covenants, duties, and Debts owing by Borrower to Lender under the
terms of this Agreement, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of  credit,
indemnification or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including without limitation, all interest, charges, expenses,
fees, attorneys fees, Lender's Expenses, filing fees, and any other sums
chargeable to Borrower hereunder or under another Loan Document.

     1.61  Old Auto Contracts shall mean Eligible Contracts which are secured by
           ------------------
a Lien on Goods which are more than seven model years old at the inception of
the Contract.

     1.62  Participant shall mean any financial institution which has been or
           -----------
will be granted the right by Lender to participate in

                                      13

<PAGE>
 
the Loan and who shall have entered into a participation agreement in form and 
substance satisfactory to Lender.

     1.63  PBGC shall mean the Pension Benefit Guaranty Corporation or any 
           ----
Person succeeding to the functions thereof.

     1.64  Permitted Liens shall mean: (a) Liens for taxes, assessments,
           ---------------
governmental charges, and claims not yet due and payable or Liens for taxes
being contested in good faith and by proper proceedings diligently pursued,
provided that a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor on any applicable financial
statements and that a stay of enforcement of any such Lien is in effect; (b)
Liens in favor of Lender; (c) Liens upon equipment granted in connection with
the acquisition of such equipment by Borrower provided the Lien attaches only to
such equipment; (d) statutory Liens of landlords, and Liens of carriers,
warehousemen, mechanics, materialmen, and repairmen, and other similar Liens
incurred in the ordinary course of business for sums not yet delinquent; (e)
Liens incurred or pledges or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance and other types of
social security or to secure the performance of tenders, statutory obligations,
surety, and appeal bonds; (f) any attachment, injunction, execution, tax lien,
or judgment for the payment of money which does not exceed $50,000 provided such
attachment, injunction execution, tax Lien or judgement is discharged or
execution thereon has been stayed within 30 days after the entry thereof; (g)
easements, rights of way, restrictions, and other similar charges or
encumbrances not interfering with the ordinary conduct of Borrower's business;
and (h) other Liens incidental to the conduct of the business of Borrower or the
ownership of its Property which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit (whether of a purchase
money nature or otherwise) and which do not in the aggregate materially detract
from the value of such Property or materially impair the use thereof in the
operation of such business, provided such Liens, other than the Liens granted to
Lender, do not in the aggregate exceed $200,000 at any one time outstanding.
                                        -------

     1.65  Person means any individual, sole proprietorship, partnership, joint
           ------  
venture, trust, unincorporated organization, association, corporation, or any
other entity.

     1.66  Plan shall mean any pension or other employee benefit plan which is
           ----
subject to Title IV of ERISA, and which is: (a) a plan maintained by Borrower;
(b) a plan to which Borrower contributes or is required to contribute; (c) a
plan to which Borrower was required to make contributions at any time during the
five calendar years preceding the date of this Agreement; or (d)

                                      14
<PAGE>
 
any other plan with respect to which Borrower has incurred or may incur 
liability, including contingent liability, under Title IV of ERISA, either to 
such plan or to the PBGC.

     1.67  Property shall mean any interest in any kind of property or asset,
           --------
whether personal or real property, or mixed, or tangible or intangible.

     1.68  Reference Rate shall mean the rate publicly announced from time to
           --------------
time by Bank, in its sole discretion as its reference rate. The Reference Rate
is not the lowest interest rate available from Bank. The Bank's Reference Rate
is based upon various factors, including Bank's costs and desired return,
general economic conditions, and other factors. Loans may be priced at, above,
or below the Reference Rate. The Reference Rate is merely a reference rate with
respect to which effective rates of interest are calculated. In the event Bank
shall abolish or abandon the practice of establishing its Reference Rate, Lender
shall designate a comparable reference rate which shall be deemed to be the
Reference Rate hereunder.

     1.69  Reference Rate Loans shall mean Advances or applicable portions of
           --------------------
the Loan bearing interest based upon the Reference Rate.

     1.70  Reportable Event shall have the meaning assigned to that term in
           ----------------
Title IV of ERISA, including, without limitation, a reportable event described
in Section 4043 of ERISA or the regulations thereunder, a withdrawal from a Plan
described in Section 4063 of ERISA, or a cessation of operations described in
Section 4062(e) of ERISA.

     1.71  Restricted Investment shall mean any interest in Property by Borrower
           ---------------------
in exchange for cash or other Property, whether in the form of an acquisition of
stock, debt security, or other indebtedness or obligation, or the purchase or
acquisition of any other Property, or by loan, advance capital contribution, or
subscription, except acquisitions of the following: (a) Contacts; (b) assets to
be used in the ordinary course of business by Borrower; (c) Goods acquired
through repossession and held for resale in the normal course of business; (d)
direct obligations of the United States of America, or any agency thereof, or
obligations guaranteed by the United States of America, provided, that such
obligations mature within one year from the date of acquisition thereof; (e)
certificates of deposit maturing within one year of the date of acquisition,
bankers acceptances or overnight bank deposits, in each case issued or created
by Cole Taylor Bank, or with a bank or trust company organized under the laws of
the United States or any state thereof having capital and surplus aggregating at
least $100,000,000; (f) commercial paper given the highest rating by a national
credit rating agency and maturing not more

                                      15

<PAGE>
 
than 270 days from the date of creation thereof; (g) Debt authorized by Section 
8.18; (h) investments in Restricted Subsidiaries; (i) bank deposits made in the 
ordinary course of business; (j) assets owned by Borrower on the Closing Date; 
and (k) loans to employees not exceeding $10,000 per employee and $100,000 in 
the aggregate at any one time outstanding.

     1.72  Restricted Subsidiary shall mean a Subsidiary, 100 percent of whose 
           ---------------------
outstanding securities of any class or classes is legally and beneficially owned
by Parent Borrower.

     1.73  Rules shall mean any law or regulation by which Lender or Borrower is
           -----
bound.

     1.74  Security Documents shall mean all security agreements, chattel
           ------------------
mortgages, deeds of trust, mortgages, or other security instruments, guaranties,
sureties, and agreements of every type and nature (including a certificate of
title) securing the obligations of a Contract Debtor under a Contract.

     1.75  Subordinated Debt shall mean all debt of Borrower which at all times
           -----------------
during the term of this Agreement is subordinated to the Obligations pursuant to
a written subordination agreement, the terms of which are satisfactory to Lender
in its sole and absolute discretion. Debt of Borrower to Cole Taylor Financial
Group, Inc. shall be considered Subordinated Debt provided (i) the principal is
not repayable while the Obligations are outstanding and (ii) interest is not
repayable while an Event of Default has occurred and is continuing.

     1.76  Subsidiary means any corporation of which more than 50 percent of 
           ----------
the outstanding securities of any class or classes, the holders of which are 
ordinarily, in the absence of contingencies, entitled to elect a majority of the
corporate directors (or Persons performing similar functions), is at the time, 
directly or indirectly through one or more intermediaries, owned by Borrower 
and/or one of more of its Subsidiaries.

     1.77  Total Credit Facility shall mean $100,000,000.
           --------------------- 

     1.78  Unused Line Fee shall have the meaning given to that term in section
           ---------------
3.10.


                              ARTICLE TWO - LOAN
                              ------------------

     2.  Loan.
         ----

         a.  Upon the request of Borrower, made from time to time during the
term hereof, Lender agrees, subject to the terms and conditions of this
Agreement, to lend Borrower an aggregate

                                      16
 
<PAGE>
 
principal amount not to exceed the lesser of (i) the Total Credit Facility or 
(ii) Borrower's Availability; provided, however, no Advances will be made to 
Borrower if an Event of Default exists which remains uncured or unwaived. All 
such Advances shall be added to the Loan when made. Subject to the other terms 
and conditions of this Agreement, funds paid by Borrower to Lender in full or 
partial repayment of the Loan, during the term of this Agreement, may be 
re-borrowed by Borrower.

          b.   Lender, in its sole and absolute discretion, may elect to make 
Advances in excess of Borrower's Availability on one or more occasions (such
financial accommodations are hereinafter referred to as "Over Advances"), but if
it does so, Lender shall not be deemed thereby to have changed the limits of the
Total Credit Facility or Availability. Immediately upon demand by Lender for
repayment of the Over Advance, Borrower shall make such payment. All Over
Advances shall constitute part of the Loan hereunder and shall be subject to all
of the terms and conditions of this Agreement.

          c.   Each Advance request shall be conclusively presumed to be made by
a Person authorized by Borrower to do so and the crediting of the Advance to 
Borrower's deposit account (which shall not be a payroll account), or as 
Borrower shall direct, shall conclusively establish the obligation of Borrower 
to repay such Advance as provided herein. Advances shall not be made into the 
Collection Account. All Lender's Expenses and other charges due from Borrower to
Lender pursuant to this Agreement, may, at Lender's option, after notice to 
Borrower, be charged to the Loan as of the date due from Borrower or the date 
paid or incurred by Lender, as the case my be.

     2.1  Monthly Statements Conclusive.  Lender shall render monthly statements
          -----------------------------
reflecting the amount of the Obligations owing by Borrower to Lender, including 
statements of all principal, interest, and Lender's Expenses owing, and such 
statements shall be conclusively presumed to be correct and accurate and shall 
constitute an account stated (except for reversals and re-applications of 
payments made to Lender as permitted under this Agreement and correction of 
errors discovered by Lender) between Borrower and Lender unless, within 90 days
after receipt thereof by Borrower, Borrower shall deliver to Lender written
objection thereto specifying the errors, if any, contained in any such
statement.

                                      17
<PAGE>
 
                  ARTICLE THREE - INTEREST AND OTHER CHARGES
                  ------------------------------------------

     3.1  Interest Rate Option.
          --------------------

          a.   The Loan, until paid in full, shall henceforth bear interest on 
the unpaid principal balance thereof from the initial funding date of each 
Reference Rate Loan or the Conversion Date of each Adjusted LIBOR Loan as 
follows:
               
               i.   with respect to Reference Rate Loans, the Reference Rate 
plus .50 percent per annum. The interest rate on Reference Rate Loans shall be 
adjusted as, when, and effective as of the first day of each month to equal the 
Reference Rate on such date plus .50 percent per annum. Changes in the Reference
Rate shall occur without notice or demand of any kind, on all Reference Rate 
Loans remaining from time to time unpaid; or

               ii.  with respect to Adjusted LIBOR Loans, at the Adjusted LIBOR 
on the relevant Interest Rate Determination Date plus 2.50 percent per annum.
                                                 ----

     3.2  Conversion, or Continuation, or Draw Down.  a.  Subject to the 
          -----------------------------------------
provisions of this Article Three, Borrower shall have the option to (i) convert 
all or a portion of the outstanding Loan from a Reference Rate Loan to one or 
more Adjusted LIBOR Loans, (ii) convert all or any portion of the Loan from 
Adjusted LIBOR Loans to a Reference Rate Loan on the expiration of the Interest 
Period applicable thereto, (iii) upon expiration of the Interest Period 
applicable to any Adjusted LIBOR Loan, to continue all or any portion thereof as
an Adjusted LIBOR Loan(s), and (iv) draw down all or any part of the Loan as an 
Adjusted LIBOR Loan(s) or as a Reference Rate Loan; provided, however, no 
                                                    -----------------   
portion of the Loan may be continued as, converted to, or drawn down as a 
Adjusted LIBOR Loan when a Default or Event of Default has occurred and is 
continuing.

          b.   Whenever Borrower desires to change, or continue, or draw down a 
portion of the Loan as an Adjusted LIBOR Loan, Borrower shall deliver by 
overnight delivery or by confirmed facsimile transmission to Lender a properly 
completed and executed Notice of Interest Rate Election no later than 11 a.m. 
Cherry Hill, New Jersey, time, at least three London Business Days in advance of
the proposed Conversion Date or expiration of the current Interest Period, in 
the case of a conversion or continuation, or draw down of the credit facility as
Adjusted LIBOR Loans. The Notice of Interest Rate Election shall specify: (i) 
the proposed Conversion Date (which shall be a Business Day); and (ii) the 
amount of the Loan to be continued, converted, or drawn down; and (iii) the 
initial or continuation Interest Period(s) therefor; provided, however, that the
                                                     --------  -------
minimum amount of any draw down, conversion to, or continuation of Adjusted 
LIBOR Loans shall be a minimum of $5.0

                                      18
<PAGE>
 
million and integral multiples of $1.0 million in excess of that amount.

          c.   If at any time any Adjusted LIBOR Loan is outstanding with
respect to which a Notice of Interest Rate Election has not been delivered to
Lender in accordance with the terms of this Agreement specifying the basis for
determining the interest rate applicable thereto at the end of the applicable
Interest Period, then on the last day of any applicable Interest Period those
portions of the Loan shall be Reference Rate Loans until a Notice of Interest
Rate Election to the contrary has been given to Lender in accordance with the
terms of this Agreement.

          d.   Subject to the provisions of section 3.6 hereof, Adjusted LIBOR 
Loans may only be converted into Reference Rate Loans or continued as Adjusted 
LIBOR Loans on the expiration date of the Interest Period applicable thereto.

          e.   All outstanding portions of the Loan shall bear interest as a 
Reference Rate Loan as determined pursuant to this Agreement, unless a Notice of
Interest Rate Election indicating that all or a portion of the Loan is to be an 
Adjusted LIBOR Loan has been delivered to Lender in accordance with this section
3.2.

          f.   Any Notice of Interest Rate Election for conversion to or 
continuation of, or a draw down of all or a portion of the Loan as an Adjusted 
LIBOR Loan shall be irrevocable and Borrower shall continue to be bound to 
convert, continue, or draw down in accordance therewith.

     3.3  Interest Periods.   The Interest Period for all Adjusted LIBOR Loans 
          ----------------
shall mean the period beginning on (and including) that date on which such 
Adjusted LIBOR Loan is made, continued as, or converted into, or drawn down as, 
an Adjusted LIBOR Loan, pursuant to section 3.2 and ending on (but excluding, 
for purposes of determining accrued interest) the day which numerically 
corresponds to such date three months thereafter, provided, however, that:
                                                  -----------------

          a.   the Interest Period for any Adjusted LIBOR Loan shall commence on
the Conversion Date of such Adjusted LIBOR Loan;

          b.   except as provided in subsection 3.3 c. hereof, if an Interest
Period would otherwise expire on a day which is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day;

          c.   any Interest Period which (i) begins on the last Business Day of
a calendar month (or a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month, or (ii) would expire on a day which
is not

                                      19

<PAGE>
 
a Business Day, but is a day of the month after which no further Business Day 
occurs in that month, such Interest Period shall expire on the last Business Day
of the month;

          d.   there shall be no more than seven Interest Periods in effect with
respect to Adjusted LIBOR Loans at any time outstanding; and

          e.   with respect to any Adjusted LIBOR Loan, no Interest Period shall
extend beyond the Maturity Date.

     3.4  Interest Calculation.    All interest (regardless of whether computed 
          --------------------
with regard to Adjusted LIBOR or the Reference Rate) shall be computed at the 
close of each day by multiplying the outstanding Loan balance hereunder at the 
close of business on that day by a daily interest factor, which daily interest 
factor shall be calculated by dividing the aforesaid interest rates in effect on
that day by 360 (which results in more interest being charged than if 365 were 
used). Lender shall calculate interest to be billed to Borrower with regard to 
Adjusted LIBOR Loans based on the Interest Period set forth in the Notice or 
Notices of LIBOR Election from Borrower to Lender. All Adjusted LIBOR Loans
shall bear interest from (and including) the first day of the applicable
Interest Period to (but excluding) the last day of such Interest Period at the
interest rate applicable to such Adjusted LIBOR Loan. All interest so computed
shall accrue for each and every day (365 days per year, 366 days per leap year)
on which any part of the Loan remains outstanding hereunder, including the day
on which any Advance is made regardless of the time of day the Advance is made,
and including the day on which funds are repaid unless repayment is credited by
Lender to the Loan prior to the close of Lender's business on the day of
receipt. Payments in immediately available federal funds received by Lender into
its account prior to 2:00 p.m. Cherry Hill, New Jersey, time on a Business Day,
shall be credited to the Obligations prior to the close of business on that day;
such funds received after 2:00 p.m. will be credited to the Obligations on the
next Business Day immediately following their receipt.

     3.5  Payment of Interest.     Until all Obligations have been paid in full,
          -------------------
interest for each calendar month shall be due and payable on the fifteenth day
of the following month ("Interest Payment Due Date"), beginning with the
fifteenth day of the month immediately following the Closing Date. The monthly
interest charge shall be due and payable in full either by wire transfer of
immediately available funds or by such other means as is satisfactory to Lender.
In the event the fifteenth day of a particular month is not a Business Day, then
the Interest Payment Due Date shall be the first Business Day immediately
preceding the fifteenth day of a month which is a Business Day.

                                      20
<PAGE>
 
3.6  Adjusted LIBOR.
     --------------

     a.   Lender shall give Borrower prompt notice of the Adjusted LIBOR 
determined by Lender for an Interest Period, and absent manifest or arithmetic 
error, each determination of such rates by Lender shall be conclusive and 
binding for all purposes hereof.

     b.   If Borrower requests a draw down of the credit facility as, or
conversion to, or continuation of an Adjusted LIBOR Loan for an Interest Period
and (a) Bank or Lender determines that, by reason of circumstances affecting the
interbank Eurodollar market generally, deposits in Dollars (in the applicable
amounts) are not then being offered to banks in the London Interbank Eurodollar
Market for the selected Interest Period, or (b) Lender shall certify in good
faith that the relevant rates of interest referred to in the definition of
Adjusted LIBOR will not accurately reflect the cost to Lender of making or
maintaining Adjusted LIBOR Loans for the Interest Periods therefor, then Lender
shall give notice thereof to Borrower not later than the proposed Conversion
Date, whereupon until Lender notifies Borrower that the circumstances giving
rise to such suspension no longer exist, the obligation of Lender to draw down,
convert, or continue any part of the Loan to bear interest at Adjusted LIBOR
shall be suspended so long as such circumstances exist.

     c.   If, after the date of this Agreement, the adoption of or any change in
applicable Rules or change in the interpretation or administration thereof, by a
governmental authority, central bank, or comparable agency charged with the 
interpretation or administration thereof, or compliance by Bank or Lender with 
any request or directive (whether or not having the force of law) of any such 
authority, central bank, or comparable agency shall make it unlawful or 
impossible for Bank or Lender to draw down, convert, or maintain loans at 
Adjusted LIBOR, Lender will forthwith notify Borrower of the circumstances and 
the interest rates on the applicable portions of the outstanding Adjusted LIBOR
Loans shall be deemed to have been converted to the Reference Rate on either (a)
the last day of the then current Interest Period if Bank or Lender may lawfully
continue to maintain loans at the Adjusted LIBOR to such day, or (b) immediately
if Bank or Lender may not lawfully continue to maintain loans at Adjusted LIBOR
to such day.

     d.   If, after the date of this Agreement, any governmental authority, 
central bank, or other comparable authority shall at any time impose, modify, or
deem applicable any reserve (including without limitation, any imposed by the 
Board of Governors of the Federal Reserve System), any tax (including without 
limitation, any United States interest equalization tax or similar tax however 
named applicable to the acquisition or holding of debt obligations and any
interest or penalties with respect

                                      21
<PAGE>
 
thereto), duty, charge, fee, deduction, withholding with respect to Adjusted
LIBOR Loans, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, Lender, which changes the
basis of taxation of payments of principal and interest of Borrower to Lender,
or shall impose on Lender or Bank or the London Interbank Eurodollar Market any
other condition affecting loans at Adjusted LIBOR and the result of any of the
foregoing is to increase materially the cost to Bank or Lender of making or
maintaining the interest rate at Adjusted LIBOR or to reduce the amount of any
sum received or receivable by Lender under this Agreement by an amount deemed by
Lender or such Participant to be material, Lender will promptly notify Borrower
of any event of which it has knowledge occurring after the date hereof. If such
event occurs during any Interest Period or if Borrower requests conversion to
Adjusted LIBOR after notification of the event, said event will entitle Lender
to compensation pursuant to this subsection. A certificate of Lender claiming
compensation under this subsection, setting forth the basis for such
compensation, and setting forth the additional amount or amounts to be paid to
Lender hereunder shall be conclusive in the absence of manifest or arithmetic
error; and within five days after demand by Lender, Borrower shall pay to Lender
such additional amount or amounts as will compensate Lender for such increased
cost or reduction.

     e.   LIBOR shall be adjusted automatically on and as of the effective day 
of any change in the relevant LIBOR Reserve Percentage.

     f.   Promptly upon notice from Lender, Borrower shall pay, prior to the 
date on which penalties may attach thereto, all present and future stamp, 
documentary, and other similar taxes, levies, or costs and charges whatsoever 
imposed, assessed, levied, or collected on or in respect of Adjusted LIBOR Loans
solely as a result of the interest rate being determined by reference to 
Adjusted LIBOR and/or the provisions of this Agreement relating to Adjusted 
LIBOR and/or the recording, registration, notarization, or other formalization 
of any of the foregoing and/or payments of principal, interest, or other amounts
made on or in respect of a Loan when the interest rate is determined by 
reference to Adjusted LIBOR (all such taxes, levies, costs, and charges being 
hereinafter collectively referred to as "Eurodollar Rate Tax"). Promptly after 
the date on which payment of any such Eurodollar Rate Tax is due pursuant to 
applicable law, Borrower will, at the request of Lender, furnish to Lender 
evidence that Borrower has met its obligation under this subsection. Borrower
shall indemnify Lender against, and reimburse Lender on demand for, any
Eurodollar Rate Tax, as determined by Lender in its good faith discretion.
Lender, as appropriate, shall provide Borrower with appropriate receipts for any
payments or reimbursements made by Borrower pursuant to this subsection 3.6 f. A
certificate of Lender as to any amount

                                      22
<PAGE>
 
payable pursuant to Article Three shall, absent manifest or arithmetic error, be
final, conclusive, and binding on all parties hereto.

          g.   Failure on the part of Lender to demand compensation for any 
increased costs or reduction in amounts received or receivable with respect to 
any Interest Period shall not constitute a waiver of Lender's right to demand 
compensation with respect to such Interest Period or any other Interest Period, 
provided demand therefor is made on Borrower not more than 90 days following the
event entitling Lender to such compensation. The protection of this subsection 
3.6 g shall be available to Lender regardless of any possible contention of the 
invalidity or inapplicability of the law, Rule, guideline, or other change or 
condition which shall have occurred or been imposed.

     3.7  Funding Losses. If Borrower fails to consummate any conversion to or 
          --------------
continuation or draw down of an Adjusted LIBOR Loan after a Notice of Interest 
Rate Election has been delivered to Lender, Borrower shall reimburse Lender on 
demand for any resulting loss or expense incurred by it (or by any Participant 
in the related Loan) as if the Adjusted LIBOR Loan had been made on the date 
specified in the Notice of Interest Rate Election at the interest rate 
determined on the Interest Rate Determination Date and prepaid on the same date 
in accordance with section 3.8; provided that Lender shall have delivered to 
Borrower a certificate as to the amount of such loss or expense, which 
certificate shall be conclusive in the absence of manifest or arithmetic error.

     3.8  Prepayments; Prepayment Compensation For Adjusted LIBOR Loans. 
          -------------------------------------------------------------
Borrower shall, on demand by Lender, at any time and from time to time and as 
often as the occasion therefor may arise, indemnify Lender against any and all 
losses, costs, and expenses which Lender may at any time or from time to time 
sustain or incur with respect to Adjusted LIBOR Loans as a consequence of the 
failure of Borrower to borrow any Adjusted LIBOR Loan on the commencement date 
of the Interest Period in respect thereof, or any prepayment of any principal of
any Adjusted LIBOR Loan or conversion of such Adjusted LIBOR Loan on a date 
other than the last day of the Interest Period relating to the principal so 
repaid or prepaid or so converted. Except as otherwise provided in section 4.2 
below, all Loan repayments and prepayments shall be applied first to Reference 
Rate Loans to the extent outstanding, then to Adjusted LIBOR Loans in the order
of the soonest to mature; if there is more than one Adjusted LIBOR Loan maturing
on any one day, then payment shall be applied to the Adjusted LIBOR Loan with
the higher rate of interest. Prepayments shall be in an aggregate amount of not
less than $5.0 million and integral multiples of $1.0 million. The losses,
costs, or expenses for which Borrower will indemnify Lender in the case of
repayment or prepayment of an Adjusted LIBOR Loan, as provided above, shall
include the amount by

                                      23
<PAGE>
 
which (a) the total interest that would otherwise have become payable during the
period (`Reemployment Period') beginning on the date of such repayment or 
prepayment and ending on the last day of the Interest Period pertaining to the 
principal being prepaid or repaid exceeds the total amount of interest which 
                                  -------  
would accrue and become payable to Lender during the Reemployment Period on the 
principal so repaid or prepaid, if Lender, following such repayment or 
prepayment, were to use its best efforts to reemploy as soon as possible (but in
any event within 3 days) the principal so prepaid or repaid by investing such 
sum in obligations of the United States Treasury (excluding those commonly known
as `Flower Bonds') having a term substantially equal to the Reemployment Period.
The maturity date and yield to maturity of such United States Treasury 
obligations shall be determined on the basis of quotations published in the Wall
                                                                            ----
Street Journal or similar publication on the prepayment or conversion date. If 
--------------
there shall be more than one debt obligation of the United States Treasury 
maturing nearest in time to the expiration of the Reemployment Period then the 
yield shall be the arithmetic average of the yields to maturity of all such 
obligations.

     3.9   Facility Fee.  On the Closing Date Borrower shall pay to Lender a
           ------------
facility fee ("Facility Fee") equal to one-quarter of one percent of the Total
Credit Facility. Lender shall credit to the Facility Fee an amount equal to the
remainder of (a) Borrower's $100,000 deposit, paid to Lender pursuant to a
certain letter dated March 22, 1994, minus (b) Lender's Expenses incurred as of
                                     -----
the date appearing on page one of this Agreement. Lender and Borrower agree that
the Facility Fee may be financed, at Lender's discretion, as an Advance to the
Loan.

     3.10  Unused Line Fee.  For every month during the term of this Agreement, 
           ---------------
Borrower shall pay to Lender a fee ("Unused Line Fee") in an amount equal to 
one-eighth of one percent per annum, multiplied by the amount by which (a) the 
Total Credit Facility exceeds (b) the average closing daily unpaid balance of 
the Loan during such month. Such fee, if any, shall be calculated on the basis 
of a year of 360 days, actual days elapsed, and shall be payable to Lender on 
the Interest Payment Due Date with respect to the prior month.

     3.11  Default Interest Rate.  If any Event of Default occurs, then
           ---------------------
commencing on the thirtieth day from the date such Event of Default occurs until
it is cured, if curable, or waived in writing by Lender, or until all
Obligations are paid and performed in full, Borrower shall pay interest on the
unpaid principal balance of the Reference Rate Loans and Adjusted LIBOR Loans at
a per annum rate three percent greater than the rate of interest otherwise
specified herein.

                                      24




<PAGE>
 
     3.12 Maximum Interest Rate.   In no event shall the interest rate and other
          ---------------------
charges exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event a court determines that Lender has received interest and other
charges in excess of the highest rate applicable hereto, Lender shall apply such
excess to the principal balance of the Obligations as of the date of such
determination. If no Obligations are then outstanding, then Lender shall refund
to Borrower such excess.

     3.13 Capital Adequacy.  If any change to an existing law or a future law, 
          ----------------
regulation, or guideline, or the interpretation thereof by any court or
administrative or governmental authority charged with the administration
thereof, or compliance by Lender with any request or directive (whether or not
having the force of law) of any such authority, shall either (a) impose, modify,
or deem applicable or result in the application of, any reserve, special
deposit, capital maintenance, capital ratio, or similar requirements against
loans or loan commitments made by Lender or against any other extensions of
credit or commitments to extend credit or other assets of or any deposits or
other liabilities taken or entered into by Lender, or (b) cause Lender, in
anticipation of the effectiveness of any capital maintenance, capital ratio, or
similar requirement, to take reasonable action to enable itself to comply
therewith, or (c) impose on Lender any other condition regarding this Agreement
or the Total Credit Facility, and the result of any event referred to in clause
(a), (b), or (c) above shall be to increase the cost to Lender of making or
maintaining, or to impose upon Lender, or increase, any capital requirement
applicable as a result of the making or maintenance of, the Total Credit
Facility or the Obligations of Borrower or to reduce the amounts receivable by
Lender hereunder (which increase in cost or increase in (or imposition of)
capital requirements or reduction in amounts receivable may be determined by
Lender's reasonable allocation of the aggregate of such cost increases, capital
increases, or impositions or reductions in amount receivable resulting from such
events), then, upon demand by Lender, Borrower shall, at Borrower's option,
either (a) pay to Lender all outstanding Obligations without payment of the
earlier termination and prepayment premiums described in Section 4.1 hereof and
terminate this Agreement, or (b) immediately pay to Lender an amount sufficient
to compensate Lender for such increased cost or increase in (or the imposition
of) capital requirements or reduction in amounts receivable by Lender from the
date of such change, together with interest on each such amount from the date
demanded until payment in full thereof at the Default Rate of interest specified
in Section 3.11 hereof. Upon the occurrence of any event referred to in clause
(a), (b), or (c) above, a certificate setting forth in reasonable detail the
increased cost, reduction in amounts receivable, or amounts necessary to
compensate Lender as a result of an increase in (or imposition of) capital

                                      25
    
<PAGE>
 
requirements submitted by Lender to Borrower, shall be conclusive, absent 
manifest or arithmetic error, for all purposes.


                              ARTICLE FOUR - TERM
                              -------------------

     4.1  Term of Agreement and Loan Repayment.  This Agreement shall have an 
          ------------------------------------
initial term of two years commencing on the Closing Date and terminating on July
12, 1996. (The date on which the term of the Agreement terminates being 
hereinafter referred to as "Maturity Date"). The Loan shall be due and payable 
in full on the Maturity Date without notice or demand and shall be repaid to 
Lender by a wire transfer of immediately available funds. Borrower may at any 
time terminate this Agreement prior to the Maturity Date by: (a) giving Lender 
at least 60 days prior notice of intention to terminate this Agreement; (b) 
paying and performing, as appropriate, all Obligations on or prior to the 
effective date of termination; and (c) paying to Lender an early termination fee
equal to (i) three-quarters of one percent of the Total Credit Facility in the 
event the effective date of termination is before the first anniversary of the 
Closing Date; and (ii) one-half of one percent of the Total Credit Facility in 
the event the effective date of termination occurs on or at any time after the 
first anniversary date of the Closing Date. Upon the occurrence of an Event of 
Default, Lender will have the rights and remedies set forth in this Agreement. 
Notwithstanding the foregoing, the early termination fee shall be equal to 
one-quarter of one percent of the Total Credit Facility, instead of the amount 
indicated above, if (i) Borrower, at any time, requests an increase in the Total
Credit Facility by an amount which is not less than $25,000,000, but not more 
than $50,000,000, without any other changes to any of the other provisions of 
this Agreement, (ii) no Default or Event of Default exists at the time of such 
request, (iii) at the time of the request the unpaid balance of the Loan is 
equal to or greater than 60 percent of the Total Credit Facility, (iv) the 
results of Borrower's operations have equaled or exceeded the projections 
delivered by Borrower to Lender prior to the date of the request, and (v) Lender
does not, within 90 days of such request, agree to that increase. In the event 
Lender grants the requested increase in the Total Credit Facility pursuant to 
the previous sentence, Lender may only charge an additional facility fee equal 
to one-quarter of one percent of the amount of the increase in the Total Credit 
Facility, pro rated for the number of months remaining to the Maturity Date.

     4.2  Application of Payments.  All payments made by Borrower to Lender and 
          -----------------------
proceeds of the Collateral received by Lender shall be applied (a) first to the 
payment of fees, interest, expenses, and all other Obligations due and payable 
except unpaid principal, as determined by Lender, (b) second, to the payment of 
unpaid principal that is due and payable; provided, however, that during
                                          ------------------

                                      26
<PAGE>
 
the continuance of an Event of Default, Lender may apply all such payments to 
the Obligations of Borrower in any amounts and in any priority as Lender shall 
determine in its sole discretion, and (c) third, following termination, to 
Borrower upon payment of all Obligations.

     4.3  Termination of Security Interests. Notwithstanding termination, until 
          ---------------------------------
the Loan and all other Obligations have been fully repaid (which shall be deemed
to occur only when Lender has received good funds), Lender shall retain a Lien 
in all Collateral existing and thereafter arising and Borrower shall continue to
observe each and every covenant contained herein. Without limiting the 
generality of the foregoing, after termination Borrower shall continue to assign
to Lender all Contracts and security therefor and shall, upon Lender's request,
immediately turn over to Lender, in kind, all proceeds received respecting the 
Collateral. Only after termination and when Lender has received payment in full 
of the Loan and all other Obligations, shall Lender execute a termination of all
security agreements and security interests given by Borrower to Lender 
hereunder.

                ARTICLE FIVE - SECURITY INTEREST IN COLLATERAL
                ----------------------------------------------

     5.1  Creation of Security Interest in Collateral. Borrower hereby 
          -------------------------------------------
irrevocably and unconditionally grants Lender a continuing security interest in 
all the Collateral and in all of Borrower's rights therein, whether presently 
existing or hereafter acquired or arising, in order to secure prompt payment of 
the Loan and the payment and performance by Borrower of all its other 
Obligations. Lender's security interest in the Collateral shall attach to all 
the Collateral without further act by Lender or Borrower. In the event any 
Contract is evidenced by or consists of Instruments, Borrower shall immediately,
upon receipt thereof, endorse or assign (as appropriate), and deliver to Lender 
such Instruments.

     5.2  Financing Statements. Borrower agrees, at its own expense, to execute 
          --------------------
financing statements, continuation statements, and assignments of financing
statements provided for by the Code, together with any and all other instruments
or documents and to take such other action, including delivery, as may be
required to perfect or maintain Lender's security interest in the Collateral.
Unless prohibited by law, Borrower hereby appoints Lender and Lender's designee
as Borrower's attorney-in-fact (such appointment being coupled with an interest
and is, therefore, irrevocable) to sign Borrower's name and file or record, as
the case may be, at any time any such financing statements on Borrower's behalf.

                                      27
<PAGE>
 
     5.3  Location of Collateral.
          ----------------------

          (a)  Borrower represents and warrants that except for Collateral which
has been delivered to Lender under the terms hereof: (i) Schedule 5.3 is a 
correct and complete list of the location of all books and records concerning 
the Collateral, the locations of the Collateral, and location of all of 
Borrower's places of business; (ii) the Collateral shall remain at all times in 
the possession of Borrower; and (iii) the Collateral shall be kept at all times 
only at the office of a Borrower who owns title to the Collateral (e.g., 
                                                                   ----
Reliance Acceptance Corp. of Texas shall only maintain at its offices Collateral
owned by that company, and not the Collateral of any other Borrower). Borrower 
covenants and agrees that, except for Collateral in the possession of Lender, it
will not maintain the Collateral at any location other than those listed in
Schedule 5.3, and will not otherwise change or add to those locations, unless it
gives Lender at least 15 days prior notice thereof and executes and delivers to
Lender any and all financing statements and other documents that Lender requests
in connection therewith.

          (b)  Notwithstanding any provision of this Agreement to the contrary, 
upon the occurrence of an Event of Default and the continuation thereof, 
Borrower shall upon Lender's request immediately deliver to Lender, all 
Contracts and related Security Documents then existing and thereafter arising. 
Lender shall not be liable or responsible in any way for any act or default of 
any carrier, forwarding agency, or other Person whatsoever sending or delivering
Collateral to Lender, but the same shall be at Borrower's sole risk. Lender 
shall comply to the standards set forth in Section 12A:9-207 of the Code with 
regard to the custody and preservation of any Collateral in Lender's possession 
at any time.

     5.4  Delivery and Marking of Collateral.  (a)  In the event that any of the
          ----------------------------------
Collateral is evidenced by Instruments, then prior to any Advance with respect 
thereto, Borrower shall endorse to Lender's order and deliver to Lender the 
original of such Instruments.

          (b)  Except with respect to Instruments delivered to Lender pursuant 
to subsection 5.4(a) above, Borrower shall immediately following the execution 
or receipt of a Contract, stamp on the Contracts the following words:

     "This document is subject to a security interest in favor of 
     BankAmerica Business Credit, Inc.";

provided, however, Borrower shall have until a date 90 days after the date of 
-----------------
the Closing Date to stamp all Contracts existing on such date which the words 
required under subsection 5.4(b).

                                      28
<PAGE>
 
          (c)  Borrower shall store all Contracts and Security Documents in 
secure cabinets at all times except when such documents are taken out thereof 
during the normal course of business.

     5.5  Protection of Collateral; Reimbursement.  (a) Borrower shall pay all 
          ---------------------------------------
expenses of protecting, storing, insuring, handling, maintaining, and shipping 
the Collateral and any and all excise, property, sales, and use taxes levied by 
any state, federal or local authority on any of the Collateral or in respect of 
the sale thereof.

          (b)  If Borrower fails promptly to pay any portion of the expenses 
specified in subsection 5.5 (a) when due, Lender may, at its option (but shall 
not be required to), pay the same and charge such amount to the Loan balance, 
and Borrower agrees promptly to reimburse Lender therefor with interest accruing
thereon daily at the rate of interest from time to time in effect for Reference 
Rate Loans. All sums so paid or incurred by Lender for any of the foregoing and 
any and all sums for which Borrower may become liable under this Agreement and 
all reasonable costs and expenses (including Lender's Expenses) which Lender may
incur in enforcing or protecting its Lien or rights and interest in the 
Collateral or any of its rights or remedies under this Agreement or any other 
agreement between the parties hereto or in respect of any of the transactions 
occurring under the Contracts until paid by Borrower to Lender with interest at 
the rate of interest from time to time in effect for Reference Rate Loans, shall
be considered as part of the Obligations and as such, shall be secured by all
the Collateral.

     5.6  Monthly Reports Re Collateral.  Borrower shall deliver to Lender, 
          -----------------------------
within 15 days after the end of each calendar month during the term of this 
Agreement, and at any other time as may be reasonably requested by Lender, all 
of the following documents (which shall be reasonably satisfactory to Lender, in
form and content):

          a.   A Collateral Report;

          b.   A report reflecting the Delinquency Rate for each of the
Subsidiary Borrowers;

          c.   A certificate executed by the chief financial officer of 
Borrower, certifying, inter alia, that Borrower is in compliance with all terms,
                      ----------
covenants, and conditions contained in this Agreement and no Default or Event of
Default then exists; and 

          d.   A summary of the aging of the Contracts on a contractual basis, 
and upon Lender's request, a detailed aging report.

                                      29
<PAGE>
 
     5.7  Inspection.  Borrower shall permit Lender and its representatives to 
          ----------
make such verification and inspection of the Collateral and to make audits and 
inspections, at any reasonable time and as frequently as Lender desires of 
Borrower's books, accounts, records, correspondence and such other papers as it 
may desire. In order to reimburse Lender for the cost of such verifications, 
audits, and inspections, Borrower shall pay to Lender a monthly audit fee 
calculated on a branch-by-branch basis, which fee for each branch shall equal 
the lesser of (a) $250; or (b) the product of (i) .004, multiplied by (ii) one 
                                                        ----------
percent of the aggregate amount of the Gross Contract Payments to be made under 
all Contracts administered by such branch office as of the last day of the month
with respect to which the fee is calculated. The monthly audit fee shall be 
based on the total number of branch offices, as determined as of the last day of
the month for which the fee is calculated. Each monthly installment shall be 
payable to Lender on each Interest Payment Due Date, commencing with the month 
immediately following the Closing Date. Notwithstanding the foregoing, upon the 
occurrence of any Event of Default, Borrower shall pay all Lender's cost 
incurred in connection with the verification, audit, and inspection of the 
Collateral without regard to the foregoing limitations. Borrower shall supply 
copies of and permit Lender to copy such records and papers as Lender may 
request, and shall permit Lender to discuss Borrower's affairs, finances, and 
accounts with Borrower's employees, partners and independent public accountants 
(and by this provision Borrower hereby authorizes said accountants to discuss 
with Lender the finances and affairs of Borrower and each of its subsidiaries) 
all at such reasonable times and as often as may be reasonably requested. 
Borrower further agrees to supply Lender with such reasonable information 
relating to Borrower and the Collateral as Lender shall request. In the event of
any litigation between Borrower and Lender, any right of civil discovery shall 
be in addition to, but not in lieu of, Lender's rights under this section.

     5.8  Verification.  Lender may, from time to time, verify directly with 
          ------------
Contract Debtors the validity, amount, and any other matters relating to the 
Collateral by means of mail, telephone, or otherwise, either in the name of 
Borrower or Lender or such other name as Lender may choose.


               ARTICLE SIX - RECORDS AND SERVICING OF CONTRACTS
               ------------------------------------------------

     6.1  Records of Contracts.  Borrower shall keep or will cause to be kept in
          --------------------
a safe place, at its chief executive office and other locations specified in
Schedule 5.3, proper and accurate books and records pertaining to the
Collateral. Borrower shall maintain a system, satisfactory to Lender, for
duplicating and storing, at a secure location, a duplicate set of books and
records concerning

                                      30
<PAGE>
 
the Collateral. In addition, Borrower shall maintain a credit file for each 
Contract Debtor, containing financial information reflecting the 
credit-worthiness of each Contract Debtor.

     6.2  Servicing of Contracts.  At no expense to Lender, Borrower shall 
          ----------------------        
diligently and faithfully perform the following services relating to the 
Contracts until (a) the occurrence of an Event of Default or a Default which 
Default would reasonably be expected to have a material adverse effect on 
Borrower on a consolidated basis (as determined by Lender in its reasonable 
discretion), and (b) Lender has notified Borrower in writing that Borrower 
shall cease providing such services:

          a.   Borrower shall collect all payments and other proceeds of the 
Contracts and other Collateral; and

          b.   Borrower shall perform customary insurance follow-up with respect
to each policy of insurance covering the Property which is the subject of the 
Contracts to ensure that such Property is insured.

     6.3  Termination of Collection Rights.  Following the occurrence of a
          -------------------------------- 
Triggering Event of Default (as defined below) and the continuation thereof all
rights of Borrower to collect any payments due under the Collateral and all
rights of Borrower to exercise the consensual rights which it would otherwise be
entitled to exercise with respect thereto, shall, at the option of Lender and
upon written notice from Lender to Borrower, immediately terminate. Borrower
acknowledges and agrees that following a Triggering Event of Default and during
the continuance thereof, Lender shall be entitled to receive all of the
                                                             ---
Contract payments, without deduction, even though this may render Borrower 
insolvent and leave Borrower without any funds to pay its operating expenses. 
Borrower, at Lender's request, shall immediately provide Lender with a current 
list of the names, addresses, and Contract account numbers for all Contract 
Debtors and shall following the occurrence of an Triggering Event of Default and
the continuation thereof at Lender's request, immediately direct all Contract 
Debtors (pursuant to a form of notice prepared by Lender) to make all payments 
due under the Contracts and the Collateral directly to Lender or to a bank 
account designated by Lender, and Borrower shall otherwise cooperate with Lender
in that regard.

     6.4  Collection Account.  While any portion of the Loan is unpaid, 
          ------------------
Borrower shall immediately, upon receipt thereof, deposit all cash proceeds of
the Collateral (including, for example, all regular monthly payments received
in connection with the Contracts) into a Collection Account, established by
Borrower and Lender under a Collection Account Agreement between Borrower,
Lender, and the bank identified therein. If, at any time, either (a) Borrower's
then-existing Excess Availability is equal to or less than 5

                                      31
<PAGE>
 
percent of the then-outstanding Loan amount; or (b) upon the occurrence of an 
Event of Default described in subsections 11.1 a., b., d., e., f., g., h., i., 
n., o., p., or q. ("Triggering Events of Default"), and the continuation
thereof, then at all times thereafter, Borrower's right to withdraw any funds
from the Collection Account shall immediately terminate and only Lender shall
thereafter have a right to withdraw any funds from the Collection Account.
Lender shall reinstate Borrower's right to withdraw funds from the Collection
Account in the event (a) where Borrower's withdrawal rights were terminated
because of inadequate Excess Availability, Borrower's Excess Availability is, at
all times, equal to or greater than 5 percent of the Loan balance during a 90-
day period, or (b) where Borrower's withdrawal rights were terminated because of
the occurrence of any of the Event of Defaults listed above, (i) no Default or
Event of Default then exists, and (ii) Borrower's excess Availability has been
equal to or greater than 5 percent of the Loan balance at all times during a 90-
day period.

           ARTICLE SEVEN - REPRESENTATIONS, WARRANTIES AND COVENANTS
           ---------------------------------------------------------

     7.   Representations and Warranties Reaffirmed.  Borrower represents and 
          -----------------------------------------   
warrants by its execution of this Agreement, by each Collateral Report delivered
to Lender and with each Advance request, the following matters as of date of 
each Advance. Each warranty and representation shall be deemed to be material 
and to be automatically repeated with each Advance and shall be conclusively 
presumed to have been relied upon by Lender regardless of any information 
possessed or any investigation made by Lender. The warranties and 
representations shall be cumulative and in addition to all other warranties, 
representations, and agreements which Borrower shall give or cause to be given 
to Lender, either now or hereafter.

     7.1  Warranties and Representation Re Contracts.  With respect to the 
          ------------------------------------------
Contracts, Borrower represents and warrants that:

          a.   To the best of Borrower's knowledge, each Contract is a bona 
fide, valid, and binding obligation of the Contract Debtor, enforceable in 
accordance with its terms, and Borrowers does not know of any fact which impairs
or will impair the validity of any such Contract.

          b.   To the best of Borrower's knowledge, each Contract and related 
Security Documents are free of any claim for credit, deduction, discount, 
allowance, defense (including the defense of usury), dispute, counterclaim
or setoff.

          c.   [Intentionally Omitted.]

                                      32
<PAGE>
 
          d.   To the best of Borrower's knowledge, each Contract correctly sets
forth the terms thereof between Borrower and the Contract Debtor, including the 
interest rate applicable thereto.

          e.   To the best of Borrower's knowledge, the Security Documents 
correctly describe the Goods subject thereto.

          f.   To the best of Borrower's knowledge, the signatures of all 
Contract Debtors are genuine and each Contract Debtor had the legal capacity to 
enter into and execute such documents on the date thereof.

          g.   There is only one original counterpart of the Contract executed 
by the Contract Debtor which is in Borrower's sole possession (with the possible
exception of one duplicate original counterpart which, if in existence, is in 
the Contract Debtor's sole possession).

     7.2  Warranties and Representations Re Collateral Generally.  Borrower 
          ------------------------------------------------------
represents, warrants, and covenants to Lender that so long as any portion of the
Loan remains unpaid or any other Obligation of Borrower to Lender is to be 
performed or paid, that:

          a.   All state and federal laws have been complied with in conjunction
with the Collateral, the noncompliance with which would have a material adverse 
impact on the value, enforceability or collectability of the Collateral.

          b.   At the time of the pledge to Lender of any Collateral by 
Borrower, Borrower has good and valid title to, and full right and authority to 
pledge, the same to Lender.

          c.   Lender has at all times a first priority, perfected, Lien in all 
of the Collateral, except that, with respect to repossessed automobiles, 
materialmen and garagemen liens for repair services may, to the extent 
authorized by law, have a priority.

          d.   Except for Permitted Liens, the Collateral (i) shall be owned 
solely by Borrower, and no other Person, other than Lender, has or will have any
right, title, interest, claim or Lien therein and in any money resulting from 
the lease, rental, sale or other disposition thereof, and (ii) shall remain 
free and clear of any Liens.

          e.   Borrower shall pay and discharge, when due, all taxes, levies, 
assessments and other charges upon the Collateral.

          f.   Any distribution of interest or principal, or loss of the 
Collateral or any of the Property secured thereby, shall not release Borrower 
from any of the Obligations.

                                      33
<PAGE>
 
     7.3  Contract and Security Document Forms.  Borrower covenants that after 
          ------------------------------------
the date hereof, only Contracts on forms submitted to Lender for its review 
shall be used by Borrower for its transactions. Borrower shall not change or 
vary the printed terms of such Contracts without Lender's prior written consent,
unless such change or variation is expressly required by applicable state and 
federal laws. Lender may at any time, with respect to new forms of Contracts or 
amendments to existing forms of Contract, require Borrower to provide to Lender 
a certification from its counsel confirming that the form of Contract is in 
material compliance with the Federal Truth in Lending Act, the applicable state 
motor vehicle financing law, and such other applicable laws as Lender may 
reasonably request.

     7.4  Solvent Financial Condition.  Immediately prior to the date of each 
          ---------------------------
Advance, the present fair salable value of the assets of Borrower is greater 
than the amount required to pay its liabilities, and Borrower is able to pay its
debts as they mature.

     7.5  Credit Guidelines.  Borrower represents and warrants that it shall not
          -----------------
make any changes in its credit guidelines which would have the effect of 
liberalizing Borrower's credit extension policies (a copy of which has been 
previously furnished by Borrower to Lender) without Lender's prior written 
consent which shall not be unreasonably withheld or delayed. Borrower's credit 
guidelines shall state in detail the credit criteria used by Borrower in 
determining the credit-worthiness of Contract Debtors with regard to the 
Contracts originated by Borrower and/or originated by Dealers, as appropriate.

     7.6  Organization, Authority, and Capital Structure.  Parent Borrower and 
          ----------------------------------------------
each Subsidiary Borrower (a) is a corporation duly organized, validly existing 
and in good standing under the laws of the state of its incorporation; (b) has 
all requisite power and authority and licenses, permits, and franchises
necessary to carry on its business the violation of which or failure to obtain
would materially and adversely affect its business or condition (financial or
otherwise) considered as a whole; and (c) has duly qualified and is authorized
to do business and is in good standing as an entity in each jurisdiction where
such qualification is necessary except where the failure to qualify would not
have a material adverse effect on Borrower. The authorized number of shares of
common stock of each Borrower and the number of such shares which are issued and
outstanding as of the date of this Agreement are listed in Schedule 7.6. (Lender
and Borrower acknowledge and agree that the Stock Pledge Agreement and Schedule
7.6 will be amended from time to time as Restricted Subsidiaries are formed
pursuant to section 8.16 below.)

     7.7  Financial Statements.  The financial statements of Borrower for the 
          --------------------
Fiscal Year ending December 31, 1993, are true and

                                      34
<PAGE>
 
correct and have been prepared in accordance with generally accepted accounting 
principles, practices and procedures, consistently applied (except for changes 
in application in which Borrower's accountants concur) and present fairly the 
financial position of Borrower as of such date and the results of its operations
for such period. Since December 31, 1993, there has been no material adverse 
change in the condition, financial or otherwise, of Borrower as of such date.

     7.8  Full Disclosure.  The financial statements referred to in section 7.7
          ---------------
above, this Agreement, and any written statement furnished by Borrower to Lender
(copies of which have been previously delivered), do not contain any untrue 
statement of a material fact or omit to state a material fact necessary to make 
the statements contained therein or herein not misleading.

     7.9  Pending Litigation.  There are no proceedings pending, or to the 
          ------------------
knowledge of Borrower threatened, against or affecting Borrower in any court or 
before any governmental authority or arbitration board or tribunal which would 
reasonably be expected to materially and adversely affecting the business, 
profits or condition (financial or otherwise) of Borrower or the ability of 
Borrower to repay or otherwise perform any of its Obligations to Lender. 
Borrower is not in default with respect to any order of any court, governmental 
authority or arbitration board or tribunal.

     7.10 Title to Properties.  Borrower has good and marketable title to the 
          -------------------
Property (including all of the Collateral) it purports to own and such Property 
(other than the Collateral which shall not be subject to any Lien other than 
Permitted Liens.

     7.11 Transaction is Legal and Authorized.  The execution and delivery of 
          -----------------------------------
this Agreement and related documents by Borrower, the grant of the Liens to 
Lender in respect to the Collateral by Borrower, and compliance by Borrower with
all of the provisions of this Agreement are valid, legal, binding, and 
enforceable in accordance with their terms, except as enforceability may be 
limited by bankruptcy, reorganization, or similar laws relating to or affecting 
the rights of creditors and will not conflict with or result in any breach of 
any of the provisions of any material agreement, bylaws, charter or instrument 
to which Borrower is a party.

     7.12 Taxes.  All tax returns required to be filed by Borrower in any 
          -----
jurisdiction have been filed or permitted extensions for filing such returns 
have been properly obtained, and all taxes, assessments, and other governmental 
charges upon Borrower, or upon any of its properties, income or franchises, 
which are due and payable, have been paid except for such assessments and 
charges which are immaterial in amount and have not been paid as a result of 
Borrower's inadvertence. The provisions for reserves for taxes

                                      35
<PAGE>
 
on the books of Borrower are adequate for all unaudited Fiscal Years, and for 
its current fiscal period.

     7.13 Compliance with Law.  Borrower: (a) is not in violation of any laws, 
          -------------------
ordinances, or Rules to which it or its business is subject, the violation of 
which would reasonably be expected to have a material adverse effect on Borrower
on a consolidated basis; and (b) has not used illegal, improper, fraudulent or 
deceptive marketing techniques or unfair business practices with respect to the 
Contracts. Borrower has complied in all material respects with all applicable 
federal statutes and all rules and regulations promulgated thereunder and with 
all provisions of law of each state whose laws and Rules relate to the 
Contracts.

     7.14 Borrower's Office.  Borrower's chief executive office is located at 
          -----------------
the address stated on page one of this Agreement, and Borrower covenants and 
agrees that it will not, without prior written notification to Lender, relocate 
said chief executive office.

     7.15 ERISA.  (a) Borrower has no Plan other than those listed in Exhibit 
          -----
7.15 attached hereto. (b) No Plan has been terminated or partially terminated or
is insolvent or in reorganization, nor has any proceedings been instituted to
terminate or reorganize any Plan. (c) Borrower has not withdrawn from any Plan
in a complete or partial withdrawal, nor has a condition occurred which if
continued would result in a complete or partial withdrawal. (d) Borrower has no
withdrawal liability, including contingent withdrawal liability, to any Plan
pursuant to Title IV of ERISA. (e) Borrower has no liability to the PBGC other
than for required insurance premiums which have been paid when due. (f) No
Reportable Event has occurred with respect to a Plan. (g) No Plan has an
"accumulated funding deficiency" (whether or not waived) as defined in Section
302 of ERISA or in Section 412 of the Internal Revenue Code. (h) Each Plan is in
substantial compliance with ERISA, and Borrower has not received any notice
asserting that a Plan is not in compliance with ERISA. Neither Borrower nor any
other "party-in-interest" or "disqualified person" has engaged in a "prohibited
transaction" as such terms are defined in Section 4975 of the Internal Revenue
Code and Title I of ERISA, in connection with any Plan which would subject a
party-in-interest or disqualified person (after giving effect to any exemption)
to the tax on prohibited transactions imposed by Section 4975 of the Code or any
other liability.

     7.16 Name Changes.  Except as disclosed in writing by Borrower prior to the
          ------------
date hereof, Borrower has not, within the six-year period immediately preceding 
the date hereof, changed its name, been the surviving entity of a merger or 
consolidation, or acquired all or substantially all of the assets of any Person.

                                      36
<PAGE>
 
                ARTICLE EIGHT - FINANCIAL AND OTHER COVENANTS
                ---------------------------------------------

     Borrower covenants that so long as any Obligation remains unpaid or is yet 
to be performed, Borrower shall observe all of the covenants and promises 
contained in this Article Eight.

     8.1  Payment of Taxes and Claims. Borrower shall pay, before they become 
          ---------------------------
delinquent, all taxes, assessments, and other governmental charges imposed upon
it or its property or the Collateral and all claims or demands which, if unpaid,
might result in the creation of a Lien upon its property or the Collateral;
provided, however, Borrower need not pay such taxes, assessments, and other
-----------------
governmental charges so long as (i) they are contested by Borrower in good faith
by appropriate proceedings, (ii) adequate accounting reserves have been
established with respect thereto, and (iii) Borrower's title to, and it right to
use its Property and the Collateral are not materially adversely affected
thereby.

     8.2  Uniform Commercial Code Financing Statements and Assignments of 
          ---------------------------------------------------------------
Contracts. Prior to any Advance hereunder and at all times all filings of Code 
---------
financing statements, assignments of the Contracts and all other filings, 
recordings and action necessary to perfect Lender's Liens granted under this 
Agreement shall have been filed or recorded and are in effect.

     8.3  Maintenance of Properties and Existence. Borrower shall:
          ---------------------------------------

          a.   Maintain insurance with respect to its properties and business 
against such casualties and contingencies of such types and in such amounts as 
is customary in such business;

          b.   Keep true books, records, and accounts of all its business 
transactions;

          c.   Except as provided in section 8.20, keep in full force and effect
its corporate existence, rights, licenses, and franchises, as the case may be, 
except for licenses and franchises the non-existence of which would not 
materially and adversely affect its business or condition (financial or 
otherwise); and 

          d.   Not violate any laws, ordinances, or governmental rules or 
regulations to which it is subject which violation would reasonably be expected 
to materially and adversely affect the business, profits, the Collateral, 
Properties, or condition (financial or otherwise) of Borrower so that all 
Contracts will be valid, binding and legally enforceable in accordance with 
their terms, subsequent to the assignment thereof to Lender.

     8.4  Offices; FTC; Warranties. a. Borrower agrees that it will operate at a
          ------------------------
licensed location in the jurisdiction requiring such license in conformity with 
all such licensing and other laws

                                      37
<PAGE>
 
applicable to the purchase of Contracts, including Motor Vehicle Retail 
Installment Sales Acts, Sales Finance Agency Acts or any other law regulating 
the business of acquiring Contracts from Dealers. To the extent Borrower does 
not have a license for each location, it will immediately procure a license or 
advise Lender of the reason that it is exempt from such licensing requirement or
that no such licensing requirement exists in the jurisdiction of such location.

          b.   Borrower is familiar with the Federal Trade Commission's used car
rule and is in compliance therewith to the extent Borrower is legally obligated 
for such compliance.

          c.   Each Contract has been originated by a Dealer pursuant to a 
Dealer Agreement that is enforceable in accordance with its terms against such 
Dealer. To the extent that Borrower allows Dealers to finance so-called 
"extended warranty plans," Borrower will (i) ensure that the cost of such plans 
are disclosed and will be in substantial compliance with all applicable consumer
credit laws, including any and all special insurance laws relating thereto to 
the extent Borrower is legally obligated for such compliance, and (ii) ensure 
that such plans are underwritten by (x) a major automobile manufacturer, or an 
Affiliate thereof, or (y) a reputable insurance company.

     8.5  Guaranties. Except for the joint and several liability of Borrower 
          ----------
under this Agreement, Borrower shall not become or be liable in respect of any 
Guaranty except by endorsement, in the ordinary course of business, of 
negotiable instruments for deposit or collection issued in the ordinary course 
of Borrower's business.

     8.6  Total Debt Ratio. Borrower shall not permit the ratio, calculated on a
          ----------------
consolidated basis as of the last day of each month, of (a) the aggregate amount
of all Debt (numerator) to (b) Adjusted Tangible Net Worth (denominator) to be 
more than 9:1.

     8.7  Minimum Interest Coverage. Borrower shall not permit the ratio, 
          -------------------------
calculated on a consolidated basis as of the last day of each quarter in each 
Fiscal Year, of (a) the sum of Adjusted Net Earnings from Operations for such 
quarter, plus interest expense and income taxes for such quarter (numerator), to
         ----
(b) interest expense and income taxes for such quarter (numerator), to (b) 
interest expense for such quarter (denominator), to be less than 1.75:1.

     8.8  Prohibition on Distributions: Equity Capital Changes. Borrower shall 
          ----------------------------------------------------
not, without Lender's prior written consent, directly or indirectly (a) declare,
make, or incur any liability to make any Distribution; or (b) make any change in
its capital equity structure which would reasonably be expected to materially 
adversely affect repayment of the Loan or other Obligations.

                                      38
<PAGE>
 
     8.9   Loss Reserves.  Borrower shall maintain aggregate reserves for credit
           -------------
losses, calculated on a consolidated basis as of the last day of each month in
an amount which shall not be less than the product of the Loss Reserve
Percentage, multiplied by the Net Contract Payments outstanding as of the date
            ----------
of determination. Aggregate reserves for credit losses shall include an
allowance for loan losses, Dealer Reserves, and dealer deferred certificates.

     8.10  Limitation on Amounts Paid to Dealers.  The average amount,
           -------------------------------------  
calculated as of the last day of each month on a cumulative, consolidated basis,
paid by Borrower to Dealers during each of the 12 calendar months immediately
preceding the date of calculation, for the purchase of Contracts which arise
from the credit sale of Goods shall not exceed the following: (a) in the case of
Contracts arising from a credit sale of new Goods, the invoice price therefor;
and (b) in the case of Contracts arising from the credit sale of used Goods, an
amount determined by utilizing the "average trade-in value" for all Goods which
are the subject of such Contracts, as established by the National Automobile
                                                         -------------------
Dealers Association Official Used Car Guide (the "Guide") in effect at the time
-------------------------------------------
Borrower purchased the subject Contract. In the event that the Guide shall at
any time cease to be published, then Lender shall, thereafter, select a
comparable publication, as determined by Lender, in its sole discretion, for
determining the foregoing calculation. For purposes of this section 8.10, there
shall be excluded from the determination of the purchase price of a Contract,
that portion of the purchase price which was paid for sums included in the
unpaid Contract balance which arise from a purchase, on a credit basis, of
credit life and disability insurance, extended vehicle warranty insurance, and
other forms of insurance, and all taxes, title, license, and similar fees.

     8.11  Unsubordinated Debt to Borrowing Base.  Borrower shall not permit the
           -------------------------------------
ratio, calculated on a consolidated basis as of the last day of each month, of
(a) the remainder of (i) Debt, minus (ii) all Subordinated Debt (numerator), to
                               ----- 
(b) Borrowing Base (denominator), to be more than 5:1.

     8.12  Charge-Off Policy.  Borrower shall establish and implement, in a
           -----------------
manner satisfactory to Lender, a policy for charging off the unpaid balance of
its delinquent Contracts. Without limiting the generality of the foregoing,
Borrower's policy shall provide that on the last Business Day of each month
Borrower shall charge off the unpaid balance of all Contracts with respect to
which (a) any payment due thereunder is 180 or more days delinquent, as
determined on a contractual basis, or (b) the Goods which are the subject
thereof have been repossessed and sold for an amount less than the Contract
balance then owing and after application of the sale proceeds and all insurance
proceeds, if any, to such Contract balance, deficiency remains.

                                      39
<PAGE>
 
     8.13  Minimum Adjusted Tangible Net Worth.  Borrower shall not permit its
           -----------------------------------
Adjusted Tangible Net Worth, calculated on a consolidated basis as of the last
day of each month, to be less than: (a) $8,000,000 on December 31, 1994, (b)
$8,000,000 during the period January 1, 1995 through December 30, 1995, (c)
$15,000,000 on December 31, 1995, and (d) $15,000,000 for the period beginning
January 1, 1995, and at all times thereafter.

     8.14  Subordinated Obligations.  Except as previously and expressly
           ------------------------
consented to in writing by Lender or permitted by the terms of the applicable
subordination agreement, Borrower shall not directly or indirectly permit (a)
any payment to be made in respect of any Subordinated Debt; (b) the amendment,
rescission, or other modification of the provisions of any of Borrower's
Subordinated Debt; or (c) the prepayment or redemption of any part of any
Subordinated Debt of Borrower.

     8.15  Intercompany Management Fees.  Borrower shall not directly or
           ----------------------------
indirectly pay in any form (including, without limitation, salary, bonuses,
commissions, fees, and incentive compensation) any Intercompany Management Fees.
Notwithstanding the foregoing provisions of this section 8.15, Borrower may pay
such administrative and overhead expenses (including taxes) as are, from time to
time, reasonably allocated to Borrower by Cole Taylor Financial Group, Inc.
and/or Cole Taylor Bank.

     8.16  New Subsidiaries.  Borrower shall not, after the date of this
           ----------------
Agreement, form or incorporate any Subsidiaries; provided, however, upon 15 days
                                                 -----------------    
prior notice to Lender and subject to the terms and conditions set forth in this
section 8.16, Borrower may form or incorporate a Restricted Subsidiary provided
no Default or Event of Default exists and is continuing at the time the
Restricted Subsidiary is formed or incorporated. Borrower shall cause each
Restricted Subsidiary to deliver to Lender within the 15 day period after its
formation or incorporation: (a) amendment(s) to this Agreement containing such
provisions as may be reasonably required by Lender, which shall include
provisions adding the Restricted Subsidiary as a "Borrower" under this Agreement
and perfecting Lender's security interest in the Collateral pledged by such
Restricted Subsidiary to Lender under this Agreement; (b) amendments to the
Security Agreement-Stock Pledge or other similar agreement, pledging the stock
of the Restricted Subsidiary to Lender; and (c) financing statements,
instruments, documents, certificates, and opinions required at that time by
Lender, each of which shall be satisfactory in form and content to Lender and
shall be substantially in the form as those delivered by Borrower to Lender on
the Closing Date.

     8.17  Dealer Agreement Forms.  Borrower covenants that only Dealer
           ----------------------   
Agreements in the form attached hereto as Exhibit 8.17 and Dealer Agreements in
form(s) hereafter approved in writing by

                                      40
<PAGE>
 
Lender shall be used by Borrower for all transactions which may now exist and 
which may exist in the future with Dealers. Borrower shall not substantially 
change the form of such Dealer Agreements without Lender's prior written 
consent, which consent shall not be unreasonably withheld or delayed, unless 
such change or variation is expressly required by applicable state and federal 
laws.

     8.18  Debt.  Borrower shall not incur or maintain any Debt other than: (a)
           ---- 
the Obligations, (b) Debt owing by Subsidiary Borrowers and Parent Borrower to
one another, (c) Debt incurred to finance the purchase or lease of equipment, 
(d) other Debt existing as of the Closing Date and reflected on Borrower's
financial statements for the most recently ended period reflected therein, (e)
unsecured Debt owing by Borrower to Cole Taylor Financial Group, Inc., and (f)
accounts payable, accrued payroll, accrued taxes, and other obligations arising
in the ordinary course of Borrower's business.

     8.19  Further Assurances.  Borrower shall from time to time execute and
           ------------------
deliver to Lender such other documents and shall take such other action as may
be requested by Lender in order to implement or effectuate the provisions of, or
more fully perfect the rights granted or intended to be granted by Borrower to
Lender pursuant to the terms of this Agreement or any other agreement executed
and delivered to Lender by Borrower.

     8.20  Merger; Liquidation.  Borrower shall not enter into any transaction
           -------------------
of Merger, reorganization, or consolidation, or transfer, sell, assign, lease,
or otherwise dispose of all or any substantial part of its Property, or wind up,
liquidate, or dissolve, or agree to do any of the foregoing. Nothwithstanding
the foregoing, Borrower may close any office if, in Borrower's opinion, it is
appropriate to do so.

     8.21  Change in Business.  Borrower shall not make any material change in
           ------------------
its financial structure or in any of its business objectives, purposes, or
operations, or in the types of loans or Contracts extended by Borrower or the
collateral taken or payment provisions pertaining thereto.

     8.22  Lender's Expenses.  Upon demand by Lender, Borrower shall immediately
           -----------------
reimburse Lender for all sums expended by Lender which constitute Lender's
Expenses, and Borrower hereby authorizes and approves all Advances and payments
by Lender on items constituting Lender's Expenses.

     8.23  Liens.  Borrower shall not permit to exist, or create, incur, assume
           -----
any Lien on any Property now owned or hereafter acquired by it, except Permitted
Liens (other than the Collateral which shall not be subject to any Lien other
than a Lien in favor of Lender).

                                      41

<PAGE>
 
     8.24 ERISA.  Borrower shall cause each Plan to be qualified within the
          -----
meaning of Section 401(a) of the Internal Revenue Code and to be administered in
all respects in compliance with ERISA and Section 401(a) of the Internal Revenue
Code.

     8.25 Fixed Charge Ratio. Borrower shall not permit the ratio, calculated on
          ------------------
a consolidated basis as of the last day of each Fiscal Year, of (a) Adjusted Net
Earnings from Operations, plus non-cash expenses for such Fiscal Year          
(numerator), to (b) the sum of all capital expenditures, plus the aggregate
                                                         ----
amount of all principal payments required to be made by Borrower on all long-
term debt during such Fiscal Year (excluding any amount owing to Lender under
this Agreement) (denominator), to be less than 1 to 1.

     8.26 Restricted Investments Prohibition.  Borrower shall not make any
          ----------------------------------
Restricted Investment.

                   ARTICLE NINE - INFORMATION AS TO BORROWER
                   -----------------------------------------

     9.1  Financial Statements.  Subject to the requirements of section 12.6,
          --------------------
below, Borrower shall submit to Lender:

          a.  Monthly and Annual Statements.  As soon as practicable: (1) after
              -----------------------------
the end of each month in each Fiscal Year of Borrower, and in any event within
45 days after the end of such period, and (2) after the end of each Fiscal Year
of Borrower and in any event within 90 days thereafter with respect to Borrower,
copies of:

              (i)    balance sheets of Borrower as at the end of such monthly
period and such year;

              (ii)   statements of income of Borrower for such month and year;

              (iii)  statement of cash flows of Borrower during such year;

              (iv)   statements of changes in stockholders equity of Borrower
during such year;

              (v)    statements of material changes of accounting policies,
presentations, or principles made during such year;

              (vi)   upon Lender's request, Borrower's corporate tax returns
prepared by Borrower; and

              (vii)  notes to such financial statements.

                                      42

<PAGE>
 
     Monthly statements and annual statements shall all be in reasonable detail 
and, upon Lender's request, shall be certified as complete and correct, subject 
to change as resulting from year-end adjustments and shall contain a 
certification that no Event of Default then exists, by the treasurer or chief 
financial officer of Borrower. Annual statements shall be accompanied by a 
report thereon unqualified as to scope by an independent certified public 
accounting firm selected by Borrower and satisfactory to Lender.

          b.   Projections.  Within 90 days of the end of the Fiscal Year of 
               -----------
Borrower, financial projections for the two following years; the projections for
the first year are to be prepared on a monthly basis and the projections for the
second year are to be prepared on an annual basis. Lender shall keep such 
projections confidential, in accordance with its usual practices.

          c.   Audit Reports.  Promptly upon receipt thereof, one copy of each 
               -------------
audit report, if any, submitted to Borrower by independent public accountants in
connection with any annual, interim, or special audit or examination made by 
them of the books of Borrower.

          d.   Requested Information.  With reasonable promptness, such other 
               ---------------------
information as, from time to time, may be reasonably requested by Lender, 
including the names and addresses of all Contract Debtors, current Contract 
balances, a payment history for all Contracts, ageings, insurance claims 
reports, and charge off and reserve reconciliations.

     9.2  Notices.  Borrower shall notify Lender in writing of the following 
          -------
matters at the following times (with each notice describing the subject matter 
thereof in reasonable detail, and setting forth the action Borrower has taken or
proposes to take with respect thereto):

          a.   Promptly upon becoming aware of the existence of any condition or
event which constitutes a Default or Event of Default;

          b.   Promptly upon becoming aware of: (i) the assertion by the holder 
of any capital stock of Borrower or of any Debt in an outstanding principal 
amount in excess of $100,000 that a default exits with respect thereto or that 
Borrower is not in compliance with the terms thereof; or (ii) the threat or 
commencement by such holder of any enforcement action because of such asserted 
default or noncompliance;

          c.   Promptly upon becoming aware of any material adverse change in 
Borrower's Property, business, operations, or condition (financial or 
otherwise), all as determined on a consolidated basis;

                                      43
<PAGE>
 
          d.  Promptly upon becoming aware of any pending action, suit, 
proceeding, or counterclaim by any Person, or any pending or threatened 
investigation by any public authority, which would reasonably be expected to 
materially and adversely affect the Collateral, repayment of the Obligations, 
Lender's rights under this Agreement, or Borrower's business, Property, 
operations, or condition (financial or otherwise), all as determined on a 
consolidated basis;

          e.   Promptly upon becoming aware of any violation of any law, 
statute, regulation, or ordinance of a public authority applicable to Borrower, 
any Subsidiary, or their respective Properties which would reasonably be 
expected to materially and adversely affect the Collateral, repayment of the 
Obligations, Lender's rights under this Agreement, or Borrower's business, 
Property, operations, or condition (financial or otherwise), all as determined 
on a consolidated basis; and

          f.   Any change in Borrower's name, state of incorporation, or form of
organization, at least 20 days prior thereto.

                       ARTICLE TEN - CLOSING CONDITIONS
                       --------------------------------

     Lender shall not be obligated to make any Advance to Borrower, unless all 
of the following conditions precedent have been satisfied as of the Closing Date
and the conditions precedent specified in sections 10.1, 10.5, and 10.7 have 
been satisfied as of the date of each Advance.

     10.1  Representations and Warranties; Covenants; Defaults.  Borrower's 
           ---------------------------------------------------
representations and warranties contained in this Agreement and the other Loan 
Documents shall be correct and complete; Borrower shall have performed and 
complied with all covenants, agreements, and conditions contained herein and in 
the other Loan Documents which are required to have been performed or complied 
with; and there shall exist no Default or Event of Default.

     10.2  Delivery of Documents.  Borrower shall have delivered, or caused to 
           ---------------------
be delivered, to the Lender the documents listed on Schedule 10.2 hereto and 
such other documents, instruments and agreements as the Lender shall request in 
connection herewith, duly executed by all parties thereto other than Lender, and
in form and substance satisfactory to the Lender and its counsel.

     10.3  Termination of Liens.  Lender shall have received duly executed UCC-3
           --------------------
Termination Statements and other instruments, in form and substance satisfactory
to Lender, as shall be necessary to

                                      44
<PAGE>
 
terminate and satisfy all Liens on the Collateral (other than those of Lender).

     10.4 Facility Fees.  Borrower shall have paid in full the Facility Fee.
          -------------

     10.5 Payment of Fees and Expenses.  Borrower shall have paid all allocated 
          ----------------------------
costs of in-house counsel and all special local counsel retained, and all other 
fees and expenses of Lender payable under the terms of this Agreement.

     10.6 Required Approvals.  Lender shall have received certified copies of 
          ------------------
all consents or approvals of any public authority or other Person which Lender 
determines is required in connection with the transactions contemplated by this 
Agreement.

     10.7 No Material Adverse Change.  There shall have occurred no material 
          --------------------------
adverse change in Borrower's business or financial condition, as determined on a
consolidated basis, or in the Collateral since December 31, 1993, and Lender 
shall have received a certificate of Borrower's chief executive officer to such 
effect.

                 ARTICLE ELEVEN - EVENTS OF DEFAULT: REMEDIES
                 --------------------------------------------

     11.1 Events of Default.  An "Event of Default" shall exist under this 
          -----------------
Agreement upon the occurrence of any of the following events or conditions (all 
of which shall conclusively be deemed to be material):

          a.   Interest or Principal. Failure to pay when due or when declared 
               ---------------------
due and payable, the principal of or interest on the Obligations within one 
Business Day following the payment due date therefor except no such grace period
shall apply with respect to the payment of the Loan on the Maturity Date.

          b.   Payment of Other Sums.  Failure to make payment, when required,
               ---------------------
of any other sums owing by Borrower to Lender (other than principal or
interest), pursuant to the terms of this Agreement after thirty days notice from
Lender to Borrower to pay such sum.

          c.   Warranties or Representations. Any warranty, representation, or
               -----------------------------
other statement made to Lender by Borrower in this Agreement or in any
certificate furnished by Borrower in compliance with this Agreement shall have
been false or misleading in any material respect when made or furnished.

          d.   Breach of Certain Covenants. Failure by Borrower to comply with 
               ---------------------------
the covenants set forth in sections 6.4, 8.6, 8.7, 8.8, 8.11, 8.13, 8.14, 8.20, 
or 8.25 of this Agreement.

                                      45
<PAGE>
 

          e.   Breach of Other Covenants. Failure by Borrower to comply with any
               -------------------------
covenant set forth in this Agreement, other than the covenants contained in
sections 6.4, 8.6, 8.7, 8.8, 8.11, 8.13, 8.14, 8.20, or 8.25, or in any other
agreement executed in connection therewith within 30 days after written notice
from Lender to Borrower requesting that Borrower cure such breach.

          f.   Material Adverse Change. Any material adverse change in the
               -----------------------
business or financial condition of Borrower as determined on a consolidated
basis after the date of this Agreement.

          g.   Voluntary Bankruptcy, Etc.  Borrower or any Subsidiary shall: (i)
               -------------------------
file a voluntary petition in bankruptcy or file a voluntary petition or answer 
or otherwise commence any action or proceeding seeking reorganization, 
arrangement or readjustment of its debt or for any other relief under the 
Federal bankruptcy code, as amended, or under any other bankruptcy or insolvency
act or law, state or federal, now or hereafter existing, or consent to, approve 
of, or acquiesce in, any such petition, action, or proceeding; (ii) apply for or
acquiesce in the appointment of a receiver, assignee, liquidator, sequestrator, 
custodian, trustee or similar officer, for it or for all or a part of its 
Property; (iii) make an assignment for the benefit of creditors; or (iv) be 
unable generally to pay its debts as they become due.

          h.   Involuntary Bankruptcy, Etc.  An involuntary petition shall be 
               ---------------------------
filed or an action or proceeding otherwise commenced seeking reorganization, 
arrangement, or readjustment of Borrower's or any Subsidiary's debts or for any 
other relief under the federal bankruptcy code, as amended, or under any other 
bankruptcy or insolvency act or law, state or federal, now or hereafter existing
which shall remain unstayed or undismissed for a period of 90 days after such 
proceedings are first initiated; provided, however, Lender shall have no 
                                 -----------------
obligation to make any Advance during such period.

          i.   Appointment of Receiver, Etc.  A receiver, assignee, liquidator, 
               ----------------------------
sequestrator, custodian, trustee, or similar officer for Borrower or any 
Subsidiary or any part of the Property shall be appointed involuntarily; or a 
warrant of attachment, execution, or similar process shall be issued against any
part of the Property of Borrower or any Subsidiary which shall remain unstayed 
or undismissed for a period of 90 days after such proceedings are first 
initiated; provided, however, Lender shall have no obligation to make any 
           -----------------
Advance during such period.

          j.   Attachment, Judgment, Tax Liens.  The issuance or filing against 
               -------------------------------
Borrower of any Lien, attachment, injunction, execution, tax Lien, or judgment 
for the payment of money in excess

                                      46
<PAGE>
 
of $250,000 which is not discharged in full or stayed within 30 days after 
issuance of filing.

           k.  Default in Other Agreements. Unwaived or uncured default in the 
               ---------------------------
payment of any sum due under any instrument of indebtedness for borrowed money 
owed of at least $500,000 by Borrower to any Person or any other unwaived or 
uncured default under such instrument of indebtedness which permits such 
indebtedness to become due prior to its stated maturity or permits the holders 
of such indebtedness to elect a majority of the board of directors or manage the
business of Borrower.

           l.  [Intentionally Omitted.]

           m.  [Intentionally Omitted.]

           n.  Assignment of Agreement. The assignment by Borrower of this 
               -----------------------
Agreement or its rights hereunder.

           o.  Payment of Subordinated Debt. If Borrower makes any payment on
               ----------------------------
account of any Subordinated Debt which is not expressly permitted by the terms
of the applicable subordination agreement.

           p.  Breach of Collection Account Agreement. A breach by Borrower of 
               --------------------------------------
any covenant contained in the Collection Account Agreement which is not cured by
Borrower within 10 days of Lender's notice to cure such breach.

           q.  Termination of Letter of Responsibility. The letter of
               ---------------------------------------
responsibility by Cole Taylor Financial Group, Inc. in favor of Lender shall be
terminated or retracted by Cole Taylor Financial Group, Inc., or Cole Taylor
Financial Group Inc. undertakes by court action or otherwise to have the letter
of responsibility declared unenforceable, or for any reason the letter of
responsibility is declared to be unenforceable by a court of competent
jurisdiction.

     11.2  Default Remedies.
           ----------------

           Upon the occurrence of an Event of Default and the continuance
thereof as provided in Section 11.1 above, Lender may, at its election
(provided, however, that upon the occurrence of an Event of Default under
subsections 11.1 g., h., and i. the following shall occur automatically),
without notice of its election and without demand (except notice shall be given
in connection with subsection 11.2(a), 11.2(b), 11.2(c) and 11.2(i), which
notice shall be effective immediately upon delivery), do any one or more of the
following, all of which are unconditionally and irrevocably authorized by
Borrower:

                                      47
<PAGE>
 

           a.  Accelerate and declare immediately due and payable all 
Obligations, including all principal and interest.

           b.  Reduce the Advance Rate, reduce the Availability, or restrict the
amount of any additional Advances.

           c.  Cease making any Advances to or for the benefit of Borrower under
this Agreement, and terminate further performance under this Agreement and any
other agreement between Borrower and Lender.

           d.  In its sole discretion, without liability to any other Person, 
make such payments and do such acts as Lender considers necessary or 
reasonable: (i) to protect the Collateral and/or its security interest therein;
(ii) to prevent any of Borrower's warranties or representations hereunder from
being or becoming incorrect, incomplete, or misleading; or (iii) to cause the 
payment of any sum or performance of any duty of Borrower hereunder.

           e.  Send notice to all Contract Debtors directing them to make full
payment of their Contract payments directly to Lender, instead of Borrower. All
payments received by Borrower contrary to this subsection 11.2 e. shall be 
received in trust for the exclusive right of Lender, shall be segregated from
other funds of Borrower, and shall forthwith be delivered to Lender.

           f.  Enter any and all premises where the Collateral is located and
take possession of the Collateral and/or require Borrower, at Borrower's 
expense, to assemble the Collateral and either immediately deliver all of the 
Collateral to Lender or make it available for delivery to Lender at a place or
places designated by Lender. Should Lender exercise its right to possession of
the Collateral hereunder, Borrower waives its right, if any, that Lender post a
bond or any other type of security.

           g.  Require Borrower to deliver to Lender all of the Contracts, 
Security Documents, and other documents representing the Collateral and to 
exercise, in Borrower's name, all of Borrower's rights thereunder.

           h.  Sell all or any part of the Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including Borrower's premises)
as is commercially reasonable. Any deficiency in the Obligations which exists
after disposition of the Collateral, as provided above, will be immediately paid
by Borrower. Any excess will be returned to Borrower by Lender, subject, 
however, to the rights of the holders of other Liens on the Collateral. Unless
a longer period is required by the Code, ten days notice to Borrower of any 
public or

                                      48
<PAGE>
 
private sale or other disposition of Collateral shall be reasonable notice 
thereof and such sale shall be at such location(s) as Lender shall designate in 
said notice. Lender shall have the right to bid at such sale on its own behalf. 
Out of proceeds arising from any such sale, Lender shall retain an amount equal
to all costs and charges, including attorneys' fees for pursuing, reclaiming,
taking, keeping, storing, and advertising such Collateral for sale, selling and
any and all other charges and expenses in connection therewith. Any balance
shall be applied upon the Obligations of Borrower to Lender; and in the event of
deficiency, Borrower shall remain liable to Lender. Lender may, from time to
time, attempt to sell all or any part of the Collateral by a private placement
restricting the bidders and prospective purchasers. In so doing, Lender may
solicit offers to buy the Collateral, or any part of it, for cash, from a
limited number of purchasers deemed by Lender, in its reasonable judgment, to be
responsible parties who might be interested in purchasing the Collateral, and if
Lender solicits such offers from not less than three such purchasers then the
acceptance by Lender of the highest offer obtained therefrom shall be deemed to
be a commercially reasonable method of disposition of such Collateral.

          i.   Terminate this Agreement as to any future obligation of Lender, 
but without affecting Lender's rights or remedies, or Borrower's Obligations, 
under this Agreement. Neither such termination, nor the termination of this 
Agreement by lapse of time, the giving of notice, or otherwise shall absolve, 
release, or otherwise affect the liability of Borrower in respect of 
transactions occurring prior to such termination, nor affect any of the Liens, 
security interests, rights, powers and remedies of Lender, but they shall, in 
all events, continue until all Obligations of Borrower to Lender are satisfied.

          j.   Exercise any and all other rights and remedies available under 
the Code, this Agreement, any other agreement with Borrower, or available at law
or in equity, to enforce Lender's rights in the Collateral and obtain payment 
and performance of the Obligations.

          k.   Appropriate and apply to any of the Obligations, any and all 
balances, credits, deposits, accounts, reserves, indebtedness, or other monies, 
whether accrued or not, due or owing to Borrower or held by Lender hereunder.

     11.3 Remedies Cumulative.  Borrower waives the right to require the filing 
          -------------------
of an undertaking or a bond by Lender in connection with its exercise of any of 
the rights and remedies specified in section 11.2 above. All undertakings of 
Borrower and the remedies of Lender contained in this Agreement, or in any 
documents referred to herein concurrently or hereafter entered into, shall be 
deemed cumulative. The failure or delay of Lender

                                      49
<PAGE>
 
to exercise or enforce any rights or remedies under this Agreement or under any 
of the aforesaid agreements or with respect to the Collateral shall not operate 
as a waiver of such rights and remedies, but all such rights and remedies shall 
continue in full force and effect until payment of all Loans and all other 
Obligations shall have been fully satisfied, and all rights and remedies herein 
provided for are cumulative and none are exclusive.

     11.4 Waiver of Right of Offset.  No portion of the Loan or other 
          -------------------------
Obligations secured by this Agreement shall be or deemed to be offset or 
compensated by all or any part of any claims, causes of action, counterclaims or
counterclaim, whether liquidated or unliquidated, which Borrower may have 
against Lender.


                           ARTICLE TWELVE - GENERAL
                           ------------------------

     12.1 Invalidated Payments.  To the extent Borrower makes a payment to 
          --------------------
Lender, which payment or any part thereof is subsequently invalidated, declared 
to be fraudulent or preferential, set aside, or is required to be repaid to a 
trustee, receiver, custodian, or any other party under any bankruptcy act, state
or federal law, common law or equitable cause, then to the extent of such 
payment or repayment, the Obligation or part thereof intended to be satisfied 
shall be revived and continued in full force and effect as if said payment had 
not been made.

     12.2 Application of Code to Agreement.  Any additional remedies available 
          --------------------------------
to Lender under the applicable provisions of the Code not specifically included 
herein shall be deemed a part of this Agreement and Lender shall have the 
benefit of any such additional remedies.

     12.3 Parties, Successors and Assigns.  This Agreement shall be binding upon
          -------------------------------
Borrower and Lender, their respective successors and assigns and inure to the 
benefit of the successors and assigns of Lender and Borrower.

     12.4 Joint and Several Liability.
          ---------------------------

          a.   Parent Borrower and each Subsidiary Borrower agrees that each is 
jointly and severally, directly and primarily liable to Lender for payment in 
full of the Obligations and that such liability is independent of the duties, 
obligations, and liabilities of the other Borrowers. Lender may bring a separate
action or actions on each, any, or all of the Obligations against any Borrower, 
whether or not action is brought against the other Borrower(s).

          b.   Each Borrower agrees that any release which may be given by 
Lender to the other Borrowers or any guarantor or endorser

                                      50
<PAGE>
 
of any of the Obligations shall not release such other Borrowers from their 
obligations hereunder.

          c.   Each Borrower hereby waives any right to assert against Lender 
any defense (legal or equitable), setoff, counterclaim, or claims which any 
Borrower individually may now or any time hereafter have against the other 
Borrowers or any other party liable to Lender for repayment of the Obligations 
in any manner or way whatsoever.

          d.   Any and all present and future indebtedness of a Borrower to the 
other Borrowers is hereby subordinated to the full payment and performance of 
the Obligations.

          e.   Each Borrower is presently informed as to the financial condition
of the other Borrowers and of all other circumstances which a diligent inquiry 
would reveal and which bear upon the risk of nonpayment of the Obligations. Each
Borrower hereby covenants that it will keep itself informed as to the financial 
condition of the other Borrowers, the status of the other Borrowers and of all 
circumstances which bear upon the risk of nonpayment. Absent a written request 
from any Borrower to Lender for information, each Borrower hereby waives any and
all rights it may have to require Lender to disclose to such Borrower any 
information which Lender or any Lender may now or hereafter acquire concerning 
the condition or circumstances of the other Borrower.

          f.   Each Borrower waives all rights to notices of default, existence,
creation, or incurring of new or additional indebtedness, and all other notices 
of formalities to which such Borrower may, as joint and several Borrower 
hereunder, be entitled.

          g.   At the request of Borrower to facilitate and expedite the 
administration and accounting processes and procedures of their borrowings 
hereunder, Lender has agreed, in lieu of maintaining separate loan accounts, 
that Lender shall maintain a single loan account under the name of Parent 
Borrower ("Loan Account"). The Loan shall be made jointly and severally to the 
Parent Borrower and Subsidiary Borrowers and shall be charged to their Loan 
account, together with all interest and other charges as permitted under and 
pursuant to this Agreement. The Loan shall be credited with all repayments of 
Obligations received by Lender, on behalf of Lender, from any Borrower as paid 
into the Collection Account pursuant to the terms of this Agreement.

          h.   Requests for borrowings may be made by any Borrower, pursuant to 
the terms of Article Two hereof. Each Borrower expressly agrees and acknowledges
that Lender shall have no responsibility to inquire into the correctness of the 
apportionment or allocation of or any disposition by any of the Borrowers of (i)
any Obligations, or (ii) any of the expenses and other items

                                      51
<PAGE>
 
charged to the Loan account pursuant to this Agreement. All Obligations and such
expenses and other items shall be made for the collective, joint and several 
account of the Borrowers and shall be charged to their Loan account.

          i.   Each Borrower agrees and acknowledges that the administration of 
the Obligations on a combined basis as set forth in this section 12.4 is being 
done as an accommodation to Borrowers and at their request, and that Lender 
shall incur no liability to any of the Borrowers as a result thereof. To induce 
Lender to do so, and in consideration thereof, each of the Borrowers hereby 
agrees to indemnify and hold Lender harmless from and against any and all 
liability, expenses, loss, damage, claim of damage, or injury, made against 
Lender by any of Borrowers or by any other Person, arising from or incurred by 
reason of such administration of the Obligations.

          j.   Each Borrower represents and warrants to Lender that the 
collective administration of the Obligations is being undertaken by Lender 
pursuant to this section 12.4., because Borrowers are integrated in their 
operation and administration and require financing on a basis permitting the 
availability of credit from time to time to each of the Borrowers. Each 
Borrower will derive benefit, directly and indirectly, from such collective 
administration and credit availability because the successful operation of each 
Borrower is enhanced by the continued successful performance of the integrated 
group.

          k.   Each Borrower hereby waives any right of subrogation it has or 
may have against the other Borrowers with respect to the Obligations or any 
other indebtedness incurred pursuant to this Agreement. In addition, each 
Borrower hereby waives any right to proceed against the other Borrowers, now or 
hereafter, for contribution, indemnity, reimbursement, and any other rights and 
claims, whether direct or indirect, liquidated or contingent, such Borrower may 
now have or hereafter have as against any other Borrower with respect to the 
Obligations or any other indebtedness incurred pursuant to this Agreement. Each 
Borrower agrees that in light of the immediately foregoing waivers, the 
execution of this Agreement shall not be deemed to make such Borrower a 
'creditor' of any other Borrower, and that for purposes of (S)(S) 547 and 550 of
the United States Bankruptcy Code (11 U.S.C. (S)(S) 547, 550), such Borrower 
shall not be deemed a 'creditor' of the other Borrower.

     12.5 Notices.  All notices, demands, or consents by any party on the other 
          -------
relating to this Agreement shall, except as otherwise provided herein, be in 
writing and sent by certified mail, return receipt requested. Notices shall be 
deemed received on the fifth Business Day after being deposited in a United 
States post office box, postage prepaid, properly addressed to Borrower or to 
Lender at the mailing address stated on page one of this Agreement or to

                                      52
<PAGE>
 
such other addresses as Borrower or Lender may from time to time specify in 
writing. Notices may also effectively be given by confirmed transmittal over 
electronic transmitting devices such as NBI, TWIX, Telex or telecopy machine, if
the party to whom the notice is being sent has such a device in its office, 
provided a complete copy of any notice so transmitted shall also be mailed in 
the same manner as required for a mailed notice. Notices sent by electronic 
transmitting device shall be deemed received on the date of confirmed 
transmittal.

     12.6 Accounting Principles.  All accounting computations required to be 
          ---------------------
made for the purposes of this Agreement shall be done in accordance with GAAP, 
except where such principles are inconsistent with the express requirements of 
this Agreement.

     12.7 Total Agreement.  This Agreement and all other agreements referred to 
          ---------------
herein or delivered in connection herewith shall constitute the entire agreement
between the parties relating to the subject matter hereof, shall rescind all 
prior agreements and understandings between the parties hereto relating to the 
subject matter hereof, and shall not be changed or terminated orally.

     12.8 Governing Law.  This Agreement and all transactions hereunder, and all
          -------------
the rights and Obligations of the parties hereto, shall be governed by the laws 
of the state of New Jersey, without reference to its conflict of law rules.

     12.9 Survival.  All warranties, representations, and covenants made by 
          --------
Borrower under this Agreement shall be considered to have been relied upon by 
Lender and shall survive the delivery to Lender of the Note regardless of any 
investigation made by Lender or on its behalf.

     12.10 Time of the Essence.  Borrower acknowledges and agrees that time is 
           -------------------
of the essence with respect to all of its obligations hereunder.

     12.11  Power of Attorney.  Borrower hereby appoints Lender, and its agents 
            -----------------
and designees, the true and lawful agents and attorneys-in-fact of Borrower, 
with full power of substitution, to do all of the following upon the occurrence 
and continuation of an Event of Default (a) receive, open, and dispose of all 
mail addressed to Borrower relating to the Collateral; (b) notify and direct the
United States Postal Service authorities by notice given in the name of Borrower
and signed on its behalf, to change the address for delivery of all mail 
addressed to Borrower relating to the Collateral to an address to be designated 
by Lender, and to cause such mail to be delivered to such designated address 
where Lender may open all such mail and remove therefrom any notes, checks,
acceptances, drafts, money orders or other instruments in payment of the
Collateral in which Lender has a security interest

                                      53
<PAGE>
 
hereunder and any documents relative thereto, with full power to endorse the 
name of Borrower upon any such notes, checks, acceptances, drafts, money order 
or other form of payment or on Collateral or security of any kind and to effect 
the deposit and collection thereof, and Lender shall have the further right and 
power to endorse the name of Borrower on any documents otherwise relating to 
such Collateral; (c) sign the name of Borrower to drafts against Contract 
Debtors or other account debtors, to send notices to such Contract Debtors or 
account debtors, to execute on behalf of Borrower assignments, notices of 
assignments, financing statements and other public records and notices on all 
other instruments or documents; and (d) do any and all other things necessary or
proper to carry out the intent of this Agreement and to perfect and protect the 
Liens and rights of Lender created under this Agreement. Borrower agrees that 
neither Lender nor any of its agents, designees or attorneys-in-fact will be 
liable for any acts of commission or omission, or for any error of judgment or 
mistake of fact or law. The powers granted hereunder are coupled with an 
interest and shall be irrevocable until the Loan and all other Obligations are 
paid in full.

     12.12 Arbitration.
           -----------

           a.  Any controversy or claim between or among the parties arising out
of or relating to this Agreement or any agreements or instruments relating 
hereto or delivered in connection herewith and any claim based upon or arising 
from an alleged tort, shall at the request of any party be determined by 
arbitration. The arbitration shall be conducted in accordance with the United 
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitration shall be conducted within
Camden County, New Jersey, or such other county as Borrower and Lender may
agree. The arbitrator(s) shall give effect to statutes of limitation in
determining any claim. Any controversy concerning whether an issue is arbitrable
shall be determined by the arbitrator(s). Judgment upon the arbitration award
may be entered in any court having jurisdiction. The institution and maintenance
of an action for judicial relief or pursuit of a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.

           b.  No provision of this section shall limit the right of Lender to 
exercise self-help remedies such as setoff, to foreclose against or sell any of 
the Collateral, or to obtain provisional or ancillary remedies from a court of 
competent jurisdiction before, after, or during the pendency of any arbitration 
or other proceeding. The exercise of a remedy does not waive the right of either
party to resort to arbitration.

                                      54
<PAGE>
 
     12.13  Litigation.  Subject to the provisions of section 12.12, state and
            ----------
federal courts located in the state of New Jersey shall have jurisdiction (but 
not exclusive jurisdiction) to hear and determine any claims or disputes between
Borrower and Lender, pertaining to this Agreement. Borrower waives any right it 
may have to assert the doctrine of forum non conveniens or object such venue.
                                   -------------------- 
Borrower expressly submits and consents in advance to such jurisdiction in any 
action or proceeding commenced in such courts.

     12.14  Severability.  To the extent any provision of this Agreement is not 
            ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Agreement.

     12.15  Participant's Security Interests.  Borrower acknowledges and agrees 
            --------------------------------        
that Lender may, subject to the provisions of section 12.16, sell participations
in the Loan and that Lender may share all information received from, or relating
to, Borrower with the Participant. If a Participant shall at any time, with
Borrower's knowledge, participate with Lender in the Loan, Borrower grants to
each such Participant and Lender and each such Participant shall have and are
hereby given, a continuing security interest and Lien on any money, securities,
and other property of Borrower in the custody of the Participants, including the
right of setoff, to the extent of the Participant's participation in the
Obligations, and such participant shall be deemed to have the same right of
setoff to the extent of Participant's participation in the Obligations under
this Agreement as it would have if it were the direct lender. Lender agrees that
it will use its best efforts to negotiate the terms of any participation
agreement between Lender and any Participant so that the participation agreement
will not materially limit Lender's right to amend the terms of this Agreement
without the consent of the Participant, provided, however, Borrower acknowledges
                                        -----------------
that any participation agreement that Lender may enter into with a Participant
may provide that Lender may not, without the consent of the Participant, agree
or consent to any (i) extension of the time of payment of any of Borrower's
obligations with respect to the Loan; (ii) increase in the amount of the
Commitment; (iii) reduction of the principal amount of, or the rate at which
interest accrues on the Loan; (iv) reduction in the Unused Line Fee or other
fees payable under the Loan Agreement; (v) release or substitution of any
guaranty of the Loan, or any Collateral for the Loan or (vi) amendment to the
definition of Availability, or Eligible Contract or Maturity Date in the Loan
Agreement.

     12.16  Confidentiality.  Lender agrees that it shall hold all non-public 
            --------------- 
information obtained pursuant to the requirements of this Agreement in 
accordance with its customary procedures for handling confidential information 
of that nature and will use such

                                      55
<PAGE>
 
information only in connection with the transactions contemplated by this 
Agreement; provided, however, Lender may disclose such information (a) to the 
           -----------------  
extent required by law (including statute, rule, regulation, and judicial 
process), (b) to counsel for Lender or to its accountants, each of whom shall be
bound by the confidentiality obligations set forth herein, (c) to bank examiners
and other appropriate governmental examining authorities, (d) if such 
information is filed by Borrower with any governmental agency and available to 
the public, (e) if such information has been previously disclosed by Borrower to
any Person not associated with Borrower, free of any restrictions as to further 
disclosure, (f) to the extent necessary or appropriate in connection with any 
obligation to which Lender is a party, and (g) to any actual or prospective 
Participant provided such Participant or prospective Participant enters into a 
confidentiality agreement the provisions of which are substantially similar to 
those contained in this section 12.16. and (h) to any of Lender's affiliates who
agree to be subject to the provisions of this section 12.16.

     12.17  Jury Trial Waiver, Etc.  SUBJECT TO THE ARBITRATION PROVISION OF 
            ----------------------       
SECTION 12.12, BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH LENDER 
ALSO WAIVES) AND THE RIGHT TO IMPOSE ANY NONCOMPULSORY COUNTERCLAIM IN ANY 
ACTION, SUIT, PROCEEDING, OR ANY OTHER NON-COMPULSORY COUNTERCLAIM OF ANY KIND 
(REGARDLESS OF THE THEORY OF LIABILITY SUCH AS TORT AND NON-TORT THEORIES) 
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OBLIGATIONS, OR THE 
COLLATERAL. BORROWER EXPRESSLY ACKNOWLEDGES THE INCLUSION OF THIS JURY TRIAL 
WAIVER THROUGH THE INITIALS OF ITS DULY AUTHORIZED REPRESENTATIVE.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.

LENDER AND                               BORROWER
SECURED PARTY                       

BankAmerica Business Credit,             Cole Taylor Finance Co.,      
Inc, a Delaware corporation              a Delaware corporation

by_________________________              by_______________________________
  Joseph F. Pignotti,                      Thomas L. Barlow, President
  Executive Vice President                 
                                         by_______________________________
                                           Marjorie J. MacLean,
                                           Assistant Secretary

                    [SIGNATURES CONTINUED ON NEXT PAGE.]  

                                      56

<PAGE>
 
OUT OF OR RELATING TO THIS AGREEMENT, THE OBLIGATIONS, OR THE COLLATERAL. 
BORROWER EXPRESSLY ACKNOWLEDGES THE INCLUSION OF THIS JURY TRIAL WAIVER THROUGH 
THE INITIALS OF ITS DULY AUTHORIZED REPRESENTATIVE.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.

LENDER AND                              BORROWER
SECURED PARTY

BankAmerica Business Credit             Cole Taylor Finance Co.,
Inc, a Delaware corporation             a Delaware corporation


by /s/ Joseph F. Pignotti               by /s/ Thomas L. Barlow
   ------------------------                --------------------------------
   Joseph F. Pignotti,                     Thomas L. Barlow, President      
   Executive Vice President                

                                        by /s/ Marjorie J. MacLean       
                                           --------------------------------
                                           Marjorie J. MacLean,  
                                           Assistant Secretary

                                        Reliance Acceptance Corp. of
                                        Colorado, a Delaware corporation 

                                        by /s/ Thomas L. Barlow
                                           --------------------------------
                                           Thomas L. Barlow President       

                                        by /s/ Marjorie J. MacLean       
                                           --------------------------------
                                           Marjorie J. MacLean,  
                                           Assistant Secretary               
           
                                        Reliance Acceptance Corp. of
                                        Florida, a Delaware corporation 

                                        by /s/ Thomas L. Barlow   
                                           --------------------------------
                                           Thomas L. Barlow, President       

                                        by /s/ Marjorie J. MacLean       
                                           --------------------------------
                                           Marjorie J. MacLean,  
                                           Assistant Secretary               

                     [SIGNATURES CONTINUED ON NEXT PAGE.]

                                      57
<PAGE>
 
                                        Reliance Acceptance Corp. of
                                        Georgia, a Delaware corporation       

                                        by /s/ Thomas L. Barlow
                                           -----------------------------
                                           Thomas L. Barlow, President     


                                        by /s/ Marjorie J. MacLean
                                           -----------------------------  
                                           Marjorie J. MacLean,
                                           Assistant Secretary  

                                             
                                        Reliance Acceptance Corp. of
                                        Indiana, a Delaware corporation       

                                        by /s/ Thomas L. Barlow
                                           -----------------------------
                                           Thomas L. Barlow, President     


                                        by /s/ Marjorie J. MacLean
                                           -----------------------------  
                                           Marjorie J. MacLean,
                                           Assistant Secretary  

                                        Reliance Acceptance Corp. of
                                        Louisiana, a Louisiana
                                        corporation


                                        by /s/ Thomas L. Barlow
                                           -----------------------------
                                           Thomas L. Barlow, President     


                                        by /s/ Marjorie J. MacLean
                                           -----------------------------  
                                           Marjorie J. MacLean,
                                           Assistant Secretary  
 
                                        Reliance Acceptance Corp. of
                                        New Mexico, a Delaware    
                                        corporation


                                        by /s/ Thomas L. Barlow
                                           -----------------------------
                                           Thomas L. Barlow, President     


                                        by /s/ Marjorie J. MacLean
                                           -----------------------------  
                                           Marjorie J. MacLean,
                                           Assistant Secretary  
 
                     [SIGNATURES CONTINUED ON NEXT PAGE.]

                                      58
<PAGE>
 
                                        Reliance Acceptance Corp. of
                                        Ohio, an Ohio corporation

                                        by /s/ Thomas L. Barlow
                                           -------------------------------
                                           Thomas L. Barlow, President

                                        by /s/ Marjorie J. MacLean    
                                           -------------------------------
                                           Marjorie J. MacLean      
                                           Assistant Secretary 

                                        Reliance Acceptance Corp. of
                                        Texas, a Texas corporation

                                        by /s/ Thomas L. Barlow
                                           -------------------------------
                                           Thomas L. Barlow, President

                                        by /s/ Marjorie J. MacLean    
                                           -------------------------------
                                           Marjorie J. MacLean      
                                           Assistant Secretary  

                                        Reliance Acceptance Corp. of
                                        Tennessee, a Delaware
                                        corporation

                                        by /s/ Thomas L. Barlow
                                           -------------------------------
                                           Thomas L. Barlow, President

                                        by /s/ Marjorie J. MacLean    
                                           -------------------------------
                                           Marjorie J. MacLean      
                                           Assistant Secretary  

                                      59

<PAGE>
 
                  EXHIBIT 1.17 TO LOAN AND SECURITY AGREEMENT

                         COLLECTION ACCOUNT AGREEMENT

     This Collection Account Agreement ("Agreement") is made as of July ___, 
1994, by and between BankAmerica Business Credit, Inc. ("Lender"), a Delaware 
corporation, doing business as BA Business Credit, Inc., located at 200 Lake
Drive East, Suite 201, Cherry Hill, New Jersey 08002; Cole Taylor Bank ("Bank")
located at 350 East Dundee Road, Wheeling, Illinois 60090; and Cole Taylor
Finance Co., a Delaware corporation ("Company"), a Delaware corporation, located
at 350 East Dundee Road, Wheeling, Illinois 60090.

                                  WITNESSETH

     Whereas, Company authorizes and/or has established with Bank, at its office
specified above, accounts numbered 000090670 and 000090662, with the titles 
Disbursement Account No.1 and Disbursement Account No.2 respectively 
(individually and collectively "Collection Account"); and

     Whereas, Company has, pursuant to a financing agreement, pledged, assigned,
and granted to Lender a continuing security interest in certain property 
described therein, including, without limitation, all present and future 
accounts, contract rights, instruments, documents, chattel paper and general 
intangibles of Company, and all proceeds thereof, which may from time to time be
deposited in the Collection Account.

     NOW, THEREFORE, in consideration of the foregoing and intending to be 
legally bound, the parties agree as follows.

                                   AGREEMENT

     1.   Deposits into Collection Account.  Company agrees that all payments, 
          -------------------------------- 
whether in cash, by check or other instrument, or otherwise, received by Company
from its customers shall be deposited by Company in the Collection Account.
Company shall, upon Lender's request, furnish to Lender each day a collection
report setting forth, in such reasonable detail as Lender may request, the
deposits made during each day in the Collection Account, together with a copy of
each deposit slip issued in connection with such deposits.

     2.   Collection Account Drawing Rights. Company authorizes and directs that
          ---------------------------------
the sole signatories authorized to withdraw amounts from, to draw upon, or to 
otherwise exercise any powers with respect to, the Collection Account and the 
funds deposited therein, are and shall be the employees of Company identified in
Company's written authorization or such other Persons as Company may from time
to time designate in writing to Bank, and the

                                       1
 


  
<PAGE>
 
officers or agents of Lender identified on Exhibit "B" attached hereto and made
a part hereof or such other Persons as Lender may from time to time designate in
writing to Bank. Funds deposited into the Collection Account may be withdrawn
subject to the Bank's funds availability schedule applied to corporate
(wholesale or non-retail) accounts, at any time or from time to time. Until such
time as Lender gives Bank Notice described in section 6 hereof, the parties
agree that all funds deposited in the Collection Account from time to time shall
be held by Bank for Company, shall be the property of Company, and all collected
funds may be withdrawn, at any time or from time to time, by check, draft, wire
transfer, or otherwise as Company shall determine. After receipt of Notice from
Lender in accordance with section 6 below and until the Notice is withdrawn by
Lender, all funds deposited in the Collection Account shall be held by Bank for
Lender, shall be the property of Lender, and all collected funds may be
withdrawn from time to time by Lender, and Company shall have no further
authority to withdraw any amount from, to draw upon, or to otherwise exercise
any powers as a depositor or owner with respect to the Collection Account and
the funds deposited therein. Company shall not give, and Bank shall not honor,
any instructions to change the authorized signatories on the Collection Account
unless such instructions are given, or approved, in writing by Lender.

     3.  Security Interest in Items to be Deposited.  Lender and Company agree
         ------------------------------------------
that all checks, money orders, and other evidences of payment deposited in the
Collection Account, which checks will be made payable to Company without
Company's endorsement, from time to time shall be held by Bank for Company or
Lender, as appropriate, and subject to the security interest of Lender. Bank
consents to and acknowledges the security interest of Lender in all items
deposited in the Collection Account and all proceeds thereof held in such
Account. Bank consents to and acknowledges the security interest of Lender in
all items deposited in the Collection Account and all proceeds thereof held in
such Account.

     4.  Charges to Collection Account.  Bank will not charge or debit, or
         -----------------------------
exercise any right of offset or banker's Lien against, the Collection Account
except as provided below. Bank may charge the Collection Account for any items
deposited in the Collection Account which are returned for any reason or
otherwise not collected and may charge the Collection Account for all service
charges, commissions, expenses, and other items ordinarily chargeable to the
Collection Account. If there are not sufficient funds in the Collection Account
to pay such amounts, then Company agrees to pay Bank within ten business days of
written demand all such amounts, regardless of any other collection efforts Bank
may have expended. If Company does not pay Bank such amounts within ten business
days, then Lender agrees to pay Bank within ten business days of written demand
(i) all service charges, commissions, and expenses ordinarily chargeable to the
Collection

                                       2

<PAGE>
 
Account, and (ii) after delivery of the Notice from Lender in accordance with 
Section 6 hereof, items deposited in the Collection Account which are returned 
for any reason or not collected otherwise. Company and Lender acknowledge 
Company is obligated to pay all customary and reasonable Bank charges resulting 
from the Collection Account. Company agrees to reimburse Lender for any monies 
that Lender forwards to Bank in settlement of any charges as detailed above. In 
the absence of willful misconduct on the part of Bank, Company agrees to bear 
all risk of loss associated with the Collection Account. Bank hereby agrees to 
accept cash payment in lieu of balances as compensation for service charges 
incurred on, or normally charged to, the Collection Account.

     5.  Collection Account Records.  Company hereby instructs Bank and Bank
         --------------------------
agrees to furnish to Lender, with a copy to Company, bank statements with
respect to the Collection Account which are customarily provided to customers of
Bank at the times such statements are normally provided to customers of Bank,
through the normal method of transmission, U.S. Mail. Additionally, Company
hereby instructs Bank and Bank agrees to make available to Lender and Company,
upon request, copies of all daily debit and credit advices of the Collection
Account.

     6.  Bank's Notice.  Bank will take the following actions upon receipt of
         -------------
written notice ("Notice") from Lender until the Notice is withdrawn by Lender:

         a.  Bank shall (and in the event of such a Notice, Company hereby
irrevocably authorizes and instructs Bank to) cease honoring all drafts,
demands, withdrawal requests, or remittance instructions by Company made after
receipt of Notice.

         b.  Following the receipt of the Notice and at all times thereafter,
Bank shall hold solely for the account of Lender all funds which may be on
deposit in the Collection Account at the time the Notice is received by Bank and
all funds thereafter deposited into the Collection Account, and Bank will remit
all such collected funds (subject to section 4 above) directly to Lender, in
accordance with Bank's procedures then in effect as the funds are collected, by
electronic transfers to the account indicated below.

     After receipt of the Notice, Bank hereby agrees and acknowledges that all 
collected funds in the Collection Account shall be forwarded by wire transfer to
BA Business Credit, Inc., account number 910-2-640704 ("Concentration Account"),
at Chase Manhattan Bank, New York, New York, ABA No. 021000021, or such other 
bank and/or account as Lender may from time to time designate in writing and, on
a daily basis, Bank will initiate an automated clearing house transfer to move 
collected funds from Bank to the Concentration Account and Lender shall have 
sole control over the Collection Account and the sole right to exercise and 
enforce all 

                                       3

<PAGE>
 
rights and remedies with respect thereof. The Notice shall be effective when it 
is received by Bank in writing at the address set forth in section 9 below (or 
at such other address as Bank may specify by written notice received by Lender) 
and when Bank has had a reasonable time, based upon the same standards as those 
applicable to payment and stop payment instructions generally, to act thereon.

     7.   Termination.  Upon receipt of Lender's prior written consent which 
          -----------
consent shall not be unreasonably withheld or delayed, this Agreement may be 
terminated by Bank or Company at any time by giving 30 days prior written notice
to the other party.

     8.   Modification of Agreement.  This Agreement cannot be changed, modified
          -------------------------
or terminated without the prior written consent of Lender, Bank, and Company.

     9.   Notices.  All notices or demands by any party on the other relating to
          -------
this Agreement shall, except as otherwise provided herein, be in writing. 
Notices shall be deemed received within five business days after being deposited
in a United States post office box, postage prepaid, properly addressed to 
Company, Lender, or to Bank at the addresses stated below, subject to the 
earlier receipt thereof as described in section 6.b. above. Notices may also 
effectively be given by transmittal over electronic transmitting devices as NBI,
TWIX, Telex or telecopy machine, if the party to whom the notice is being sent 
has such a device in its office, provided a complete copy of any notice so 
transmitted shall also be mailed in the same manner as required for a mailed 
notice. Notices given by electronic transmitting devices shall be deemed 
effective on the day of transmission. All notices, including telephone notices, 
daily debit and credit advices, monthly statements of account, photocopies, 
returned items and general correspondence shall be sent to the following 
addresses and, where applicable given at the following telephone numbers or to 
such other Person or address as any party shall designate to the others from 
time to time in writing:

          A.   BankAmerica Business Credit, Inc.
               200 Lake Drive East, Suite 201
               Cherry Hill, NJ 08002
               Attention:     Cindy Berwick
               Telephone:     609-482-9500
               Facsimile:     609-482-7075

          B.   Cole Taylor Finance Co.
               350 East Dundee Road, Suite 203
               Wheeling, Illinois 60090
               Attention:     Leo Knowles
               Telephone:     708-808-6304
               Facsimile:     708-537-4337

                                       4
<PAGE>
 
          C.   Cole Taylor Bank
               350 East Dundee Road, Suite 204
               Wheeling, Illinois 60090
               Attention:     Randy Soderman
               Telephone:     708-808-6329
               Facsimile:     708-537-8128

     10.  Notice of Legal Process.  If Bank receives any notice of legal process
          -----------------------
of any kind relating to Company, Bank shall use its best efforts to give 
reasonable oral notice to Lender of such legal process.

     11.  Indemnification.  Company hereby agrees to indemnify and hold Bank 
          ---------------
harmless from and against any and all liabilities, losses, costs, and expenses 
incurred directly or indirectly by Bank as a consequence of Bank executing this 
Agreement and performing its obligations hereunder, including reasonable 
attorney's fees. Under no circumstances will Bank be liable for any 
consequential or special damages to Company, Lender or any third party, as a 
result of this Agreement.

     12.  Successors and Assigns; Governing Law.  This Agreement shall be 
          -------------------------------------
binding upon and inure to the benefit of the successors and assigns of the 
parties and shall be governed by and construed in accordance with the laws of 
the state of New Jersey.

     13.  Counterparts.  This Agreement may be executed in any number of 
          ------------
counterparts, and by the parties hereto in separate counterparts, each of which 
when so executed and delivered shall be deemed an original but all such 
counterparts together shall constitute one and the same instrument.

     14.  Agreement Duly Authorized.  All parties hereto represent and warrant 
          -------------------------
that they have taken all actions and obtained all authorizations, consents and 
approvals as are conditions precedent to their authority to execute this 
Agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
shown above.

                                   "COMPANY"
                                   
                                   Cole Taylor Finance Co.,
                                   a Delaware corporation

                                   By___________________________________
                                     Thomas L. Barlow, President

                      [SIGNATURES CONTINUED ON NEXT PAGE]

                                       5
<PAGE>
 
                                        "LENDER"

                                        BankAmerica Business Credit, Inc.,
                                        a Delaware corporation


                                        By______________________________________
                                          Joseph F. Pignotti,
                                          Executive Vice President


                                        "BANK"

                                        Cole Taylor Bank


                                        By______________________________________

                                        ________________________________________
                                        Name and Title 

                                        Accepted this _______ day of July, 1994.


     The following companies individually agree to be bound by all of the
foregoing terms and conditions of this Agreement and expressly grant to Lender a
security interest in all of the funds deposited into the Collection Account.

Executed this 12th day of July, 1994.

Reliance Acceptance Corp. of Colorado,
Reliance Acceptance Corp. of Florida,
Reliance Acceptance Corp. of Georgia,
Reliance Acceptance Corp. of Indiana,
Reliance Acceptance Corp. of Louisiana,
Reliance Acceptance Corp. of New Mexico,
Reliance Acceptance Corp. of Ohio,
Reliance Acceptance Corp. of Texas, and
Reliance Acceptance Corp. of Tennessee


by____________________________________
  Thomas L. Barlow, President

by____________________________________
  Marjorie J. MacLean,
  Assistant Secretary

                                       6

<PAGE>
 
                                  EXHIBIT "B"
                                      TO
                         COLLECTION ACCOUNT AGREEMENT


                          Authorized Persons - Lender
                          ---------------------------


    Name                                                Signature Exemplar
    ----                                                ------------------



1.  ________________                                    ________________________


2.  ________________                                    ________________________


3.  ________________                                    ________________________

                                       1
<PAGE>
 
                                EXHIBIT 1.59 TO
                          LOAN AND SECURITY AGREEMENT

                      NOTICE OF INTEREST RATE ELECTION BY
                           COLE TAYLOR FINANCE CO.,
                    RELIANCE ACCEPTANCE CORP. OF COLORADO,
                     RELIANCE ACCEPTANCE CORP. OF FLORIDA,
                     RELIANCE ACCEPTANCE CORP. OF GEORGIA,
                     RELIANCE ACCEPTANCE CORP. OF INDIANA,
                    RELIANCE ACCEPTANCE CORP. OF LOUISIANA,
                   RELIANCE ACCEPTANCE CORP. OF NEW MEXICO,
                      RELIANCE ACCEPTANCE CORP. OF OHIO,
                    RELIANCE ACCEPTANCE CORP. OF TEXAS, AND
                    RELIANCE ACCEPTANCE CORP. OF TENNESSEE

To:  BankAmerica Business Credit, Inc. ("Lender")

     This Notice of Interest Rate Election ("Notice") is provided to Lender to 
evidence the desire of Cole Taylor Finance Co.; Reliance Acceptance Corp. of 
Colorado; Reliance Acceptance Corp. of Georgia; Reliance Acceptance Corp. of 
Florida; Reliance Acceptance Corp. of Indiana; Reliance Acceptance Corp. of New 
Mexico; Reliance Acceptance Corp. of Ohio; Reliance Acceptance Corp. of
Louisiana; Reliance Acceptance Corp. of Texas; and Reliance Acceptance Corp. of
Tennessee (individually and collectively "Borrower") to convert or continue the
basis for determining the interest rate on such portion of the Loan pursuant to
the terms of the Loan and Security Agreement ("Loan Agreement"), dated June 12,
1994, by and between Lender and Borrower. All capitalized terms not defined
herein shall have the meaning provided in the Loan Agreement unless the context
clearly requires to the contrary.

     Borrower desires to (draw down) (convert) (continue) $_________________ of
such portion of the Loan for which (there is no present Interest Period) (the
Interest Period expires on _____________________) (to) (as) Adjusted LIBOR Loans
as follows: $_______________ Adjusted LIBOR Loans with an Interest Period of
three months; this notice is provided to Lender by 11 a.m. Cherry Hill, New
Jersey, time at least three London Business Days prior to the first day of such
Interest Period, which day is hereby requested to be ______________.

     This Notice, if to convert all or any portion of the Loan, shall be, 
subject only to sections 3.6.b., 3.6.c., 3.6.d. and 3.7 of the Loan Agreement, 
IRREVOCABLE on and after the Interest Rate Determination Date pertaining to the 
request made hereby.

                                       1
<PAGE>
 
     The  undersigned hereby certifies that no Default or Event of Default has 
occurred or is continuing on the date hereof.

                                           "BORROWER"

                                           Cole Taylor Finance Co.;
                                           Reliance Acceptance Corp. of
                                           Colorado; Reliance Acceptance Corp.
                                           of Florida; Reliance Acceptance Corp.
                                           of Georgia; Reliance Acceptance Corp.
                                           of Indiana; Reliance Acceptance Corp.
                                           of Louisiana; Reliance Acceptance
                                           Corp. of New Mexico; Reliance
                                           Acceptance Corp. of Ohio; Reliance
                                           Acceptance Corp. of Tennessee; and
                                           Reliance Acceptance Corp. of Texas


                                           by______________________________
                                              Type name: __________________
                                              Type Title: _________________

                                       2
<PAGE>
 
                  SCHEDULE 5.3 TO LOAN AND SECURITY AGREEMENT
           (LOCATION OF BORROWER'S BOOKS AND RECORDS AND COLLATERAL)


Cole Taylor Finance Co.                 Reliance Acceptance Corp. 
350 East Dundee Road, Suite 203         of Ohio    
Wheeling, IL 60090                      1425 E. Dublin Granville Rd.
                                        Suite 203
Cole Taylor Finance Co.                 Columbus, OH 42229
400 N. Loop 1604 East, Ste. 315
San Antonio, TX 78232                   Reliance Acceptance Corp.
                                        of Florida
Reliance Acceptance Corp.               455 Douglas Avenue, Suite 1155
of Texas                                Altamonte Springs, FL 32714
10127 Morocco, Suite 210
San Antonio, TX 78216                   Reliance Acceptance Corp.
                                        of Indiana
Reliance Acceptance Corp.               6100 North Keystone, Suite 400
of Texas                                Indianapolis, IN 46220
2211 S. Interstate Hwy. 35
Suite 204                               Reliance Acceptance Corp.
Austin, TX 78741                        of Texas
                                        9525 Katy Freeway, Suite 207
Reliance Acceptance Corp.               Houston, TX 77024
of Texas
3765 South Alameda, Suite 426           Reliance Acceptance Corp.
Corpus Christi, TX 78411                of New Mexico
                                        9301 Indian School Road NE.
Reliance Acceptance Corp.               Suite 108
of Texas                                Albuquerque, NM 87112
1510 N. Hampton Rd., Ste. 270           
DeSoto, TX 75115                        Reliance Acceptance Corp.
                                        of Ohio
Reliance Acceptance Corp.               26777 Lorain Road, Suite 209
of Texas                                North Olmstead, OH 44070
817 East Southmore, Suite 200           
Pasadena, TX 77502                      Reliance Acceptance Corp.
                                        of Georgia
Reliance Acceptance Corp.               3953 Pleasantdale, Suite 103
of Ohio                                 Atlanta, GA 30340
10979 Reed Hartman Hwy. #101
Cincinnati, OH 45242                    Reliance Acceptance Corp.
                                        of Indiana
Reliance Acceptance Corp.               4410 Executive Blvd., Suite 6B
of Texas                                Ft. Wayne, IN 46808
555 N. Interstate Hwy. 35
Suite 224                               Reliance Acceptance Corp.
New Braunfels, TX 78130                 of Ohio
                                        1161 Lyons Road, Building E
Reliance Acceptance Corp.               Centerville, OH 45458
of Georgia
2814 New Spring Rd. Ste. 112
Atlanta, GA 30339

                                       1
<PAGE>
 
                                  EXHIBIT 7.6
                                      TO
                          LOAN AND SECURITY AGREEMENT

              [AUTHORIZED SHARES OF STOCK/ISSUED AND OUTSTANDING]

<TABLE> 
<CAPTION> 
                              No. of Shares            No. of Shares       Percentage     Certificate
Entity                        Authorized               Outstanding         Owned          Number
------                        ----------               -----------         -----          -----
<S>                           <C>                      <C>                 <C>            <C> 
Cole Taylor Finance Co.       25,000                   100                 100%           1

Reliance Acceptance
 Corp. of Colorado             1,000                   100                 100%           1


Reliance Acceptance
 Corp. of Florida              1,000                   100                 100%           1

Reliance Acceptance
 Corp. of Georgia              1,000                   100                 100%           1

Reliance Acceptance
 Corp. of Indiana              1,000                   100                 100%           1

Reliance Acceptance
 Corp. of Louisiana            1,000                    10                 100%           1

Reliance Acceptance
 Corp. of New Mexico           1,000                   100                 100%           1

Reliance Acceptance
 Corp. of Ohio                 1,000                    10                 100%           1

Reliance Acceptance
 Corp. of Tennessee            1,000                   100                 100%           1

Reliance Acceptance
 Corp. of Texas                  200                   100                 100%           1
</TABLE> 

                                       2
<PAGE>
 
                                EXHIBIT 7.15 TO
                          LOAN AND SECURITY AGREEMENT

                                [LIST OF PLANS]


                                     NONE

                                       1
<PAGE>
 
                                EXHIBIT 8.18 TO
                          LOAN AND SECURITY AGREEMENT

                      [APPROVED FORM OF DEALER AGREEMENT]

                                       1

<PAGE>
 
                              LETTER OF AGREEMENT

DEALER:_______________________                    TERMS TO THIS AGREEMENT
                                                  ARE SUBJECT TO CHANGE
       _______________________                    -----------------------

       _______________________

The following terms are incorporated into and made part of the attached 
AUTOMOBILE RETAIL PURCHASE AGREEMENT:

RATES:  At authorized rates and as shown on the Retail Rate Schedule in effect.

TERMS:  1994, 1995 (new and used)            48 months maximum term
        1993, 1992                           42 months maximum term
        1991, 1990                           36 months maximum term
        1989, 1988 and older                 24 months maximum term

     On special situations Reliance Acceptance will finance up to 30 months on 
     1988 and older.

AMOUNT(S) FINANCED:  Reliance will finance ________ of the current NADA Trade In
Value.
        Example:    NADA Trade In Value    $5000.00
                    Hard Adds (+/- miles) +  500.00
                                            -------
                    Total                  $5500.00
                                           x
                                            -------
                    Available to Finance   

Contracts are non-recourse from time of funding, unless otherwise stipulated in 
this Letter of Agreement.

AUTO WARRANTIES:  Reliance Acceptance will pay to the Dealer 10% of the Auto 
Warranty premium if Dealer sells Reliance Auto Warranty. The Dealer will pay to 
Reliance Acceptance 10% of the Auto Warranty premium if Dealer sells "in-house" 
Auto Warranty. A minimum of $100.00 will be retained or paid by Reliance 
Acceptance. Reliance Acceptance will finance a _________ maximum premium.

CREDIT INSURANCE:  Reliance Acceptance will finance 100% of the Credit Insurance
premium sold on each contract. Reliance Acceptance will pay the Dealer _________
of the gross premium whenever Dealer sells Reliance Credit Insurance. The Dealer
will pay Reliance Acceptance _________ of the gross premium if Dealer sells 
"in-house" Credit Insurance.

DISCOUNT:  Reliance Acceptance will retain a minimum of ________ of the amount 
shown on Line 3 (unpaid balance of cash price) on each contract purchased. This 
is a non-refundable discount.

APPLICATION PROCESSING:  Reliance Acceptance will charge the Dealer a processing
fee of ________ on each contract purchased.

______________________________               _______________________________
     BRANCH OFFICE                                        DEALER

BY:___________________________               BY:____________________________

DATE:_________________________               DATE:__________________________

<PAGE>
 
                  AUTOMOBILE DEALER RETAIL PURCHASE AGREEMENT


The undersigned Dealer proposes to sell to the undersigned Finance Company, from
time to time, Promissory Notes, Security Agreements, Retail Installment 
Contracts, Conditional Sales Contracts, or other instruments hereinafter 
referred to as "Contracts", evidencing installment payment obligations owing 
Dealer arising from the time sale of motor vehicles and secured by such 
Contracts. It is understood that Finance Company shall have the sole discretion 
to determine which Contracts it will purchase from Dealer.

1.   Dealer represents and warrants that Contracts submitted to Finance Company 
     for purchase shall represent valid, bonafide sales for the respective
     amount therein set forth in such Contracts and that such Contracts
     represent sales of motor vehicles owned by Dealer free and clear of all
     liens and encumbrances.

2.   Upon purchase of Finance Company of any Contracts hereunder from Dealer, 
     Dealer shall endorse and assign to Finance Company both the obligations and
     all pertinent security and security instruments, along with such
     provisional endorsements as may be stipulated for such Contracts purchased
     by Finance Company.

3.   Rates that will apply shall be those stipulated from time to time by the 
     Finance Company in their Retail Rate Schedule which is incorporated by
     reference herein and made a part of this Agreement. Year models for this
     purpose will change on October 1st of each calendar year, unless otherwise
     provided for by existing State regulations.

4.   This Agreement shall be governed by, and construed and enforced in 
     accordance with the laws of the State in which this Agreement was executed.

5.   No course of dealing between the Dealer and the Finance Company or any 
     delay or failure on the part of the Finance Company in exercising any
     rights hereunder shall operate as a waiver of any rights of the Finance
     Company, except to the extent expressly waived in writing by the Finance
     Company.

6.   No provisions hereof may be modified, changed or supplemented, except in 
     writing by a duly authorized representative of the Finance Company.


_______________________________              ______________________________
        FINANCE COMPANY                                DEALER

BY:____________________________              BY:___________________________
                                                              DEALER
DATE:__________________________              DATE:____________NUMBER_______
<PAGE>
 

                                 SCHEDULE 10.2
                                      TO
                          LOAN AND SECURITY AGREEMENT

                     [LIST OF REQUIRED CLOSING DOCUMENTS]

     Lender shall have received on or before the Closing Date all of the 
following documents which shall be satisfactory to Lender in form and content:

     1.   Certificate of Secretary for each Borrower

     2.   UCC-1 financing statements for each Borrower.

     3.   Certificate of good standing for each Borrower

     4.   Statement of qualification for each Borrower for each Borrower 
          operating in a state other than the state of its incorporation.

     5.   Opinion of Borrower's counsel.

     6.   Certificate of Borrower's chief financial officer for each Borrower.

     7.   Payoff letters and releases.

     8.   Borrower's authorization letters.

     9.   UCC termination statements.

    10.   Security Agreement-Stock Pledge for the stock of each Subsidiary 
          Borrower of Parent Borrower.

    11.   Letter of Responsibility issued by Cole Taylor Financial Group, Inc.

    12.   Stock Certificates

    13.   Stock Powers

                                       1
<PAGE>
 
                AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 1 to Loan and Security Agreement ("Amendment") is 
entered into as of March 23, 1995, by and between BankAmerica Business Credit,
Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a Delaware
corporation; Reliance Acceptance Corp. of Colorado, a Delaware corporation;
Reliance Acceptance Corp. of Georgia, a Delaware corporation; Reliance
Acceptance Corp. of Florida, a Delaware corporation; Reliance Acceptance Corp.
of Indiana, a Delaware corporation; Reliance Acceptance Corp. of New Mexico, a
Delaware corporation; Reliance Acceptance Corp. of Ohio, an Ohio corporation;
Reliance Acceptance Corp. of Texas, a Texas corporation; and Reliance Acceptance
Corp. of Tennessee, a Delaware corporation; (individually and collectively,
"Existing Borrowers"),and Reliance Acceptance Corp. of Kentucky, a Delaware
corporation; Reliance Acceptance Corp. of Illinois, a Delaware corporation;
Reliance Acceptance Corp. of Minnesota, a Delaware corporation; Reliance
Acceptance Corp. of North Carolina, a Delaware corporation; Reliance Acceptance
Corp. of South Carolina, a Delaware corporation; Reliance Acceptance Corp. of
Arizona, a Delaware corporation; Reliance Acceptance Corp. of Iowa, a Delaware
corporation; Reliance Acceptance Corp. of Missouri, a Delaware corporation;
Reliance Acceptance Corp. of Nevada, a Delaware corporation; Reliance Acceptance
Corp. of Oregon, a Delaware corporation; and Reliance Acceptance Corp. of
Washington, a Delaware corporation (individually and collectively, "New
Borrowers").

                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:

           a.  Existing Borrowers and Lender entered into a Loan and Security 
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as 
amended, modified, and supplemented prior to the date hereof being hereinafter
referred to as "Loan Agreement"). (The Loan Agreement, and all other documenting
the loan evidenced thereby and the security therefor are hereinafter 
collectively referred to as "Loan Documents".)

           b.  New Borrowers are newly formed, wholly owned subsidiaries of Cole
Taylor Finance Co. Existing Borrowers desire to amend the Loan Agreement to
include New Borrowers as "Subsidiary Borrowers" and as "Borrower" thereunder and
to otherwise amend the Loan Agreement.

           c.  Lender is willing to amend the Loan Agreement subject to the 
terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.

                                      -1-



<PAGE>
 
                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1   Amendment of "Subsidiary Borrowers" and "Borrower." The term 
           ---------------------------------------------------  
"Subsidiary Borrowers" and "Borrower" as used in the Loan Agreement and other
Loan Documents are hereby amended to mean New Borrowers and Existing Borrowers,
individually and collectively. New Borrowers absolutely and unconditionally
assume all Obligations existing under the Loan Documents as of the date hereof,
expressly grant to Lender the security interests referenced therein in regard to
the Property of the New Borrowers of the type specified therein, and acknowledge
and agree that each of the New Borrowers shall be jointly and severally liable
for all Obligations, as more particularly provided in Section 12.4 of the Loan
Agreement.

     1.2   Amendment of Section 1.7. Section 1.7 of the Loan Agreement is
           ------------------------
amended and restated to read in its entirety as follows:

           "
           1.7  Advance Rate shall mean Eighty-three percent (83%), provided, 
                ------------  
     however:

                (a) In the event that the Delinquency Rate, computed as of the
     last day of each month for each of the three calendar months immediately
     preceding the date of calculation, exceeds three percent (3.0%) but is not
     more than three and one-half percent (3.5%) in one of those three months,
     then the Advance Rate shall mean eighty-two percent (82%), and

                (b) In the event that the Delinquency Rate, computed as of the
     last day of each month for each of the three calendar months immediately
     preceding the date of calculation, is equal to or greater than three and
     one-half percent (3.5%) but is not more than four percent (4.0%) in one of
     those three months, then the Advance Rate shall mean eighty-one percent
     (81%), and

                (c) In the event that the Delinquency Rate, computed as of the
     last day of each month for each of the three calendar months immediately
     preceding the date of calculation, is greater than four percent (4.0%),
     then the Advance Rate shall mean eighty percent (80%).

          The date of calculation of the Advance Rate and the date any change
     therein shall become effective is the date Borrower actually delivers to
     Lender its most recent Collateral Report reflecting the Delinquency Rates
     for Borrower. The Advance Rate, as so calculated, shall

                                      -2-
<PAGE>
 
     remain in effect until Borrower delivers to Lender its next Collateral
     Report reflecting the Delinquency Rates for the Borrower. (For
     example, if Borrower's Collateral Reports for the months of March,
     April, and May, delivered to Lender on June 15, reflect that the
     Delinquency Rate for Borrower was 3.4 percent, 4.0 percent and 3.75
     percent respectively, then the Advance Rate will immediately thereupon
     be 82 percent for the period of June 15 to and including July 14 (the
     next report being due on July 15), and if, as a result of such
     calculation, an Over Advance was determined to have existed as of June
     15, based on an Advance Rate of 82 percent, then Borrower shall be
     required to pay down the Loan accordingly, and for example, if
     Borrower's Collateral Reports for the months of March, April, and May,
     delivered to Lender on June 15, reflect that the Delinquency Rate for
     Borrower was 3.8 percent, 4.0 percent and 4.2 percent respectively,
     then the Advance Rate will immediately thereupon be 81 percent for the
     period of June 15 to and including July 14 (the next report being due
     on July 15), and if, as a result of such calculation, an Over Advance
     was determined to have existed as of June 15, based on an Advance Rate
     of 81 percent, then Borrower shall be required to pay down the Loan
     accordingly.)"

     1.3  Amendment of Section 1.9.  Section 1.9 of the Loan Agreement is 
          ------------------------
amended and restated to read in its entirety as follows:

          "1.9  Availability shall mean, as of any date of calculation, the 
                ------------
     remainder of (a) the sum of (i) the Advance Rate multiplied by the
     aggregate amount of all Net Contract Payments to be made under all
     Eligible Contracts which are not Alternative Finance Plan Eligible
     Contracts, plus (ii) the Advance Rate multiplied by the lesser of (1)
                ----
     the aggregate purchase price paid to Dealers for Alternative Finance
     Plan Eligible Contracts then outstanding, or (2) the aggregate amount
     of all Net Contract Payments due under such Contracts, minus (b) the
                                                            -----
     sum of (i) the product of the Dealer Reserve Percentage multiplied by
     the Dealer Reserve, plus (ii) Commercial Paper Indebtedness; provided,
                         ----                                     ---------
     however, that (a) the Net Contract Payments due under Old Auto
     --------
     Contracts included in the Availability shall at no time exceed five
     percent (5%) of all Net Contract Payments, (b) the Net Contract
     Payments due under Alternative Finance Plan Eligible Contracts
     included in the Availability shall at no time exceed ten percent (10%)
     of all Net Contract Payments, and (c) in the event Borrower, after the
     date of this Agreement, changes its method of accounting for the 
     Dealer Reserve which has the effect of accelerating the rate at which 
     such reserve is recognized as income, then

                                      -3-

<PAGE>
 
     Lender may increase the percentage rate applicable to the Dealer
     Reserve in order that the Dealer Reserve deduction from Availability
     is the same as it would have been had Borrower not changed such
     accounting method."

     1.4  Amendment of Subsection 1.30 r.  Subsection 1.30 r. of the Loan 
          ------------------------------
Agreement is amended and restated to read in its entirety as follows:

          "r. the original term of the Contract, together with any and all
     extensions thereof, and the mileage of the Goods shall not exceed the
     number of months and number of miles indicated opposite the age of the
     Goods which are the subject of the Contract at the time the Contract is
     originated:

<TABLE> 
<CAPTION> 
     Age of Goods               Maximum
     ------------               -------
     (Model Years)              Monthly Term        Mileage Limit
     -------------              ------------        -------------
     <S>                        <C>                 <C> 
     6 and more                 36                  No limit
     4 or 5                     42                  No limit
     3 or less                  54                  No limit
     3 or less                  60                  35,000 or less"
</TABLE> 

     1.5  Amendment of Section 1.61.  Section 1.61 of the Loan Agreement is 
          -------------------------
amended and restated to read in its entirety as follows:

          "1.61  Old Auto Contracts shall mean Eligible Contracts which are
                 ------------------
     secured by a Lien on Goods which are more than seven model years old
     at the inception of the Contract; provided, however, `Old Auto
                                       -----------------
     Contracts' shall not include Alternative Finance Plan Eligible
     Contracts."

     1.6  Amendment of Section 1.77.  Section 1.77 of the Loan Agreement is 
          -------------------------
amended and restated to read in its entirety as follows:

          "1.77   Total Credit Facility shall mean $150,000,000."
                  ---------------------

     1.7  Amendment of Section One.  Article One of the Loan Agreement is 
          ------------------------        
amended by the addition of two new sections, numbered 1.79 and 1.80, which
shall read in their entirety as follows:

          "1.79  Dealer Reserve Percentage shall mean sixty percent (60%), 
                 -------------------------
     provided, however, in the event the average Dealer Reserve for the
     --------  -------
     three immediately preceding months, calculated as of the last day
     thereof, exceeds twelve percent (12%) of the Gross Contract Payments 
     then due under all Contracts purchased during such three months, then 
     the Dealer Reserve Percentage shall be one hundred percent (100%).

                                   -4-

<PAGE>
 
          1.80 `Alternative Finance Plan Eligible Contract' shall mean a
     Contract which meets all of the criteria for an Eligible Contract except
     for the criteria set forth in subsection 1.30 r of the Agreement, and, in
     addition meets at all times all of the following requirements as determined
     by Lender, in its reasonable discretion:

          (a) The amount paid by Borrower to the Dealer to purchase the Contract
     does not exceed the lesser of (i) fifty percent (50%) of the Net Contract
     Payments due under the Contract on the date of purchase by Borrower, or
     (ii) to the extent that the Contract Debtor's down payment for the subject
     Goods was in the form of cash, and not in the form of a trade-in of other
     Goods or other form of property, one hundred fifty percent (150%) of the
     cash down payment paid by the Contract Debtor for the Goods;

          (b) The original term of the Contract, together with any and all
     extensions thereof, does not exceed 30 months; and

          (c) The Contract is subject to a Dealer Agreement which provides that
     (i) Borrower shall receive a monthly servicing fee based upon sums
     collected from the Contract Debtor during each month of the term of the
     Contract, (ii) Borrower shall do all billing and collecting of payments due
     under the Contract, and (iii) the Dealer shall not receive any portion of
     the payments paid by the Contract Debtor under the Contract unless and
     until Borrower first receives from such monthly payments (after first
     deducting Borrower's monthly servicing fee) an amount equal to the purchase
     price paid to the Dealer for such Contract."

     1.8  Amendment of Article Three.  Article Three of the Loan Agreement is
          --------------------------  
amended by the addition of a new section, numbered 3.14, which shall read in its
entirety as follows:

          "3.14  Commercial Paper Fee.  For every month during the term of
                 --------------------
     this Agreement, Borrower shall pay to Lender a fee ("Commercial Paper Fee")
     in an amount equal to the product of five-eighths of one percent per annum,
     multiplied by the average daily closing balance of the Commercial Paper
     -------------
     Indebtedness outstanding during such month. Such fee, if any, shall be
     calculated on the basis of a year of 360 days, actual days elapsed, and
     shall be payable to Lender on the Interest Payment Due Date with respect to
     the prior month."

     1.9  Amendment of Schedule 5.3.  Schedule 5.3 of the Loan Agreement is
          --------------------------  
amended by the addition of nine new addresses which are follows:

                                      -5-

<PAGE>
 
*Reliance Acceptance Corp. of Colorado      
10800 East Bethany Drive, Ste. 325
Aurora, CO 80014

Reliance Acceptance Corp. of Florida
11570 San Jose Blvd.
Jacksonville, FL 32223

Reliance Acceptance Corp. of North Carolina
4401 East Independence Boulevard, Suite 204
Charlotte, North Carolina 29205

Reliance Acceptance Corp. of South Carolina
722-A Lowndes Hill Road
Greenville, SC 29607

Reliance Acceptance Corp. of Colorado
3630 Sinton Road, Suite 201
Colorado Springs, Colorado 80907

Reliance Acceptance Corp. of Tennessee
907 Two Mile Parkway, Ste. A-2
Goodlettsville, TN 37072

Reliance Acceptance Corp. of Texas
102 Oak Park Drive, Suite 104
Clute, TX 77531

Reliance Acceptance Corp. of Illinois
5501 West 79th Street, Suite 310
Burbank, Illinois 60457

Reliance Acceptance Corp. of Texas
8930 Four Winds Drive, Suite 100
San Antonio, Texas 78239

     1.10  Amendment of Section 5.6.  Section 5.6 of the Loan Agreement is 
           ------------------------
amended by the addition of two new subsections, numbered 5.6 e and f, which 
shall read in their entirety as follows:

          "e.  A summary of the aging of the Alternative Finance Plan Eligible 
     Contracts on a contractual basis, and upon Lender's request, a detailed
     aging report for such Contracts; and

          f.   A report reflecting the Delinquency Rate for Alternative Finance 
     Plan Eligible Contracts for each of the Subsidiary Borrowers."

     1.11  Amendment of Schedule 7.6.  Schedule 7.6 of the Loan Agreement is 
           -------------------------
amended by the addition of the following corporations and related information:

<TABLE> 
<CAPTION> 
                                   No. of Shares       No. of Shares       Percentage       Certificate
     Entity                        Authorized          Outstanding         Owned            Number     
     ------                        ----------          -----------         -----            ------
     <S>                           <C>                 <C>                 <C>              <C>         
     Reliance Acceptance Corp.                                                                          
     of Kentucky                   1,000               100                 100%             1

     Reliance Acceptance Corp.
     of Illinois                   1,000               100                 100%             1

     Reliance Acceptance Corp.
     of Minnesota                  1,000               100                 100%             1

     Reliance Acceptance Corp.
     of North Carolina             1,000               100                 100%             1
</TABLE> 

                                      -6-
<PAGE>
 
     Reliance Acceptance Corp.
     of South Carolina           1,000        100         100%        1 


     Reliance Acceptance Corp.
     of Arizona                  1,000        100         100%        1 


     Reliance Acceptance Corp.
     of Iowa                     1,000        100         100%        1 


     Reliance Acceptance Corp.
     of Missouri                 1,000        100         100%        1 


     Reliance Acceptance Corp.
     of Nevada                   1,000        100         100%        1 


     Reliance Acceptance Corp.
     of Oregon                   1,000        100         100%        1 


     Reliance Acceptance Corp.
     of Washington               1,000        100         100%        1 


     1.12  Amendment of Section 8.10.  Section 8.10 of the Loan Agreement is 
           -------------------------
amended and restated to read in its entirety as follows:

          "8.10  Limitation of Amounts Paid to Dealers. The average 
                 -------------------------------------   
     amount, calculated as of the last day of each month on a cumulative,
     consolidated basis, paid by Borrower to Dealers during each of the 12
     calendar months immediately preceding the date of calculation, for
     the purchase of Contracts which arise from the credit sale of Goods
     shall not exceed the following: (a) in the case of Contracts arising
     from a credit sale of new Goods, the invoice price therefor; and (b)
     in the case of Contracts arising from the credit sale of used Goods,
     an amount determined by utilizing either (i) the `average trade-in
     value' for the Goods which are the subject of such Contracts, as
     established by the National Automobile Dealers Association Official
                        ------------------------------------------------
     Used Car Guide or (ii) the `wholesale value' for the Goods which are
     --------------
     the subject of such Contracts, as established by the Kelly Blue Book
                                                          ---------------
     Auto Market Report Official Guide (collectively and individually the
     ---------------------------------
     "Guide") in the effect at the time Borrower purchased the subject
     Contract. In the event that the Guide shall at any time cease to be
     published, then Lender shall, thereafter, select a comparable
     publication, as determined by Lender, in its sole discretion, for
     determining the foregoing calculation. For purposes of this section
     8.10, there shall be excluded from the determination of the purchase
     price of a Contract, that portion of the purchase price which was
     paid for sums included in the unpaid Contract balance which arise
     from a purchase, on a credit basis, of credit

                                      -7-
<PAGE>
 
     life and disability insurance, extended vehicle warranty
     insurance, and other forms of insurance, and all taxes, title,
     license, and similar fees."

     1.13  Amendment of Subsection 8.11.  Section 8.11 of the Loan Agreement is 
           ----------------------------
amended and restated to read in its entirety as follows:

           "8.11  Unsubordinated Debt to Borrowing Base. Borrower shall
                  -------------------------------------
     not permit the ratio, calculated on a consolidated basis as of
     the last day of each month, of (a) the remainder of (i) Debt,
     minus (ii) all Subordinated Debt (numerator), to (b) Borrowing
     -----
     Base (denominator), to be more than: 5:1; provided, however, if
                                               -----------------
     at any time the sum of the unpaid balance of the Loan plus the
                                                           ----
     aggregate principal amount of the Commercial Paper Indebtedness
     is equal to or greater than $100,000,000, then Borrower shall not
     permit the ratio at all times thereafter, as so calculated, to be
     more than 3.75; 1."

     1.14  Amendment of Section 8.13.  Section 8.13 of the Loan Agreement is
           -------------------------
amended and restated to read in its entirety as follows:

           "8.13  Minimum Adjusted Tangible Net Worth.  Borrower shall 
                  -----------------------------------
     not permit its Adjusted Tangible Net Worth, calculated on a
     consolidated basis as of the last day of each month, to be less
     than: (a) $8,000,000 on December 31, 1994, (b) $8,000,000 during
     the period January 1, 1995, through December 30, 1995, (c)
     $15,000,000 on December 31, 1995, and (d) $15,000,000 for the
     period beginning January 1, 1996, and at all times thereafter."

     1.15  Amendment of Section 8.18.  Section 8.18 of the Loan Agreement is
           -------------------------
amended and restated to read in its entirety as follows:

           "8.18  Debt.  Borrower shall not incur or maintain any Debt
                  ----
     other than: (a) the Obligations, (b) Debt owing by Subsidiary
     Borrowers and Parent Borrower to one another, (c) Debt incurred
     to finance the purchase or lease of equipment, (d) other Debt
     existing as of the Closing Date and reflected on Borrower's
     financial statements for the most recently ended period reflected
     therein, (e) unsecured Debt owing by Borrower to Cole Taylor
     Financial Group, Inc., (f) accounts payable, accrued payroll,
     accrued taxes, and other obligations arising in the ordinary
     course of Borrower's business, (g) loans to employees not
     exceeding $200,000 in the aggregate at any one time, and (h)
     Commercial Paper Indebtedness."

                                      -8-
<PAGE>
 
     1.16 Deletion of Subsection 11.1 f.  Subsection 11.1 f of the Loan 
          -----------------------------
Agreement, entitled "Material Adverse Change", is hereby deleted from the Loan 
Agreement in its entirety as is of no further force or effect.

     1.17 Amendment of Section 11.1.  Section 11.1 of the Loan Agreement is 
          -------------------------
amended by the addition of a new subsection, numbered 11.1 r, which shall read 
in its entirety as follows:

               "r.  High Delinquency Rate.  Borrower's Delinquency
                    ---------------------
     Rate, calculated on a consolidated basis as of the last day of
     each month, for each of the three months immediately preceding
     the date of calculation, exceeds four and one-half percent
     (4.5%)."

     1.18 Amendment of Article Twelve.  Article Twelve of the Loan Agreement is 
          ---------------------------
amended by the addition of a new section, numbered 12.18, which shall read in 
its entirety as follows:

          "12.18  Third Party Beneficiaries.  This Agreement is solely
                  -------------------------
     for the benefit of Borrower, and may not be relied on by any
     other party."

     1.19 Acknowledgment of Collection Account Agreement.  New Borrowers
          ----------------------------------------------
individually agree to be bound by all of the terms of the that certain
Collection Account Agreement, dated as of July 12, 1994, by and between Lender
and Cole Taylor Finance Co. and expressly pledge, assign, and grant a security
interest to Lender in all funds deposited into the Collection Account.

               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

     2.1  Conditions Precedent to Amendment.  This Amendment shall become 
          ---------------------------------
legally binding upon Existing Borrowers, New Borrowers, and Lender only when 
Borrower, Existing Borrowers, and New Borrowers shall have executed and 
delivered to Lender or caused to be executed and delivered to Lender, as 
appropriate, all of the following documents which are satisfactory to Lender in 
form and content:

          a.   Certificate of Assistant Secretary of each of the Existing 
Borrowers;

          b.   Certificate of Assistant Secretary of each of the New Borrowers;

          c.   Opinion of counsel for New Borrowers;

          d.   Amendment No. 1 to Security Agreement-Stock Pledge;

          e.   Stock Powers for the stock of New Borrowers and the original 
stock certificates evidencing such stock;

                                      -9-
<PAGE>
 
          f.   Good standing certificates for each of the New Borrowers;

          g.   Certificates of qualification for each of the New Borrowers;

          h.   UCC-1 financing statements for each of the New Borrowers to be 
filed in the state of Illinois and for each of the New Borrowers and Cole Taylor
Finance Co. to be filed in the state (and if required, the county) in which each
of the New Borrowers operates or intends to operate;

          i.   Certificate of Assistant Secretary of Cole Taylor Finance Co.; 
and

          j.   Reaffirmation letter from Cole Taylor Finance Group, Inc.

     2.2  New Facility Fee.  On the date Borrower executes this Amendment, 
          ----------------
Borrower shall pay to Lender a facility fee ("New Facility Fee") equal to 
one-quarter of one percent (0.25%) of $50,000,000, prorated for the number of 
months remaining to the Maturity Date. Borrower and Lender agree that the New 
Facility Fee may be financed, at Lender's discretion, as an Advance to the Loan.


                SECTION THREE - REPRESENTATIONS AND WARRANTIES
                ----------------------------------------------

     2.3  Acknowledgments of Borrowers.  Existing Borrowers and New Borrowers 
          ----------------------------
each hereby represent and warrant that: (a) the execution and delivery of this 
Amendment and compliance by Existing Borrowers and New Borrowers with all of the
provisions of this Amendment (i) are within the powers and purposes of Existing 
Borrowers and New Borrowers; (ii) have been duly authorized or approved by 
Existing Borrowers New Borrower; and (iii) when executed and delivered by or on 
behalf of Existing Borrowers and New Borrowers, will constitute valid and 
binding obligations of Existing Borrowers and New Borrowers, enforceable in 
accordance with its terms; (b) Existing Borrowers and New Borrowers have no 
offsets or counterclaims against Lender or defenses to the payments due under 
the Loan Documents; (c) Lender has a first perfected security interest in the 
Collateral to secure the Obligations under the Loan Documents; and (d) the 
recitals in this Amendment are true. Existing Borrowers each reaffirm its 
obligation to pay all amounts due Lender under the Loan Documents in accordance 
with the terms thereof, as modified hereby.


                       SECTION FOUR - GENERAL PROVISIONS
                       ---------------------------------

     4.1  Loan Documents Unmodified.  Except as otherwise specifically modified 
          -------------------------
by this Amendment, all terms and provisions of the Loan Documents and all liens 
and security interests created

                                     -10-
<PAGE>
 
thereby shall remain unmodified and in full force and effect. Nothing contained 
in this Amendment shall in any way impair the validity or enforceability of the 
Loan Documents, as modified hereby, or alter, waive, annul, vary, affect, or 
impair any provision, condition, or covenant contained therein or any rights, 
power, or remedy granted therein.

     4.2  Construction of Amendment.  Each party hereto has cooperated in the 
          -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party. This Amendment may be amended or 
modified only by a written agreement signed by the parties hereto. This 
Amendment may be executed in counterparts, each of which when so executed and 
delivered shall be deemed an original but all such counterparts together shall 
constitute one and the same instrument.

     4.3  Parties, Successors and Assigns.  This Amendment shall be binding upon
          -------------------------------
and shall inure to the benefit of Borrower, Lender, and their respective 
successors and assigns.

     4.4  Definitions.  Unless specifically defined herein, all capitalized 
          -----------
terms shall be defined in accordance with the Loan Agreement as amended by this 
Amendment.

     4.5  Severability.  To the extent any provision of this Amendment is not 
          ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

     4.6  Total Agreement.  This Amendment, and all other agreements referred to
          ---------------
herein or delivered in connection herewith, shall constitute the entire 
agreement between the parties relating to the subject matter hereof, and shall 
rescind all prior

                                     -11-

<PAGE>
 
agreements and understandings between the parties hereto relating to the subject
matter hereof, and shall not be changed or terminated orally.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                              "EXISTING BORROWERS"
                              
                              Cole Taylor Finance Co.;
                              Reliance Acceptance Corp. of Colorado;
                              Reliance Acceptance Corp. of Georgia;
                              Reliance Acceptance Corp. of Florida;
                              Reliance Acceptance Corp. of Indiana;
                              Reliance Acceptance Corp. of New Mexico;
                              Reliance Acceptance Corp. of Ohio;
                              Reliance Acceptance Corp. of Tennessee;
                              and Reliance Acceptance Corp. of Texas
                              
Date:  March 23, 1995         by /s/ Thomas L. Barlow 
                                ----------------------------------------
                                Thomas L. Barlow, President
                              
Date:  March 23, 1995         by /s/ Marjorie J. MacLean
                                ----------------------------------------
                                Marjorie J. MacLean, Assistant Secretary
                              
                              "NEW BORROWERS"

                              Reliance Acceptance Corp. of Kentucky;
                              Reliance Acceptance Corp. of Illinois;
                              Reliance Acceptance Corp. of Minnesota;
                              Reliance Acceptance Corp. of North
                              Carolina; and Reliance Acceptance Corp. of
                              South Carolina; Reliance Acceptance Corp.
                              of Arizona; Reliance Acceptance Corp. of
                              Iowa; Reliance Acceptance Corp. of
                              Missouri; Reliance Acceptance Corp. of
                              Nevada; Reliance Acceptance Corp. of
                              Oregon; and Reliance Acceptance Corp. of
                              Washington

Date:  March 23, 1995         by /s/ Thomas L. Barlow,
                                ----------------------------------------
                                Thomas L. Barlow, President

Date:  March 23, 1995         by /s/ Marjorie J. MacLean, 
                                ----------------------------------------
                                Marjorie J. MacLean, Assistant Secretary


                 [SIGNATURE OF LENDER CONTINUED ON NEXT PAGE.]

                                     -12-
<PAGE>
 
                                        "LENDER"

                                        BankAmerica Business Credit, Inc.,
                                        a Delaware corporation

Date: March 23, 1995                    by /s/ Joseph F. Pignotti
                                          ------------------------------------
                                           Joseph F. Pignotti
                                           Executive Vice President  

                                     -13-
<PAGE>
 
                AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT


     This Amendment No. 2 to Loan and Security Agreement ("Amendment") is 
entered into as of May 19, 1995, by and between BankAmerica Business Credit, 
Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a Delaware 
corporation; Reliance Acceptance Corp. of Colorado, a Delaware corporation; 
Reliance Acceptance Corp. of Georgia, a Delaware corporation; Reliance 
Acceptance Corp. of Florida, a Delaware corporation; Reliance Acceptance Corp. 
of Indiana, a Delaware corporation; Reliance Acceptance Corp. of New Mexico, a 
Delaware corporation; Reliance Acceptance Corp. of Ohio, an Ohio corporation; 
Reliance Acceptance Corp. of Texas, a Texas corporation; and Reliance Acceptance
Corp. of Tennessee, a Delaware corporation; Reliance Acceptance Corp. of 
Kentucky, a Delaware corporation; Reliance Acceptance Corp. of Illinois, a 
Delaware corporation; Reliance Acceptance Corp. of Minnesota, a Delaware 
corporation; Reliance Acceptance Corp. of North Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation; 
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance 
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada, 
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware 
corporation; and Reliance Acceptance Corp. of Washington, a Delaware corporation
(individually and collectively, "Borrowers").

                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:

          a.   Borrowers and Lender entered into a Loan and Security Agreement, 
dated as of July 12, 1994 (the Loan and Security Agreement, as amended, modified
and supplemented prior to the date hereof being hereinafter referred to as "Loan
Agreement). (The Loan Agreement, and all other documents documenting the loan 
evidenced thereby and the security therefor are hereinafter collectively 
referred to as "Loan Documents".)

          b.   Borrowers desire to amend the Loan Agreement.

          c.   Lender is willing to amend the Loan Agreement subject to the 
terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.

                                      -1-
<PAGE>
 
                          SECTION ONE - AMENDMENTS
                          ------------------------

     1.1  Amendment of Section 1.9.  Section 1.9 of the Loan Agreement is hereby
          ------------------------
amended and restated to read in its entirety as follows:

          "1.9  Availability shall mean, as of any date of calculation, the 
                ------------     
     remainder of (a) the sum of (i) the Advance Rate multiplied by
     the aggregate amount of all Net Contract Payments to be made
     under all Eligible Contracts which are not Alternative Finance
     Plan Eligible Contracts, plus (ii) the Advance Rate multiplied by
                              ----
     the lesser of (1) the aggregate purchase price paid to Dealers
     for Alternative Finance Plan Eligible Contracts then outstanding,
     or (2) the aggregate amount of all Net Contract Payments due
     under such Contracts, minus (b) the sum of (i) the product of
                           -----
     the Dealer Reserve Percentage multiplied by the Dealer Reserve,
     plus (ii) Commercial Paper Indebtedness (after giving effect to
     ----
     the application of any Loan proceeds to the payment of such
     Commercial Paper Indebtedness); provided, however, that (a) the
                                     -----------------
     Net Contract Payments due under Old Auto Contracts included in
     the Availability shall at no time exceed five percent (5%) of all
     Net Contract Payments, (b) the Net Contract Payments due under
     Alternative Finance Plan Eligible Contracts included in the
     Availability shall at no time exceed ten percent (10%) of all Net
     Contract Payments, and (c) in the event Borrower, after the date
     of this Agreement, changes its method of accounting for the
     Dealer Reserve which has the effect of accelerating the rate at
     which such reserve is recognized as income, then Lender may
     increase the percentage rate applicable to the Dealer Reserve in
     order that the Dealer Reserve deduction from Availability is the
     same as it would have been had Borrower not changed such
     accounting method."

     1.2  Amendment of Section One.  Article One of the Loan Agreement is hereby
          ------------------------
amended by the addition of four new sections, numbered 1.81, 1.82, 1.83, and 
1.84, which shall read in their entirety as follows:

          "1.81  Commercial Paper Advance shall mean an Advance 
                 ------------------------
     intended by Borrower to be used to repay Commercial Paper
     Indebtedness.

          1.82  Commercial Paper Agreements shall mean (a) that certain 
                ---------------------------
     Commercial Paper Dealer Agreement, dated May ____, 1995, between
     The Chicago Corporation, as dealer, Cole Taylor Finance Co., as
     the issuer, and Cole Taylor Financial Group, Inc., as guarantor,
     and that certain Depository Agreement, dated May ____, 1995,
     between Cole Taylor Finance Co., as issuer, and FNBC, as agent;
     and

                                      -2-
<PAGE>
 
     (b)  any other documents of a similar nature which have been
     previously reviewed and approved by the Lender.

          1.83  Depository Account shall mean the Note Account and any 
                ------------------
     other account indentified in the Commercial Paper Agreements as
     the bank account from which FNBC or any other financial
     institution acting as paying agent under the Commercial Paper
     Agreements is required to pay off the Commercial Paper
     Indebtedness.

          1.84  FNBC shall mean The First National Bank of Chicago."
                ----

     1.3  Amendment of Section 2. Section 2 of the Loan Agreement is hereby 
          ----------------------
amended by the addition of a new subsection, numbered 2.d, which shall read in 
its entirety as follows:

               "d.  Whenever Borrower desires a Commercial Paper
     Advance, Borrower shall deliver to Lender a written borrowing
     request which shall indicate that Borrower is requesting a
     Commercial Paper Advance and shall specify: (i) the amount of the
     Commercial Paper Advance; and (ii) the date of such Advance,
     which shall be a Business Day. Each request for a Commercial
     Paper Advance shall be accompanied by a Collateral Report. All
     Commercial Paper Advances shall be made to the Depository
     Account. Borrower acknowledges and agrees that Lender shall have
     no obligation to make a Commercial Paper Advance except to the
     same extent Lender is obligated to make any other Advance and all
     Commercial Paper Advances are subject to all terms and conditions
     of this Agreement, including without limitation, the provisions
     of Article Ten hereof. Lender agrees to fund each requested
     Commercial Paper Advance by 12 a.m. Cherry Hill, New Jersey,
     time, on the day specified in Borrower's request. Lender shall
     have no liability for any act or omission of FNBC or any other
     depository or other paying agent or party to the Commercial Paper
     Agreements. Each Borrower acknowledges and agrees that it shall
     derive direct and indirect economic benefits from each Commercial
     Paper Advance."

     1.4  Amendment of Article Seven.  Article Seven of the Loan Agreement is 
          --------------------------
hereby amended by the addition of a new section, numbered 7.17, which shall read
in its entirety as follows:

          "7.17  Amendment of Commercial Paper Agreements.  Borrower
                 ---------------------------------------- 
     shall not amend the Commercial Paper Agreements without Lender's
     prior written consent, which shall not be unreasonably withheld
     or delayed."

          SECTION TWO - REPRESENTATIONS AND WARRANTIES
          --------------------------------------------

                                 -3-
<PAGE>
 
     2.1  Acknowledgments of Borrowers.  Borrowers each hereby represent and 
          ----------------------------
warrant that:  (a) the execution and delivery of this Amendment and compliance 
by the Borrowers with all of the provisions of this Amendment (i) are within the
powers and purposes of the Borrowers; (ii) have been duly authorized or approved
by the Borrower; and (iii) when executed and delivered by or on behalf of the 
Borrowers, will constitute valid and binding obligations of the Borrowers, 
enforceable in accordance with its terms; (b) the Borrowers have no offsets or 
counterclaims against Lender or defenses to the payments due under the Loan 
Documents; (c) Lender has a first perfected security interest in the Collateral 
to secure the Obligations under the Loan Documents; and (d) the recitals in this
Amendment are true. Each Borrower reaffirms its obligation to pay all amounts 
due Lender under the Loan Documents in accordance with the terms thereof, as 
modified hereby.


                      SECTION THREE - GENERAL PROVISIONS
                      ----------------------------------

     3.1  Loan Documents Unmodified.  Except as otherwise specifically modified 
          -------------------------
by this Amendment, all terms and provisions of the Loan Documents and all liens 
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the 
validity or enforceability of the Loan Documents, as modified hereby, or alter, 
waive, annul, vary, affect, or impair any provision, condition, or covenant 
contained therein or any rights, power, or remedy granted therein.

     3.2  Construction of Amendment.  Each party hereto has cooperated in the 
          -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party. This Amendment may be amended or 
modified only by a written agreement signed by the parties hereto. This 
Amendment may be executed in counterparts, each of which when so executed and 
delivered shall be deemed an original but all such counterparts together shall 
constitute one and the same instrument.

     3.3  Parties, Successors and Assigns. This Amendment shall be binding upon
          -------------------------------
and shall inure to the benefit of Borrowers, Lender, and their respective
successors and assigns.

     3.4  Definitions.  Unless specifically defined herein, all capitalized 
          -----------
terms shall be defined in accordance with the Loan Agreement as amended by this 
Amendment.

     3.5  Severability.  To the extent any provision of this Amendment is not 
          ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

     3.6  Total Agreement.  This Amendment, and all other agreements referred to
          ---------------
herein or delivered in connection herewith, 

                                      -4-
<PAGE>
 
shall constitute the entire agreements between the parties relating to the 
subject matter hereof, and shall resume all prior agreements and understandings 
between the parties hereto relating to the subject matter hereof, and shall not 
be changed or terminated orally.

     IN WITNESS WHEREOF, the parties have started this Amendments as of the date
first written above.

                                   "BORROWERS"

                                   Cole Taylor Finance Co.;
                                   Reliance Acceptance Corp. of Colorado,
                                   Reliance Acceptance Corp. of Georgia,
                                   Reliance Acceptance Corp. of Florida,
                                   Reliance Acceptance Corp. of Indiana,
                                   Reliance Acceptance Corp. of New Mexico,
                                   Reliance Acceptance Corp. of Ohio,
                                   Reliance Acceptance Corp. of Tennassee,
                                   and Reliance Acceptance Corp. of Texas 
                                   Reliance Acceptance Corp. of Kentucky,
                                   Reliance Acceptance Corp. of Illinois,
                                   Reliance Acceptance Corp. of Minnesota,
                                   Reliance Acceptance Corp. of North
                                   Carolina, Reliance Acceptance Corp. of 
                                   South Carolina; Reliance Acceptance Corp. 
                                   of Arizona, Reliance Acceptance Corp. of
                                   Iowa; Reliance Acceptance Corp. of 
                                   Missouri, Reliance Acceptance Corp. of 
                                   Nevada; Reliance Acceptance Corp. of 
                                   Oregan, and Reliance Acceptance Corp. of 
                                   Washington


Date: May 19, 1995                 by /s/ William S. Race
          --                          ----------------------------
                                        William S. Race,
                                        Vice President and Treasurer  


Date: May 19, 1995                 by /s/ Marjorie J. MacLean
          --                          ----------------------------
                                         Marjorie J. MacLean,
                                         Assistant Secretary


                                   "LENDER"

                                   BankAmerica Business Credit, Inc.,
                                   a Delaware corporation

Date: May 19, 1995                 by /s/ James Magaluso
          --                          ----------------------------
                                        James Magaluso
                                        Vice President

                                      -5-
<PAGE>
 
                AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 3 to Loan and Security Agreement ("Amendment") is 
entered into as of September 30, 1995, by and between BankAmerica Business 
Credit, Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a 
Delaware corporation; Reliance Acceptance Corp. of Colorado, a Delaware 
corporation; Reliance Acceptance Corp. of Georgia, a Delaware corporation; 
Reliance Acceptance Corp. of Florida, a Delaware corporation; Reliance 
Acceptance Corp. of Indiana, a Delaware corporation; Reliance Acceptance Corp. 
of New Mexico, a Delaware corporation; Reliance Acceptance Corp. of Ohio, an 
Ohio corporation; Reliance Acceptance Corp. of Texas, a Texas corporation; 
Reliance Acceptance Corp. of Tennessee, a Delaware corporation, Reliance 
Acceptance Corp. of Kentucky, a Delaware corporation; Reliance Acceptance Corp. 
of Illinois, a Delaware corporation; Reliance Acceptance Corp. of Minnesota, a 
Delaware corporation; Reliance Acceptance Corp. of North Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation; 
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance 
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada, 
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware 
corporation; and Reliance Acceptance Corp. of Washington, a Delaware corporation
(individually and collectively, "Borrowers").

                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:

          a.   Borrowers and Lender are parties to a Loan and Security 
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as 
amended, modified, and supplemented prior to the date hereof being hereinafter 
referred to as "Loan Agreement). (The Loan Agreement, and all other documents 
documenting the loan evidenced thereby and the security therefor are hereinafter
collectively referred to as "Loan Documents".)

          b.   Borrowers desire to amend the Loan Agreement in certain respects.

          c.   Lender is willing to amend the Loan Agreement subject to the 
terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.
<PAGE>
 
                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1  Amendment of Section 1.7.  Section 1.7 of the Loan Agreement is hereby
          ------------------------
amended and restated to read in its entirety as follows:

          "1.7  Advance Rate shall mean eighty-five percent (85%),
                ------------
     provided, however:
     --------  -------

                (a)  In the event that the Delinquency Rate, computed 
     as of the last day of each month for each of the three calendar
     months immediately preceding the date of calculation, exceeds
     three percent (3.0%) but is less than three and one-half percent
     (3.5%) in one of those three months, then the Advance Rate shall
     mean eighty-three percent (83%), and

                (b)  In the event that the Delinquency Rate, computed 
     as of the last day of each month for each of the three calendar
     months immediately preceding the date of calculation, is equal to
     or greater than three and one-half percent (3.5%) but is not more
     than four percent (4.0%) in one of those three months, then the
     Advance Rate shall mean eighty-two percent (82%), and

                (c)  In the event that the Delinquency Rate, computed 
     as of the last day of each month for each of the three calendar
     months immediately preceding the date of calculation, is greater
     than four percent (4.0%), then the Advance Rate shall mean eighty-
     one percent (81%).

          The date of calculation of the Advance Rate and the date any
     change therein shall become effective is the date Borrower
     actually delivers to Lender its most recent Collateral Report
     reflecting the Delinquency Rates for Borrower. The Advance Rate,
     as so calculated, shall remain in effect until Borrower delivers
     to Lender its next Collateral Report reflecting the Delinquency
     Rates for the Borrower. (For example, if Borrower's Collateral
     Reports for the months of March, April, and May, delivered to
     Lender on June 15, reflect that the Delinquency Rate for Borrower
     was 3.4 percent, 4.0 percent and 3.75 percent respectively, then
     the Advance Rate will immediately thereupon be 83 percent for the
     period of June 15 to and including July 14 (the next report being
     due on July 15), and if, as a result of such calculation, an Over
     Advance was determined to have existed as of June 15, based on an
     Advance Rate of 83 percent, then Borrower shall be required to
     pay down the Loan accordingly, and for example, if Borrower's
     Collateral Reports for the months of March, April, and May,
     delivered to Lender on June 15, reflect that the

                                 -2-

<PAGE>
 
     Delinquency Rate for Borrower was 3.8 percent, 4.0 percent and
     4.2 percent respectively, then the Advance Rate will immediately
     thereupon be 82 percent for the period of June 15 to and
     including July 14 (the next report being due on July 15), and if,
     as a result of such calculation, an Over Advance was determined
     to have existed as of June 15, based on an Advance Rate of 82
     percent, then Borrower shall be required to pay down the Loan
     accordingly.)"


     1.2  Amendment of Subsection 3.1 a (ii).   Subsection 3.1 a (ii) of the 
          -----------------------------------
Loan Agreement is hereby amended and restated to read in its entirety as 
follows:

               "(ii) with respect to Adjusted LIBOR Loans, at the
     Adjusted LIBOR on the relevant Interest Rate Determination Date
     plus two and one-quarter percent (2.25%) per annum."
     ----

     1.3  Amendment of Section 3.14. Section 3.14 of the Loan Agreement is 
          -------------------------
hereby amended and restated to read in its entirety as follows:

          "3.14     Commercial Paper Fee. For every month during the
                    -------------
     term of this Agreement, Borrower shall pay to Lender a fee
     ("Commercial Paper Fee") equal to the product of (a) (i) five-
     eights of one percent (0.625%) per annum prior to September 1,
     1995, and (ii) five-sixteenths of one percent (0.3125%) per annum
     on and after September 1, 1995, multiplied by (b) the average
                                     -------------
     daily closing balance of the Commercial Paper Indebtedness
     outstanding during such month. Such fee, if any, shall be
     calculated on the basis of a year of 360 days, actual days
     elapsed, and shall be payable to Lender on the Interest Payment
     Due Date with respect to the prior month."

     1.4  Amendment of Section 4.1. Section 4.1 of the Loan Agreement is hereby 
          ------------------------
amended and restated to read in its entirety as follows:

     "4.1      Term of Agreement and Loan Repayment. This Agreement
               ------------------------------------
     shall have an initial term commencing on the Closing Date and
     terminating on July 12, 1997. (The date on which the term of the
     Agreement terminates is hereinafter referred to as "Maturity
     Date.") The Loan shall be due and payable in full on the Maturity
     Date without notice or demand and shall be repaid to Lender by a
     wire transfer of immediately available funds. Borrower may at any
     time terminate this Agreement prior to the Maturity Date by: (a)
     giving Lender at least 60 days prior notice of intention to
     terminate this Agreement; (b) paying and performing, as
     appropriate, all

                                      -3-



<PAGE>
 
     Obligations on or prior to the effective date of termination; and (c)
     paying to Lender an early termination fee equal to (i) three-quarters of
     one percent (0.75%) of the Total Credit Facility in the event the effective
     date of termination is before the first anniversary of the Closing Date;
     and (ii) one-half of one percent (0.5%) of the Total Credit Facility in the
     event the effective date of termination occurs on or at any time after the
     first anniversary date of the Closing Date. Notwithstanding the foregoing,
     (a) the early termination fee shall be equal to zero, instead of the amount
     indicated above, if (1) Borrower, at any time, requests an increase in the
     Total Credit Facility by an amount which is not less than $25,000,000, but
     not more than $50,000,000, without any other changes to any of the other
     provisions of this Agreement, (2) no Default or Event of Default exists at
     the time of such request, (3) at the time of the request the sum of the
     unpaid balance of the Loan plus the aggregate amount of all Commercial
     Paper Indebtedness is equal to or greater than sixty percent (60%) of the
     Total Credit Facility, (4) the results of Borrower's operations have
     equaled or exceeded the projections delivered by Borrower to Lender prior
     to the date of the request, and (5) Lender does not, within ninety (90)
     days of such request, agree to that increase; and (b) the early termination
     fee shall be one-quarter of one percent (0.25%) if, the conditions
     specified in clause (a) are satisfied and, in addition to an increase in
     the Total Credit Facility, Borrower requests a lower interest rate as to
     either Adjusted LIBOR Loans or Reference Rate Loans and/or less stringent
     financial covenants than presently contained in Article VII hereof. In the
     event Lender grants the requested increase in the Total Credit Facility
     pursuant to the previous sentence, Lender may only charge an additional
     facility fee equal to one-quarter of one percent of the amount of the
     increase in the Total Credit Facility."

     1.5  Amendment of Section 5.7. The second sentence of Section 5.7 of the 
          ------------------------
Loan Agreement is hereby amended and restated to read in its entirety as 
follows:

     "In order to reimburse Lender for the cost of such verifications, audits,
     and inspections, Borrower shall pay to Lender a monthly audit fee
     calculated on a branch-by-branch basis, which fee for each branch shall
     equal the lesser of (a) $200, or (b) the product of (i) .004, multiplied by
                                                                   -------------
     (ii) one percent (1.0%) of the aggregate amount of the Gross Contract
     Payments to be made under all Contracts administered by such branch office
     as of the last day of the month with respect to which the fee is
     calculated."

                                      -4-

<PAGE>
 
     1.6  Amendment of Section 8.11.  Section 8.11 of the Loan Agreement is 
          -------------------------
hereby amended and restated to read in its entirety as follows:

          "8.11  Unsubordinated Debt to Borrowing Base. Borrower shall
                 -------------------------------------
     not permit the ratio, calculated on a consolidated basis as of
     the last day of each month, of (a) the remainder of (i) all Debt,
     minus (ii) all Subordinated Debt (numerator), to (b)
     -----

     Borrowing Base (denominator), to be more than: (a) prior to July
     1, 1995, 5 to 1; provided, however, if at any time prior to July
                      -----------------
     1, 1995 the sum of the unpaid balance of the Loan plus the
                                                       ----
     aggregate principal amount of the Commercial Paper Indebtedness is
     equal to or greater than $100,000,000, then Borrower shall not
     permit the ratio at all times thereafter, as so calculated, to be
     more than 3.75 to 1; and (b) on and after July 1, 1995, 5 to 1."

     1.7  Amendment of Section 8.13.  Section 8.13 of the Loan Agreement is 
          -------------------------
hereby amended and restated to read in its entirety as follows:

          "8.13  Minimum Adjusted Tangible Net Worth. Borrower shall
                 -----------------------------------
     not permit its Adjusted Tangible Net Worth, calculated on a
     consolidated basis as of the last day of each month, to be less
     than: (a) $8,000,000 prior to December 1, 1995, to and including
     November 31, 1996; and (c) $22,500,000 for the period beginning
     on December 1, 1996, and at all times thereafter."


               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

     2.1  Conditions Precedent to Amendment. This Amendment shall become
          ---------------------------------
legally binding upon Borrowers and Lender only when Borrowers shall have
executed and delivered to Lender or caused to be executed and delivered to
Lender, as appropriate, (a) a Certificate of Assistant Secretary of each of the
Borrowers and this Amendment, and (b) letter from Cole Taylor Financial Group,
Inc., reaffirming its obligations under its letter of responsibility.


                SECTION THREE - REPRESENTATIONS AND WARRANTIES
                ----------------------------------------------

     3.1  Acknowledgments of Borrowers. Borrowers each hereby represent and 
          ----------------------------
warrant that: (a) the execution and delivery of this Amendment and compliance by
Borrowers with all of the provisions of this Amendment (i) are within the powers
and purposes of Borrowers; (ii) have been duly authorized or approved by 
Borrowers; and (iii) when executed and delivered by or on behalf of Borrowers, 
will

                                      -5-
<PAGE>
 
constitute valid and binding obligations of Borrowers, enforceable in accordance
with its terms; (b) Borrowers have no offsets or counterclaims against Lender or
defenses to the payments due under the Loan Documents; (c) Lender has a first 
perfected security interest in the Collateral to secure the Obligations under 
the Loan Documents; and (d) the recitals in this Amendment are true. Borrowers 
each reaffirm its obligation to pay all amounts due Lender under the Loan 
Documents in accordance with the terms thereof, as modified hereby.


                       SECTION FOUR - GENERAL PROVISIONS
                       ---------------------------------

     4.1  Loan Documents Unmodified.  Except as otherwise specifically modified
          -------------------------
by this Amendment, all terms and provisions of the Loan Documents and all liens
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the
validity or enforceability of the Loan Documents, as modified hereby, or alter,
waive, annul, vary, affect, or impair any provision, condition, or covenant
contained therein or any rights, power, or remedy granted therein.

     4.2  Construction of Amendment.  Each party hereto has cooperated in the 
          --------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party. This Amendment may be amended or 
modified only by a written agreement signed by the parties hereto. This 
Amendment may be executed in counterparts, each of which when so executed and 
delivered shall be deemed an original but all such counterparts together shall 
constitute one and the same instrument.

     4.3  Parties, Successors and Assigns.  This Amendment shall be binding 
          -------------------------------
upon and shall inure to the benefit of Borrower, Lender, and their respective 
successors and assigns.

     4.4  Definitions.  Unless specifically defined herein, all capitalized 
          -----------
terms shall be defined in accordance with the Loan Agreement as amended by this 
Amendment.

     4.5  Severability.  To the extent any provision of this Amendment is not 
          ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

     4.6  Total Agreement.  This Amendment, and all other agreements referred 
          ---------------
to herein or delivered in connection herewith, shall constitute the entire 
agreement between the parties relating to the subject matter hereof, and shall 
rescind all prior

                                      -6-

<PAGE>
 
agreements and understandings between the parties hereto relating to the subject
matter hereof, and shall not be changed or terminated orally.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                                             "BORROWERS"

                                             Cole Taylor Finance Co.; Reliance
                                             Acceptance Corp. of Colorado; 
                                             Reliance Acceptance Corp. of 
                                             Georgia; Reliance Acceptance Corp. 
                                             of Florida; Reliance Acceptance 
                                             Corp. of Indiana; Reliance 
                                             Acceptance Corp. of New Mexico; 
                                             Reliance Acceptance Corp. of Ohio; 
                                             Reliance Acceptance Corp. of 
                                             Tennessee; Reliance Acceptance 
                                             Corp. of Texas; Reliance Acceptance
                                             Corp. of Kentucky; Reliance 
                                             Acceptance Corp. of Illinois; 
                                             Reliance Acceptance Corp. of 
                                             Minnesota; Reliance Acceptance 
                                             Corp. of North Carolina; and 
                                             Reliance Acceptance Corp. of South 
                                             Carolina; Reliance Acceptance Corp.
                                             of Arizona; Reliance Acceptance 
                                             Corp. of Iowa; Reliance Acceptance 
                                             Corp. of Missouri; Reliance 
                                             Acceptance Corp. of Nevada; 
                                             Reliance Acceptance Corp. of 
                                             Oregon; and Reliance Acceptance 
                                             Corp. of Washington

                                             by /s/ Thomas L. Barlow, 
                                               ---------------------------
                                               Thomas L. Barlow, President

                                             by /s/ Michael D. Bernick
                                               ---------------------------
                                               Michael D. Bernick,
                                               Treasurer

                                             "LENDER"

                                             BankAmerica Business Credit, Inc.,
                                             a Delaware corporation

                                             by /s/ Joseph F. Pignotti
                                               ---------------------------
                                               Joseph F. Pignotti,
                                               Executive Vice President

                                      -7-
<PAGE>
 
                AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 4 to Loan and Security Agreement ("Amendment") is 
entered into as of November 17, 1995, by and between BankAmerica Business 
Credit, Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a 
Delaware corporation; Reliance Acceptance Corp. of Colorado, a Delaware 
corporation; Reliance Acceptance Corp. of Georgia, a Delaware corporation; 
Reliance Acceptance Corp. of Florida, a Delaware corporation; Reliance 
Acceptance Corp. of Indiana, a Delaware corporation; Reliance Acceptance Corp. 
of New Mexico, a Delaware corporation; Reliance Acceptance Corp. of Ohio, an 
Ohio corporation; Reliance Acceptance Corp, of Texas, a Texas corporation; 
Reliance Acceptance Corp. of Tennessee, a Delaware corporation, Reliance 
Acceptance Corp. of Kentucky, a Delaware corporation; Reliance Acceptance Corp. 
of Illinois, a Delaware corporation; Reliance Acceptance Corp. of Minnesota, a 
Delaware corporation; Reliance Acceptance Corp. of North Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation; 
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance 
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada, 
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware 
corporation; and Reliance Acceptance Corp. of Washington, a Delaware corporation
(individually and collectively, "Borrowers").

                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:

         a.  Borrowers and Lender are parties to a Loan and Security Agreement, 
dated as of July 12, 1994 (the Loan and Security Agreement, as amended, 
modified, and supplemented prior to the date hereof being hereinafter referred 
to as "Loan Agreement"). (The Loan Agreement, and all other documents 
documenting the loan evidenced thereby and the security therefor are hereinafter
collectively referred to as "Loan Documents".) Unless specifically defined 
herein, all capitalized terms shall be defined in accordance with the Loan 
Agreement as amended by this Amendment.

         b.  Borrowers desire to amend the Loan Agreement in certain respects.

         c.  Lender is willing to amend the Loan Agreement subject to the terms 
and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.


                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1 Amendment of Section 1.77. Section 1.77 of the Loan Agreement is 
         -------------------------
amended and restated to read in its entirety as follows:

                                      -1-

      
<PAGE>
 
           "1.77 Total Credit Facility shall mean (a) $170,000,000 prior to 
                 ---------------------
     January 1, 1996, and (b) $150,000,000 on and after January 1, 1996."

               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

     2.1   Conditions Precedent to Amendment. This Amendment shall become 
           ---------------------------------
legally binding upon Borrowers and Lender only when:

           (a)  Borrowers shall have executed and delivered to Lender or caused 
to be executed and delivered to Lender, as appropriate, (i) a Certificate of 
Assistant Secretary of each of the Borrowers and this Amendment, and (ii) letter
from Cole Taylor Financial Group, Inc., reaffirming its obligations under its 
letter of responsibility; and

           (b)  Borrowers shall have paid to Lender a fee of $15,000 as part of 
the consideration for entering into this Amendment.

                SECTION THREE - REPRESENTATIONS AND WARRANTIES
                ----------------------------------------------

     3.1   Acknowledgements of Borrowers. Borrowers each hereby represent and
           ----------------------------- 
warrant that: (a) the execution and delivery of this Amendment and compliance by
Borrowers with all of the provisions of this Amendment (i) are within the powers
and purposes of Borrowers; (ii) have been duly authorized or approved by 
Borrowers; and (iii) when executed and delivered by or on behalf of Borrowers, 
will constitute valid and binding obligations of Borrowers, enforceable in 
accordance with its terms; (b) Borrowers have no offsets or counterclaims 
against Lender or defenses to the payments due under the Loan Documents; (c) 
Lender has a first perfected security interest in the Collateral to secure the 
Obligations under the Loan Documents; and (d) the recitals in this Amendment are
true. Borrowers each reaffirm its obligation to pay all amounts due Lender under
the Loan Documents in accordance with the terms thereof, as modified hereby.

                       SECTION FOUR - GENERAL PROVISIONS
                       ---------------------------------

     4.1   Loan Documents Unmodified. Except as otherwise specifically modified 
           -------------------------
by this Amendment, all terms and provisions of the Loan Documents and all liens 
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the 
validity or enforceability of the Loan Documents, as modified hereby, or alter, 
waive, annul, vary, affect, or impair any provision, condition, or covenant 
contained therein or any rights, power, or remedy granted therein.

     4.2   Construction of Amendment. Each party hereto has cooperated in the 
           -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party. This Amendment may be amended or 
modified only by a written agreement

                                      -2-
<PAGE>
 
signed by the parties hereto. This Amendment may be executed in counterparts, 
each of which when so executed and delivered shall be deemed an original but all
such counterparts together shall constitute one and the same instrument.

       4.3  Parties, Successors and Assigns. This Amendment shall be binding 
            -------------------------------
upon and shall inure to the benefit of Borrower, Lender, and their respective 
successors and assigns.

       4.4  Severability. To the extent any provision of this Amendment is not 
            ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

       4.5  Total Agreement. This Amendment, and all other agreements referred 
            ---------------
to herein or delivered in connection herewith, shall constitute the entire 
agreement between the parties relating to the subject matter hereof and shall 
not be changed or terminated orally.

       IN WITNESS WHEREOF, the parties have executed this Amendment as of the 
date first written above.


                                       "BORROWERS"

                                        Cole Taylor Finance Co.; Reliance
                                        Acceptance Corp. of Colorado; Reliance
                                        Acceptance Corp. of Georgia; Reliance
                                        Acceptance Corp. of Florida; Reliance
                                        Acceptance Corp. of Indiana; Reliance
                                        Acceptance Corp. of New Mexico; Reliance
                                        Acceptance Corp. of Ohio; Reliance
                                        Acceptance Corp. of Tennessee; Reliance
                                        Acceptance Corp. of Texas; Reliance
                                        Acceptance Corp. of Kentucky; Reliance
                                        Acceptance Corp. of Illinois; Reliance
                                        Acceptance Corp. of Minnesota; Reliance
                                        Acceptance Corp. of North Carolina; and
                                        Reliance Acceptance Corp. of South
                                        Carolina; Reliance Acceptance Corp. of
                                        Arizona; Reliance Acceptance Corp. of
                                        Iowa; Reliance Acceptance Corp. of
                                        Missouri; Reliance Acceptance Corp. of
                                        Nevada; Reliance Acceptance Corp. of
                                        Oregon; and Reliance Acceptance Corp. of
                                        Washington

                                        by /s/ Thomas L. Barlow
                                          ------------------------------
                                           Thomas L. Barlow, President

                                        by /s/ Michael Bernick
                                          ------------------------------
                                           Michael Bernick, Vice President

                                      -3-

<PAGE>
 
                                            "LENDER"                           
                                                                               
                                            BankAmerica Business Credit, Inc., 
                                            a Delaware corporation             
                                                                               
                                            by /s/ Joseph P. Pignotti          
                                               -------------------------       
                                                   Joseph P. Pignotti,         
                                                   Executive Vice President     
<PAGE>
 
                AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT

        This Amendment No. 5 to Loan and Security Agreement ("Amendment") is
entered into as of December 26, 1995, by and between BankAmerica Business
Credit, Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a
Delaware corporation; Reliance Acceptance Corp. of Colorado, a Delaware
corporation; Reliance Acceptance Corp. of Georgia, a Delaware corporation;
Reliance Acceptance Corp. of Florida, a Delaware corporation; Reliance
Acceptance Corp. of Indiana, a Delaware corporation; Reliance Acceptance Corp.
of New Mexico, a Delaware corporation; Reliance Acceptance Corp. of Ohio, an
Ohio corporation; Reliance Acceptance Corp. of Texas, a Texas corporation;
Reliance Acceptance Corp. of Tennessee, a Delaware corporation; Reliance
Acceptance Corp. of Kentucky, a Delaware corporation; Reliance Acceptance Corp.
of Illinois, a Delaware corporation; Reliance Acceptance Corp. of Minnesota, a
Delaware corporation; Reliance Acceptance Corp. of North Carolina, a Delaware
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation;
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada,
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware
corporation; and Reliance Acceptance Corp. of Washington, a Delaware corporation
(individually and collectively, "Borrowers").


                                   RECITALS
                                   --------

        This Amendment is entered into in reference to the following facts:
                
                a.   Borrowers and Lender are parties to a Loan and Security 
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as 
amended, modified, and supplemented prior to the date hereof being hereinafter 
referred to as "Loan Agreement").  (The Loan Agreement, and all other documents 
documenting the loan evidenced thereby and the security therefor are hereinafter
collectively referred to as "Loan Documents".)  Unless specifically defined 
herein, all capitalized terms shall be defined in accordance with the Loan 
Agreement as amended by this Amendment.

                b.   Borrowers desire to amend the Loan Agreement in certain 
respects.

                c.   Lender is willing to amend the Loan Agreement subject to
the terms and conditions contained herein.

        NOW, THEREFORE, in consideration of the mutual covenants contained 
herein, the parties agree as follows.


                                      -1-

<PAGE>
 
                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1   Amendment of Section 1.77.  Section 1.77 of the Loan Agreement is 
           --------------------------
amended and restated to read in its entirety as follows:

           "1.77 Total Credit Facility shall mean $200,000,000."
                 ---------------------


               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

     2.1   Conditions Precedent to Amendment.  This Amendment shall become 
           ---------------------------------
legally binding upon Borrowers and Lender only when:

           (a)  Borrowers shall have executed and delivered to Lender or caused 
to be executed and delivered to Lender, as appropriate, (i) a Certificate of 
Assistant Secretary of each of the Borrowers, and (ii) letter from Cole Taylor 
Financial Group, Inc., reaffirming its obligations under its letter of 
responsibility; and 

           (b)  Borrowers shall have paid to Lender a fee of $125,000 as part of
the consideration for entering into this Amendment.

                SECTION THREE - REPRESENTATIONS AND WARRANTIES
                ----------------------------------------------

     3.1   Acknowledgments of Borrowers.  Borrowers each hereby represent and 
           ----------------------------
warrant that:  (a) the execution and delivery of this Amendment and compliance 
by Borrowers with all of the provisions of this Amendment (i) are within the 
powers and purposes of Borrowers; (ii) have been fully authorized or approved by
Borrowers; and (iii) when executed and delivered by or on behalf of Borrowers,
will constitute valid and binding obligations of Borrowers, enforceable in
accordance with its terms; (b) Borrowers have no offsets or counterclaims
against Lender or defenses to the payments due under the Loan Documents; and (c)
Lender has a first perfected security interest in the Collateral to secure the
Obligations under the Loan Documents. Borrowers reaffirm their obligations to
pay all amounts due Lender under the Loan Documents in accordance with the terms
thereof, as modified hereby.


                       SECTION FOUR - GENERAL PROVISIONS
                       ---------------------------------

     4.1   Loan Documents Unmodified.  Except as otherwise specifically modified
           -------------------------
by this Amendment, all terms and provisions of the Loan Documents and all liens 
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the
validity or enforceability of the Loan Documents, as

                                      -2-
<PAGE>
 
modified hereby, or alter, waive, annul, vary, affect, or impair any provision, 
condition, or covenant contained therein or any rights, power, or remedy granted
therein.

     4.2   Parties, Successors and Assigns.  This Amendment shall be binding 
           -------------------------------
upon and shall inure to the benefit of Borrower, Lender, and their respective 
successors and assigns.

     4.3   Severability.  To the extent any provision of this Amendment is not 
           ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

     4.4   Total Agreement.  This Amendment and all other agreements referred to
           ---------------
herein or delivered in connection herewith shall constitute the entire agreement
between the parties relating to the subject matter hereof and shall not be 
changed or terminated orally.

     4.5   Construction of Amendment.  Each party hereto has cooperated in the 
           -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party.  This Amendment may be amended or 
modified only by a written agreement

                                      -3-
<PAGE>
 
signed by the parties hereto. This Amendment may be executed in counterparts, 
each of which when so executed and delivered shall be deemed an original but all
such counterparts together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                           "BORROWERS"

                           Cole Taylor Finance Co.; Reliance Acceptance Corp. of
                           Colorado; Reliance Acceptance Corp. of Georgia;
                           Reliance Acceptance Corp. of Florida; Reliance
                           Acceptance Corp. of Indiana; Reliance Acceptance
                           Corp. of New Mexico; Reliance Acceptance Corp. of
                           Ohio; Reliance Acceptance Corp. of Tennessee;
                           Reliance Acceptance Corp. of Texas; Reliance
                           Acceptance Corp. of Kentucky; Reliance Acceptance
                           Corp. of Illinois; Reliance Acceptance Corp. of
                           Minnesota; Reliance Acceptance Corp. of North
                           Carolina; and Reliance Acceptance Corp. of South
                           Carolina; Reliance Acceptance Corp. of Arizona;
                           Reliance Acceptance Corp. of Iowa; Reliance
                           Acceptance Corp. of Missouri; Reliance Acceptance
                           Corp. of Nevada; Reliance Acceptance Corp. of Oregon;
                           and Reliance Acceptance Corp. of Washington


                           By:  /s/ Thomas L. Barlow
                              -------------------------------------------------
                                Thomas L. Barlow, President

                           By:  /s/ Michael Bernick
                              -------------------------------------------------
                                Michael Bernick, Vice President


                           "LENDER"

                           BankAmerica Business Credit, Inc.


                           By:  /s/ Joseph F. Pignotti
                              -------------------------------------------------
                                Joseph F. Pignotti
                                Executive Vice President

                                      -4-
<PAGE>
 
                AMENDMENT NO. 6 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 6 to Loan and Security Agreement ("Amendment") is
entered into as of March ___, 1996, by and between BankAmerica Business Credit,
Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a Delaware
corporation; Reliance Acceptance Corp. of Colorado, a Delaware corporation;
Reliance Acceptance Corp. of Georgia, a Delaware corporation; Reliance
Acceptance Corp, of Florida, a Delaware corporation; Reliance Acceptance Corp.
of Indiana, a Delaware corporation; Reliance Acceptance Corp. of New Mexico, a
Delaware corporation; Reliance Acceptance Corp. of Ohio, an Ohio corporation;
Reliance Acceptance Corp. of Texas, a Texas corporation; Reliance Acceptance
Corp. of Tennessee, a Delaware corporation, Reliance Acceptance Corp. of
Kentucky, a Delaware corporation; Reliance Acceptance Corp. of Illinois, a
Delaware corporation; Reliance Acceptance Corp. of Minnesota, a Delaware
corporation; Reliance Acceptance Corp. of North Carolina, a Delaware
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation;
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada,
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware
corporation; and Reliance Acceptance Corp. of Washington, a Delaware corporation
(individually and collectively, "Existing Borrowers") and Reliance Acceptance
Corp. of Utah, a Delaware corporation.

                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:

         (a)  Existing Borrowers and Lender are parties to a Loan and Security 
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as 
amended, modified, and supplemented prior to the date hereof being hereinafter 
referred to as "Loan Agreement"). Unless specifically defined herein, all 
capitalized terms shall be defined in accordance with the Loan Agreement as 
amended by this Amendment.

         (b)  New Borrower is a newly formed, wholly owned subsidiary of Cole 
Taylor Finance Co. Existing Borrowers desire to amend the Loan Agreement to 
include New Borrower as one of the "Subsidiary Borrowers" and as "Borrower" 
thereunder and to otherwise amend the Loan Agreement.

         (c)  Lender is willing to amend the Loan Agreement subject to the terms
and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.

                                      -1-
<PAGE>
 
                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1  Amendment of "Subsidiary Borrowers" and "Borrower."  The term 
          ---------------------------------------------------
"Subsidiary Borrowers" and "Borrower" as used in the Loan Agreement are hereby 
amended to mean New Borrower and Existing Borrowers, individually and 
collectively. New Borrower hereby absolutely and unconditionally assumes all 
Obligations existing under the Loan Agreement as of the date hereof, expressly 
grants to Lender the security interests referenced therein in regard to the 
Property of New Borrower of the type specified therein, and acknowledges and 
agrees that New Borrower shall be jointly and severally liable for all 
Obligations, as more particularly provided in Section 12.4 of the Loan 
                                              ------------
Agreement.

     1.2  Amendment of Section 1.77.  Section 1.77 of the Loan Agreement is 
          --------------------------
amended and restated to read in its entirety as follows:

          "1.77 Total Credit Facility shall mean $220,000,000."
                ---------------------

     1.3  Amendment of Article One.  Article One of the Loan Agreement is 
          ------------------------
amended by the addition of a new section, numbered 1.84, which shall read in its
entirety as follows:

          "1.84 Repossession Value shall mean the sum of (a) value of a 
                ------------------
     repossessed vehicle, as reflected on Borrower's books and records, which
     was the subject of a Contract, minus (b) the amount of any insurance claims
                                    -----
     and refunds applicable thereto."

     1.4  Amendment of Schedule 7.6. Schedule 7.6 of the Loan Agreement is 
          -------------------------
amended by the addition of the following corporation and related information:

<TABLE> 
<CAPTION> 

                           No. of Shares  No. of Shares  Percentage  Certificate
     Entity                Authorized     Outstanding    Owned       Number
     ------                ----------     -----------    -----       ------
     <S>                        <C>         <C>              <C>          <C> 
 
     Reliance Acceptance
     Corp. of Utah              1.000       100              100%         1

</TABLE> 

     1.5  Amendment of Section 8.6.  Section 8.6 of the Loan Agreement is hereby
          ------------------------
amended and restate to read in its entirety as follows:

          "8.6  Total Debt Ratio. Borrower shall not permit the ratio, 
                -----------------
     calculated on a consolidated basis as of the last day of each month, of (a)
     the aggregate amount of all Debt (numerator) to (b) Adjusted Tangible Net
     Worth (denominator) to be more than 10:1."

     1.6  Amendment of Article Eight.  Article Eight of the Loan Agreement is 
          --------------------------
hereby amended by the addition of a new section, numbered 8.27, which shall read
in its entirety as follows:

                                      -2-
<PAGE>
 
           "8.27  Repossession Inventory. Borrower shall charge off the
                  ---------------------- 
     Repossession Value of a vehicle for which more than one hundred twenty
     (120) days have elapsed since the date Borrower has repossessed the
     vehicle."

               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

     2.1   Conditions Precedent to Amendment. This Amendment shall become 
           ---------------------------------
legally binding upon Existing Borrowers, New Borrower, and Lender only when the 
Existing Borrowers, Cole Taylor Finance Co. and New Borrower shall have executed
and delivered to Lender or caused to be executed and delivered to Lender, as 
appropriate, all of the following documents, satisfactory to Lender in form and 
content: (a) a Certificate of Assistant Secretary of each of the Existing 
Borrowers; (b) a Certificate of Assistant Secretary of the New Borrower; (c) 
opinion of counsel for New Borrower; (d) Amendment No. 2 to Security Agreement 
-----------------------------------
Stock Pledge; (e) a Stock Power for the original stock certificates evidencing 
New Borrower's stock; (f) a good standing certificate for the New Borrower; (g)
a certificate of qualification for the New Borrower; (h) UCC-1 financing 
statements for the New Borrower, to be filed in the state of Illinois, Texas, 
and Utah and for Cole Taylor Finance Co. to be filed in the state of Utah; (i) a
Certificate of Assistant Secretary of Cole Taylor Finance Co.; (j) Amendment No.
1 to Subordination Agreement; and (k) a letter from Cole Taylor Financial Group,
Inc., reaffirming its obligations under its letter of responsibility.

                                      -3-
<PAGE>
 
        2.2     New Facility Fee.  On the date Borrower executes this Amendment,
                ----------------
Borrower shall pay to Lender a facility fee ("New Facility Fee") equal to 
one-quarter of one percent (0.25%) of $20,000,000.  Borrower and Lender agree 
that the New Facility Fee may be financed, at Lender's discretion, as an Advance
to the Loan.

                 SECTION THREE - REPRESENTATIONS AND WARRANTIES
                 ----------------------------------------------

        3.1     Acknowledgments of Borrowers.  Existing Borrowers and New 
                ----------------------------
Borrower each hereby represent and warrant that: (a) the execution and delivery
of this Amendment and compliance by Existing Borrowers and New Borrower with all
of the provisions of this Amendment (i) are within the powers and purposes of
Existing Borrowers and New Borrower; (ii) have been duly authorized or approved
by Existing Borrowers and New Borrower; and (iii) when executed and delivered by
or on behalf of Existing Borrowers and New Borrower, will constitute valid and
binding obligations of Existing Borrowers and New Borrower, enforceable in
accordance with its terms; (b) Existing Borrowers and New Borrower have no
offsets or counterclaims against Lender or defenses to the payments due under
the Loan Agreement; and (c) Lender has a first perfected security interest in
the Collateral to secure the Obligations under the Loan Agreement. Existing
Borrowers each reaffirm their obligations to pay all amounts due Lender under
the Loan Agreement in accordance with the terms thereof, as modified hereby.


                       SECTION FOUR - GENERAL PROVISIONS
                       ---------------------------------

        4.1     Loan Agreement Unmodified.  Except as otherwise specifically 
                -------------------------
modified by this Amendment, all terms and provisions of the Loan Agreement and
all liens and security interests created thereby shall remain unmodified and in
full force and effect. Nothing contained in this Amendment shall in any way
impair the validity or enforceability of the Loan Agreement, as modified hereby,
or alter, waive, annul, vary, affect, or impair any provision, condition, or
covenant contained therein or any rights, power, or remedy granted therein.

        4.2     Parties, Successors, and Assigns.  This Amendment shall be 
                --------------------------------
binding upon and shall inure to the benefit of Existing Borrower, New Borrower, 
Lender, and their respective successors and assigns.

        4.3     Severability.  To the extent any provision of this Amendment is 
                ------------ 
not enforceable under applicable law, such provision shall be deemed null and 
void and shall have no effect on the remaining portions of the Amendment.

        4.4     Total Agreement.  This Amendment and all other agreements 
                ---------------
referred to herein or delivered in connection herewith shall constitute the 
entire agreement between the parties relating to the subject matter hereof and 
shall not be changed or terminated orally.

                                      -4-
<PAGE>
 
     4.5   Construction of Amendment.  Each party hereto has cooperated in the 
           -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party.  This Amendment may be amended or 
modified only by a written agreement signed by the parties hereto.  This 
Amendment may be executed in counterparts, each of which when so executed and 
delivered shall be deemed an original but all such counterparts together shall 
constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
                   
                   "EXISTING BORROWERS"

                   Cole Taylor Finance Co.; Reliance Acceptance Corp. of
                   Colorado; Reliance Acceptance Corp. of Georgia; Reliance
                   Acceptance Corp. of Florida; Reliance Acceptance Corp. of
                   Indiana; Reliance Acceptance Corp. of New Mexico; Reliance
                   Acceptance Corp. of Ohio; Reliance Acceptance Corp. of
                   Tennessee; Reliance Acceptance Corp. of Texas; Reliance
                   Acceptance Corp. of Kentucky; Reliance Acceptance Corp. of
                   Illinois; Reliance Acceptance Corp. of Minnesota; Reliance
                   Acceptance Corp. of North Carolina; and Reliance Acceptance
                   Corp. of South Carolina; Reliance Acceptance Corp. of
                   Arizona; Reliance Acceptance Corp. of Iowa; Reliance
                   Acceptance Corp. of Missouri; Reliance Acceptance Corp. of
                   Nevada; Reliance Acceptance Corp. of Oregon; and Reliance
                   Acceptance Corp. of Washington.


                   By: /s/ Thomas L. Barlow
                      ---------------------------------------
                           Thomas L. Barlow, President


                   By: /s/ Michael D. Bernick
                      ---------------------------------------
                           Michael D. Bernick, Vice President


                   "NEW BORROWER"

                   Reliance Acceptance Corp. of Utah,
                   a Delaware corporation


                   By: /s/ Thomas L. Barlow
                      ---------------------------------------
                           Thomas L. Barlow, President


                   By: /s/ Michael D. Bernick
                      ---------------------------------------
                           Michael D. Bernick, Vice President

                 [SIGNATURE OF LENDER CONTINUED ON NEXT PAGE.]

                                      -5-

<PAGE>
 
                   "LENDER"

                   BankAmerica Business Credit, Inc.

                   
                   By: /s/ Joseph F. Pignotti
                      --------------------------------------
                           Joseph F. Pignotti,
                           Executive Vice President

                                      -6-
<PAGE>
 
                AMENDMENT NO. 7 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 7 to Loan and Security Agreement ("Amendment") is 
entered into as of April 30, 1996, by and between BankAmerica Business Credit, 
Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a Delaware 
corporation; Reliance Acceptance Corp. of Colorado, a Delaware corporation; 
Reliance Acceptance Corp. of Georgia, a Delaware corporation; Reliance 
Acceptance Corp. of Florida, a Delaware corporation; Reliance Acceptance Corp. 
of Indiana, a Delaware corporation; Reliance Acceptance Corp. of New Mexico, a 
Delaware corporation; Reliance Acceptance Corp. of Ohio, an Ohio corporation; 
Reliance Acceptance Corp. of Texas, a Texas corporation; Reliance Acceptance 
Corp. of Tennessee, a Delaware corporation, Reliance Acceptance Corp. of 
Kentucky, a Delaware corporation; Reliance Acceptance Corp. of Illinois, a 
Delaware corporation; Reliance Acceptance Corp. of Minnesota, a Delaware 
corporation; Reliance Acceptance Corp. of North Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation; 
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance 
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada, 
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware 
corporation; and Reliance Acceptance Corp. of Washington, a Delaware 
corporation, and Reliance Acceptance Corp. of Utah, a Delaware corporation 
(individually and collectively, "Borrowers").

                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:

           (a)  Borrowers and Lender are parties to a Loan and Security 
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as 
amended, modified, and supplemented prior to the date hereof being hereinafter 
referred to as "Loan Agreement"). Unless specifically defined herein, all 
capitalized terms shall be defined in accordance with the Loan Agreement as 
amended by this Amendment.

           (b)  Borrower and Lender desire to amend the Loan Agreement in 
certain respects subject to the terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.


                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1   Amendment of Section 1.77. Section 1.77 of the Loan Agreement is 
           -------------------------
amended and restated to read in its entirety as follows:

                "1.77 Total Credit Facility shall mean $250,000,000."
                      ---------------------

                                      -1-
<PAGE>
 
               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

       2.1  Conditions Precedent to Amendment.  This Amendment shall become 
            ---------------------------------
legally binding upon Borrowers and Lender only when the Borrowers and Cole 
Taylor Finance Co. shall have executed and delivered to Lender or caused to be 
executed and delivered to Lender (a) this Agreement and (b) a letter from Cole 
Taylor Financial Group, Inc. reaffirming its obligations under its Letter of 
Responsibility.

       2.2  New Facility Fee. On the date Borrower executes this Amendment, 
            ----------------
Borrower shall pay to Lender a facility fee ("New Facility Fee") $75,000. 
Borrower and Lender agree that the New Facility Fee may be financed, at Lender's
discretion, as an Advance to the Loan.

                SECTION THREE - REPRESENTATIONS AND WARRANTIES
                ----------------------------------------------

       3.1  Acknowledgments of Borrowers. Borrowers each hereby represent and 
            ----------------------------
warrant that: (a) the execution and delivery of this Amendment and compliance by
Borrowers with all of the provisions of this Amendment (i) are within the powers
and purposes of Borrowers; (ii) have been duly authorized or approved by 
Borrowers; and (iii) when executed and delivered by or on behalf of Borrowers 
will constitute valid and binding obligations of Borrowers, enforceable in 
accordance with its terms; (b) Borrowers have no offsets or counterclaims 
against Lender or defenses to the payments due under the Loan Agreement; and (c)
Lender has a first perfected security interest in the Collateral to secure the 
Obligations under the Loan Agreement. Borrowers each reaffirm their obligations 
to pay all amounts due Lender under the Loan Agreement in accordance with the 
terms thereof, as modified hereby.

                       SECTION FOUR - GENERAL PROVISIONS
                       ---------------------------------

       4.1  Loan Agreement Unmodified. Except as otherwise specifically modified
            -------------------------
by this Amendment, all terms and provisions of the Loan Agreement and all liens 
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the 
validity or enforceability of the Loan Agreement, as modified hereby, or alter, 
waive, annul, vary, affect, or impair any provision, condition, or covenant 
contained therein or any rights, power, or remedy granted therein.

       4.2  Parties, Successors and Assigns. This Amendment shall be binding 
            -------------------------------
upon and shall inure to the benefit of Borrowers, Lender, and their respective 
successors and assigns.

       4.3  Severability. To the extent any provision of this Amendment is not 
            ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

       4.4  Total Agreement. This Amendment and all other agreements referred to
            ---------------
herein or delivered in connection herewith shall constitute the entire agreement
between the parties relating to the subject matter hereof and shall not be 
changed or terminated orally.

                                      -2-


<PAGE>
 
     4.5  Construction of Amendment. Each party hereto has cooperated in the 
          -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party. This Amendment may be amended or 
modified only by a written agreement signed by the parties hereto. This 
Amendment may be executed in counterparts, each of which when so executed and 
delivered shall be deemed an original but all such counterparts together shall 
consitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                   "BORROWERS"

                   Cole Taylor Finance Co.; Reliance Acceptance Corp. of
                   Colorado; Reliance Acceptance Corp. of Georgia; Reliance
                   Acceptance Corp. of Florida; Reliance Acceptance Corp. of
                   Indiana; Reliance Acceptance Corp. of New Mexico; Reliance
                   Acceptance Corp. of Ohio; Reliance Acceptance Corp. of
                   Tennessee; Reliance Acceptance Corp. of Texas; Reliance
                   Acceptance Corp. of Kentucky; Reliance Acceptance Corp. of
                   Illinois; Reliance Acceptance Corp. of Minnesota; Reliance
                   Acceptance Corp. of North Carolina; Reliance Acceptance Corp.
                   of South Carolina; Reliance Acceptance Corp. of Arizona;
                   Reliance Acceptance Corp. of Iowa; Reliance Acceptance Corp.
                   of Missouri; Reliance Acceptance Corp. of Nevada; Reliance
                   Acceptance Corp. of Oregon; Reliance Acceptance Corp. of
                   Washington and Reliance Acceptance Corp. of Utah

                   By: /s/ Thomas L. Barlow
                      ----------------------------------------
                       Thomas L. Barlow, President

                   By: /s/ Michael D. Bernick
                      ----------------------------------------
                       Michael D. Bernick, Vice President


                   "LENDER"

                   BankAmerica Business Credit, Inc.

                   By: /s/ Joseph F. Pignotti
                      ----------------------------------------
                      Joseph F. Pignotti,
                      Executive Vice President

                                      -3-

   
<PAGE>
 
                AMENDMENT NO. 8 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 8 to Loan and Security Agreement ("Amendment") is
entered into as of July 22, 1996, by and between BankAmerica Business Credit,
Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a Delaware
corporation; Reliance Acceptance Corp. of Colorado, a Delaware corporation;
Reliance Acceptance Corp. of Georgia, a Delaware corporation; Reliance
Acceptance Corp. of Florida, a Delaware corporation; Reliance Acceptance Corp.
of Indiana, a Delaware corporation; Reliance Acceptance Corp. of New Mexico, a
Delaware corporation; Reliance Acceptance Corp. of Ohio, an Ohio corporation;
Reliance Acceptance Corp. of Texas, a Texas corporation; Reliance Acceptance
Corp. of Tennessee, a Delaware corporation; Reliance Acceptance Corp. of
Kentucky, a Delaware corporation; Reliance Acceptance Corp. of Illinois, a
Delaware corporation; Reliance Acceptance Corp. of Minnesota, a Delaware
corporation; Reliance Acceptance Corp. of North Carolina, a Delaware
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation;
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada,
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware
corporation; and Reliance Acceptance Corp. of Washington, a Delaware
corporation; and Reliance Acceptance Corp. of Utah, a Delaware corporation
(individually and collectively, "Borrowers").


                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:
  
         (a)  Borrowers and Lender are parties to a Loan and Security Agreement,
dated as of July 12, 1994 (the Loan and Security Agreement, as amended, 
modified, and supplemented prior to the date hereof being hereinafter referred 
to as "Loan Agreement"). Unless specifically defined herein, all capitalized 
terms shall be defined in accordance with the Loan Agreement as amended by this 
Amendment.

         (b)  Borrower and Lender desire to amend the Loan Agreement in certain 
respects subject to the terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.

                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1  Amendment of Section 1.77.  Section 1.77 of the Loan Agreement is 
          -------------------------
amended and restated to read in its entirety as follows:

         "1.77  Total Credit Facility shall mean (a) $275,000,000 prior to
                ---------------------
     November 15, 1996, and (b) $250,000,000 at all times thereafter."

     1.2  Amendment of Section 8.27.  Section 8.27 of the Loan Agreement is 
          -------------------------
hereby amended and restated to read in its entirety as follows:

          "8.27  Repossession Inventory.  Borrower shall charge off the 
                 ----------------------
     Repossession Value of a vehicle for which more than one hundred twenty
     (120)

                                      -1-
<PAGE>
 
       days have elapsed since the date Borrower has repossessed the vehicle. A
       vehicle shall be deemed to have been repossessed as of the date the
       Borrower or any person acting on its behalf obtains physical possession
       of the vehicle, regardless of any right which the Contract Debtor may
       have under state law or otherwise to redeem the vehicle."

               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

       2.1  Conditions Precedent to Amendment.  This Amendment shall become 
            ---------------------------------
legally binding upon Borrowers and Lender only when the Borrowers and Cole 
Taylor Finance Co. shall have executed and delivered to Lender or caused to be 
executed and delivered to Lender (a) this Agreement and (b) a letter from Cole 
Taylor Financial Group, Inc. reaffirming its obligations under its Letter of 
Responsibility.

       2.2  New Facility Fee. On the date Borrower executes this Amendment, 
            ----------------
Borrower shall pay to Lender a facility fee ("New Facility Fee") $20,833.34.
Borrower and Lender agree that the New Facility Fee may be financed, at Lender's
discretion, as an Advance to the Loan.

                SECTION THREE - REPRESENTATIONS AND WARRANTIES
                ----------------------------------------------

       3.1  Acknowledgments of Borrowers. Borrowers each hereby represent and 
            ----------------------------
warrant that: (a) the execution and delivery of this Amendment and compliance by
Borrowers with all of the provisions of this Amendment (i) are within the powers
and purposes of Borrowers; (ii) have been duly authorized or approved by 
Borrowers; and (iii) when executed and delivered by or on behalf of Borrowers 
will constitute valid and binding obligations of Borrowers, enforceable in 
accordance with its terms; (b) Borrowers have no offsets or counterclaims 
against Lender or defenses to the payments due under the Loan Agreement; and (c)
Lender has a first perfected security interest in the Collateral to secure the 
Obligations under the Loan Agreement. Borrowers each reaffirm their obligations 
to pay all amounts due Lender under the Loan Agreement in accordance with the 
terms thereof, as modified hereby.

                       SECTION FOUR - GENERAL PROVISIONS
                       ---------------------------------

       4.1  Loan Agreement Unmodified. Except as otherwise specifically modified
            -------------------------
by this Amendment, all terms and provisions of the Loan Agreement and all liens 
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the 
validity or enforceability of the Loan Agreement, as modified hereby, or alter, 
waive, annul, vary, affect, or impair any provision, condition, or covenant 
contained therein or any rights, power, or remedy granted therein.

       4.2  Parties, Successors and Assigns. This Amendment shall be binding 
            -------------------------------
upon and shall insure to the benefit of Borrowers, Lender, and their respective 
successors and assigns.

       4.3  Severability. To the extent any provision of this Amendment is not 
            ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

       4.4  Total Agreement. This Amendment and all other agreements referred to
            ---------------
herein or delivered in connection herewith shall constitute the entire agreement
between the parties relating to the subject matter hereof and shall not be 
changed or terminated orally.

                                      -2-
<PAGE>
 
        4.5     Construction of Amendment.  Each party hereto has cooperated in 
                -------------------------
the drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party. This Amendment may be amended or
modified only by a written agreement signed by the parties hereto. This
Amendment may be executed in counterparts, each of which when so executed and
delivered shall be deemed an original but all such counterparts together shall
constitute one and the same instrument.

        IN WITNESS WHEREOF, the parties have executed this Amendment as of the 
date first written above.

  
                                "BORROWERS  

                                Cole Taylor Finance Co.; Reliance Acceptance
                                Corp. of Colorado; Reliance Acceptance Corp. of
                                Georgia; Reliance Acceptance Corp. of Florida;
                                Reliance Acceptance Corp. of Indiana; Reliance
                                Acceptance Corp. of New Mexico; Reliance
                                Acceptance Corp. of Ohio; Reliance Acceptance
                                Corp. of Tennessee; Reliance Acceptance Corp. of
                                Texas; Reliance Acceptance Corp. of Kentucky;
                                Reliance Acceptance Corp. of Illinois; Reliance
                                Acceptance Corp. of Minnesota; Reliance
                                Acceptance Corp. of North Carolina; Reliance
                                Acceptance Corp. of South Carolina; Reliance
                                Acceptance Corp. of Arizona; Reliance Acceptance
                                Corp. of Iowa; Reliance Acceptance Corp. of
                                Missouri; Reliance Acceptance Corp. of Nevada;
                                Reliance Acceptance Corp. of Oregon; Reliance
                                Acceptance Corp. of Washington and Reliance
                                Acceptance Corp. of Utah


                                By: /s/ Thomas L. Barrow
                                   -----------------------------------------
                                        Thomas L. Barrow, President


                                By: /s/ Michael D. Bernick
                                   ------------------------------------------
                                        Michael D. Bernick, Vice President


                                "LENDER"

                                BankAmerica Business Credit, Inc.

                                By: /s/ Joseph F. Pignotti
                                   -----------------------------------------
                                        Joseph F. Pignotti,
                                        Executive Vice President

                                      -3-
<PAGE>
 

                 [SIGNATURE OF LENDER CONTINUED ON NEXT PAGE]
<PAGE>
 
                                   "LENDER"

                                   BankAmerica Business Credit, Inc.


                                   By:
                                      ----------------------------------------
                                           Joseph F. Pignotti,
                                           Executive Vice President

                                      -5-
<PAGE>
 
                AMENDMENT NO. 9 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 9 to Loan and Security Agreement ("Amendment") is 
entered into as of September 16, 1996, by and between BankAmerica Business 
Credit, Inc., a Delaware corporation ("Lender") and Cole Taylor Finance Co., a 
Delaware corporation; Reliance Acceptance Corp. of Colorado, a Delaware 
corporation; Reliance Acceptance Corp. of Georgia, a Delaware corporation; 
Reliance Acceptance Corp. of Florida, a Delaware corporation; Reliance 
Acceptance Corp. of Indiana, a Delaware corporation; Reliance Acceptance Corp. 
of New Mexico, a Delaware corporation; Reliance Acceptance Corp. of Ohio, an 
Ohio corporation; Reliance Acceptance Corp. of Texas, a Texas corporation; 
Reliance Acceptance Corp. of Tennessee, a Delaware corporation, Reliance 
Acceptance Corp. of Kentucky, a Delaware corporation; Reliance Acceptance Corp. 
of Illinois, a Delaware corporation; Reliance Acceptance Corp. of Minnesota, a 
Delaware corporation; Reliance Acceptance Corp. of North Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation; 
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance 
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada, 
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware 
corporation; and Reliance Acceptance Corp. of Washington, a Delaware 
corporation, and Reliance Acceptance Corp. of Utah, a Delaware corporation 
(individually and collectively, "Borrowers").


                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:

           (a)  Borrowers and Lender are parties to a Loan and Security 
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as 
amended, modified, and supplemented prior to the date hereof being hereinafter 
referred to as "Loan Agreement"). Unless specifically defined herein, all 
capitalized terms shall be defined in accordance with the Loan Agreement as 
amended by this Amendment.

           (b)  Borrowers and Lender desire to amend the Loan Agreement in 
certain respects subject to the terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.

                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1   Amendment of Section 1.77. Section 1.77 of the Loan Agreement is 
           -------------------------
amended and restated to read in its entirety as follows:

           "1.77 Total Credit Facility shall mean (a) $295,000,000 from 
                 ---------------------
     September 16, 1996 to November 15, 1996, and (b) $250,000,000 at all times 
     thereafter."

               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

     2.1   Conditions Precedent to Amendment. This Amendment shall become 
           ---------------------------------
legally binding upon Borrowers and Lender only when the Borrowers and Cole 
Taylor Finance Co. shall have executed and delivered to Lender or caused to be 
executed and delivered to Lender (a)

                                      -1-
<PAGE>
 
this Agreement and (b) a letter from Cole Taylor Financial Group, Inc. 
reaffirming its obligations under its Letter of Responsibility.

     2.2   New Facility Fee.  On the date Borrowers execute this Amendment, 
           ----------------
Borrower shall pay to Lender a facility fee ("New Facility Fee") of $12,500.  
Borrowers and Lender agree that the New Facility Fee may be financed, at 
Lender's discretion, as an Advance to the Loan.


                 SECTION THREE-REPRESENTATIONS AND WARRANTIES
                 --------------------------------------------

     3.1   Acknowledgments of Borrowers.  Borrowers each hereby represent and 
           ----------------------------
warrant that:  (a) the execution and delivery of this Amendment and compliance 
by Borrowers with all of the provisions of this Amendment (i) are within the 
powers and purposes of Borrowers; (ii) have been duly authorized or approved by 
Borrowers; and (iii) when executed and delivered by or on behalf of Borrowers 
will constitute valid and binding obligations of Borrowers, enforceable in 
accordance with its terms; (b) Borrowers have no offsets or counterclaims 
against Lender or defenses to the payments due under the Loan Agreement; (c) 
Lender has a first perfected security interest in the Collateral to secure the 
Obligations under the Loan Agreement; and (d) no Default or Event of Default has
occurred and is continuing.  Borrowers each reaffirm their obligations to pay 
all amounts due Lender under the Loan Agreement in accordance with the terms 
thereof, as modified hereby.


                      SECTION THREE - GENERAL PROVISIONS
                      ----------------------------------

     4.1   Loan Agreement Unmodified.  Except as otherwise specifically modified
           -------------------------
by this Amendment, all terms and provisions of the Loan Agreement and all liens 
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the
validity or enforceability of the Loan Agreement, as modified hereby, or alter,
waive, annul, vary, affect, or impair any provision, condition, or covenant
contained therein or any rights, power or remedy granted therein.

     4.2   Parties, Successors and Assigns.  This Amendment shall be binding 
           -------------------------------
upon and shall inure to the benefit of Borrowers, Lender, and their respective 
successors and assigns.

     4.3   Severability.  To the extent any provision of this Amendment is not 
           ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of this Amendment.

     4.4   Total Agreement.  This Amendment, the Loan Documents, and all other 
           ---------------
agreements referred to herein or delivered in connection herewith shall 
constitute the entire agreement between the parties relating to the subject 
matter hereof and shall not be changed or terminated orally.

     4.5   Construction of Amendment.  Each party hereto has cooperated in the 
           -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment
shall not be construed against each party. This Amendment may be amended or
modified only by a written agreement signed by the parties hereto. This
Amendment may be executed in counterparts, each of which when so executed

                                      -2-
<PAGE>
 
and delivered shall be deemed an original but all such counterparts together 
shall constitute one and the same instrument.

        IN WITNESS WHEREOF, the parties have executed this Amendment as of the 
date first written above.

  
                                "BORROWERS"

                                Cole Taylor Finance Co.; Reliance Acceptance
                                Corp. of Colorado; Reliance Acceptance Corp. of
                                Georgia; Reliance Acceptance Corp. of Florida;
                                Reliance Acceptance Corp. of Indiana; Reliance
                                Acceptance Corp. of New Mexico; Reliance
                                Acceptance Corp. of Ohio; Reliance Acceptance
                                Corp. of Tennessee; Reliance Acceptance Corp. of
                                Texas; Reliance Acceptance Corp. of Kentucky;
                                Reliance Acceptance Corp. of Illinois; Reliance
                                Acceptance Corp. of Minnesota; Reliance
                                Acceptance Corp. of North Carolina; Reliance
                                Acceptance Corp. of South Carolina; Reliance
                                Acceptance Corp. of Arizona; Reliance Acceptance
                                Corp. of Iowa; Reliance Acceptance Corp. of
                                Missouri; Reliance Acceptance Corp. of Nevada;
                                Reliance Acceptance Corp. of Oregon; Reliance
                                Acceptance Corp. of Washington and Reliance
                                Acceptance Corp. of Utah;


                                By: /s/ Thomas L. Barlow
                                   -----------------------------------------
                                        Thomas L. Barlow, President


                                By: /s/ Michael D. Bernick
                                   ------------------------------------------
                                        Michael D. Bernick, Vice President


                                "LENDER"

                                BankAmerica Business Credit, Inc.

                                By: 
                                   -----------------------------------------
                                        Paul A. Cottone,
                                        Senior Vice President

                                      -3-

<PAGE>
 
        IN WITNESS WHEREOF, the parties have executed this Amendment as of the 
date first written above.

  
                                "BORROWERS  

                                Reliance Acceptance Corporation; Reliance
                                Acceptance Corp. of Colorado; Reliance
                                Acceptance Corp. of Georgia; Reliance Acceptance
                                Corp. of Florida; Reliance Acceptance Corp. of
                                Indiana; Reliance Acceptance Corp. of New
                                Mexico; Reliance Acceptance Corp. of Ohio;
                                Reliance Acceptance Corp. of Tennessee; Reliance
                                Acceptance Corp. of Texas; Reliance Acceptance
                                Corp. of Kentucky; Reliance Acceptance Corp. of
                                Illinois; Reliance Acceptance Corp. of
                                Minnesota; Reliance Acceptance Corp. of North
                                Carolina; Reliance Acceptance Corp. of South
                                Carolina; Reliance Acceptance Corp. of Arizona;
                                Reliance Acceptance Corp. of Iowa; Reliance
                                Acceptance Corp. of Missouri; Reliance
                                Acceptance Corp. of Nevada; Reliance Acceptance
                                Corp. of Oregon; Reliance Acceptance Corp. of
                                Washington and Reliance Acceptance Corp. of
                                Utah


                                By: /s/ Howard B. Silverman
                                   ------------------------------------------
                                        Howard B. Silverman, Chairman


                                By: /s/ James L. Kaplan
                                   ------------------------------------------
                                        James L. Kaplan,
                                        General Counsel and Corporate Secretary


                                "LENDER"

                                BankAmerica Business Credit, Inc.

                                By: /s/ Joseph P. LaCognata
                                   -----------------------------------------
                                        Joseph P. LaCognata,
                                        Executive Vice President

                                      -7-
<PAGE>
 
                AMENDMENT NO.10 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 10 to Loan and Security Agreement ("Amendment") is
entered into as of November 14, 1996, by and between BankAmerica Business
Credit, Inc., a Delaware corporation ("Lender") and Reliance Acceptance
Corporation, a Delaware corporation (formerly known as Cole Taylor Finance Co.);
Reliance Acceptance Corp. of Colorado, a Delaware corporation; Reliance
Acceptance Corp. of Georgia, a Delaware corporation; Reliance Acceptance Corp.
of Florida, a Delaware corporation; Reliance Acceptance Corp. of Indiana, a
Delaware corporation; Reliance Acceptance Corp. of New Mexico, a Delaware
corporation; Reliance Acceptance Corp. of Ohio, an Ohio corporation; Reliance
Acceptance Corp. of Texas, a Texas corporation; Reliance Acceptance Corp. of
Tennessee, a Delaware corporation, Reliance Acceptance Corp. of Kentucky, a
Delaware corporation; Reliance Acceptance Corp. of Illinois, a Delaware
corporation; Reliance Acceptance Corp. of Minnesota, a Delaware corporation;
Reliance Acceptance Corp. of North Carolina, a Delaware corporation; Reliance
Acceptance Corp. of South Carolina, a Delaware corporation; Reliance Acceptance
Corp. of Arizona, a Delaware corporation; Reliance Acceptance Corp. of Iowa, a
Delaware corporation; Reliance Acceptance Corp. of Missouri, a Delaware
corporation; Reliance Acceptance Corp. of Nevada, a Delaware corporation;
Reliance Acceptance Corp. of Oregon, a Delaware corporation; and Reliance
Acceptance Corp. of Washington, a Delaware corporation, and Reliance Acceptance
Corp. of Utah, a Delaware corporation (individually and collectively,
"Borrowers").

                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:


          (a)  Borrowers and Lender are parties to a Loan and Security 
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as 
amended, modified, and supplemented prior to the date hereof being hereinafter 
referred to as "Loan Agreement). Unless specifically defined herein, all 
capitalized terms shall be defined in accordance with the Loan Agreement as 
amended by this Amendment.

          (b)  Borrowers and Lender desire to amend the Loan Agreement in 
certain respects subject to the terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.

                           SECTION ONE - AMENDMENTS
                           -------------------------

     1.1  Amendment of Section 1.77. Section 1.77 of the Loan Agreement is 
          --------------------------
amended and restated to read in its entirety as follows:

          "1.77 Total Credit Facility shall mean (a) $295,000,000 from September
                ---------------------
     30, 1996 to and including December 14, 1996, and (b) $250,000,000 at all
     times thereafter."

                                      -1-
<PAGE>
 
                SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
                -----------------------------------------------

     2.1  Conditions Precedent to Amendment. This Amendment shall become legally
          ---------------------------------
binding upon Borrowers and Lender only when the Borrowers and Reliance 
Acceptance Corporation shall have executed and delivered to Lender or caused to
be executed and delivered to Lender (a) this Amendment and (b) a letter from
Cole Taylor Financial Group, Inc. reaffirming its obligations under its Letter
of Responsibility.

                SECTION THREE - REPRESENTATIONS AND WARRANTIES
                ----------------------------------------------

     3.1  Acknowledgments of Borrowers. Borrowers each hereby represent and 
          ----------------------------
warrant that: (a) the execution and delivery of this Amendment and compliance 
by Borrowers with all of the provisions of this Amendment (i) are within the 
powers and purposes of Borrowers; (ii) have been duly authorized or approved by 
Borrowers; and (iii) when executed and delivered by or on behalf of Borrowers 
will constitute valid and binding obligations of Borrowers, enforceable in 
accordance with its terms; (b) Borrowers have no offsets or counterclaims
against Lender or defenses to the payments due under the Loan Agreement; (c)
Lender has a first perfected security interest in the Collateral to secure the
Obligations under the Loan Agreement; and (d) no Default or Event of Default has
occurred and is continuing. Borrowers each reaffirm their obligations to pay all
amounts due Lender under the Loan Agreement in accordance with the terms
thereof, as modified hereby.


                      SECTION THREE - GENERAL PROVISIONS
                      ----------------------------------

     4.1  Loan Agreement Unmodified. Except as otherwise specifically modified 
          -------------------------
by this Amendment, all terms and provisions of the Loan Agreement and all liens 
and security interests created thereby shall remain unmodified and in full force
and effect.  Nothing contained in this Amendment shall in any way impair the 
validity or enforceablity of the Loan Agreement, as modified hereby, or alter, 
waive, annul, vary, effect, or impair any provision, condition, or covenant 
contained therein or any rights, power, or remedy granted therein.

     4.2  Parties, Successors and Assigns. This Amendment shall be binding upon 
          -------------------------------
and shall inure to the benefit of Borrowers, Lender, and their respective 
successors and assigns.

     4.1  Severability. To the extent any provision of this Amendment is not 
          ------------
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

     4.2  Total Agreement. This Amendment, the Loan Documents, and all other 
          ---------------
agreements referred to herein or delivered in connection herewith shall 
constitute the entire agreement between the parties relating to the subject 
matter hereof and shall not be changed or terminated orally.

     4.3  Construction of Amendment. Each party hereto has cooperated in the 
          -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party. This Amendment may be amended or 
modified only by a written agreement signed by the parties hereto. This 
Amendment may be executed in counterparts, each of which when so executed and 
delivered shall be deemed an original but all such counterparts together shall 
constitute one and the same instrument.

                                      -2-
<PAGE>


     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                       "BORROWERS"

                       Reliance Acceptance Corporation; Reliance Acceptance
                       Corp. of Colorado; Reliance Acceptance Corp. of Georgia; 
                       Reliance Acceptance Corp. of Florida; Reliance Acceptance
                       Corp. of Indiana; Reliance Acceptance Corp. of New
                       Mexico; Reliance Acceptance Corp. of Ohio; Reliance
                       Acceptance Corp. of Tennessee; Reliance Acceptance Corp.
                       of Texas; Reliance Acceptance Corp. of Kentucky; Reliance
                       Acceptance Corp. of Illinois; Reliance Acceptance Corp.
                       of Minnesota; Reliance Acceptance Corp. of North
                       Carolina; Reliance Acceptance Corp. of South Carolina;
                       Reliance Acceptance Corp. of Arizona; Reliance Acceptance
                       Corp. of Iowa; Reliance Acceptance Corp. of Missouri;
                       Reliance Acceptance Corp. of Nevada; Reliance Acceptance
                       Corp. of Oregon; Reliance Acceptance Corp. of Washington
                       and Reliance Acceptance Corp. of Utah

                       By:_____________________________________________
                               Thomas L. Barlow, President            
                                                                      
                       By: /s/ Michael D. Bernick
                          ---------------------------------------------
                               Michael D. Bernick, Vice President     
                                                                      
                       "LENDER"                                       
                                                                      
                       BankAmerica Business Credit, Inc.              
                                                                      
                       By:_____________________________________________
                               Joseph P. La Cognata,                  
                               Executive Vice President                

                                       -3-
<PAGE>
 
     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                       "BORROWERS"

                       Reliance Acceptance Corporation; Reliance Acceptance
                       Corp. of Colorado; Reliance Acceptance Corp. of Georgia; 
                       Reliance Acceptance Corp. of Florida; Reliance Acceptance
                       Corp. of Indiana; Reliance Acceptance Corp. of New
                       Mexico; Reliance Acceptance Corp. of Ohio; Reliance
                       Acceptance Corp. of Tennessee; Reliance Acceptance Corp.
                       of Texas; Reliance Acceptance Corp. of Kentucky; Reliance
                       Acceptance Corp. of Illinois; Reliance Acceptance Corp.
                       of Minnesota; Reliance Acceptance Corp. of North
                       Carolina; Reliance Acceptance Corp. of South Carolina;
                       Reliance Acceptance Corp. of Arizona; Reliance Acceptance
                       Corp. of Iowa; Reliance Acceptance Corp. of Missouri;
                       Reliance Acceptance Corp. of Nevada; Reliance Acceptance
                       Corp. of Oregon; Reliance Acceptance Corp. of Washington
                       and Reliance Acceptance Corp. of Utah

                       By: /s/ Thomas L. Barlow
                          ---------------------------------------------
                               Thomas L. Barlow, President            
                                                                      
                       By:_____________________________________________
                               Michael D. Bernick, Vice President     
                                                                      
                       "LENDER"                                       
                                                                      
                       BankAmerica Business Credit, Inc.              
                                                                      
                       By:_____________________________________________
                               Joseph P. La Cognata,                  
                               Executive Vice President                

                                      -3-

<PAGE>
 
                AMENDMENT NO. 11 TO LOAN AND SECURITY AGREEMENT

     This Amendment No. 11 to Loan and Security Agreement ("Amendment") is 
entered into as of November 20, 1996, by and between BankAmerica Business 
Credit, Inc., a Delaware corporation ("Lender") and Reliance Acceptance 
Corporation (formerly, "Cole Taylor Finance Co.") (individually, "Reliance"), a 
Delaware corporation; Reliance Acceptance Corp. of Colorado, a Delaware 
corporation; Reliance Acceptance Corp. of Georgia, a Delaware corporation; 
Reliance Acceptance Corp. of Florida, a Delaware corporation; Reliance 
Acceptance Corp. of Indiana, a Delaware corporation; Reliance Acceptance Corp. 
of New Mexico, a Delaware corporation; Reliance Acceptance Corp. of Ohio, an 
Ohio corporation; Reliance Acceptance Corp. of Texas, a Texas corporation; 
Reliance Acceptance Corp. of Tennessee, a Delaware corporation, Reliance 
Acceptance Corp. of Kentucky, a Delaware corporation; Reliance Acceptance Corp. 
of Illinois, a Delaware corporation; Reliance Acceptance Corp. Minnesota, a 
Delaware corporation; Reliance Acceptance Corp. of North Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of South Carolina, a Delaware 
corporation; Reliance Acceptance Corp. of Arizona, a Delaware corporation;
Reliance Acceptance Corp. of Iowa, a Delaware corporation; Reliance Acceptance
Corp. of Missouri, a Delaware corporation; Reliance Acceptance Corp. of Nevada,
a Delaware corporation; Reliance Acceptance Corp. of Oregon, a Delaware
corporation; Reliance Acceptance Corp. of Washington, a Delaware corporation,
and Reliance Acceptance Corp. of Utah, a Delaware corporation (Reliance and the
other entities, individually and collectively, "Borrowers").


                                   RECITALS
                                   --------

     This Amendment is entered into in reference to the following facts:

          (a)  Borrowers and Lender are parties to a Loan and Security 
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as 
amended, modified, and supplemented prior to the date hereof being hereinafter 
referred to as "Loan Agreement"). Unless specifically defined herein, all 
capitalized terms shall be defined in accordance with the Loan Agreement as 
amended by this Amendment.

          (b)  Reliance and certain of the other Borrowers are about to enter 
into a certain transaction ("Securitization Transaction") whereby:

               (i)  Certain of the Borrowers will sell to Reliance certain of 
their Contracts and certain other Property related thereto, pursuant to the 
terms of a certain Receivables Purchase Agreement, dated as of November 20, 
1996;

               (ii)  Reliance will concurrently therewith enter into a Pooling 
and Servicing Agreement, dated as of November 20, 1996, with Reliance Auto 
Receivables Corporation (the "Issuer"), a wholly owned subsidiary of Reliance, 
whereby Reliance will sell and/or contribute to the Issuer those Contracts and 
the other related Property acquire from those Borrowers;

                                      -1-
<PAGE>
 
               (iii)  The Issuer will concurrently therewith enter into an 
Indenture, dated as of November 20, 1996, with Harris Trust and Savings Bank 
("Trustee"), whereby the Issuer will sell its notes to various third parties and
will grant to the Trustee a security interest in the "Indenture Collateral," as 
defined in the Indenture, including the Contracts and the other related 
Property; and 

               (iv)  Lender will release its Lien in those Contracts and the 
other Property related thereto.

          (c)  Borrowers desire to amend the Loan Agreement to facilitate the 
Securitization Transaction and Lender is willing to do so.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, 
the parties agree as follows.


                           SECTION ONE - AMENDMENTS
                           ------------------------

     1.1  Amendment of Chief Executive Office. The address of the Borrowers' 
          -----------------------------------
chief executive office is hereby amended to be "400 North Loop 1604 East, Suite 
210, San Antonio, Texas 78232," in place and instead of "350 East Dundee Road, 
Suite 203, Wheeling, Illinois, 60090."

     1.2  Amendment of Article One, Article One of the Loan Agreement is hereby 
          ------------------------
amended by the addition of twenty new sections, numbered 1.85 through 1.104, 
which shall read in their entirety as follows:

          "1.85 Collateral Insurance means a vendor's single interest
                --------------------
     or other collateral protection insurance policy with respect to a
     Financed Vehicle.

          1.86  Dealer Assignment means an assignment executed by a 
                -----------------
     Dealer conveying a Receivable to an Originator.

          1.87  Financed Vehicle means a new or used automobile or
                ----------------
     light truck, together with all accessions thereto, securing or
     purporting to secure a Contract Debtor's indebtedness under a
     Receivable.

          1.88  Force-Placed Insurance means insurance which the
                ----------------------
     Servicer has, if a Contract Debtor fails to obtain or maintain
     physical loss and damage insurance, obtained with respect to the
     related Financed Vehicle and advanced the premiums for such
     insurance on behalf of the Contract Debtor.

          1.89  Indenture shall mean that certain Indenture, dated as 
                ---------
     of

                                      -2-
<PAGE>
 
     November 20, 1996, between the Issuer and Harris Trust and 
     Savings Bank.

          1.90  Issuer means Reliance Auto Receivables Corporation, a 
                ------
     Delaware corporation, a wholly owned Subsidiary of Reliance.

          1.91  Insurance Policy means any insurance policy benefiting
                ----------------
     the holder of a Receivable providing loss or physical damage, 
     credit life, credit disability, theft, mechanical breakdown or 
     similar coverage with respect to the Financed Vehicle or the 
     related Contract Debtor.

          1.92  Liquidated Receivable means a Receivable as to which 
                ---------------------
     (i) 120 or more days have elapsed since the Servicer repossessed 
     the Financed Vehicle (following the expiration of any applicable 
     redemption period), (ii) the Servicer has determined in good 
     faith that all amounts it expects to recover have been received, 
     (iii) 5% of more of any payment scheduled thereunder has become 
     180 or more days delinquent, or (iv) the related Financed Vehicle
     has been sold and all of the proceeds have been received with 
     respect to such Receivable (including proceeds of Insurance 
     Policies)

          1.93  Liquidation Proceeds means all amounts realized with 
                --------------------
     respect to a Liquidated Receivable, including proceeds of 
     Insurance Policies, net of (i) reasonable out-of-pocket expenses 
     incurred by the Servicer in connection with the collection of 
     such Receivable and the repossession and disposition of the 
     related Financed Vehicle and (ii) amounts that are required to be
     refunded to the Contract Debtor on such Receivable.

          1.94  Originators shall mean Reliance Acceptance Corp. of 
                -----------
     Florida, Reliance Acceptance Corp. of Georgia, Reliance 
     Acceptance Corp. of Illinois, Reliance Acceptance Corp. of 
     Indiana, Reliance Acceptance Corp. of Kentucky, Reliance 
     Acceptance Corp. of Missouri, Reliance Acceptance Corp. of 
     Nevada, Reliance Acceptance Corp. of New Mexico, Reliance 
     Acceptance Corp. of North Carolina, Reliance Acceptance Corp. of 
     Ohio, Reliance Acceptance Corp. of South Carolina, Reliance 
     Acceptance Corp. of Tennessee, and Reliance Acceptance Corp. of 
     Texas.

          1.95  Other Conveyed Property means, with respect to each 
                -----------------------
     Receivable (1) all of the right, title, and interest of Reliance 
     and the Originators in, to and under a Receivable and all monies 
     paid or payable thereon or in respect thereof on and after 
     November 1, 1996, including Liquidation Proceeds and recoveries 
     received with respect to such Receivable; (2) the security 
     interests in the Financed Vehicles granted by the Contract Debtor
     pursuant to the Receivable and any other interest of Reliance and
     the Originators in the Financed Vehicles and other property

                                   -3-
<PAGE>
 
     (including the right to receive future Liquidation Proceeds) that
     secures a Receivable and that has been acquired by Reliance or an
     Originator pursuant to the liquidation of any such Receivable;
     (3) The Insurance Policies and any proceeds of any Insurance
     Policies relating to the Receivable, the related Contract Debtor
     or the related Financed Vehicle, including rebates of premiums,
     all Collateral Insurance and any Fore-Placed Insurance relating
     to the Receivable; (4) the rights of Reliance and any Originator
     against Dealers with respect to the Receivable under the Dealer
     Agreements and the Dealer Assignments; (5) all items contained in
     the Receivables File related to the Receivable and any and all
     other documents that Reliance or the Originators keep on file in
     accordance with their customary procedures relating to the
     Receivable, the Contract Debtors or the related Financed
     Vehicle; and (6) all proceeds and related investments of any of
     the foregoing, all present and future claims, demands, causes and
     choses in action in respect of any or all of the foregoing and
     all payments on or under any all proceeds of every kind and nature
     whatsoever in respect of any or all of the foregoing.

          1.96  Pooling and Servicing Agreement shall mean that certain 
                -------------------------------
     Pooling and Servicing Agreement relating to Reliance Acceptance Auto
     Receivables Corporation Asset Backed Notes, Series 1996-A,
     between the Issuer, Reliance, as servicer, and Harris Trust and
     Savings Bank, as backup servicer and as trustee.

          1.97  Receivable shall mean each of the Contracts listed in 
                ----------
     Exhibit 1.97 to this Agreement.

          1.98  Receivables File means the following documents, 
                ----------------
     electronic entries, instruments and writings pertaining to a
     particular Receivable: (i) the original of a Receivable (together
     with any agreements modifying the Receivable, including extension
     agreements, (ii) the original credit application, or copy
     thereof, of each Contract Debtor, executed by each such Contract
     Debtor; and (iii) the original certificate of title of the
     Financed Vehicle.

          1.99  Reliance shall mean Reliance Acceptance Corporation, 
                --------
     a Delaware corporation, formerly known as Cole Taylor Finance Co.

          1.100  Reliance Purchase Agreement shall mean that certain 
                 ---------------------------
     Receivables Purchase Agreement, dated as of November 20, 1996,
     between each of the Originators, as sellers, and Reliance, as
     buyer.

          1.101  Servicer shall mean Reliance or such other entity 
                 --------
     acting as servicer under the terms of the Pooling and Servicing 
     Agreement

          1.102  Securitization Transaction shall mean a transaction 
                 --------------------------
     whereby

                                 -4-
<PAGE>
 
     (i) the Originators will sell to Reliance the Receivables and 
     the Other Conveyed Property, pursuant to the terms of the 
     Reliance Purchase Agreement, (ii) Reliance will concurrently 
     therewith enter into the Pooling and Servicing Agreement with
     the Issuer, whereby Reliance will sell and/or contribute to 
     the Issuer the Receivables and the Other Conveyed Property; 
     (iii) the Issuer will concurrently therewith enter into the 
     Indenture with Harris Trust and Savings Bank ("Trustee"), 
     whereby the Issuer will sell its notes to various third 
     parties and will grant to the Trustee a security interest in 
     the "Indenture Collateral," as defined in the Indenture, 
     including the Receivables and the Other Conveyed Property; 
     and (iv) Lender will release its Lien in the Receivables and 
     Other Conveyed Property.

          1.103  Subservicing Agreement shall mean the Subservicing
                 ----------------------
     Agreement, dated as of November 20, 1996, between the Originators
     named therein, as Subservicers, and the Servicer.

          1.104  Subservicer means any of the Persons named as a 
                 -----------
     Subservicer in the Subservicing Agreement."

     1.3  Amendment of Section 1.15. Section 1.15 of the Loan Agreement is 
          -------------------------
hereby amended by the addition of the following provisions, which shall be 
inserted at the end of that section:

     "Notwithstanding any provision of this Section 1.15 and any of the other 
     provisions of this Agreement to the contrary, the term "Collateral" shall 
     not include the Receivables and the Other Conveyed Property."

     1.4  Amendment of Section 1.64. Section 1.64 of the Loan Agreement is 
          -------------------------
hereby amended by the addition of a new clause "(i)", which shall be inserted 
immediately after clause "(h)" thereof and which shall read in its entirety as 
follows:

     "(i) Liens on the Issuer's Property, including the Receivables 
     and Other Conveyed Property."

     1.5  Amendment of Article Five. Article Five of the Loan Agreement is 
          -------------------------
hereby amended by the addition of a new section, numbered 5.9, which shall read 
in its entirety as follows:

          "5.9  Release of Collateral. Borrower shall not sell or 
                ---------------------
     otherwise dispose of the Collateral or any interest therein.
     Notwithstanding the foregoing, Lender hereby releases its 
     Lien on the Receivables and the Other Conveyed Property, 

                                      -5-
<PAGE>
 
     1.6  Amendment of Article Six. Article Six of the Loan Agreement is hereby 
          ------------------------
amended by the addition of a new section, numbered 6.5, which shall read in its 
entirety as follows:

          "6.5  The Borrower covenants and agrees that at all times
     after December 20, 1996, it shall (a) not deposit any of the
     payments or other proceeds received with respect to the
     Receivables and Other Conveyed Property into the Collection
     Account, and (b) deposit into the Collection Account only the
     proceeds of the Collateral. Upon Lender's request, the Borrower
     shall promptly deliver to Lender a report, satisfactory to Lender
     in form and content and for such periods of time as Lender may
     specify, indicating in detail the sources and applications of (i)
     the funds deposited into the Collection Account and (ii) the funds
     received and paid out under the terms of the Indenture and the
     Pooling and Servicing Agreement, including a list of the Contracts
     and Receivables with respect to which such funds were received,
     and the amount received in connection with each such Contract and
     Receivable"

     1.7  Amendment of Section 8.5. Section 8.5 of the Loan Agreement is hereby 
          ------------------------
amended and restated to read in its entirety as follows:

          "8.5  Guaranties. Except for the joint and several liability 
                ----------
     of Borrower under this Agreement, Borrower shall not become or be 
     liable in respect of any Guaranty, except (a) by endorsement, in 
     the ordinary

                                 -6-
<PAGE>
 
     course of business, of negotiable instruments for deposit or
     collection issued in the ordinary course of Borrower's business,
     and (b) the Guaranties under the terms of the Reliance Purchase
     Agreement, the Indenture, the Pooling and Servicing Agreement, and
     other Related Documents (as defined in the Pooling and Servicing
     Agreement)."

     1.8  Amendment of Section 8.16.  Section 8.16 of the Loan Agreement is 
          -------------------------
hereby amended by the addition of the following provisions, which shall be 
inserted at the end of that section:

     "Notwithstanding any provision of this Section 8.16 to the
                                            ------------
     contrary, the Borrower may incorporate the Issuer, provided,
     however, the Issuer shall not be considered a "Borrower" under
     this Agreement, none of the Issuer's Property shall be pledged to
     the Lender as Collateral, and none of the capital stock issued by
     the Issuer shall be pledged to the Lender."

     1.9  Amendment of Section 8.18.  Section 8.18 of the Loan Agreement is 
          -------------------------
hereby amended by the addition of a clause "(g)", which shall be inserted 
immediately after clause "(f)" of that section, and which shall read in its 
entirety as follows:

     "(g) Debt incurred under the Reliance Purchase Agreement, the
     Indenture, the Pooling and Servicing Agreement and the Related
     Documents (as defined in the Pooling and Servicing Agreement)."


     1.10 Addition of Exhibit.  The Loan Agreement is hereby amended by the 
          -------------------
addition of an Exhibit 1.97, attached hereto as Annex-I, which is to be inserted
at the end of the Loan Agreement.


               SECTION TWO - CONDITIONS PRECEDENT TO AMENDMENTS
               ------------------------------------------------

     2.1  Conditions Precedent to Amendment.  This Amendment shall become 
          ---------------------------------
legally binding upon Borrowers and Lender only when the Borrowers shall have 
executed and delivered to Lender or caused to be executed and delivered to 
Lender (a) this Amendment and (b) a letter from Cole Taylor Financial Group, 
Inc. reaffirming its obligations under its Letter of Responsibility.


                SECTION THREE - REPRESENTATIONS AND WARRANTIES
                ----------------------------------------------

     3.1  Acknowledgements of Borrowers.  Each of the Borrowers hereby 
          -----------------------------
represents and warrants that: (a) the execution and delivery of this Amendment 
and compliance by Borrowers with all of the provisions of this Amendment (i) are
within the powers and purposes of Borrowers; (ii) have been duly authorized or 
approved by Borrowers; and (iii) when executed and delivered by or on behalf of 
Borrowers will constitute valid and binding obligations of Borrowers, 
enforceable in accordance with its terms; (b) Borrowers have no offsets or

                                      -7-
<PAGE>
 
counterclaims against Lender or defenses to the payments due under the Loan 
Agreement; (c) Lender has a first perfected security interest in the Collateral 
to secure the Obligations under the Loan Agreement; (d) no Default or Event of 
Default has occurred and is continuing or would exist after giving effect to 
each sale of Receivables and Other Conveyed Property pursuant to the 
Securitization Transaction, and (e) no Over Advance would exist after giving 
effect to the sale of the Receivables and the Other Conveyed Property pursuant 
to the Securitization Transaction. Each Borrower reaffirms its obligations to 
pay all amounts due Lender under the Loan Agreement in accordance with the terms
thereof, as modified hereby.

     3.2  Agreement of Lender.  The Lender agrees, upon satisfaction of the 
          -------------------
conditions specified in Article Two of this Agreement, to deliver to the 
Borrowers, from time to time, UCC-3 partial releases and such other documents as
the Borrowers may reasonably request, to more fully evidence the Lender's 
release of its Lien in the Receivables and the Other Conveyed Property.


                       SECTION FOUR - GENERAL PROVISIONS
                       ---------------------------------

     4.1  Loan Agreement Unmodified. Except as otherwise specifically modified 
          -------------------------
by this Amendment, all terms and provisions of the Loan Agreement and all liens 
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the 
validity or enforceability of the Loan Agreement, as modified hereby, or alter, 
waive, annul, vary, affect, or impair any provision, condition, or covenant 
contained therein or any rights, power, or remedy granted therein.

     4.2  Parties, Successors and Assigns.  This Amendment shall be binding upon
          -------------------------------
and shall inure to the benefit of Borrowers, Lender, and their respective 
successors and assigns.

     4.3  Severability.  To the extent any provision of this Amendment is not 
          ------------ 
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment.

     4.4  Total Agreement. This Amendment, the Loan Documents, and all other 
          ---------------
agreements referred to herein or delivered in connection herewith shall 
constitute the entire agreement between the parties relating to the subject 
matter hereof and shall not be changed or terminated orally.

     4.5  Construction of Amendment.  Each party hereto has cooperated in the 
          -------------------------
drafting and preparation of this Amendment and, as a result, this Amendment 
shall not be construed against any party. This Amendment may be amended or 
modified only by a written agreement signed by the parties hereto. This
Amendment may be executed in counterparts, each of which when so executed

                                      -8-
<PAGE>
 
///
///
///
///
///
///
///
///
///
///
///
///
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                                      -9-
<PAGE>

and delivered shall be deemed an original but all such counterparts together
shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                       "BORROWERS"

                       Reliance Acceptance Corporation; Reliance Acceptance
                       Corp. of Colorado; Reliance Acceptance Corp. of Georgia; 
                       Reliance Acceptance Corp. of Florida; Reliance Acceptance
                       Corp. of Indiana; Reliance Acceptance Corp. of New
                       Mexico; Reliance Acceptance Corp. of Ohio; Reliance
                       Acceptance Corp. of Tennessee; Reliance Acceptance Corp.
                       of Texas; Reliance Acceptance Corp. of Kentucky; Reliance
                       Acceptance Corp. of Illinois; Reliance Acceptance Corp.
                       of Minnesota; Reliance Acceptance Corp. of North
                       Carolina; Reliance Acceptance Corp. of South Carolina;
                       Reliance Acceptance Corp. of Arizona; Reliance Acceptance
                       Corp. of Iowa; Reliance Acceptance Corp. of Missouri;
                       Reliance Acceptance Corp. of Nevada; Reliance Acceptance
                       Corp. of Oregon; Reliance Acceptance Corp. of Washington
                       and Reliance Acceptance Corp. of Utah

                       By:_____________________________________________
                               Thomas L. Barlow, President            
                                                                      
                       By:_____________________________________________
                               Michael D. Bernick, Vice President     
                                                                      
                       "LENDER"                                       
                                                                      
                       BankAmerica Business Credit, Inc.              
                                                                      
                       By: /s/ Joseph P. La Cognata 
                          ---------------------------------------------
                               Joseph P. La Cognata,                  
                               Executive Vice President                

                                     -10-
<PAGE>
 
and delivered shall be deemed an original but all such counterparts together
shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                       "BORROWERS"

                       Reliance Acceptance Corporation; Reliance Acceptance
                       Corp. of Colorado; Reliance Acceptance Corp. of Georgia; 
                       Reliance Acceptance Corp. of Florida; Reliance Acceptance
                       Corp. of Indiana; Reliance Acceptance Corp. of New
                       Mexico; Reliance Acceptance Corp. of Ohio; Reliance
                       Acceptance Corp. of Tennessee; Reliance Acceptance Corp.
                       of Texas; Reliance Acceptance Corp. of Kentucky; Reliance
                       Acceptance Corp. of Illinois; Reliance Acceptance Corp.
                       of Minnesota; Reliance Acceptance Corp. of North
                       Carolina; Reliance Acceptance Corp. of South Carolina;
                       Reliance Acceptance Corp. of Arizona; Reliance Acceptance
                       Corp. of Iowa; Reliance Acceptance Corp. of Missouri;
                       Reliance Acceptance Corp. of Nevada; Reliance Acceptance
                       Corp. of Oregon; Reliance Acceptance Corp. of Washington
                       and Reliance Acceptance Corp. of Utah

                       By:_____________________________________________
                               Thomas L. Barlow, President            
                                                                      
                       By: /s/ Michael D. Bernick
                          ---------------------------------------------
                               Michael D. Bernick, Vice President     
                                                                      
                       "LENDER"                                       
                                                                      
                       BankAmerica Business Credit, Inc.              
                                                                      
                       By:_____________________________________________
                               Joseph P. La Cognata,                  
                               Executive Vice President                

                                     -8-

<PAGE>
 
and delivered shall be deemed an original but all such counterparts together
shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                       "BORROWERS"

                       Reliance Acceptance Corporation; Reliance Acceptance
                       Corp. of Colorado; Reliance Acceptance Corp. of Georgia; 
                       Reliance Acceptance Corp. of Florida; Reliance Acceptance
                       Corp. of Indiana; Reliance Acceptance Corp. of New
                       Mexico; Reliance Acceptance Corp. of Ohio; Reliance
                       Acceptance Corp. of Tennessee; Reliance Acceptance Corp.
                       of Texas; Reliance Acceptance Corp. of Kentucky; Reliance
                       Acceptance Corp. of Illinois; Reliance Acceptance Corp.
                       of Minnesota; Reliance Acceptance Corp. of North
                       Carolina; Reliance Acceptance Corp. of South Carolina;
                       Reliance Acceptance Corp. of Arizona; Reliance Acceptance
                       Corp. of Iowa; Reliance Acceptance Corp. of Missouri;
                       Reliance Acceptance Corp. of Nevada; Reliance Acceptance
                       Corp. of Oregon; Reliance Acceptance Corp. of Washington
                       and Reliance Acceptance Corp. of Utah

                       By: /s/ Thomas L. Barlow
                          ---------------------------------------------
                               Thomas L. Barlow, President            
                                                                      
                       By:_____________________________________________
                               Michael D. Bernick, Vice President     
                                                                      
                       "LENDER"                                       
                                                                      
                       BankAmerica Business Credit, Inc.              
                                                                      
                       By:_____________________________________________
                               Joseph P. La Cognata,                  
                               Executive Vice President                

                                      -9-

<PAGE>

                            WAIVER OF DEFAULTS AND
               AMENDMENT NO. 12 TO LOAN AND SECURITY AGREEMENT

     This Waiver of Defaults and Amendment No. 12 to Loan and Security Agreement
("Amendment") is entered into as of March 3, 1997, by and between BankAmerica
Business Credit, Inc. ("Lender") and Reliance Acceptance Corporation; Reliance
Acceptance Corp. of Colorado; Reliance Acceptance Corp. of Georgia; Reliance
Acceptance Corp. of Florida; Reliance Acceptance Corp. of Indiana; Reliance
Acceptance Corp. of New Mexico; Reliance Acceptance Corp. of Ohio; Reliance
Acceptance Corp. of Texas; Reliance Acceptance Corp. of Tennessee; Reliance
Acceptance Corp. of Kentucky; Reliance Acceptance Corp. of Illinois; Reliance
Acceptance Corp. of Minnesota; Reliance Acceptance Corp. of North Carolina;
Reliance Acceptance Corp. of South Carolina; Reliance Acceptance Corp. of
Arizona; Reliance Acceptance Corp. of Iowa; Reliance Acceptance Corp. of
Missouri; Reliance Acceptance Corp. of Nevada; Reliance Acceptance Corp. of
Oregon; Reliance Acceptance Corp. of Washington; and Reliance Acceptance Corp.
of Utah (collectively, the "Borrowers").

                                   RECITALS

     This Amendment is entered into in reference to the following facts:

          (a) The Borrowers and the Lender are parties to a Loan and Security
Agreement, dated as of July 12, 1994 (the Loan and Security Agreement, as
amended, modified, and supplemented prior to the date hereof being hereinafter
referred to as the "Loan Agreement"). Unless specifically defined herein, all
capitalized terms shall be defined in accordance with the Loan Agreement as
amended by this Amendment.

          (b) Reliance Acceptance Group, Inc. (f/k/a Cole Taylor Financial
Group, Inc.) ("RAGI"), the sole shareholder of Reliance Acceptance Corporation
(f/k/a Cole Taylor Finance Co.) ("Old Reliance"), agreed to a transaction (the
"Spin-Off Transaction") whereby, among other things, (i) Cole Taylor Bank, a
wholly-owned subsidiary of RAGI, formed a new wholly-owned subsidiary, Cole
Taylor Auto Finance, Inc. ("CTAF"), to which Cole Taylor Bank contributed its
used automobile receivables business and a certain amount in cash, (ii) Cole
Taylor Bank distributed the capital stock of CTAF to RAGI, (iii) Old Reliance
merged with and into CTAF, and CTAF, as the surviving corporation, changed its
name to "Reliance Acceptance Corporation" ("New Reliance"), (iv) RAGI
transferred all of the outstanding shares of Cole Taylor Bank and certain other
assets of RAGI to certain shareholders of RAGI, in exchange for such
shareholders' outstanding shares of RAGI, and (v) Cole Taylor Financial Group,
Inc. changed its name to "Reliance Acceptance Group, Inc.", all as more
particularly described in a certain Amended and Restated Share Exchange
Agreement ("Share Exchange Agreement"), dated as of June 12, 1996, between RAGI
and such shareholders.

          (c) The Borrowers desire that the Lender (i) consent to the Spin-Off
Transaction, (ii) waive certain defaults existing under the Loan Agreement, and
(iii) amend the Loan Agreement in certain respects and the Lender is willing to
do so.

                                      -1-
<PAGE>
 
     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows.


                              SECTION ONE CONSENT
                              -------------------

     1.1  Consent to Spin-Off Transaction. Notwithstanding any provision of the
Loan Documents which may restrict or prohibit the entering into and the
consummation of the transactions described in the Share Exchange Agreement, the
Lender hereby consents to the entering into and consummation of the Spin-Off
Transaction, and the Lender hereby further waivers any Events of Default that
may have occurred in connection therewith.


                       SECTION TWO - WAIVER OF DEFAULTS
                       --------------------------------

     2.1  Waiver of Defaults. The Lender hereby waives the following Events of
Default: (a) the ratio of (i) the aggregate amount of all Debt, to (ii) Adjusted
Tangible Net Worth, as of each of December 31, 1996 and January 31, 1997, was
greater than the maximum permitted ratio under Section 8.6 of the Loan
Agreement; (b) the ratio of (i) Adjusted Net Earnings from Operations for the
quarter ending December 31, 1996, plus interest expense and income taxes for
such quarter, to (ii) interest expense for such quarter, as of the quarter
ending December 31, 1996, was less than the minimum required ratio under Section
8.7 of the Loan Agreement; (c) the ratio of (i) all Debt minus all Subordinated
Debt, to (ii) Borrowing Base, as of each of December 31, 1996 and January 31,
1997, was greater than the maximum permitted ratio under Section 8.11 of the
Loan Agreement; and (d) the Borrower's Adjusted Tangible Net Worth, as of each
of December 31, 1996 and January 31, 1997, was less than the minimum required
amount under Section 8.13 of the Loan Agreement.

     2.2  Effect of Waiver. The waiver set forth in Section 2.1 above is only
applicable and shall only be effective in the specific instance and for the
specific purpose for which given. Such waiver is expressly limited to the facts
and circumstances referred to herein and shall not operate (a) as a waiver of or
consent to non-compliance with any other section of the Loan Agreement or any
other Loan Document, (b) as a waiver of, or a restriction on or prejudice with
respect to, any right, power or remedy of the Lender under the Loan Agreement or
any other Loan Document, or (c) as a waiver of or consent to any other Event of
Default or Default under the Loan Agreement or any other Loan Document.


                          SECTION THREE - ASSUMPTION
                          --------------------------

     3.1  Assumption by New Reliance.  New Reliance hereby absolutely and
unconditionally assumes and confirms all Obligations existing under the Loan
Documents as of the date hereof, expressly grants to the Lender the security
interests referenced therein in regard to the Property of New Reliance of the
type specified therein, absolutely and unconditionally assumes and confirms all
obligations and liabilities of Old Reliance under any and all agreements,
instruments and other documents to which Old Reliance was a party, and

                                      -2-
<PAGE>
 
acknowledges and agrees that it shall be jointly and severally liable for all 
Obligations, as more particularly provided in Section 12.4 of the Loan 
Agreement. The term "Borrower" as used in the Loan Agreement and the other Loan 
Documents is hereby amended to include New Reliance in addition to all of the 
other Borrowers.

                           SECTION FOUR - AMENDMENTS

     4.1 Amendment to Section 1.9. Section 1.9 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:

          "1.9 Availability means, as of any date of calculation, the remainder
     of (a) the sum of (i) the Advance Rate multiplied by the aggregate amount
     of all Net Contract Payments payable under all Eligible Contracts which are
     not Alternative Finance Plan Eligible Contracts, plus (ii) the Advance Rate
     multiplied by the lesser of (1) the aggregate purchase price paid by the
     Borrower to Dealers for Alternative Finance Plan Eligible Contracts, or (2)
     the aggregate amount of all Net Contract Payments payable under such
     Contracts, minus (b) the sum of (i) the Dealer Reserve, plus (ii) the
     Commercial Paper indebtedness (after giving effect to the application of
     any Loan proceeds to the payment of such Commercial Paper Indebtedness);
     provided, however, (a) the Net Contract Payments payable under Old Amo
     Contracts included in the Availability shall at no time exceed five percent
     (5%) of all Net Contract Payments, and (b) the Net Contract Payments
     payable under Alternative Finance Plan Eligible Contracts included in the
     Availability shall at no time exceed ten percent (10%) of all Net Contract
     Payments."

     4.2 Amendment of Section 1.79. Section 1.79 of the Loan Agreement is hereby
deleted from the Loan Agreement in its entirety and shall be of no further force
or effect. 

     4.3 Amendment of Section 8.6. Section 8.6 of the Loan Agreement is hereby 
amended and restated to read in its entirety as follows:

          "8.6 Total Debt Ratio. The Borrower shall not permit the ratio,
     calculated on a consolidated basis as of the last day of each month, of (a)
     the aggregate amount of all Debt, to (b) Adjusted Tangible Net Worth, to
     exceed 6 to 1."

     4.4 Amendment of Section 8.7. Section 8.7 of the Loan Agreement is hereby 
amended and restated to read in its entirety as follows:

          "8.7 Minimum Interest Coverage Ratio. The Borrower shall not permit
     the ratio, calculated on a consolidated basis as of the last day of each
     quarter in each Fiscal Year, of (a) Adjusted Net Earnings from Operations
     for such fiscal quarter, plus interest expense and income taxes


   
                                      -3-

<PAGE>
 
     for such quarter, minus Distributions made during such quarter, to (b) 
     interest expense for such quarter, to be less than 1.75 to 1."

     4.5 Amendment of Section 8.8. Section 8.8 of the Loan Agreement is hereby 
amended and restated to read in its entirety as follows:

           "8.8. Prohibition on Distributions; Equity Capital Changes. The
     Borrower shall not, without the Lender's prior written consent, directly or
     indirectly, (a) declare, make or incur any liability to make any
     Distribution; or (b) make any change in its capital equity structure which
     would reasonably be expected to materially and adversely affect payment of
     the Loan or other Obligations; provided, however, the Borrower may (a) make
     Distributions during its Fiscal Year ending December 31, 1997, provided,
     (i) the aggregate amount of all such Distributions does not exceed
     $6,000,000, and (ii) at the time of the Distributions no Default and no
     Event of Default has occurred and is continuing or would rank therefrom,
     after giving effect to such Distributions."

     4.6 Amendment of Section 8.11. Section 8.11 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:

           "8.11 Unsubordinated Debt to Borrowing Base. The Borrower shall not
     permit the ratio, calculated on a consolidated basis as of the last day of
     each month, of (a) all Debt minus all Subordinated Debt, to (b) Borrowing
     Base, to exceed 3.5 to 1."

     4.7 Amendment of Section 8.13. Section 8.13 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:

           "8.13 Minimum Adjusted Tangible Net Worth. The Borrower shall not
     permit its Adjusted Tangible Net Worth, calculated on a consolidated basis
     as of the last day of each month, to be less than (a) $90,000,000 prior to
     and including December 30, 1997; and (b) $120,000,000 thereafter."

     4.8 Amendment of Section 12.6. Section 12.6 of the Loan Agreement is hereby
amended by the addition of a new sentence to be inserted at the end of that
section which shall read in its entirety as follows:

      "Notwithstanding any provision of this Section to the contrary, the
      Borrower shall account for all asset securitization transactions, such as
      the Securitization Transaction, using the 'as earned' method, and not the
      'gain-on-sale' method of accounting treatment."


                                      -4-


<PAGE>

 

                SECTION FIVE - CONDITIONS PRECEDENT TO AMENDMENT
                ----------------------------------------------

     5.1  Conditions Precedent to Amendment. This Amendment (including the
consent and waiver contained in Section 1.1 above and the waiver contained in
Section 2.1 above) shall become legally binding upon the Borrowers and the
Lender only when the Borrowers shall have (a) executed and delivered to the
Lender this Amendment, together with the following items, satisfactory to the
Lender in form and content: (i) a copy, certified by the Delaware Secretary of
State, of the articles of incorporation of New Reliance, (ii) a Certificate of
the Secretary or an Assistant Secretary of New Reliance, certifying as to the 
by-laws of New Reliance, resolutions of the Board of Directors of New Reliance
authorizing the execution and delivery by New Reliance of this Amendment, and
the incumbency and signatures of officers of New Reliance authorized to execute
this amendment and other Loan Documents on behalf of New Reliance, (iii) a
Certificate of the Secretary or an Assistant Secretary of New Reliance,
certifying as true and correct the copies attached thereto of the documents
relating to the merger of Old Reliance into CTAF, (iv) a copy, certified by the
Delaware Secretary of State, of the certificate of name change of New Reliance,
and (v) a certificate of the chief financial officer of New Reliance certifying
that, as of the date of the effectiveness of this Amendment, (1) no Default or
Event of Default has occurred and is continuing, and (2) the Adjusted Tangible
Net Worth of the Borrowers is not less than $90,000,000 as a result of the
merger of Old Reliance into CTAF, (b) increased their Adjusted Tangible Net
Worth to an amount which is not less than $90,000,000 as a result of the merger
of Old Reliance into CTAF, and (c) caused to be executed and delivered to the
Lender a letter from RAGI reaffirming its obligations under its letter of
responsibility, together with a copy, certified by the Delaware Secretary of
State, of the certificate of name change for RAGI.

     5.2  Amendment Fee. On the date the Borrowers execute this Amendment, the 
Borrowers shall pay to Lender an amendment fee (the "Amendment Fee") equal to 
$50,000. The Borrowers and the Lender agree that the Amendment Fee may be 
financed, at Lender's discretion, as an Advance of the Loan.


                  SECTION SIX - REPRESENTATIONS AND WARRANTIES
                  ------------------------------------------

     6.1  Acknowledgements of Borrowers.  Each of the Borrowers hereby 
represents and warrants that: (a) the execution and delivery of this Amendment
and compliance by the Borrowers with all of the provisions of this Amendment (i)
are within the powers and purposes of the Borrowers; (ii) have been duly 
authorized or approved by the Borrowers; and (iii) when executed and delivered 
by or on behalf of the Borrowers will constitute valid and binding obligation of
the Borrowers, enforceable in accordance with its terms; (b) the Borrowers have 
no ???? or counterclaims against the Lender or defenses to the payments due 
under the Loan Agreement; (c) the Lender has a first perfected security interest
in the Collateral to secure the Obligations under the Loan Agreement; and (d) no
Default or Event of Default has occurred and is continuing as of the date 
hereof.

    6.2  Further Acknowledgement of Borrowers. Each of the Borrowers hereby
further represents and warrants that all of the assets transferred to CTAF by
Cole Taylor Bank were
 
                                      -5-
<PAGE>
 
transferred to CTAF free and clear of any liens thereon of any kind whatsoever
and free and clear of any indebtedness or other obligations associated
therewith, and that, immediately prior to the time of the consummation of the
merger of Old Reliance into CTAF, all of the assets of CTAF were free and clear
of any liens thereon of any kind whatsoever and CTAF had no indebtedness or
other obligations of any kind whatsoever, except, in each such case, for any
obligations of CTAF to Cole Taylor Bank arising under a Participation Agreement
dated February 11, 1997 between CTAF and Cole Taylor Bank, which Participation
Agreement, however, has now been terminated by the parties thereto so that, as
of the date of the effectiveness of this Amendment, New Reliance has no duties
or liabilities arising thereunder.


                        SECTION SEVEN--GENERAL PROVISIONS
                        ---------------------------------

     7.1  Loan Agreement Unmodified.  Except as otherwise specifically modified
by this Amendment, all terms and provisions of the Loan Agreement and all liens
and security interests created thereby shall remain unmodified and in full force
and effect. Nothing contained in this Amendment shall in any way impair the
validity or enforceability of the Loan Agreement, as modified hereby, or alter,
waive, annul, vary, affect, or impair any provision, condition, or covenant
contained therein or any rights, power, or remedy granted therein.

     7.2  Parties, Successors and Assists.  This Amendment shall be binding upon
and shall inure to the benefit of the Borrowers, the Lender, and their
respective successors and assigns.

     7.3  Severability.  To the extent any provision of this Amendment is not 
enforceable under applicable law, such provision shall be deemed null and void 
and shall have no effect on the remaining portions of the Amendment. 

     7.4   Total Agreement.  This Amendment, the Loan Documents, and all other 
agreements referred to herein or delivered in connection herewith shall 
constitute the entire agreement between the parties relating to the subject 
matter hereof and shall not be changed or terminated orally.

     7.5  Construction of Amendment.  Each party hereto has cooperated in the
drafting and preparation of this Amendment and, as a result, this Amendment
shall not be construed against any party. This Amendment may be amended or
modified only by a written agreement signed by the parties hereto. This
Amendment may be executed in counterparts, each of which when so executed and
delivered shall be deemed an original but all such counterparts together shall
constitute one and the same instrument. 

                                      -6-


<PAGE>
 
      IN WITNESS WHEREOF, the parties have executed this Amendment as of the 
date first written above.

                                       "BORROWERS"

                                       Reliance Acceptance Corporation;
                                       Reliance Acceptance Corp. of Colorado;
                                       Reliance Acceptance Corp. of Georgia;
                                       Reliance Acceptance Corp. of Florida;
                                       Reliance Acceptance Corp. of Indiana;
                                       Reliance Acceptance Corp. of New Mexico;
                                       Reliance Acceptance Corp. of Ohio;
                                       Reliance Acceptance Corp. of Tennessee;
                                       Reliance Acceptance Corp. of Texas;
                                       Reliance Acceptance Corp. of Kentucky;
                                       Reliance Acceptance Corp. of Illinois;
                                       Reliance Acceptance Corp. of Minnesota;
                                       Reliance Acceptance Corp. of North
                                       Carolina; Reliance Acceptance Corp. of
                                       South Carolina; Reliance Acceptance Corp.
                                       of Arizona; Reliance Acceptance Corp. of
                                       Iowa; Reliance Acceptance Corp. of
                                       Missouri; Reliance Acceptance Corp. of
                                       Nevada; Reliance Acceptance Corp. of
                                       Oregon; Reliance Acceptance Corp. of
                                       Washington and Reliance Acceptance Corp.
                                       of Utah

                                       By: /s/ Howard B. Silverman
                                           -------------------------------------
                                              Howard B. Silverman, Chairman

                                       By: /s/ James I. Kaplan
                                           -------------------------------------
                                                James I. Kaplan,
                                                General Counsel and Corporate
                                                Secretary

                                       "LENDER"

                                       BankAmerica Business Credit, Inc.

                                       By: /s/ Joseph P. LaCongata
                                           -------------------------------------
                                               Joseph P. LaCognata,
                                               Executive Vice President

                                     -7-