Exhibit 10.18

FINOVA Capital Corporation
Rediscount Finance






                     SECOND AMENDED AND RESTATED SCHEDULE TO
                           LOAN AND SECURITY AGREEMENT




Borrower:                  THE THAXTON GROUP, INC.

Address:                   1524 PAGELAND HIGHWAY
                           LANCASTER, SOUTH CAROLINA  29721


Date:                      JULY 29, 1996


         This  Second  Amended  and  Restated  Schedule  to  Loan  and  Security
Agreement  ("Second Amended Schedule") is executed in conjunction with a certain
Amended and Restated Loan and Security Agreement ("Agreement"), dated March, 27,
1995,  by and  between  FINOVA  Capital  Corporation,  as Lender,  and the above
Borrower,  formerly  known as C.L.  Thaxton & Sons,  Inc., as Borrower and as an
amendment  and  restatement  of  that  certain  Schedule  to Loan  and  Security
Agreement,  dated March 27, 1995 and that  certain  First  Amended and  Restated
Schedule,  dated  February 23, 1996  (collectively  referred to herein as "Prior
Schedules").  The terms and  provisions of this Second  Amended  Schedule  shall
supersede  all terms  and  provisions  contained  in the  Prior  Schedules.  All
references to Section numbers herein refer to Sections in the Agreement.



1.9.A.   MAXIMUM AMOUNT OF AN ELIGIBLE RECEIVABLE (SECTION 1.9).

                           The term "Maximum  Amount of an Eligible  Receivable"
                           shall mean for each Receivable  Category as set forth
                           below:

                           Category  One (Direct Loan  Receivable)  - the sum of
                           Seven  Thousand  Five  Hundred  Dollars   ($7,500.00)
                           remaining due thereon at any date of determination.

                           Category  Three  (Vehicle  Receivable)  - the  sum of
                           Twenty Thousand  Dollars  ($20,000.00)  remaining due
                           thereon at any date of determination.

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1.9.B.   MAXIMUM TERM OF AN ELIGIBLE RECEIVABLE (SECTION 1.9).

                           The "Maximum Term of an Eligible Receivable" shall be
                           for each Receivable Category as set forth below:

                           Category One (Direct Loan Receivable) - the period of
                           Forty-Eight  (48) months remaining until the due date
                           of  such   Eligible   Receivable   at  any   date  of
                           determination.

                           Category Two  (Insurance  Premium  Receivable)  - the
                           period of Twelve (12) months  remaining until the due
                           date  of  such  Eligible  Receivable  at any  date of
                           determination.

                           Category Three  (Vehicle  Receivable) - the period of
                           Forty-Eight  (48) months remaining until the due date
                           of  such   Eligible   Receivable   at  any   date  of
                           determination.




1.9.C.   RECEIVABLE LIMITATIONS - EXPANDED (SECTION 1.9).

                           Notwithstanding  the provisions of Section 1.9, up to
                           Ten percent (10%) of the  aggregate  dollar amount of
                           Eligible  Receivables may be composed of Category One
                           Receivables (Direct Loan Receivables) and/or Category
                           Three (Vehicle  Receivables) which exceed the Maximum
                           Amount of an Eligible Receivable and the Maximum Term
                           of an Eligible Receivable  applicable to Category One
                           Receivables (Direct Loan Receivables) and/or Category
                           Three    (Vehicle    Receivables),    provided   said
                           Receivables  satisfy all other  requirements  of this
                           Section  1.9.  and the balance  remaining  due on any
                           such  Receivable  does  not  exceed  Thirty  Thousand
                           Dollars and the term remaining  until the due date of
                           such Receivable does not exceed Sixty (60) months, at
                           any date of determination.



1.9.D.   AGING PROCEDURES AND ELIGIBILITY TEST (SECTION 1.9).

AGING PROCEDURES FOR A CONTRACTUAL AGING FOR THE FOLLOWING RECEIVABLE
           CATEGORIES:

CATEGORY ONE (DIRECT LOAN RECEIVABLES)

1.       No payment missed or due               =  Current.

2.       1 to 30 days past due                  = "30 day Account".

3.       31 to 60 days past due                 = "60 day Account".

4.       61 to 90 days past due                 = "90 day Account".

5.       91 or more days past due               = "90 + day Account"

CATEGORY TWO (INSURANCE PREMIUM RECEIVABLES)

1.       No payment missed or due               =  Current.

2.       1 to 30 days past due                  = "30 day NC Account".
         (financing contract not canceled)

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3.       31 or more days past due               = "30+ day NC Account".
         (financing contract not canceled)

4.       1 to 30 days past due                  = "30 day Canceled Account".
         (financing contract canceled)

5.       31 to 60 days past due                  = "60 day Canceled Account".
         (finance contract canceled)

6.       61 or more days past due                = "60 + day Canceled Account".
         (finance contract canceled)

         For the purposes of the Loan Documents the cancellation of an insurance
receivable shall be immediately  effective upon the effective  cancellation date
of the associated insurance policy.

CATEGORY THREE (VEHICLE RECEIVABLES)

1.       No payment missed or due                 =  Current.

2.       1 to 30 days past due                    = "30 day Account".

3.       31 to 60 days past due                   = "60 day Account".

4.       61 or more days past due                 = "60 + day Account".

ELIGIBILITY TEST:

The term "Eligibility  Test" shall mean the test to determine the eligibility of
a Receivable for the purposes of Section 1.9 hereof, that test, being as follows
for each Receivable Category:

         Category One (Direct Loan Receivables)

                  (1)      No payment due on said Receivable  remains unpaid
                           more than ninety (90) days from the specific  date on
                           which such  payment was due  pursuant to the terms of
                           said Receivable;

                   (2)     If the  initial  advance of said  Receivable  was
                           greater than One Thousand  Dollars  ($1,000.00),  the
                           payment  of  said  Receivable  shall  be  secured  by
                           collateral; and

                  (3)      If said  Receivable  is purchased  from a third party
                           wherein the  Borrower is or will become  obligated to
                           such third party in conjunction  with the purchase of
                           such   Receivable   through  a  "reserve"   or  other
                           liability  arrangement,  all of  such  third  party's
                           rights  in and to the  "reserve"  or other  liability
                           shall subordinated to Lender in all respects,  except
                           as  set  forth  below,   in  a  form  and   substance
                           satisfactory  to  Lender.  This  provision  shall not
                           restrict  Borrower  from making a payment or payments
                           to a third  party  for a reserve  or other  liability
                           arrangement, or a part thereof, provided such payment
                           is  then  contractually  due  to  such  third  party,
                           pursuant to a written agreement  executed at or prior
                           to the time the  respective  Receivable was purchased
                           by  Borrower,  and an Event of Default  does not then
                           exist.

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         Category Two (Insurance Premium Receivables)

                  (1)      No payment due on said Receivable remains unpaid more
                           than  (i)   thirty   (30)  days  for   Category   Two
                           Receivables    that   the   contractual    obligation
                           evidencing  such  Receivable  has not  been  canceled
                           according  to the terms of such  Receivable  and (ii)
                           sixty (60) days for Category Two Receivables that the
                           contractual obligation evidencing such Receivable has
                           been   canceled   according  to  the  terms  of  such
                           Receivable,  from the  specific  date on  which  such
                           payment  was  due  pursuant  to  the  terms  of  said
                           Receivable.

                  (2)      The insurance company issuing the insurance policy of
                           which said Receivable  evidences the financing of the
                           payment  of  the   premiums   with  respect  to  such
                           insurance policy meets one of the following criteria:

                           (i)   rated  "C+"  or  better  pursuant  to  the
                                 current  edition of "Best's Key Rating  Guide -
                                 Property and Casualty" as published by the A.M.
                                 Best Company ("A.M. Best"); or

                           (ii)  a member of a state  reinsurance  facility
                                 or shared pool.

                  (3)      No more than twenty  percent  (20%) of the  aggregate
                           outstanding  balance of all Category Two  Receivables
                           can evidence the financing of the payment of premiums
                           for insurance  policies for any one insurance company
                           is not one of the following:

                           (i) rated "A-" or better by A.M. Best; or

                           (ii)  a member  of a state  reinsurance  facility  or
                                 shared pool.

         Category Three (Vehicle Receivables)

                   (1)     No payment due on said Receivable remains unpaid more
                           than sixty (60) days from the specific  date on which
                           such  payment  was due  pursuant to the terms of said
                           Receivable.

                  (2)      If said  Receivable  is purchased  from a third party
                           wherein the  Borrower is or will become  obligated to
                           such third party in conjunction  with the purchase of
                           such   Receivable   through  a  "reserve"   or  other
                           liability  arrangement,  all of  such  third  party's
                           rights  in and to the  "reserve"  or other  liability
                           shall subordinated to Lender in all respects,  except
                           as  set  forth  below,   in  a  form  and   substance
                           satisfactory  to  Lender.  This  provision  shall not
                           restrict  Borrower  from making a payment or payments
                           to a third  party  for a reserve  or other  liability
                           arrangement, or a part thereof, provided such payment
                           is  then  contractually  due  to  such  third  party,
                           pursuant to a written agreement  executed at or prior
                           to the time the  respective  Receivable was purchased
                           by  Borrower,  and an Event of Default  does not then
                           exist.



1.27 ADDITIONAL  DEFINITIONS  (SECTION 1.27, 1.28, 1.29, 1.30, 1.31, 1.32, 1.33,
1.34, 1.35, 1.36, 1.37, 1.38 AND 1.39)

     The  following  definitions  are hereby added in their  entirety as Section
     1.27,  1.28, 1.29, 1.30, 1.31, 1.32, 1.33, 1.34, 1.35, 1.36, 1.37, 1.38 and
     1.39:

                  "  1.27  DIRECT  LOAN  RECEIVABLE  .  The  term  "Direct  Loan
                  Receivable" shall mean any Receivable of Borrower,  except any
                  Receivable  that the proceeds of such  Receivable were used to
                  purchase a motor  vehicle  and such  Receivable  is secured by
                  such motor  vehicle,  including  but not  limited to  vehicles
                  purchased from any entity affiliated,  directly or indirectly,
                  with Borrower, or a Receivable that evidences the financing of
                  the payment of insurance premiums. Direct Loan Receivables
                  shall be deemed "Category One Receivables" herein.

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                  " 1.28  INSURANCE  PREMIUM  RECEIVABLE.  The  term  "Insurance
                  Premium Receivable" shall mean a Receivable that evidences the
                  financing  of the  payment of  insurance  premiums.  Insurance
                  Premium Receivables shall be deemed "Category Two Receivables"
                  herein.

                  " 1.29 VEHICLE RECEIVABLE. The term "Vehicle Receivable" shall
                  mean a Receivable  that the proceeds of such  Receivable  were
                  used to  purchase  a motor  vehicle  and  such  Receivable  is
                  secured  by such  motor  vehicle  purchase  by  Borrower  from
                  unaffiliated  third  parties.  Vehicle  Receivables  shall  be
                  deemed "Category Three Receivables" herein.

                  "  1.30  BULK  PURCHASE  RESERVES.  The  term  "Bulk  Purchase
                  Reserves" shall mean the unearned purchase discount of a group
                  (more than one) of Receivables  that are purchased by Borrower
                  with respect to such Receivables.

                  " 1.31 DEALER  RESERVE.  The term "Dealer  Reserve" shall mean
                  the  amount  due to a  dealer  with  respect  to a  Receivable
                  wherein  the  Borrower  is or will  become  obligated  to such
                  dealer in  conjunction  with the  purchase or transfer of such
                  Receivable,  through an  agreement  in writing,  containing  a
                  "reserve" or other  liability  arrangement  between the dealer
                  and Borrower.

                  " 1.32  CHARGE  OFFS.  The term  "Charge  Offs" shall mean the
                  amount due  (including  the principal  balance plus all earned
                  fees and charges)  pursuant to a  Receivable  on the date that
                  Borrower   charges  off  such  Receivable  as   uncollectible,
                  pursuant to Borrower's policies and/or procedures.

                  " 1.33 COLLATERAL RECOVERY RATE. The term "Collateral Recovery
                  Rate" shall mean, for twelve (12) calendar months  immediately
                  preceding  any  date  of  determination,  (i) the  total  cash
                  collected from all  Receivables  (including but not limited to
                  all cash proceeds from charge off recoveries), divided by (ii)
                  the sum of (a) the  Included  Rebates  plus (b) the total cash
                  collected  from all  Receivables  (excluding all cash proceeds
                  from  charge off  recoveries)  plus (c) the  aggregate  of all
                  Charge Offs for that period.

                  " 1.34 INCLUDED REBATE  PERCENTAGE.  The term "Included Rebate
                  Percentage" shall mean, for any period of  determination,  the
                  percentage  determined by (i) the aggregate of all Charge Offs
                  for that period, divided by (ii) the Nonpayment Net Receivable
                  Reductions for that period.

                  " 1.35 INCLUDED  REBATES.  The term  "Included  Rebates" shall
                  mean,  for any period of  determination,  (i) the aggregate of
                  all rebates of interest  for that period,  multiplied  by (ii)
                  the Included Rebate Percentage.

                  "  1.36  NONPAYMENT  NET  RECEIVABLE   REDUCTIONS.   The  term
                  "Nonpayment  Net  Receivable  Reductions"  shall mean, for any
                  period of  determination,  the sum of (i) the aggregate of all
                  Charge Offs for that  period,  plus (ii) the  aggregate of all
                  net refinanced balances of a Receivable for that period.

                  " 1.37  TRANCHE "A" CREDIT  FACILITY.  The term  "Tranche  "A"
                  Credit  Facility"  shall  mean  that  certain  portion  of the
                  availability  of  the  Loan  as  determined  pursuant  to  the
                  provision of Section 2.16 hereof.

                  " 1.38  TRANCHE "B" CREDIT  FACILITY.  The term  "Tranche  "B"
                  Credit  Facility"  shall  mean  that  certain  portion  of the
                  availability  of  the  Loan  as  determined  pursuant  to  the
                  provision of Section 2.17 hereof.

                  " 1.39 CRR ADVANCE  RATE.  The term "CRR  Advance  Rate" shall
                  mean, on any date of  determination,  the Collateral  Recovery
                  Rate percentage less fifteen percentage points (.15).

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     The  definitions  set forth below are hereby  amended in their  entirety as
follows:

                  " 1.16 LEVERAGE RATIO.  The term "Leverage  Ratio" shall mean,
                  at any  date of  determination,  the  remainder  of the  total
                  liabilities of Borrower,  including the outstanding balance of
                  the  Indebtedness,   less  the  outstanding   balance  of  all
                  Subordinated  Debt  divided  by  the  sum  of  the  amount  of
                  Borrower's  Tangible Net Worth plus the outstanding balance of
                  all  Subordinated  Debt plus the  outstanding  balance of that
                  portion  of  the  Indebtedness  outstanding  pursuant  to  the
                  Tranche "B" Credit Facility.



2.1. AMOUNT OF LOAN (SECTION 2.1)

         Section 2.1,  AMOUNT OF LOAN,  is hereby  deleted and the  following is
substituted in lieu thereof:

                  "2.1  AMOUNT OF LOAN.  Subject  to the  terms,  covenants  and
                  conditions  hereinafter  set  forth,  Lender  agrees  upon the
                  Borrower's request from time to time, until the Maturity Date,
                  to make advances to Borrower (collectively, the "Loan"), in an
                  aggregate  amount  not to exceed at any time  outstanding  the
                  lesser of the  following:  (a) the Amount of Revolving  Credit
                  Line (Schedule  Section 2.1.A.),  (b) the sum of the Amount of
                  the Tranche "A" Credit Facility plus the Amount of the Tranche
                  "B"  Credit  Facility  (Schedule  Section  2.1.A.)  or (c) the
                  Availability  on  Eligible   Receivables   (Schedule   Section
                  2.1.B.).  Within the limits of this Section 2.1,  Borrower may
                  borrow, repay and reborrow the advances. The Loan is a renewal
                  and extension, and not an extinguishment,  of the indebtedness
                  due to  Lender by  Borrower  as of the date  hereof.  The Loan
                  shall be evidenced by the Note.



2.1.A.  AMOUNT OF  REVOLVING  CREDIT  LINE,  AMOUNT OF THE  TRANCHE  "A"  CREDIT
FACILITY AND AMOUNT OF THE TRANCHE "B" CREDIT FACILITY (SECTION 2.1):

                  The "Amount of the  Revolving  Credit Line" is Eighty  Million
Dollars ($80,000,000.00).

                  The  "Amount of the Tranche  "A" Credit  Facility"  is Seventy
Million Dollars ($70,000,000.00).

                  The "Amount of the Tranche "B" Credit Facility" is Ten Million
Dollars ($10,000,000.00).



2.1.B.   AVAILABILITY ON ELIGIBLE RECEIVABLES (SECTION 2.1):

                  The "Availability on Eligible Receivables" shall be the sum of
the following:

                  (i) with respect to the Tranche "A" Credit Facility, an amount
equal to the lesser of:

                           (a)   eighty-five   percent   (85%)  of  the
                           aggregate unmatured and unpaid amount due to
                           Borrower  from  the  Account   Debtor  named
                           thereon,   excluding  all  unearned  finance
                           charges,  Bulk Purchase  Reserves and Dealer
                           Discounts    pursuant   to   the    Eligible
                           Receivables, or

                           (b) the Amount of the Tranche "A" Credit Facility;

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                  (ii) with  respect  to the  Tranche  "B" Credit  Facility,  an
amount equal to the lesser of:

                       (c)  one  hundred   percent  (100%)  of  the
                       aggregate unmatured and unpaid amount due to
                       Borrower  from  the  Account   Debtor  named
                       thereon,   excluding  all  unearned  finance
                       charges,  Bulk Purchase  Reserves and Dealer
                       Discounts    pursuant   to   the    Eligible
                       Receivables   less   the   amount   of   the
                       availability for the Tranche "A" pursuant to
                       Schedule Section 2.1.B.(i) hereinabove; or

                       (d)  one  hundred   percent  (100%)  of  the
                       aggregate unmatured and unpaid amount due to
                       Borrower  from  the  Account   Debtor  named
                       thereon,   including  all  unearned  finance
                       charges,  Bulk Purchase  Reserves and Dealer
                       Discounts    pursuant   to   the    Eligible
                       Receivables  multiplied  by the CRR  Advance
                       Rate,  less the  amount of the  availability
                       for the  Tranche  "A"  pursuant  to Schedule
                       Section 2.1.B.(i) hereinabove, or

                       (e) the Amount of the Tranche "B" Credit Facility.



2.2. STATED INTEREST RATE (SECTION 2.2).

                  TRANCHE "A" CREDIT FACILITY STATED INTEREST RATE

                           The  "Tranche  "A" Credit  Facility  Stated  Interest
                  Rate"  shall be  lesser  of (i) the  Governing  Rate  plus One
                  percent (1.00%) per annum; or (ii) the Maximum Rate.

                  TRANCHE "B" CREDIT FACILITY STATED INTEREST RATE

                           The  "Tranche  "B" Credit  Facility  Stated  Interest
                  Rate"  shall be  lesser  of (i) the  Governing  Rate plus Five
                  percent (5.00%) per annum; or (ii) the Maximum Rate.



2.2.A.   INTEREST RATE (SECTION 2.2)

         "2.2  INTEREST  RATE.  The   outstanding   principal   balance  of  the
         Indebtedness  allocated  hereunder  to the Tranche "A" Credit  Facility
         shall bear interest at the Tranche "A" Credit  Facility Stated Interest
         Rate (Schedule  Section 2.2). The portion of the outstanding  principal
         balance of the  Indebtedness  allocated  hereunder  to the  Tranche "B"
         Credit  Facility shall bear interest at the Tranche "B" Credit Facility
         Stated   Interest  Rate  (Schedule   Section  2.2).  If  the  aggregate
         outstanding  balance of the  Indebtedness  allocated to the Tranche "A"
         Credit Facility is or becomes more than the Tranche "A" Credit Facility
         Availability,  then in that event,  the amount of the balance in excess
         of the Tranche "A" Credit Facility  Availability  shall be allocated to
         the Tranche "B" Credit  Facility  hereunder.  Each  request for advance
         hereunder shall set forth the most current availability calculation for
         the Tranche "A" and the  Tranche  "B"  availability  and the portion of
         such  requested  advance  that  is  to be  allocated  to  increase  the
         outstanding  balance of either the Tranche "A" Credit  Facility  and/or
         the Tranche "B" Credit Facility.

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                  If  Lender  is ever  prevented  from  charging  or  collecting
         interest at the rates set forth in Tranche "A" Credit  Facility  Stated
         Interest  Rate  Section (i) or the Tranche "B" Credit  Facility  Stated
         Interest  Rate Section (i) because  interest at such rates when applied
         to the outstanding balance of the Indebtedness would exceed interest at
         the Maximum Rate,  then such restricted rate or rates shall continue to
         be the Maximum  Rate until  Lender has charged and  collected  the full
         amount of interest  chargeable and collectable had interest at the rate
         set  forth in such  Stated  Interest  Rate  Sections  (i)  always  been
         lawfully chargeable and collectible. As the Governing Rate changes, the
         rate set  forth in each  Stated  Interest  Rate  Section  (i)  shall be
         increased or decreased  (subject to the Maximum  Rate) on the first day
         of each calendar  month to correspond  with the change in the Governing
         Rate then in effect and shall remain fixed at such rate until the first
         day of the next succeeding calendar month, notwithstanding fluctuations
         in the  Governing  Rate during the month.  All changes in the Governing
         Rate shall be made without notice to Borrower. The monthly interest due
         on the principal  balance of the Indebtedness  allocated to Tranche "A"
         Credit  Facility and Tranche "B" Credit Facility  outstanding  shall be
         computed  for the  actual  number of days  elapsed  during the month in
         question on the basis of a year consisting of three hundred sixty (360)
         days and shall be calculated by determining the average daily principal
         balance  outstanding  allocated  to the  Tranche "A"  Facility  and the
         Tranche "B" Credit Facility for each day of the month in question.  The
         daily  rate shall be equal to 1/360th  times the Stated  Interest  Rate
         (but shall not exceed the Maximum Rate).



2.3. MATURITY DATE (SECTION 2.3.C).

                  The primary  term of this  Agreement  shall expire on July 31,
                  1998.  If Borrower  desires to extend the primary  term or any
                  term thereafter of this Agreement,  Borrower shall give Lender
                  notice of its intent to extend  the term no  earlier  than one
                  hundred  and eighty  (180) days and no later than one  hundred
                  and fifty  (150)  days  prior to any  expiration  date of this
                  Agreement.  Upon the receipt by Lender of Borrower's notice to
                  extend the term of this Agreement,  if Lender desires to renew
                  and  extend  the term of this  Agreement,  Lender  shall  give
                  Borrower  notice of Lender's intent to extend the term of this
                  Agreement,  within  sixty  (60) days of  Lender's  receipt  of
                  Borrower's  notice to extend. If Lender does not give Borrower
                  notice of Lender's intent to extend the term of this Agreement
                  within  the sixty  (60) days  period,  then it shall be deemed
                  that  Lender  does not  intend to renew and extend the term of
                  this Agreement.  Notwithstanding the foregoing, this Agreement
                  shall remain in full force and effect  until the  Indebtedness
                  due and owing to Lender has been paid in full.



2.6      VOLUNTARY PREPAYMENTS (SECTION 2.6)

     Section 2.6 of the  Agreement  is hereby  deleted in its  entirety  and the
following is substituted in lieu thereof:

                  "2.6  VOLUNTARY  PREPAYMENTS.  Borrower  may,  at its  option,
                  voluntarily  prepay  the  Indebtedness  in full and  terminate
                  Lender's security interest in the Collateral  hereunder at any
                  time, provided, however, that Borrower has given Lender ninety
                  (90) days written  notice of any such  intention to prepay the
                  Indebtedness   in  full  and  Borrower   pays  to  Lender  the
                  "Liquidated  Damages"  (Schedule  Section  2.6) as  liquidated
                  damages and not as a penalty for such prepayment. Borrower may
                  not  make  such  prepayment  prior to the  expiration  of such
                  ninety (90) day period.  Upon written  notice of prepayment of
                  the  Indebtedness in full, the commitment by Lender to advance
                  funds to  Borrower  and all the  obligations  of Lender  shall
                  terminate  on the  expiration  of said  ninety (90) day notice
                  period,  and the entire amount of the Indebtedness,  including
                  the amount of the Liquidated Damages, shall be due and payable
                  on such date.

                  The  amount of  "Liquidated  Damages"  shall  be, if  Borrower
                  notifies  the  Lender  of  Borrower's  intention  to  pay  the
                  Indebtedness  in full and requests a  termination  of Borrower
                  security interest in the Collateral hereunder (i) on or before
                  July 31, 1997, the amount of "Liquidated  Damages" shall be an
                  amount equal to one percent  (1.00%)  multiplied by the Amount
                  of the Revolving  Credit  Facility,  or (ii) if after July 31,
                  1997,  but on or  before  January  31,  1998,  the  amount  of
                  "Liquidated   Damages"   shall  be  one-half   percent  (.50%)
                  multiplied by the Amount of the Revolving Credit Facility.

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2.7. MAXIMUM INTEREST; CONTROLLING AGREEMENT (SECTION 2.7)

     Section  2.7 of the  Agreement  is  hereby  deleted  and the  following  is
substituted in lieu thereof:

                  "2.7 MAXIMUM INTEREST;  CONTROLLING  AGREEMENT.  If a court of
                  competent  jurisdiction  determines that the laws of any state
                  other than the State of Arizona apply to this  Agreement  then
                  the  following  paragraph  A.  shall  be  applicable  to  this
                  Agreement  and  paragraph  2.7.B.  hereinbelow  shall be of no
                  force or effect.

                           A. It is the intent of the parties  hereto to conform
                  strictly  to the  usury  laws  in  force  that  apply  to this
                  transaction.  Accordingly,  all agreements  between Lender and
                  Borrower,  whether  now  existing  or  hereafter  arising  and
                  whether  written  or oral,  are  hereby  limited so that in no
                  contingency,  whether by reason of demand or  acceleration  of
                  the  maturity  of the  Indebtedness  or  otherwise,  shall the
                  interest  (and all other sums that are deemed to be  interest)
                  contracted for, charged,  received,  paid or agreed to be paid
                  to Lender exceed  interest  computed at the Maximum Rate.  If,
                  from any circumstance whatsoever,  interest would otherwise be
                  payable  to  Lender  in excess  of  interest  computed  at the
                  Maximum Rate and, if from any  circumstance  Lender shall ever
                  receive anything of value deemed interest by applicable law in
                  excess of interest computed at the Maximum Rate, then Lender's
                  receipt  of  the  same  shall  be  deemed  unintentional,  the
                  interest  payable  to  Lender  shall be  reduced  to  interest
                  computed  at the  Maximum  Rate;  and so long as no  Event  of
                  Default shall be continuing,  such excess interest received by
                  Lender shall,  at the option of Lender,  be repaid to Borrower
                  or   credited   to  the  unpaid   principal   balance  of  the
                  Indebtedness.  If the  Indebtedness is prepaid or the maturity
                  of the Indebtedness is accelerated by reason of an election of
                  Lender, then the unearned interest,  if any, shall be canceled
                  and, if theretofore paid, shall be either refunded to Borrower
                  or  credited on the  Indebtedness  as the Lender  elects.  All
                  interest  paid or agreed to be paid to  Lender  shall,  to the
                  extent  permitted by applicable  law, be amortized,  prorated,
                  allocated and spread  throughout the full period until payment
                  in full of the principal  (including the period of any renewal
                  and extension  thereof) so that the interest so computed shall
                  not exceed the Maximum Rate.  Notwithstanding that the parties
                  hereto in good faith deem each and every fee  provided by this
                  Agreement or paid to Lender in connection  with this Agreement
                  to be a bona fide fee for services rendered and to be rendered
                  separate and apart from the lending of money or the  provision
                  of credit,  if any such fee is ever  determined  by a court of
                  competent  jurisdiction  or other  tribunal  or by  Lender  to
                  constitute interest,  then the treatment of such fee for usury
                  purposes shall be controlled by the provisions of this Section
                  2.7.  This  paragraph  shall  control all  agreements  between
                  Borrower and Lender.

                           If a court of competent jurisdiction  determines that
                  the laws of the State of Arizona apply to this  Agreement then
                  the  following  paragraph  B.  shall  be  applicable  to  this
                  Agreement  and  paragraph  2.7.A.  hereinabove  shall be of no
                  force or effect.

                  B. The  contracted  for rate of interest  of the Loan  without
                  limitation,  shall consist of the  following:  (i) the Tranche
                  "A" Credit  Facility  Stated Interest Rate and the Tranche "B"
                  Credit Facility  Stated Interest Rate,  calculated and applied
                  to the principal  balance of the Note in  accordance  with the
                  provisions of the Note and this  Agreement;  (ii) all interest
                  after  an  Event  of  Default  or due  date  hereof,  if  any,
                  calculated  and  applied to the  amounts due under the Note in
                  accordance  with  the  provisions   thereof;   and  (iii)  all
                  Additional Sums (as herein defined),  if any.  Borrower agrees
                  to pay an effective  contracted  for rate of interest which is
                  the sum of the above-referenced elements.

                  All fees,  charges,  goods, things in action or any other sums
                  or  things  of value  (other  than  amounts  described  in the
                  immediately previous  paragraph),  paid or payable by Borrower
                  (collectively, the "Additional Sums"), whether pursuant to the
                  Note,  this Agreement or any other documents or instruments in
                  any way pertaining to this lending  transaction,  or otherwise
                  with  respect  to this  lending  transaction,  that  under any
                  applicable  law may be deemed to be interest  with  respect to
                  this lending  transaction,  for the purpose of any  applicable
                  law that may  limit  the  maximum  amount  of  interest  to be
                  charged  with respect to this  lending  transaction,  shall be
                  payable by Borrower as, and shall be deemed to be,  additional
                  interest  and for such  purposes  only,  the  agreed  upon and
                  "contracted for rate of interest" of this lending  transaction
                  shall  be  deemed  to be  increased  by the  rate of  interest
                  resulting from the inclusion of the Additional Sums.

                                        30

<PAGE>

                  It is the intent of the  parties to comply  with the usury law
                  ("Applicable  Usury Law") applicable  pursuant to the terms of
                  the  preceding  paragraph  or such  other  usury  law which is
                  applicable if the law chosen by the parties is not applicable.
                  Accordingly,  it is agreed that notwithstanding any provisions
                  to  the  contrary  in  the  Loan  Documents,  or in any of the
                  documents   securing  payment  hereof  or  otherwise  relating
                  hereto, in no event shall the Loan Documents or such documents
                  require  the payment or permit the  collection  of interest in
                  excess  of  the  maximum   contract  rate   permitted  by  the
                  Applicable  Usury  Law.  In the event  (a) any such  excess of
                  interest   otherwise  would  be  contracted  for,  charged  or
                  received  from  Borrower or otherwise in  connection  with the
                  loan evidenced hereby, or (b) the maturity of the indebtedness
                  evidenced by the Loan  Documents is accelerated in whole or in
                  part,  or (c) all or part of the  principal or interest of the
                  Loan  Documents  shall be  prepaid,  so that under any of such
                  circumstances the amount of interest contracted for, shared or
                  received in connection with the loan evidenced  hereby,  would
                  exceed the maximum  contract rate  permitted by the Applicable
                  Usury Law,  then in any such event (1) the  provisions of this
                  paragraph shall govern and control,  (2) neither  Borrower nor
                  any other  person or entity  now or  hereafter  liable for the
                  payment  hereof  will be  obligated  to pay the amount of such
                  interest  to the  extent  that it is in excess of the  maximum
                  contract rate permitted by the  Applicable  Usury Law, (3) any
                  such  excess  which  may have been  collected  shall be either
                  applied as a credit against the then unpaid  principal  amount
                  hereof or refunded to Borrower,  at Lender's  option,  and (4)
                  the effective rate of interest will be  automatically  reduced
                  to the maximum amount of interest  permitted by the Applicable
                  Usury  Law.  It  is  further  agreed,   without  limiting  the
                  generality of the foregoing,  that to the extent  permitted by
                  the  Applicable  Usury Law; (x) all  calculations  of interest
                  which are made for the  purpose of  determining  whether  such
                  rate would exceed the maximum  contract rate  permitted by the
                  Applicable  Usury Law shall be made by amortizing,  prorating,
                  allocating and spreading  during the period of the full stated
                  term of the loan  evidenced  hereby,  all interest at any time
                  contracted for, charged or received from Borrower or otherwise
                  in  connection  with such loan;  and (y) in the event that the
                  effective  rate of  interest  on the loan  should  at any time
                  exceed the maximum  contract rate allowed under the Applicable
                  Usury Law, such excess interest that would otherwise have been
                  collected had there been no ceiling  imposed by the Applicable
                  Usury Law shall be paid to  Lender  from time to time,  if and
                  when the effective  interest rate on the loan otherwise  falls
                  below the maximum  amount  permitted by the  Applicable  Usury
                  Law,  to  the  extent  that  interest  paid  to  the  date  of
                  calculation   does  not  exceed  the  maximum   contract  rate
                  permitted by the Applicable Usury Law, until the entire amount
                  of interest  which would have  otherwise  been  collected  had
                  there been no ceiling imposed by the Applicable  Usury Law has
                  been paid in full.  Borrower  further  agrees  that should the
                  maximum contract rate permitted by the Applicable Usury Law be
                  increased  at any time  hereafter  because  of a change in the
                  law, then to the extent not prohibited by the Applicable Usury
                  Law, such increases shall apply to all indebtedness  evidenced
                  hereby  regardless of when incurred;  but, again to the extent
                  not prohibited by the Applicable Usury Law, should the maximum
                  contract  rate  permitted  by  the  Applicable  Usury  Law  be
                  decreased because of a change in the law, such decreases shall
                  not apply to the indebtedness  evidenced hereby  regardless of
                  when incurred.



2.15 UNUSED CREDIT LINE FEE (SECTION 2.15)

     The  following  Section  2.15 is  hereby  added  to the  Agreement,  in its
entirety:

                  "2.15 UNUSED CREDIT LINE FEE. Borrower hereby agrees to pay to
                  Lender  monthly,  on the  fifteenth  (15th)  day of each month
                  during the term hereof,  for the immediately  preceding month,
                  an  amount  equal  to  (i)  the  outstanding  balance  of  the
                  Indebtedness  subtracted  from  the  Amount  of the  Revolving
                  Credit Line  multiplied  by  one-eighth  percent  (0.125%) per
                  annum (0.0104% per month)."

                                        31

<PAGE>






2.16 TRANCHE "A" CREDIT FACILITY (SECTION 2.16)

     The following Section 2.16 is hereby added to the Agreement:

                  "2.16  TRANCHE "A" CREDIT  FACILITY.  The  "Tranche "A" Credit
                  Facility" shall be that portion of the outstanding  balance of
                  the  Indebtedness  as  designated  by Borrower as allocated to
                  Tranche  "A" Credit  Facility,  pursuant  to the most  current
                  Request  for  Advance  Form  received  by  Lender,  up to  and
                  including an amount,  on any date of  determination,  equal to
                  the  "Tranche  "A"  Credit  Facility  Availability"  (Schedule
                  Section  2.1.B.),  but  shall  not  exceed  the  Amount of the
                  Tranche "A" Credit Facility (Schedule Section 2.1.A.).



2.17 TRANCHE "B" CREDIT FACILITY (SECTION 2.17)

         The following Section 2.17 is hereby added to the Agreement:

                  "2.17  TRANCHE "B" CREDIT  FACILITY.  The  "Tranche "B" Credit
                  Facility" shall be that portion of the outstanding  balance of
                  the  Indebtedness  as  designated  by Borrower as allocated to
                  Tranche  "B" Credit  Facility,  pursuant  to the most  current
                  Request  for  Advance  Form  received  by  Lender,  up to  and
                  including an amount,  on any date of  determination,  equal to
                  the  "Tranche  "B"  Credit  Facility  Availability"  (Schedule
                  Section  2.1.B.),  but  shall  not  exceed  the  Amount of the
                  Tranche "B" Credit Facility (Schedule Section 2.1.A.).



3.2. BUSINESS LOCATIONS OF BORROWER (SECTIONS 3.2, 3.6 and 5.1.N.).

                  All locations are as set forth on a list of locations attached
hereto.



4.4. ANNUAL FINANCIAL STATEMENTS (SECTION 4.4).

                  Annual   audited  financial  statements  to be  prepared  by a
                           independent certified public accountant, satisfactory
                           to Lender.



4.5. GUARANTOR (whether one or more) (SECTION 4.5).

                  James D. Thaxton (Validity and Support Agreement)



5.1. BORROWER'S TRADENAMES (whether one or more)(SECTION 5.1.B.)

                  TICO Credit Company
                  Eagle Premium Finance Company
                  TICO Premium Finance Company

                                        32

<PAGE>




6.2.A.   LEVERAGE RATIO LIMIT (SECTION 6.2.J).

                  The term "Leverage Ratio Limit" shall mean 7.00 to 1.00.



6.2.B.   MINIMUM NET INCOME (SECTION 6.2.K).

                  The  Minimum  Net Income  shall be One Dollar  ($1.00) for any
fiscal year of Borrower.



6.2.C.   DISTRIBUTIONS LIMITATION (SECTION 6.2.L).

                  The Distributions  shall not exceed fifty percent (50%) of Net
                  Income for each fiscal year of Borrower based upon  Borrower's
                  annual audited financial.



6.2.D.   MINIMUM TANGIBLE NET WORTH (SECTION 6.2.M.)

                  The  Minimum  Tangible  Net  Worth  shall not be less than Six
Million Dollars ($6,000,000.00) during the term hereof.



6.2.E.   MODIFICATION TO NEGATIVE COVENANT (SECTION 6.2.C.)

                  Section 6.2.C. and 6.2.F. are hereby deleted in their entirety
                  and the following are substituted in lieu thereof:

                           "C. Be a party to or  participate  in: (i) any merger
                  or  consolidation;  (ii) any purchase or other  acquisition of
                  all or substantially all of the assets or properties or shares
                  of any class of, or any partnership or joint venture  interest
                  in, any other corporation or entity with an aggregate purchase
                  price for any  acquisition  in excess of One  Million  Dollars
                  ($1,000,000.00), without Lender's prior written consent; (iii)
                  any   sale,   transfer,   conveyance   or   lease  of  all  or
                  substantially all of Borrower's assets or properties;  or (iv)
                  any  sale  or  assignment  with  or  without  recourse  of any
                  Receivables.  With respect to any acquisition  with a purchase
                  price in excess of One Million Dollars ($1,000,000.00), Lender
                  shall have the right,  but not the  obligation  to perform its
                  own audit of the assets or entity to be acquired by Borrower."

                           "F.  Incur,  assume  or  suffer  to  exist  any  debt
                  (including    capitalized   leases)   other   than   (i)   the
                  Indebtedness,  (ii) accounts  payable incurred in the ordinary
                  course of business, (iii) Subordinated Debt, (iv) debt secured
                  solely by the Premium Finance Receivables, which shall include
                  an intercreditor  agreement  between such secured creditor and
                  Lender in a form and  substance  acceptable  to Lender or (iv)
                  other Debt consented to in writing by Lender.



8.1. REIMBURSEMENT OF EXPENSES (SECTION 8.1).

                  Borrower's shall reimburse Lender for Lender expenses incurred
                  in  Lender's  attorneys  fees  and  expenses  incurred  in the
                  negotiation,  preparation  and  execution of this Schedule and
                  the other Loan Documents executed in conjunction therewith.

                                        33

<PAGE>

8.2. NOTICES (SECTION 8.2).

              Lender:     FINOVA Capital Corporation
                          (copy each office below with all notices)

                          Corporate Finance Office:

                          FINOVA Capital Corporation
                          355 South Grand Avenue, Suite 2400
                          Los Angeles, CA  90071
                          Attn:  John J. Bonano, Senior Vice President
                          Telephone:  (213) 253-1600
                          Telecopy No.: (213) 625-0268

                          Corporate Office:

                          FINOVA Capital Corporation
                          Dial Tower
                          Dial Corporate Center
                          Phoenix, AZ  85077
                          Attn:  Joseph R. D'Amore, Senior Counsel
                          Telephone:  (602) 207-4900
                          Telecopy No.:  (602) 207-5543

                          Rediscount Finance Office:

                          FINOVA Capital Corporation
                          13355 Noel Road, Suite 800
                          Dallas, TX  75240
                          Attn: Cash Rohrbough
                          Telephone:  (214) 458-5600
                          Telecopy No.:  (214) 458-5650

              Borrower:   The Thaxton Group, Inc.
                          1345 East Arch Street
                          Lancaster, South Carolina  29721
                          Telephone:
                          Telecopy No.:

              Guarantor:  James D. Thaxton
                          413 E. Pigg
                          P. O. Box 338
                          Pageland, South Carolina 29728
                          Telephone:
                          Telecopy No.:



8.17.    AGENT FOR SERVICE OF PROCESS (SECTION 8.17).

                  James D.  Thaxton,  whose  address  is 1345 East Arch  Street,
                  Lancaster, South Carolina 29721.
                          (Agent)

                                        34


<PAGE>


     IN WITNESS WHEREOF,  the parties have executed this Schedule on the day and
year first set forth above.


                           LENDER:

                           FINOVA CAPITAL CORPORATION,
                           a Delaware corporation


                           By:  
                              -------------------------------------------------
                                (Signature)

                               
                              -------------------------------------------------
                               (Printed Name and Title)         (Date)



                           BORROWER:

                           THE THAXTON GROUP, INC.
                           a South Carolina corporation


                            By:  
                              -------------------------------------------------
                                 James D. Thaxton, President    (Date)


                           GUARANTORS:


                                 
                              -------------------------------------------------
                                     James D. Thaxton

                                        35

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