SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                  FORM 10 - QSB

               QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934



      FOR QUARTER ENDED SEPTEMBER 30, 1997 COMMISSION FILE NUMBER 0-17832

-------------------------------------------------------------------------------
                         Allstate Financial Corporation
             (exact name of registrant as specified in its charter)

           -----------------------------------------------------------
                 Virginia                      54-1208450
          (State of Incorporation) (I.R.S. Employer Identification No)
           -----------------------------------------------------------
            2700 South Quincy Street, Suite 540, Arlington, VA 22206
               (address of principal executive offices) (zip code)


Registrant's Telephone Number, Including Area Code:  (703) 931-2274




Indicate  by the check mark  whether  the  Registrant  (1) has filed all reports
required to be filed by Section 13 and 15 of the  Securities and Exchange Act of
1934  during the  preceding  12 months and (2) has been  subject to such  filing
requirements for the past 90 days. Yes [ X ]
  No  [   ]

2,318,185 Common Shares were outstanding as of November 12, 1997.







<PAGE>




                         ALLSTATE FINANCIAL CORPORATION
                                   FORM 10-QSB
                                      INDEX

                                                                         Page
                                                                        Number
Part I.  Financial Information

  Item 1 -  Financial Statements

   Consolidated Balance Sheets at September 30, 1997
   and December 31, 1996                                                 1-2

   Consolidated Statements of Operations Three and Nine Months Ended
   September 30, 1997 and 1996                                           3

   Consolidated Statements of Shareholders' Equity Nine
   Months Ended September 30, 1997 and Year Ended
   December 31, 1996                                                     4

   Consolidated Statements of Cash Flows Nine Months Ended
   September 30, 1997 and 1996                                           5-6

   Notes to Consolidated Financial Statement                             7-10

  Item 2 - Management's Discussion and Analysis of Results of
         Operations and Financial Conditions                             11-19

Part II.
  Item 1 -  Legal Proceedings                                            20

  Item 6 -  Exhibits and Reports on Form 8-K                             20

Signature                                                                21





<PAGE>





















                         PART I - FINANCIAL INFORMATION









<PAGE>



                 ALLSTATE FINANCIAL CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                                    September 30,   December 31,
                                                        1997           1996
                                                     -----------    -----------
                                                    
                                                      (Unaudited)
                                     ASSETS

CURRENT ASSETS:
     Cash ..........................................   $ 2,062,321   $ 1,624,899
     Receivables:
         Finance, net ..............................    22,167,840    30,574,239
         Purchased life insurance contracts, net ...     4,125,474     4,493,088
         Other .....................................     3,749,180     4,394,975

     Prepaid expenses ..............................       122,480       154,434

     Income Tax Receivable .........................          --       1,150,289

     Deferred income taxes .........................       803,357       893,000
                                                           -------       -------

     TOTAL CURRENT ASSETS ..........................    33,030,652    43,284,924

FURNITURE, FIXTURES AND EQUIPMENT, Net .............       479,320       538,164

OTHER ASSETS .......................................     3,748,967     2,116,343
                                                         ---------     ---------

                                                       $37,258,939   $45,939,431
                                                       ===========   ===========



                                       LIABILITIES AND SHAREHOLDERS' EQUITY


CURRENT LIABILITIES:
     Accounts payable and accrued expenses .....     $   464,367     $   446,360
     Notes payable .............................       6,277,719      14,851,582
     Note payable-related party ................         103,000         103,000
     Credit balances of factoring clients ......       2,066,809       2,964,873
                                                       ---------       ---------

      TOTAL CURRENT LIABILITIES ................       8,911,895      18,365,815

                                        1

<PAGE>



                 ALLSTATE FINANCIAL CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (continued)

                                                    September 30,   December 31,
                                                         1997          1996
                                                     -----------    ------------
                                                     (Unaudited)

NONCURRENT PORTION OF NOTES PAYABLE:
     Related parties .........................           52,015           61,969
     Convertible Subordinated Notes ..........        4,983,110        4,985,110
                                                      ---------        ---------

         TOTAL LIABILITIES ...................       13,947,020       23,412,894
                                                     ----------       ----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
     Preferred stock, authorized 2,000,000
         shares with no par value; no shares
         issued or outstanding ...................        --              --

     Common stock, authorized 10,000,000 shares with
         no par value; 3,102,328 issued, 2,318,185
         outstanding  at September 30, 1997 and
         2,317,919 at December 31, 1996,
         exclusive of shares held in the Treasury        40,000           40,000

     Additional paid-in-capital ..................   18,852,312       18,852,312

     Treasury Stock (784,143 shares at 9/30/97 and
         784,409 at 12/31/96) ....................   (5,032,589)     (5,034,584)

     Retained Earnings ...........................    9,452,196        8,668,809
                                                      ---------        ---------

         TOTAL SHAREHOLDERS' EQUITY ..............   23,311,919       22,526,537
                                                     ----------       ----------

                                                   $ 37,258,939     $ 45,939,431
                                                   ============     ============



                 See Notes to Consolidated Financial Statements

                                        2

<PAGE>


<TABLE>

                 ALLSTATE FINANCIAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<CAPTION>
                                                      Three Months Ended September 30,  Nine Months Ended September 30,
                                                             1997            1996           1997             1996
                                                        -----------     -----------     -----------     ----------- 
                                                        (Unaudited)      (Unaudited)    (Unaudited)     (Unaudited)
<S>                                                    <C>             <C>             <C>             <C>         
INCOME:
     Earned discounts .............................    $  1,546,155    $  2,423,715    $  5,335,750    $  7,479,676
     Fees and other income ........................         784,451         499,802       1,809,075       1,615,052
                                                            -------         -------       ---------       ---------

         Total Income .............................       2,330,606       2,923,517       7,144,825       9,094,728
                                                          ---------       ---------       ---------       ---------

EXPENSES:
     Compensation and fringe benefits .............         738,837         737,910       2,201,033       2,584,291
     General and administrative expense ...........         558,515         632,985       1,598,462       2,184,707
     Interest expense .............................         201,675         360,627         829,002       1,142,970
     Provision for credit losses ..................         362,621         527,341       1,038,411       5,079,570
     Commission ...................................          68,332         126,248         234,444         352,034
                                                             ------         -------         -------         -------

          TOTAL EXPENSES ..........................       1,929,980       2,385,111       5,901,352      11,343,572
                                                          ---------       ---------       ---------      ----------

INCOME/(LOSS) BEFORE INCOME TAXES .................         400,626         538,406       1,243,473      (2,248,844)

INCOME TAXES/(BENEFIT) ............................         148,232         198,800         460,086      (  832,400)
                                                            -------         -------         -------      ----------- 

NET INCOME/(LOSS) .................................    $    252,394    $    339,606    $    783,387    $ (1,416,444)
                                                       ============    ============    ============    ============ 

NET INCOME/(LOSS) PER SHARE  ......................    $        .11    $       0.15    $        .34    $ (     0.61)
                                                       ============    ============    ============    ============ 

WEIGHTED AVERAGE NUMBER OF SHARES  ................       2,318,139       2,317,237       2,317,993       2,331,797
                                                          =========       =========       =========       =========
</TABLE>


                                        3

<PAGE>


<TABLE>

                 ALLSTATE FINANCIAL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                          YEAR ENDED DECEMBER 31, 1996
                    AND NINE MONTHS ENDED SEPTEMBER 30, 1997

<CAPTION>
  
                                                                     Common          Paid in           Treasury           Retained
                                                                      Stock          Capital             Stock            Earnings
                                                                   ---------       -----------       ------------       ----------- 

<S>                                                              <C>               <C>               <C>                <C>        
BALANCE - January 1, 1996 ................................       $    40,000       $18,852,312       $(2,871,901)       $ 9,709,953

  Exchange of Convertible
     Subordinated Notes for
     338,275 shares of common stock ......................              --                --          (2,170,683)              --

  Conversion of Convertible Subordinated
     Notes to 1,066 shares of Common
     Stock ...............................................              --                --               8,000               --

  Net Loss ...............................................              --                --                --           (1,041,144)
                                                                   ---------       -----------       ------------       ----------- 


BALANCE - December 31, 1996 ..............................            40,000        18,852,312       $(5,034,584)       $ 8,668,809

  Conversion of Convertible Subordinated
     Notes to 266 shares of Common
     Stock ...............................................              --                --               1,995               --

  Net Income (unaudited) .................................              --                --                --              783,387
                                                                   ---------       -----------       ------------       ----------- 

BALANCE - September 30, 1997 .............................       $    40,000       $18,852,312       $(5,032,589)       $ 9,452,196
                                                                 ===========       ===========       ===========        ===========

</TABLE>



                                        4

<PAGE>


<TABLE>

                 ALLSTATE FINANCIAL CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                             Nine Months Ended September 30,
                                                             -------------------------------
                                                                1997             1996
                                                             -----------   --------------    

<S>                                                       <C>              <C>           
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income/(Loss) ......................             $     783,387    $  (1,416,444)
     Adjustments to reconcile net income
         to cash provided by operating activities:
         Depreciation - net .................                   146,900           97,400
         Provision for credit losses ........                 1,038,411        5,079,570
     Changes in operating assets and liabilities:
         Decrease/(Increase) in other receivables             1,804,832         (819,484)
         Decrease/(Increase) in prepaid expenses                 31,954          (20,202)
         (Increase)/Decrease in other assets                 (1,182,624)       1,226,774
         Increase in accounts payable
              and accrued expenses ..........                    18,007          210,273
         Decrease/(Increase) in income taxes receivable       1,239,932         (824,130)
                                                              ---------         -------- 


NET CASH PROVIDED BY
     OPERATING ACTIVITIES ...................                 3,880,799        3,533,757
                                                              ---------        ---------


CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of finance receivables, including
         accounts receivable, secured advances,
         repurchases and life insurance contracts          (135,092,067)    (142,451,717)
     Collection of finance receivables, including
         accounts receivable, secured advances,
         repurchases and life insurance contracts           141,218,632      139,876,073
     (Decrease)/Increase in credit balances of
         factoring clients ..................                  (898,064)         508,094
     Purchase of furniture, fixtures and equipment              (88,056)         (51,255)
                                                                -------          ------- 


NET CASH PROVIDED/(USED) BY
    INVESTING ACTIVITIES ....................                 5,140,445       (2,118,805)
                                                              ---------       ---------- 
</TABLE>



                                        5

<PAGE>


<TABLE>

                 ALLSTATE FINANCIAL CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (continued)
<CAPTION>

                                                            Nine Months Ended September 30,
                                                            -------------------------------
                                                                1997              1996
                                                              --------        -----------   
<S>                                                          <C>              <C>       
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from line of credit and
         other borrowings ............................       49,965,511       45,155,265
     Principal payments on line of credit
         and other borrowings ........................      (58,549,333)     (45,830,244)
     Treasury Stock Acquisition Costs ................           --               22,683)
                                                            ============      ========== 

NET CASH USED IN FINANCING ACTIVITIES: ...............       (8,583,822)        (697,662)
                                                             ----------         -------- 

NET INCREASE IN CASH .................................          437,422          717,290

CASH, Beginning of period ............................        1,624,899          754,295
                                                              ---------          -------

CASH, End of period ..................................     $  2,062,321     $  1,471,585
                                                           ============     ============



SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:

     Interest paid ...................................     $    818,033     $  1,142,970
                                                           ============     ============

     Income taxes paid ...............................     $    300,000     $       --
                                                           ============     ============

     Transfer of finance and other
        receivables to other assets ..................     $  1,800,000     $       --
                                                           ============     ============

     Issuance of Convertible Subordinated
        Notes in exchange for Common Stock ...........     $       --       $  2,148,000
                                                           ============     ============

     Issuance of Common Stock in exchange
         for Subordinated Notes ......................     $      2,000     $      5,000
                                                           ============     ============

</TABLE>
                                        6

<PAGE>



                 ALLSTATE FINANCIAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  General.  The  consolidated   financial  statements  of  Allstate  Financial
Corporation and its wholly owned  subsidiaries  (the "Company")  included herein
are unaudited for all periods ended September 30, 1997 and 1996;  however,  they
reflect all adjustments  which,  in the opinion of management,  are necessary to
present fairly the results for the periods  presented.  Certain  information and
note  disclosures   normally  included  in  financial   statements  prepared  in
accordance with generally accepted accounting  principles have been condensed or
omitted  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission.  Allstate  Financial  Corporation  believes that the disclosures are
adequate  to make the  information  presented  not  misleading.  The  results of
operations  for the nine months  ended  September  30, 1997 are not  necessarily
indicative  of the results of operations to be expected for the remainder of the
year.

It is  suggested  that  these  consolidated  financial  statements  be  read  in
conjunction  with  the  consolidated  financial  statements  and  notes  thereto
included in Allstate Financial Corporation's Annual Report on Form 10-KB for the
year ended December 31, 1996.

2. Net income per share.  Net income per share of common stock has been computed
by  dividing  net income by the  weighted  average  number of common  shares and
common stock equivalents outstanding during the periods presented. Stock options
are considered common stock equivalents,  unless determined to be anti-dilutive.
For the quarters  ended  September 30, 1997 and 1996,  weighted  average  shares
outstanding  were 2,318,139 and 2,317,237,  respectively.  At September 30, 1997
and December 31, 1996 there were 106,830 and 158,400 stock options  outstanding,
at exercise prices ranging from $5.44 to $14.00 per share. During the year ended
December 31, 1996, 24,867 options were terminated without being exercised. There
were no options  exercised during 1996 or during the nine months ended September
30, 1997.

In March 1997,  the Financial  Accounting  Standards  Board issued SFAS No. 128,
"Earnings Per Share". SFAS No. 128 supersedes APB No. 15 to conform earnings per
share with  internal  standards  as well as to simplify  the  complexity  of the
computation  under APB No. 15. In summary,  SFAS No. 128  replaces  the previous
primary earnings per share ("EPS") calculation with a basic EPS calculation. The
basic EPS differs  from the primary EPS  calculation  in that the basic EPS does
not include any potentially dilutive securities.  Fully dilutive EPS is replaced
with diluted EPS and should be disclosed  regardless  of its dilutive  impact on
EPS. SFAS No. 128 is effective for both interim and annual  periods ending after
December 15, 1997. The EPS in the  Statements of Operations are presented  under
APB No. 15.  Proforma EPS under SFAS No. 128 for the nine months ended September
30, 1997 and 1996 would not have resulted in a material  difference  from EPS as
shown.

3. Line of credit. As of September 30, 1997, the Company had approximately $18.7
million  available  under a $25 million  secured  revolving line of credit.  The
credit facility contains a $5.0 million sub-facility for the issuance of letters
of credit,  a $5 million  sub-facility  the proceeds of which may be used by the
Company to make advances to clients secured by machinery and

                                        7

<PAGE>



equipment and a $2.5 million  sub-facility  the proceeds of which may be used by
the Company to make advances to clients secured by inventory.  Borrowings  under
the credit  facility  bear  interest  at a spread over the bank's base rate or a
spread  over  LIBOR,  at the  Company's  election.  The  Company  is  subject to
covenants  which are typical in revolving  credit  facilities of this type.  The
maturity date on this credit facility is May 27, 2000.


4. Convertible Subordinated Notes Payable. As of September 30, 1997, included in
Notes  Payable the Company had  outstanding  $4,976,000  in aggregate  principal
amount of Convertible  Subordinated Notes. The Notes (I) mature on September 30,
2000;  (ii) currently bear interest at the rate of 9.5% per annum which rate may
fluctuate in accordance  with the prime rate, but may not fall below 8% nor rise
above 10% per annum;  (iii) are convertible  into common stock of the Company at
the rate of $7.50 per share;  (iv) are  subordinated to Senior  Indebtedness (as
defined)  of the Company and (v) were  issued  pursuant  to an  indenture  which
contains  certain  covenants which are less  restrictive than those contained in
the Company's secured revolving credit facility.  Upon the occurrence of certain
change of  control  events,  holders  of the Notes  have the right to have their
Notes redeemed at par.

5. New  Financial  Accounting  Standards.  In  September  1996,  SFAS  No.  125,
"Accounting for Transfers and Servicing of Financial Assets and  Extinguishments
of  Liabilities"  was issued.  SFAS No. 125 provides  accounting  and  reporting
standards for transfers and servicing of financial assets and extinguishments of
liabilities,  based on a financial-components  approach that focuses on control.
Under this  approach,  after a  transfer  of  financial  assets,  financial  and
servicing  assets are recognized if controlled or liabilities  are recognized if
incurred. Financial and servicing assets are removed from the balance sheet when
control has been surrendered and liabilities are removed when extinguished. SFAS
No.  125 was  effective  and  adopted  on  January  1, 1997 and will be  applied
prospectively.  The  Company  does not  anticipate  any  material  effect on its
financial position from this implementation.

6.  Certain  Contingencies.  The  Company is a  defendant  in White,  Trustee v.
Allstate  Financial  Corporation  pending in the U.S.  Bankruptcy  Court for the
Western District of Pennsylvania. The Company provided receivables financing and
advances for Lyons Transportation  Lines, Inc. ("Lyons").  Lyons was the subject
of a leveraged buy-out and subsequently  filed a bankruptcy  petition.  In 1991,
the Lyon's trustee brought an action against the Company  claiming,  among other
things,  fraudulent  transfer and breach of contract.  In late 1994, the Company
reached a settlement  agreement with the Lyons  trustee,  subject to approval by
the bankruptcy court, which would have released the Company from all claims upon
the payment of $300,000. In connection with the settlement, the Company paid and
added  $300,000 to the  provision  for credit  losses in 1994. A creditor in the
bankruptcy  proceeding,  Sherwin-Williams  Company,  objected  to  the  proposed
settlement  amount  and, in March  1995,  the  objection  was  sustained  by the
bankruptcy  court.  The $300,000  previously paid by the Company was returned to
the  Company in April  1996.  The matter is  currently  being  litigated  in the
District Court.  Management does not believe at this time that the Company has a
material  exposure  significantly  in  excess  of  the  previously  agreed  upon
settlement amount.


                                        8

<PAGE>



     In  connection  with the same  transaction,  the  Company was also named in
January 1994 as a defendant in  Sherwin-Williams  Company v. Robert Castello et.
al.  pending in the United States  District  Court for the Northern  District of
Ohio.  Sherwin-Williams  is  suing  all  parties  with  any  involvement  in the
transaction  to  recover  damages  allegedly  incurred  by  Sherwin-Williams  in
connection  with the leveraged  buy-out and the  bankruptcy  litigation  arising
therefrom.  Sherwin-Williams  asserts  that it has or will  incur  pension  fund
liabilities  and  other  liabilities  as a  result  of  the  transaction  in the
approximate amount of $11 million and has asserted claims against the Company in
that amount. The complaint asserts,  among other things,  that the purchasers of
Lyons breached their purchase  agreement with  Sherwin-Williams  by pledging the
assets of Lyons to the Company to obtain the down payment. The Company was not a
party to the purchase agreement. In response to the complaint, the Company filed
a motion to dismiss all claims. In March 1997, a federal magistrate  recommended
to the District Court that the Company's  motion to dismiss the claims contained
in the  original  complaint  held against the Company be granted.  However,  the
magistrate  recommended  that the  Company's  motion to  dismiss  two new claims
contained  in an amended  complaint be denied.  The  District  Court has not yet
ruled  on the  magistrate's  recommendation.  Management  does not  believe  the
litigation will have a material  effect on the financial  position or results of
operations  of the Company  because,  in  management's  opinion,  the claims are
without merit.

     The Company is a counterclaim  defendant in Allstate Financial  Corporation
v. A.G.  Construction,  Inc.  (n/k/a  A.G.  Plumbing,  Inc.),  American  General
Construction  Corp., Adam Guziczek and Cheryl Lee Guziczek pending in the United
States  Bankruptcy  Court for the  Southern  District  of New York.  The Company
provided receivable financing to A.G. Construction,  Inc. (n/k/a/ A.G. Plumbing,
Inc.) in 1988 and to American  General  Construction  Corp.  (hereinafter,  A.G.
Construction,  Inc.  (n/k/a/ A.G.  Plumbing) and American  General  Construction
shall be collectively  referred to as "AG") in 1991.  AG's primary  business was
renovation of public housing for the City of New York.  Adam and Cheryl Guziczek
(hereinafter  collectively referred to as "Guziczek")  personally guaranteed the
obligation  due the  Company  under  the  financing  arrangement.  In  1993,  AG
defaulted on its obligations  under the financing  arrangement with the Company.
Thereafter,  the Company confessed  judgment against AG and Guziczek in Virginia
and  commenced  actions in New York to  enforce  the  guaranties  and to attempt
recovery  on the  confessed  judgments.  In one of the  actions  an  answer  and
counterclaim against the Company was filed. The counterclaim asserted claims for
usury, diversion of proceeds of public improvement contracts and overpayments to
the Company by AG in excess of $2,000,000.00  (hereinafter the "Counterclaims").
No specific damage claim amount was set forth in the counterclaim.  On August 1,
1994,  Guziczek  filed a voluntary  Chapter 11 petition  under the United States
Bankruptcy  code and on June 14,  1995 the case was  converted  to a  Chapter  7
proceeding.  On  January  3,  1996,  AG filed a  separate  voluntary  Chapter  7
petition.  No  action  was  ever  taken by the  trustee  in the  Guziczek  or AG
bankruptcy proceedings to pursue the Counterclaims. On June 2, 1997, the Trustee
for the AG bankruptcy  estate filed a motion to abandon  certain  claims against
the Company,  including all claims that the Company diverted  proceeds of public
improvement contracts.  On October 7, 1997, New York Surety Company (hereinafter
referred to as the "Surety")  filed  pleadings  objecting to the  abandonment of
such claims against the Company. The Surety provided the payment and performance
bond to AG in connection  with the  construction  jobs performed for the City of
New York. In its pleadings the Surety asserts that it is subrogated to

                                        9

<PAGE>



AG's claims and thereby  seeks to intervene and file an  intervenor's  complaint
against the Company.  The proposed  complaint adopts the Counterclaims and seeks
an accounting.  The Surety asserts  damages of  approximately  $4,000,000.00.  A
hearing on the motion for  intervention has been scheduled for January 14, 1998.
The  Company  believes it has  meritorious  defenses  to the  Counterclaims  and
intends to  vigorously  defend all claims.  However,  the  litigation  is in the
preliminary stage and the probability of a favorable or unfavorable  outcome and
the potential  amount of loss, if any, cannot be determined or estimated at this
time.

     Except as described above, the Company is not party to any litigation other
than routine  proceedings  incidental to its business,  and the Company does not
expect  that  these  proceedings  will  have a  material  adverse  effect on the
Company.  From time to time,  the Company is required to initiate  litigation to
collect  amounts owed by former clients,  guarantors or obligors.  In connection
with such  litigation,  the Company  periodically  encounters  counterclaims  by
defendant(s) for material amounts.  Such counterclaims are typically without any
factual  basis and,  management  believes,  are usually  asserted for  defensive
purposes by the litigant.





                      [THIS SPACE INTENTIONALLY LEFT BLANK]


                                       10

<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
   AND RESULTS OF OPERATIONS

FORWARD-LOOKING INFORMATION

     Certain  disclosures  contained in this Form 10-QSB contain forward looking
information  based on current  information and  expectations of the Company that
involve a number of risks, uncertainties and assumptions,  including the overall
state of the  economy,  competition  among  financial  institutions,  the credit
quality of the Company's clients and account debtors,  and the Company's ability
to generate  growth in earning  assets  through the  generation of new business.
Should one or more of these risks or  uncertainties  materialize,  or should the
underlying  assumptions  prove incorrect,  actual outcomes could vary materially
from those expected.

GENERAL

     The Company's  principal  business is the  discounted  purchase of accounts
receivable,  usually on a full recourse,  full notification  basis. In addition,
the Company  also makes  advances to its clients  collateralized  by  inventory,
equipment,  real  estate  and  other  assets  ("Collateralized   Advances").  On
occasion,  the Company will also provide other specialized  financing structures
which satisfy the unique requirements of the Company's clients. The Company also
provides  its clients  with  letters of  guaranty,  arranges for the issuance of
letters of credit for its clients and provides other related financial services.

     The Company's  clients are small- to  medium-sized  businesses  with annual
revenues typically ranging between $600,000 and $75,000,000.  Historically,  the
Company's  clients  have  not  qualified  for  traditional  bank or  asset-based
financing  because  they are either too new,  too  small,  undercapitalized  (or
over-leveraged), unprofitable or otherwise unable to satisfy the requirements of
a bank or traditional,  asset-based lender.  Banks and other asset-based lenders
have, however,  started to lend to the Company's traditional,  high risk type of
client. Given the Company's typical client profile,  there is a significant risk
of default and client failure inherent in the Company's business.

     Continuing  competition  within the  marketplace  from  banks,  asset-based
lenders and newly created  finance  companies have encroached upon the Company's
potential client base and have negatively  affected earned discounts on factored
accounts  receivable.  Additionally,  the Company has attracted  larger  clients
which  often  increases  the  amount of time  needed to  negotiate  and fund new
business.  Also,  Collateralized Advances require extensive in-depth and diverse
due diligence which can further delay the funding of new business.  Nonetheless,
the  Company  believes  that its  ability  to  respond  quickly  and to  provide
specialized,  flexible and  comprehensive  financing  structures  to its clients
enables it to compete effectively.  In order to remain competitive,  the Company
is,  where  necessary  and  appropriate,   offering  lower  rates  than  it  has
historically.  The Company believes that increased competition will continue for
the foreseeable  future and will continue to exert downward pressure on pricing,
especially in the Company's  core  factoring  business.  To counter the downward
pressure on pricing, the Company intends to continue to diversify its sources of
income, primarily by continuing to place emphasis on funding relationships which
include (in addition to the factoring of full recourse accounts  receivable) the
making of

                                       11

<PAGE>



Collateralized  Advances and by expanding into logically  related  product lines
such as the traditional  non-recourse  factoring of accounts  receivable through
the Company's Allstate Factors division.

     Historically,   the  Company  has  not   expected  to  maintain  a  funding
relationship  with a client for more than two years;  the Company  expected that
its  clients  would  ultimately  qualify for more  competitively  priced bank or
asset-based  financing within that time period.  Therefore,  the Company's major
clients  have  historically  tended  to change  significantly  over  time.  More
recently,  however,  because the Company is, where  necessary  and  appropriate,
offering lower rates and making Collateralized Advances, it is possible that the
duration  of  the  Company's  funding  relationships  with  its  clients  may be
extended.  In addition,  the Company's  Allstate Factors division is expected to
provide a more stable  client base than the Company's  traditional  client base.
Even  if  the  Company  succeeds  in  extending  the  duration  of  its  funding
relationship  with its clients,  there will not be a  corresponding  increase in
non-current  assets  on the  Company's  balance  sheet.  This is  because  it is
anticipated  that the  Company's  funding  relationships  with its clients  will
continue to renew no less frequently than once a year.  Although the Company has
historically been successful in replacing major clients, the loss of one or more
major  clients and an inability to replace  those  clients could have a material
adverse effect on the Company.

     Lifetime  Options,  a  wholly-owned  subsidiary  of the  Company,  provided
financial   assistance  to  individuals  facing   life-threatening   illness  by
purchasing their life insurance policies at a discount from face value.  Because
most  of  the  life  insurance   policies  purchased  by  Lifetime  Options  are
underwritten by highly rated insurance  companies (and, in many cases, backed by
state guaranty  funds),  the management of Lifetime Options believes that credit
risk is not  material  to its  business.  Lifetime  Options  has  curtailed  its
operations.  This decision  enables  management to better focus on the Company's
core commercial  finance business at a time when competition has reduced yields,
and medical  advances have created a certain degree of uncertainty,  in Lifetime
Options' business.  Lifetime Options is currently  exploring the sale of some or
all of the life insurance policies in its portfolio.


  RESULTS OF OPERATIONS

       The  following  table sets forth  certain items of income and expense for
the periods indicated and indicates the percentage  relationship of each item to
total income.






                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                       12

<PAGE>



                                        For the Three Months Ended September 30,
                                        ----------------------------------------
                                              1997                   1996
                                        ------------------    ------------------
                                       (Unaudited)              (Unaudited)

INCOME
   Earned discounts .................   $1,546,155     66.3%  $2,423,715   82.9%
   Fees and other income ............      784,451     33.7      499,802   19.1
                                           -------     ----      -------   ----
        TOTAL INCOME ................    2,330,606    100.0%   2,923,517  100.0%
                                         ---------    -----    ---------  ----- 

EXPENSES
   Compensation and fringe benefits .      753,637     32.3%     737,910   25.3
   General and administrative expense      543,715     23.3      632,985   21.7
   Interest expense .................      201,675      8.7      360,627   12.3
   Provision for credit losses ......      362,621     15.6      527,341   18.0
   Commissions ......................       68,332      2.9      126,248    4.3
                                            ------      ---      -------    ---

         TOTAL EXPENSES .............    1,929,980     82.8    2,385,111   81.6
                                         ---------     ----    ---------   ----

INCOME BEFORE INCOME TAXES ..........      400,626     17.2      538,406   18.4

INCOME TAXES ........................      148,232      6.4      198,800    6.8
                                           -------      ---      -------    ---

NET INCOME ..........................   $  252,394     10.8% $   339,606   11.6%
                                        ==========     ====  ===========   ==== 

NET INCOME PER SHARE ................          $ 0.11           $   0.15
                                               ======           ========

WEIGHTED AVERAGE NUMBER OF SHARES ...       2,318,139         2,317,237
                                            =========         =========


                                         For the Nine Months Ended September 30,
                                         ---------------------------------------
                                              1997                    1996
                                         ------------------- -------------------
                                              (Unaudited)          (Unaudited)
INCOME
   Earned discounts ..................  $  5,335,750   74.7% $  7,479,676  82.2%
   Fees and other income .............     1,809,075   25.3     1,615,052  17.8
                                           ---------   ----     ---------  ----
      TOTAL INCOME ...................     7,144,825  100.0%    9,094,728 100.0%
                                           ---------  -----     --------- ----- 

EXPENSES
   Compensation and fringe benefits ..     2,215,833   31.0     2,584,291  28.4
   General and administrative expense      1,583,662   22.2     2,184,707  24.0
   Interest expense ..................       829,002   11.6     1,142,970  12.6
   Provision for credit losses .......     1,038,411   14.5     5,079,570  55.8
      Commissions ....................       234,444    3.3       352,034   3.9
                                             -------    ---       -------   ---

      TOTAL EXPENSES .................     5,901,352   82.6    11,343,572 124.7
                                           ---------   ----    ---------- -----

INCOME (LOSS) BEFORE INCOME TAXES ....     1,243,473   17.4    (2,248,844)(24.7)

INCOME TAXES (BENEFIT) ...............       460,086    6.4      (832,400)  9.2
                                             -------    ---      --------   ---

NET INCOME (LOSS) ....................  $    783,387   11.0%  $(1,416,444)(15.5)
                                        ============   ====   =========== ===== 

NET INCOME (LOSS) PER SHARE                        $0.34           $(0.61)
                                                   =====           ====== 

WEIGHTED AVERAGE NUMBER OF SHARES               2,317,993        2,331,797
                                                =========        =========

                                       13

<PAGE>



         TOTAL INCOME.  Total income  consists of (I) earned  discounts and (ii)
fees and other income.  "Earned  discounts" consist primarily of income from the
purchase of accounts receivable and income from Collateralized  Advances.  "Fees
and other income" consist primarily of application fees,  commitment or facility
fees,  other related  financing  fees,  revenue  recognized on the collection of
certain  non-performing assets and supplemental discounts paid by clients who do
not sell the minimum volume of accounts  receivable  required by their contracts
with the Company  (including as a result of  "graduating" to a lower cost source
of funding).

         The following table breaks down total income by type of transaction for
the  periods  indicated  and  the  percentage   relationship  of  each  type  of
transaction to total income.

                                        For the Three Months Ended September 30,

                                             1997                    1996
                                         (Unaudited)             (Unaudited)
                                      --------------------  --------------------
                                      Earned    % of Total    Earned  % of Total
    Type of Transaction               Income      Income      Income    Income
    -------------------             ----------   -------    -----------  ------

Discount on Factored
     Accounts Receivable .......    $1,100,130    47.2%      $1,470,677    50.4%
Earnings on Collateralized
     Advances ..................       238,308    10.2          685,778    23.4
Earnings on Purchased Life
     Insurance Policies ........          --      --            149,172     5.1
Other Earnings .................       207,717     8.9          118,088     4.0
                                       -------     ---          -------     ---
     Total .....................     1,546,155    66.3        2,423,715    82.9

Fees and Other Income ..........       784,451    33.7          499,802    17.1
                                       -------    ----          -------    ----
     Total Income ..............    $2,330,606   100.0%      $2,923,517   100.0%
                                    ==========   =====       ==========   ===== 


                                         For the Nine Months Ended September 30,

                                           1997                      1996
                                          (Unaudited)            (Unaudited)
                                      -------------------    -------------------
                                      Earned   % of Total     Earned  % of Total
   Type of Transaction                Income     Income       Income     Income
   -------------------               ---------  --------     ----------  -------

Discount on Factored
     Accounts Receivable .........  $3,582,944    50.1%      $4,033,922    44.3%
Earnings on Collateralized
     Advances ....................     697,856     9.8        2,345,413    25.8
Earnings on Purchased Life
     Insurance Policies ..........     200,000     2.8          491,244     5.4

Other Earnings ...................     854,950    12.0          609,097     6.7
                                       -------    ----          -------     ---


                                       14

<PAGE>



                                             1997                    1996
                                         (Unaudited)             (Unaudited)
                                   --------------------      -------------------

     Total .......................   5,335,750    74.7        7,479,676    82.2
Fees and Other Income ............   1,809,075    25.3        1,615,052    17.8
                                     ---------    ----        ---------    ----
     Total Income ................  $7,144,825   100.0%      $9,094,728   100.0%
                                    ==========   =====       ==========   ===== 


         Total income  decreased 21.4% in the first nine months of 1997 from the
same period in 1996, from $9.1 million to $7.1 million;  total income  decreased
21.9% for the third  quarter  of 1997  over the same  period in 1996,  from $2.9
million to $2.3 million.  Earned  discounts  from factored  accounts  receivable
decreased,  from $4.0  million to $3.6  million in the first nine months of 1997
versus  the first  nine  months of 1996.  In the third  quarter  of 1997  earned
discounts  from factored  accounts  receivable  decreased $1.1 million from $1.5
million.  The decline in earned discounts from factored  accounts  receivable in
the nine months ended  September 30, 1997 is, in part,  attributable to the loss
of volume from several large clients that paid their  obligations in full at the
beginning of the year.  During the third quarter of 1997,  however,  the Company
funded seven new clients. Revenue from these accounts should enhance performance
in the fourth quarter of 1997. In addition,  competition in the  marketplace has
continued to exert downward pressure on earned discounts.  Earned discounts from
factored  accounts  receivable  as  a  percentage  of  total  factored  accounts
receivable purchased were 3.0% and 3.4%, respectively,  in the first nine months
of 1997 and 1996. In the third quarters of 1997 and 1996,  earned discounts were
3.0% and 3.4%, respectively,  of factored accounts receivable. In the first nine
months of 1997 and 1996,  earned  discounts  from factored  accounts  receivable
accounted  for 50.1% and  44.3%,  respectively,  of total  income.  In the third
quarters of 1997 and 1996 earned  discounts  from factored  accounts  receivable
accounted for 47.2% and 50.4%, respectively, of total income.

         Earned discounts from Collateralized  Advances decreased  approximately
70.2% in the first nine months of 1997 versus the comparable  period in 1996, to
approximately $1.0 million from $2.4 million and decreased  approximately  65.2%
in the third  quarter of 1997 over the same  quarter in 1996,  to  approximately
$238  thousand  from $686  thousand.  In the first nine months of 1997 and 1996,
earned discounts from Collateralized Advances constituted approximately 9.8% and
25.8%,  respectively,  of total  income.  The decline in earned  discounts  from
Collateralized  Advances  in 1997 does not  reflect a  strategic  move away from
Collateralized  Advances.  Rather, it reflects a reduction in the average amount
of Collateralized Advances outstanding during the relevant periods. In the third
quarters  of 1997  and  1996,  earned  discounts  from  Collateralized  Advances
constituted  10.2% and  23.4%,  respectively,  of total  income.  Collateralized
Advances currently bear interest at a rate, on average,  of approximately 2% per
month   calculated   generally  on  the  average   outstanding   amount  of  the
Collateralized  Advance during the month.  Earned discounts from  Collateralized
Advances are required to be paid in cash monthly in arrears.  (See Provision for
Credit Losses below.)

        As of  September  30, 1997 and  December  31,  1996,  factored  accounts
receivable  included on the Company's  balance sheet were $20.1 million  (65.8%)
and $22.4 million (59.6%),  respectively,  of gross finance  receivables.  As of
September 30, 1997 and December 31, 1996,  Collateralized  Advances  included on
the Company's  balance sheet were $4.4 million (15.4%) and $8.8 million (23.4%),
respectively, of gross finance receivables.


                                       15

<PAGE>



         Fees and other income increased 12.5% to approximately  $1.8 million in
the first nine months of 1997 as compared to $1.7  million in the same period in
1996.  In the third  quarter of 1997,  fees and other income were $784  thousand
compared to $500  thousand,  an increase of 56.8% in the third  quarter of 1997.
The  increase  in fees and other  income in 1997 is  primarily  attributable  to
revenue recognized on the collection of certain non-performing assets offset, in
part, by a reduction in facility fees and one-time fees received in 1996.

         Compensation and Fringe Benefits.  In the first nine months of 1997 and
1996, compensation and fringe benefits were $2.2 million (31.0% of total income)
and $2.6 million (28.4% of total income),  respectively.  For the third quarters
of 1997 and 1996,  compensation and fringe benefits were $754 thousand (32.3% of
total income) and $738 thousand  (25.2% of total income),  respectively.  Within
compensation and fringe benefits,  executive compensation decreased in the first
nine months of 1997 as compared to the same period in 1996,  from $904  thousand
(9.9% of total  income)  to $652  thousand  (9.1%  of total  income).  Executive
compensation  increased  in the third  quarter of 1997 as  compared  to the same
period in 1996, from $190 thousand (6.5% of total income) to $220 thousand (9.5%
of total  income).  The  higher  compensation  and  fringe  benefits  (including
executive  compensation)  during the first nine months of 1996 were  chiefly the
result of expenses  associated  with the  severance  of a key employee and costs
associated with replacing that employee.

         General and Administrative Expense.  General and administrative expense
was $1.6 million  (22.4% of total income) as compared to $2.2 million  (24.0% of
total income) for the first nine months of 1997 and 1996, respectively.  For the
third  quarters of 1997 and 1996,  general and  administrative  expense was $559
thousand  (24.0% of total  income) and $633  thousand  (21.7% of total  income),
respectively.  The decrease  for the first nine months and the third  quarter of
1997 was primarily  attributable to a decrease in professional  fees,  offset in
part by increases in depreciation. Professional fees were $432 thousand (6.0% of
total  income) in the first nine months of 1997 versus $980  thousand  (10.8% of
total income) in the first nine months of 1996 and were $14.2  thousand (6.1% of
total income) in the third  quarter of 1997 versus $226 thousand  (7.7% of total
income) in the third quarter of 1996. The decrease in professional  fees in 1997
is attributable,  in part, to the final resolution of legal proceedings in prior
years. General and administrative expense (other than professional fees) for the
nine months ended  September 30, 1997 and 1996 was $1.2 million (16.3%) and $1.2
million (13.2%), respectively. For the three months ended September 30, 1997 and
1996, general and administrative expense (other than professional fees) was $417
thousand (17.9%) and $407 thousand (13.9%), respectively.

         Interest  Expense.  Interest  expense was $829 thousand (11.6% of total
income) versus $1.1 million (12.6% of total income) for the first nine months of
1997 and 1996,  respectively,  and $202 thousand  (8.7% of total income)  versus
$360 thousand  (12.3% of total income) for the third  quarters of 1997 and 1996,
respectively.  The decrease in interest expense is attributable to a decrease in
the average daily balance outstanding on the Company's revolving lines of credit
and to more favorable borrowing rates negotiated by the Company in May 1997. The
average daily outstanding balance on the Company's revolving lines of credit was
$4.9  million  and $10.4  million  for the first  nine  months of 1997 and 1996,
respectively,  and $3.7  million  and $9.5  million for the three  months  ended
September 30, 1997 and 1996, respectively. The average interest rate paid on the
Company's  revolving  lines of credit  decreased  to 8.89% during the first nine
months of 1997 from 9.12%  during  the first  nine  months of 1996 and was 8.45%
during the third  quarter of 1997 as compared to 9.28% during the third  quarter
of 1996.

                                       16

<PAGE>



         Interest expense on the Company's  Convertible  Subordinated  Notes was
approximately  $118,000 in the third  quarters of 1997 and 1996 and $355,000 for
the first nine months of 1997 and 1996.

         Provision for Credit Losses.  The provision for credit losses decreased
from $5.1  million  (55.9% of total  income) in the first nine months of 1996 to
$1.0  million  (14.5% of total  income)  in the first nine  months of 1997.  The
provision  for credit  losses  during the first nine  months of 1996  included a
provision  of  $3.9  million  in the  second  quarter  of 1996  associated  with
management's  decision to write-off or  write-down  nine  non-performing  assets
totaling  $4.2  million.  As of  September  30, 1997 and  December  31, 1996 the
allowance for credit losses was 10.0% ($2.8  million) and 6.9% ($2.6 million) of
gross finance  receivables,  respectively.  At September 30, 1997 the accrual of
earnings was suspended on $1.9 million of gross finance  receivables as compared
to $4.5 million of gross finance  receivables at December 31, 1996. In addition,
"other  receivables" and "other assets" appearing on the Company's balance sheet
typically do not accrue earnings for financial statement purposes. The following
table  provides a summary of the  Company's  gross  finance  receivables  (which
includes primarily  factored accounts  receivable,  Collateralized  Advances and
non-earning receivables), "other receivables" and "other assets" and information
regarding the allowance for credit losses as of the dates indicated.


<TABLE>
<CAPTION>
                                                              As of (or for               As of (or for the Nine
                                                             the Year Ended)            Months Ended) September 30,
                                                            December 31, 1996             1997                1996 
                                                            -----------------           --------           ---------  
                                                                                      (Unaudited)      (Unaudited)
                                                                             (Dollars in thousands)

<S>                                                              <C>                   <C>                   <C>     
Gross Finance Receivables, Other
  Receivables and Other Assets Data:
Gross Finance Receivables .............................          $ 37,600              $ 28,314              $ 35,416
Non-Earning Receivables (also included
  in Gross Finance Receivables) .......................             4,548                 1,895                   313
Other Receivables .....................................             4,390                 3,748                 3,565
Other Assets (excluding
miscellaneous) ........................................             1,884                 3,481                   590

Allowance for credit
  losses:
Balance, January 1 ....................................             2,351                 2,579                 2,351
Provision for credit
  losses ..............................................             5,878                 1,038                 5,080
Receivables charged off ...............................            (5,711)               (1,120)               (5,708)
Recoveries ............................................                61                   330                    15
                                                                       --                   ---                    --
Ending Balance ........................................          $  2,579              $  2,827              $  1,738
                                                                 ========              ========              ========

Allowance for Credit Losses
 as a percent of:
Gross Finance Receivables .............................               6.9%                 10.0%                  4.9%
Non-Earning Receivables ...............................              56.7%                149.2%                555.3%
Non-Earning Receivables, Other
  Receivables and Other Assets ........................              28.3%                 31.0%                 39.0%
</TABLE>


                                       17

<PAGE>
<TABLE>
<CAPTION>
                                                              As of (or for               As of (or for the Nine
                                                             the Year Ended)            Months Ended) September 30,
                                                            December 31, 1996             1997                1996 
                                                            -----------------           --------           ---------  
                                                                                      (Unaudited)      (Unaudited)
                                                                             (Dollars in thousands)

<S>                                                              <C>                   <C>                   <C>     
As a percent of the sum of Gross
  Finance Receivables, Other
  Receivables and Other Assets:
Non-Earning
  Receivables ....................................               10.4%                  5.3%                 0.1%
Other Receivables ................................               10.0%                 10.5%                 9.0%
Other Assets .....................................                4.3%                  9.8%                 0.9%
</TABLE>



         Although the Company  maintains an  allowance  for credit  losses in an
amount  deemed by  management  to be  adequate  to cover  potential  losses,  no
assurance  can be given that the  allowance  will in fact be adequate or that an
inadequacy, if any, in the allowance could not have a material adverse effect on
the  Company's  earnings in future  periods.  Furthermore,  although  management
believes  that its periodic  estimates of the value of "other  receivables"  and
"other assets" are appropriate, no assurance can be given that the amounts which
the Company  ultimately  collects  with respect to other  receivables  and other
assets will not differ  significantly from management's  estimates or that those
differences,  if any, could not have a material  adverse effect on the Company's
earnings in future periods.

         COMMISSIONS.  Commission  expense  was  $234  thousand  (3.3%  of total
income) in the first nine months of 1997 as compared to $352  thousand  (3.9% of
total income) in the first nine months of 1996. For the quarter ended  September
30, 1997, commission expense was $68 thousand (2.9% of total income) versus $126
thousand  (4.3% of total income) for the same quarter in 1996.  The reduction in
commission expense is related, in part, to the decrease in earned discounts and,
in part,  to  certain  new  business  acquired  from  non-commissioned  referral
sources.

IMPACT OF INFLATION

         Management believes that inflation has not had a material effect on the
Company's income, expenses or liquidity during the past three years.

         Changes in  interest  rate  levels do not  generally  affect the income
earned by the Company in the form of discounts  charged.  Rising  interest rates
would,  however,  increase  the  Company's  cost of borrowed  funds based on its
current  borrowing  arrangements  which  are  prime  or  LIBOR  adjusted  credit
facilities.

CHANGES IN FINANCIAL CONDITION

         The  Company's  total  assets  decreased  18.9%  to  $37.3  million  at
September  30, 1997 from $45.9  million at December  31,  1996.  The decrease is
primarily  the result of a decrease in net finance  receivables.  The  Company's
assets  have  increased  24.7% from June 30, 1997 to  September  30,  1997.  The
increase is primarily due to the increase in net finance receivables.



                                       18

<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

         The Company's  principal funding sources are the collection of factored
accounts receivable,  retained cash flow and external borrowings. For additional
detail  regarding  external  borrowings,  see  Notes  3 and 4 to  the  unaudited
financial statements contained in this Form 10- QSB.

         The Company  believes that  internally  generated  funds and borrowings
under its revolving  credit facility will be sufficient to finance the Company's
funding requirements for the next 12 months.

         At September  30, 1997 and  December 31, 1996,  the Company had working
capital of $24.1 million and $24.9 million, respectively, and a ratio of current
assets to current liabilities of 3.7 to 1 and 2.36 to 1, respectively.






                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                       19

<PAGE>



                           PART II - OTHER INFORMATION



ITEM 1. -LEGAL PROCEEDINGS

         For  details   regarding  legal   proceedings,   see  Note  6,  Certain
Contingencies,  to the  unaudited  financial  statements  contained in this Form
10-QSB.

ITEM 6(a). - EXHIBITS

         EXHIBIT 10.1 MATERIAL CONTRACTS

         Factoring Agreement with Republic Business Credit

         EXHIBIT 10.9.  EMPLOYMENT CONTRACTS

         Hotsenpiller, Employment Agreement

         EXHIBIT 27.  FINANCIAL DATA SCHEDULE

ITEM 6(b). - REPORTS ON FORM 8-K

         None.

                                       20

<PAGE>


SIGNATURES

         Pursuant to the  requirements of Section 13 or 15 (d) of the Securities
and Exchange  Act of 1934,  the Company has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                         ALLSTATE FINANCIAL CORPORATION


                         By:    /s/ Lawrence M. Winkler
                                -----------------------
                                    Lawrence M. Winkler



Date:     November 14, 1997                    /s/ Lawrence M. Winkler
                                               -----------------------
                                                   Lawrence M. Winkler
                                                   Secretary/Treasurer
                                                   Chief Financial Officer



                                       21

<PAGE>