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                   AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT

         Amendment No. One to the Employment Agreement dated January 29, 1997,
by and between AMERICAN BUSINESS FINANCIAL SERVICES, INC., a Delaware
corporation (the "Company"), and BEVERLY SANTILLI, an individual (the
"Employee") is entered into this 1st day of October, 1997 ("Amendment One").

                                  BACKGROUND

         The Executive is currently employed by the Company in the position of
Executive Vice President and Secretary. The Company and the Executive desire
to amend the Employment Agreement to revise the terms of the Bonus payable to
Executive as more fully set forth below.

         NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt of which is hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:

         Section 3 of the Employment Agreement entitled "Compensation" be and
hereby is amended to read as follows:

                  Compensation. During the Term, the Executive shall be
                  entitled to a minimum base annual salary of not less than
                  $200,000. The foregoing figure shall be adjusted in January
                  of each calendar year during the Term for any increase in
                  the cost of living (based upon the Consumer Price Index,
                  Philadelphia, PA - New Jersey: all items, 1982-84=100, as
                  published by the U.S. Department of Labor) from May, 1996 to
                  November of the immediately preceding calendar year. The
                  minimum base annual salary of the Executive, as adjusted for
                  the cost of living, shall be reviewed annually, and may be
                  increased from time to time by the Company's Board of
                  Directors during the Term, and once increased may not
                  thereafter be decreased. The Board of Directors shall
                  establish a cash bonus plan which provides for the following
                  bonuses to be paid for each fiscal year during the Term: (a)
                  if the Executive achieves 80% of the targets approved by the
                  Board of Directors for the fiscal year (the "Targets"), a
                  cash bonus equal to 50% of base annual salary; (b) if the
                  Executive achieves 100% of the Targets, a cash bonus equal
                  to 100% of base annual salary, and if the Executive achieves
                  more than 80% and less than 100% of the Targets, the cash
                  bonus will be proportional to the achievement (e.g., if 90%
                  of the Targets are achieved, the cash bonus would equal 75%
                  of base annual salary); (c) if the Executive achieves more
                  than 100% of the Targets, the cash bonus will be 100% of the
                  base annual salary plus an additional 2.5% for each 1% over
                  100% of the Targets actually achieved (for example, if the
                  Executive achieves 120% of the Targets, the cash bonus would
                  equal 150% of the base annual salary). The Targets
                  established by the Board of Directors may not be increased
                  by more than twenty-five percent (25%) from one fiscal year
                  to the next subsequent fiscal year and may not be increased
                  after a Change of Control (as defined in Section 6 hereof)
                  to which the Executive does not give her written consent as
                  provided in Section 6. The Executive shall also be entitled
                  to such stock options and other incentive payments as are
                  determined from time to time by the Company's Board of
                  Directors.



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         IN WITNESS WHEREOF, the Company and Executive have executed this
Amendment One as of the date first written above.


                         AMERICAN BUSINESS FINANCIAL SERVICES, INC.

(Corporate Seal)          By: /s/ Jeffrey M. Ruben
                              --------------------------------------
                          Attest: /s/ David M. Levin         
                              --------------------------------------
Witness: /s/ David M. Levin
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                         /s/ Beverly Santilli                       (SEAL)
                         -------------------------------------------------
                         Beverly Santilli