<PAGE>

         GUARANTY

                   THIS GUARANTY, dated as of November 16, 2001, (this
"Guaranty"), is made by and among American Business Financial Services, Inc.
("ABFS"), American Business Credit, Inc. ("ABC"), HomeAmerican Credit, Inc.
d/b/a Upland Mortgage ("Upland"), American Business Mortgage Services, Inc.
("ABMS"; and jointly and severally with ABFS, ABC and Upland, the "Guarantors")
and Credit Suisse First Boston Mortgage Capital LLC (the "Buyer", which term
shall include any buyer for whom Buyer acts as Agent as defined and provided for
in the Master Repurchase Agreement referred to below).

         RECITALS

                   A. Pursuant to the Master Repurchase Agreement, dated as of
November 16, 2001 (as amended, supplemented or otherwise modified from time to
time, the "Master Repurchase Agreement"), between ABFS REPO 2001, Inc. (the
"Seller") and the Buyer, the Buyer has agreed to purchase certain loans (the
"Loans") from the Seller and the Seller has agreed to repurchase such Loans upon
the terms and subject to the conditions set forth therein.

                   B. To induce the Buyer to enter into the Master Repurchase
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantors have agreed to
guaranty the Seller's obligations with respect to the Master Repurchase
Agreement and the documents referenced therein.

                   C. It is a condition precedent to the obligation of the Buyer
to purchase the Loans from the Seller under the Master Repurchase Agreement that
the Guarantors shall have executed and delivered this Guaranty to the Buyer.

                   NOW, THEREFORE, for good and valuable consideration, receipt
of which by the parties hereto is hereby acknowledged, the parties hereto hereby
agree as follows:

                   1. Defined Terms. (a) Unless otherwise defined herein, terms
defined in the Master Repurchase Agreement and used herein shall have the
meanings given to them in the Master Repurchase Agreement.

                   (b) "Expiration Date" shall have the meaning set forth in
Section 2(d) herein.

                   (c) "Obligations" shall mean the obligations and liabilities
of the Seller and the Guarantors to the Buyer, including, without limitation,
the obligations whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, or out
of or in connection with the Master Repurchase Agreement, this Guaranty, any
<PAGE>

other Program Documents and any other document made, delivered or given in
connection therewith or herewith, whether on account of covenants, Repurchase
Prices, reimbursement obligations, fees, indemnities (subject to the limitations
set forth in Section 22(b) of the Master Repurchase Agreement), costs, expenses
(including, without limitation, all reasonable fees and disbursements of counsel
to the Buyer that are required to be paid by the Seller pursuant to the terms of
the Master Repurchase Agreement) or otherwise.


                   (d) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guaranty shall refer to this Guaranty as a
whole and not to any particular provision of this Guaranty, and section and
paragraph references are to this Guaranty unless otherwise specified.

                   (e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

                   2. Guaranty. (a) The Guarantors hereby, unconditionally and
irrevocably, guarantee to the Buyer and its successors, indorsees, transferees
and assigns the prompt and complete payment and performance by the Seller when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

                   (b) The Guarantors further agree to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by the Buyer in enforcing any rights with
respect to, or collecting, any or all of the Obligations and/or enforcing any
rights with respect to, or collecting against, the Guarantors under this
Guaranty. This Guaranty shall remain in full force and effect until the
Obligations are paid in full, notwithstanding that from time to time prior
thereto the Seller may be free from any Obligations.

                   (c) Each Guarantor agrees that the Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing this Guaranty or affecting the rights and remedies
of the Buyer hereunder.

                   (d) No payment or payments made by the Seller, the
Guarantors, any other guarantor or any other Person or received or collected by
the Buyer from the Seller, the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of the Guarantors hereunder which shall, notwithstanding any such
payment or payments other than payments made by the Guarantors in respect of the
Obligations or payments received or collected from the Guarantors in respect of
the Obligations, remain liable for the Obligations up to the maximum liability
of the Guarantors hereunder until the Obligations are paid in full and the
Master Repurchase Agreement is terminated (such date, the "Expiration Date").
<PAGE>

                   (e) Each Guarantor agrees that whenever, at any time, or from
time to time, it shall make any payment to the Buyer on account of its liability
hereunder, it will notify the Buyer in writing that such payment is made under
this Guaranty for such purpose.

                   (f) Each Guarantor shall be jointly and severally liable to
the Buyer for all obligations of the Guarantors hereunder.

                   3. Reserved.

                   4. Representations and Warranties of the Guarantors.

                   Each Guarantor hereby represents and warrants that:

                   (a) It is duly organized and validly existing in good
standing under the laws of the jurisdiction under which it is organized and is
duly qualified to do business and is in good standing in every other
jurisdiction as to which the nature of the business conducted by it makes such
qualification necessary.

                   (b) It has the full power, authority and legal right to
execute, deliver and perform its obligations under this Guaranty. This Guaranty
has been duly executed and delivered by it, has not been amended or otherwise
modified, is in full force and effect and is the legal, valid and binding
obligation of each Guarantor, enforceable against it in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally and to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law).

                   (c) Neither the execution and delivery of this Guaranty nor
the consummation of the transactions contemplated herein will conflict with or
result in a breach of, or require any consent under, any applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which the
Guarantors are a party or by which the Guarantors or their property is bound or
to which the Guarantors are subject, or constitute a default under any such
agreement or instrument, or (except for the liens created pursuant hereto)
result in the creation or imposition of any lien or encumbrance upon the
Guarantors' revenues or assets pursuant to the terms of any such agreement or
instrument.

                   (d) The Guarantors have received and reviewed copies of the
Master Repurchase Agreement.
<PAGE>

                   (e) This Guaranty is the legal, valid and binding obligation
of the Guarantors, enforceable against each Guarantor, in accordance with its
terms, subject to bankruptcy, insolvency and similar laws and to the
availability of equitable remedies.

                   (f) There is no action, suit or proceeding at law or in
equity by or before any governmental authority, arbitral tribunal or other body
now pending, or to the best of the Guarantors' knowledge, threatened against or
affecting the Guarantors or any of their property that could have a material
adverse effect on the Guarantors' condition, financial or otherwise.

                   (g) No authorizations, approvals or consents of, and no
filings or registrations with, any governmental authority are necessary for the
execution, delivery or performance by the Guarantors of this Guaranty.

                   5. Covenants of Guarantors.

                   Each Guarantor covenants and agrees that:

                   (a) It shall pay and discharge all taxes now or hereafter
imposed on it, on its income or profits, on any of its property or upon the
liens provided herein prior to the date on which penalties attach thereto; it
shall promptly pay any valid, final judgment enforcing any such tax and cause
the same to be satisfied of record and shall also pay, or cause to be paid, when
due all claims for labor, material, supplies or services that, if unpaid, could
by law result in a mechanics' lien.

                   (b) It shall notify the Buyer promptly upon obtaining
knowledge of any material action, suit or proceeding at law or in equity by or
before any government authority, arbitral tribunal or other body pending or
threatened against it or the Seller.

                   6. Reserved.

                   7. Right of Set-off. Upon the occurrence of any Event of
Default, the Guarantors hereby irrevocably authorize the Buyer or any of its
Affiliates at any time and from time to time without notice to the Guarantors,
any such notice being expressly waived by the Guarantors, to set-off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Buyer or any
of its Affiliates to or for the credit or the account of the Guarantors, or any
part thereof in such amounts as the Buyer may elect, against and on account of
the obligations and liabilities of the Guarantors to the Buyer hereunder and
claims of every nature and description of the Buyer or any of its Affiliates
against the Guarantors, in any currency, whether arising hereunder, under the
Master Repurchase Agreement as the Buyer may elect, whether or not the Buyer has
made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The Buyer shall notify the Guarantors
promptly of any such set-off and the application made by the Buyer, provided

<PAGE>

that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Buyer and its Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Buyer and its Affiliates may
have.

                   8. No Subrogation. Notwithstanding any payment or payments
made by the Guarantors hereunder or any set-off or application of funds of the
Guarantors by the Buyer or any of its Affiliates, the Guarantors shall not be
entitled to be subrogated to any of the rights of the Buyer against the Seller
or any other guarantor or any collateral security or guarantee or right of
offset held by the Buyer for the payment of the Obligations, nor shall the
Guarantors seek or be entitled to seek any contribution or reimbursement from
the Seller or any other guarantor in respect of payments made by the Guarantors
hereunder, until all amounts owing to the Buyer by the Seller on account of the
Obligations are paid in full and the Master Repurchase Agreement is terminated.
If any amount shall be paid to the Guarantors on account of such subrogation
rights at any time when all of the Obligations shall not have been paid in full,
such amount shall be held by the Guarantors in trust for the Buyer, segregated
from other funds of each Guarantor, and shall, forthwith upon receipt by the
Guarantors, be turned over to the Buyer in the exact form received by the
Guarantors (duly indorsed by the related Guarantor to the Buyer, if required),
to be applied against the Obligations, whether matured or unmatured, in such
order as the Buyer may determine.

                   9. Amendments, Etc. with Respect to the Obligations. The
Guarantors shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantors and without notice to or further
assent by the Guarantors, any demand for payment of any of the Obligations made
by the Buyer may be rescinded by the Buyer and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Buyer, and the Master Repurchase Agreement and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Buyer may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Buyer for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. The Buyer shall not have any
obligation to protect, secure, perfect or insure any lien at any time held by it
as security for the Obligations or for this Guaranty or any property subject
thereto. When making any demand hereunder against any Guarantor, the Buyer may,
but shall be under no obligation to, make a similar demand on the Seller or any
other guarantor, and any failure by the Buyer to make any such demand or to
collect any payments from the Seller or any such other guarantor or any release
of the Seller or such other guarantor shall not relieve the Guarantors of their
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Buyer against
the Guarantors. For the purposes hereof "demand" shall include the commencement
and continuance of any legal proceedings.
<PAGE>

                   10. Waiver of Rights. The Guarantors waive any and all notice
of the creation, renewal, extension or accrual of any of the Obligations, and
notice of or proof of reliance by the Buyer upon this Guaranty or acceptance of
this Guaranty; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guaranty; and all dealings between the Seller and
the Guarantors, on the one hand, and the Buyer, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
this Guaranty. The Guarantors waive diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Seller or the
Guarantors with respect to the Obligations.

                   11. Guaranty Absolute and Unconditional. The Guarantors
understand and agree that this Guaranty shall be construed as a continuing,
absolute and unconditional guarantee of the full and punctual payment and
performance by the Seller of the Obligations and not of their collectibility
only, and is in no way conditioned upon any requirement that the Buyer first
attempt to collect any of the obligations from the Seller, without regard to (a)
the validity, regularity or enforceability of the Master Repurchase Agreement,
any of the Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Buyer, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Seller against the Buyer, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Seller or the Guarantors) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Seller from the Obligations, or of the Guarantors from this
Guaranty, in bankruptcy or in any other instance. When pursuing its rights and
remedies hereunder against the Guarantors, the Buyer may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the Seller
or any other Person or any other collateral security or guarantee for the
Obligations or any right of offset with respect thereto, and any failure by the
Buyer to pursue such other rights or remedies or to collect any payments from
the Seller or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Seller or any such other Person or any such collateral security, guarantee
or right of offset, shall not relieve the Guarantors of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Buyer against the Guarantors. This
Guaranty shall remain in full force and effect and be binding in accordance with
and to the extent of its terms upon the Guarantors and the successors and
assigns thereof, and shall inure to the benefit of the Buyer, and its
successors, indorsees, transferees and assigns, until all the Obligations and
the obligations of the Guarantors under this Guaranty shall have been satisfied
by payment in full and the Master Repurchase Agreement shall be terminated,
notwithstanding that from time to time during the term of the Master Repurchase
Agreement the Seller may be free from any Obligations.
<PAGE>

                   12. Reinstatement. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Buyer upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Seller or any of the Guarantors, or upon or
as a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Seller or any of the Guarantors or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

                   13. Payments. The Guarantors hereby guarantee that payments
hereunder will be paid to the Buyer without set-off or counterclaim in U.S.
Dollars in accordance with the wiring instructions of the Buyer.

                   14. Notices. All notices, requests and other communications
provided for herein (including without limitation any modifications of, or
waivers, requests or consents under, this Guaranty) shall be given or made in
writing (including without limitation by telecopy) and delivered to the intended
recipient at the "Address for Notices" specified on the signature page hereto;
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other party. All such communications shall be deemed
to have been duly given when transmitted by telecopy or personally delivered or,
in the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.

                   15. Severability. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                   16. Integration. This Guaranty and the Master Repurchase
Agreement represent the agreement of the Guarantors with respect to the subject
matter hereof and thereof and there are no promises or representations by the
Buyer relative to the subject matter hereof or thereof not reflected herein or
therein.

                   17. Amendments in Writing; No Waiver; Cumulative Remedies.
(a) None of the terms or provisions of this Guaranty may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Guarantors and the Buyer, provided that any provision of this Guaranty may
be waived by the Buyer.

                   (b) The Buyer shall not by any act (except by a written
instrument pursuant to Section 17(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Buyer, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Buyer of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Buyer would otherwise have
on any future occasion.
<PAGE>

                   (c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.

                   18. Section Headings. The section headings used in this
Guaranty are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

                   19. Successors and Assigns. This Guaranty shall be binding
upon the successors and assigns of the Guarantors and shall inure to the benefit
of the Buyer and its successors and assigns. This Guaranty may not be assigned
by any of the Guarantors without the express written consent of the Buyer.

                   20. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY NEW
YORK LAW WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.

                   21. SUBMISSION TO JURISDICTION; WAIVERS. EACH GUARANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY:

                   (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS GUARANTY AND THE PROGRAM DOCUMENTS, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;

                   (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

                   (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH
THE BUYER SHALL HAVE BEEN NOTIFIED; AND

                   (D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO SUE IN ANY OTHER JURISDICTION.
<PAGE>

                   22. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY, THE MASTER REPURCHASE AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

                   23. Reserved.

                   24. Other Liens. Notwithstanding anything to the contrary
contained herein, liens previously granted by the Guarantors in favor of the
Buyer or future liens that are granted by the Guarantors in favor of the Buyer
will not constitute a breach of this Guaranty.

                   25. Agents. The Buyer may employ agents and attorneys-in-fact
in connection herewith and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-infact selected by it in good faith.

                   26. Counterparts. This Guaranty may be executed in any number
of counterparts, all of which when taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Guaranty by
signing any such counterpart.


<PAGE>


                   IN WITNESS WHEREOF, the parties hereto have caused this
Guaranty to be duly executed and delivered as of the day and year first above
written.

AMERICAN BUSINESS FINANCIAL SERVICES, INC., jointly and severally as Guarantor


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

HOMEAMERICAN CREDIT, INC. d/b/a UPLAND MORTGAGE, jointly and severally as
Guarantor


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

<PAGE>


AMERICAN BUSINESS CREDIT, INC., jointly and severally as Guarantor


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


AMERICAN BUSINESS MORTGAGE SERVICES, INC., jointly and severally as Guarantor


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

<PAGE>



Address for Notices with respect to each of the foregoing:
American Business Financial Services, Inc.
Balapointe Office Centre
111 Presidential Blvd, Suite 127
Bala Cynwyd, Pennsylvania 19004
Attention: Jeffrey M. Ruben
Telephone: (610) 617-5562
Facsimile: (610) 668-4164

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC

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


Address for Notices:
11 Madison Avenue, 5th Floor
New York, New York 10010
Attention: Thomas Irwin
Telecopier No.: (212) 325-8232
Telephone No.: (212) 325-0331

with a copy to (at same address):
Attention: Gabriella Morizio
Telecopier No.: (212) 325-8219
Telephone No.: (212) 325-9646