<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549


                                      FORM 10-Q


       [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934
             (For the Quarterly Period ended September 30, 1997)

                                         OR

       [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
            For transition period from ________________to_______________

                   Commission File Number:  0-24286


                             EAGLE FINANCE CORP.
            ------------------------------------------------------
            (Exact name of Registrant as specified in its charter)


            DELAWARE                                36-2464365          
-------------------------------        ------------------------------------
(State or other jurisdiction of        (IRS Employer Identification Number)
incorporation or organization)

1425 TRI-STATE PARKWAY, GURNEE, ILLINOIS              60031-4060
----------------------------------------              ----------
(Address of principal executive offices)              (Zip Code)

                                    (847) 855-7150        
                ----------------------------------------------------
                (Registrant's telephone number, including area code)



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

    Indicate the number of shares outstanding of each of the Issuer's classes
of common stock as of the latest practicable date:

10,000,000 shares of common stock, $0.01 par value per share, were authorized
and 4,228,690 shares were issued and outstanding as of September 30, 1997.


<PAGE>

                               EAGLE FINANCE CORP.

                                     FORM 10-Q

                              ________________________

                                 TABLE OF CONTENTS
                              ________________________
                                                                           PAGE
                                                                          NUMBER
                                                                          ------
                          PART I - FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

         Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

         Statements of Income. . . . . . . . . . . . . . . . . . . . . . . . . 4

         Statements of  Changes in Stockholders' Equity. . . . . . . . . . . . 5

         Statements of  Cash Flows . . . . . . . . . . . . . . . . . . . . . . 6

         Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 7

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . 9

                          PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . 21

Item 2.  CHANGES IN SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . 22

Item 3.  DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . . . . . . . 22

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . 22

Item 5.  OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . 22

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . 22

SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-1


                                        2
<PAGE>

                                 EAGLE FINANCE CORP.

                                    BALANCE SHEETS
               AS OF SEPTEMBER 30, 1997 AND 1996 AND DECEMBER 31, 1996
                                     (Unaudited)

                                        ASSETS

<TABLE>
<CAPTION>

                                                                    SEPTEMBER 30,
                                                            --------------------------     DECEMBER 31,
                                                                 1997         1996             1996
                                                            ------------  -------------    -----------
<S>                                                        <C>
Finance receivables, net. . . . . . . . . . . . . . . . . . $ 46,512,640   $118,001,578    $54,663,926
Nonrefundable acquisition discount. . . . . . . . . . . . .     (769,956)    (3,789,744)    (1,443,164)
Allowance for credit losses . . . . . . . . . . . . . . . .   (4,075,078)    (7,949,865)    (6,045,514)
                                                            ------------   ------------    -----------
                                                              41,667,606    106,261,969     47,175,248
Excess servicing receivable . . . . . . . . . . . . . . . .    2,645,331             --      1,050,590
Cash  . . . . . . . . . . . . . . . . . . . . . . . . . . .    2,341,969      2,198,112      1,271,594
Money market investments. . . . . . . . . . . . . . . . . .      552,301        545,509        552,651
Prepaid expenses and debt issuance costs. . . . . . . . . .    1,161,996      1,875,702      1,554,082
Repossessed or titled assets. . . . . . . . . . . . . . . .    1,902,452      5,388,343      4,249,443
Income tax receivable . . . . . . . . . . . . . . . . . . .           --             --      4,732,346
Deferred income tax benefit . . . . . . . . . . . . . . . .    1,467,129      4,865,984      1,004,912
Other assets    . . . . . . . . . . . . . . . . . . . . . .    2,854,811        543,200      2,176,696
                                                            ------------   ------------    -----------
                                                            $ 54,593,595   $121,678,819    $63,767,562
                                                            ------------   ------------    -----------
                                                            ------------   ------------    -----------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Senior debt . . . . . . . . . . . . . . . . . . . . . . . .   27,996,177    $84,491,239    $32,827,893
Subordinated debt . . . . . . . . . . . . . . . . . . . . .   17,597,981     18,006,905     17,977,720
Accrued interest. . . . . . . . . . . . . . . . . . . . . .      152,710        160,967        468,533
Accounts payable and accrued liabilities. . . . . . . . . .    2,598,322      2,636,405      1,893,737
Unearned insurance commissions. . . . . . . . . . . . . . .        1,179         23,884          5,158
Dealer reserves . . . . . . . . . . . . . . . . . . . . . .      271,357        278,505        286,783
                                                            ------------   ------------    -----------
Total liabilities . . . . . . . . . . . . . . . . . . . . .   48,617,726    105,597,905     53,459,824
Stockholders' equity:
Preferred Stock, authorized 3,000,000 shares;
  none issued . . . . . . . . . . . . . . . . . . . . . . .           --            --              --
Common Stock:  $.01 par value, authorized 10,000,000
  shares, issued and outstanding 4,228,690 shares . . . . .       42,287         41,891         41,891
Additional paid-in capital. . . . . . . . . . . . . . . . .   13,593,206     13,514,422     13,514,422
Retained earnings . . . . . . . . . . . . . . . . . . . . .   (7,659,624)     2,524,601     (3,248,575)
                                                            ------------   ------------    -----------
Total stockholders' equity. . . . . . . . . . . . . . . . .    5,975,869     16,080,914     10,307,738
                                                            ------------   ------------    -----------
                                                             $54,593,595   $121,678,819    $63,767,562
                                                            ------------   ------------    -----------
                                                            ------------   ------------    -----------

</TABLE>

                See accompanying notes to financial statements.


                                        3
<PAGE>

                              EAGLE FINANCE CORP

                             STATEMENTS OF INCOME
            THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED SEPTEMBER 30,  NINE MONTHS ENDED SEPTEMBER 30,
                                                 --------------------------------  -------------------------------
                                                       1997           1996            1997           1996
                                                   -----------     ----------     -----------     ----------
<S>                                                <C>             <C>             <C>           <C>
Interest income:
   Interest and fee income. . . . . . . . . . . .   $2,738,079     $6,949,015      $9,344,063    $22,308,922
   Interest expense . . . . . . . . . . . . . . .   (1,311,917)    (2,406,059)     (4,072,396)    (7,278,781)
                                                   -----------     ----------     -----------     ----------
Net interest income . . . . . . . . . . . . . . .    1,426,162      4,542,956       5,271,667     15,030,141
Provision for credit losses . . . . . . . . . . .   (1,297,225)    (1,730,000)     (4,465,546)    (6,626,000)
                                                   -----------     ----------     -----------     ----------
Net interest income after provision
  for credit losses . . . . . . . . . . . . . . .      128,937      2,812,956         806,121      8,404,141
Other income:
   Servicing income . . . . . . . . . . . . . . .      524,777      1,758,189       2,964,349      4,111,599
   Gain on sale of finance receivables. . . . . .      468,563             --       3,089,795             --
   Insurance commissions. . . . . . . . . . . . .           --          8,530           5,044         43,615
                                                   -----------     ----------     -----------     ----------
Total other income. . . . . . . . . . . . . . . .      993,340      1,766,719       6,059,188      4,155,214
Income before operating expenses. . . . . . . . .    1,122,277      4,579,675       6,865,309     12,559,355
Operating expenses:
   Salaries and related costs . . . . . . . . . .    1,941,567      2,033,544       5,928,035      5,915,906
   Other operating expenses . . . . . . . . . . .    1,634,133      2,198,669       5,348,323      6,006,450
                                                   -----------     ----------     -----------     ----------
Total operating expenses. . . . . . . . . . . . .    3,575,700      4,232,213      11,276,358     11,922,356
                                                   -----------     ----------     -----------     ----------
Income (loss) before income taxes . . . . . . . .   (2,453,423)       347,462      (4,411,049)       636,999
Applicable income taxes . . . . . . . . . . . . .           --        133,439             --         212,423
                                                   -----------     ----------     -----------     ----------
Net income (loss) . . . . . . . . . . . . . . . .  $(2,453,423)      $214,023     $(4,411,049)      $424,576
                                                   -----------     ----------     -----------     ----------
                                                   -----------     ----------     -----------     ----------
Per share data:
   Net income (loss) per common share
    (primary) . . . . . . . . . . . . . . . . . .       ($0.58)         $0.05          ($1.05)         $0.10
   Net income (loss) per common share
    (fully diluted) . . . . . . . . . . . . . . .       ($0.58)         $0.05          ($1.05)         $0.09
   Average number of common shares
    outstanding (primary) . . . . . . . . . . . .    4,206,313      4,189,100       4,194,901      4,189,100
   Average number of common shares
    outstanding (fully diluted) . . . . . . . . .    4,206,313      4,189,100       4,194,901      4,195,809

</TABLE>

                   See accompanying notes to financial statements.


                                        4
<PAGE>

                                 EAGLE FINANCE CORP.

                    STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
               THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                     (Unaudited)

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED SEPTEMBER 30,  NINE MONTHS ENDED SEPTEMBER 30,
                                                 --------------------------------  -------------------------------
                                                       1997           1996            1997           1996
                                                   -----------     ----------     -----------     ----------
<S>                                                <C>             <C>             <C>           <C>
Common stock:
   Balance at beginning of period . . . . . . . .     $ 41,891       $ 41,891       $ 41,891       $ 41,891
   Stock grants . . . . . . . . . . . . . . . . .          396             --            396             --
                                                   -----------     ----------     -----------     ----------
                                                        42,287         41,891         42,287         41,891
                                                   -----------     ----------     -----------     ----------
Additional paid-in capital:
   Balance at beginning and end of period . . . .   13,514,422     13,514,422     13,514,422     13,514,422
   Stock grants . . . . . . . . . . . . . . . . .       78,784             --         78,784             --
                                                   -----------     ----------     -----------     ----------
                                                    13,593,206     13,514,422     13,593,206     13,514,422
                                                   -----------     ----------     -----------     ----------

Retained earnings:
   Balance at beginning of period . . . . . . . .   (5,206,201)     2,310,578     (3,248,575)     2,100,024
   Net income (loss). . . . . . . . . . . . . . .   (2,453,423)       214,023     (4,411,049)       424,577
                                                   -----------     ----------     -----------     ----------
                                                    (7,659,624)     2,524,601     (7,659,624)     2,524,601
                                                   -----------     ----------     -----------     ----------
Total stockholders' equity. . . . . . . . . . . .   $5,975,869    $16,080,914     $5,975,869    $16,080,914
                                                   -----------     ----------     -----------     ----------
                                                   -----------     ----------     -----------     ----------
</TABLE>



                   See accompanying notes to financial statements.


                                        5
<PAGE>
                                 EAGLE FINANCE CORP.

                               STATEMENTS OF CASH FLOWS
               THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                     (Unaudited)


<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED SEPTEMBER 30,  NINE MONTHS ENDED SEPTEMBER 30,
                                                 --------------------------------  -------------------------------
                                                       1997            1996            1997            1996
                                                   -------------    ------------   ------------    ------------
<S>                                                <C>              <C>            <C>             <C>
Cash flows from operating activities:
  Net income (loss) . . . . . . . . . . . . . . .  $ (2,453,423)    $    214,022   $ (4,411,049)   $    424,576
  Adjustments to reconcile net income to 
    net cash provided by (used in) 
    operating activities:
      Provision for credit losses . . . . . . . .     1,297,225        1,730,000      4,465,546       6,626,000
      Net finance receivable (charge-offs) 
        recoveries against allowance. . . . . . .    (1,518,366)      (2,672,558)    (6,435,982)     (9,483,970)
      Decrease (increase) in:
        Prepaid expenses unrelated to debt. . . .      (104,487)         484,003         47,087        (311,265)
        Excess servicing receivable . . . . . . .       237,440               --     (1,594,741)             --
        Repossessed or titled assets. . . . . . .       (44,633)        (626,362)     2,346,991        (959,203)
        Other assets. . . . . . . . . . . . . . .      (149,324)         738,948       (678,115)        709,846
        Deferred income tax . . . . . . . . . . .         3,400          772,071      4,270,129              --
      Increase (decrease) in:
        Accrued interest. . . . . . . . . . . . .      (350,281)        (206,386)      (315,823)       (341,867)
        Accrued income tax. . . . . . . . . . . .        (1,925)        (729,714)            --      (1,412,858)
        Accounts payable and accrued
          liabilities . . . . . . . . . . . . . .       501,184         (350,539)       704,585        (543,921)
        Unearned insurance commissions. . . . . .           (30)          (6,368)        (3,979)        (22,231)
        Dealer reserves . . . . . . . . . . . . .        (2,233)         (12,196)       (15,426)        (34,359)
        Nonrefundable dealer reserves . . . . . .       (26,980)      (1,568,695)      (673,208)     (5,618,408)
                                                    -----------      -----------    -----------     -----------
Net cash provided by (used in) operating 
  activities. . . . . . . . . . . . . . . . . . .    (2,612,433)      (3,201,780)    (2,293,985)    (10,967,660)
                                                    -----------      -----------    -----------     -----------
Cash flows from investing activities:
  Purchase of investments . . . . . . . . . . . .           562            8,646            350            (509)
  Proceeds from bulk sale/securitization  of 
    vehicle retail installment notes. . . . . . .     6,243,193        9,463,170     36,993,236      43,745,444
  Principal collected on finance receivables. . .     3,577,106       10,728,904     13,527,013      37,868,774
  Finance receivables originated or 
    acquired (net of write-offs). . . . . . . . .   (16,579,279)     (18,719,680)   (42,368,963)    (53,896,930)
                                                    -----------      -----------    -----------     -----------
Net cash provided by (used in) investing 
  activities. . . . . . . . . . . . . . . . . . .    (6,758,418)       1,481,040      8,151,636      27,716,779
                                                    -----------      -----------    -----------     -----------
Cash flows from financing activities:
  Proceeds from draws on bank lines . . . . . . .    24,149,348       12,170,000     15,080,000      41,450,583
  Repayments of borrowings. . . . . . . . . . . .   (32,235,338)      (9,601,631)   (18,856,728)    (58,082,214)
  Debt to affiliate . . . . . . . . . . . . . . .      (138,311)          20,195     (1,054,988)        471,313
  Proceeds from issuance of other debt. . . . . .        23,085           36,791         73,853          92,519
  Repayment of other debt . . . . . . . . . . . .       (56,832)              --       (453,592)       (130,913)
  Debt issuance cost. . . . . . . . . . . . . . .        60,824         (360,954)       344,999        (421,512)
  Paid in capital . . . . . . . . . . . . . . . .        78,784               --         78,784              --
  Stock grants. . . . . . . . . . . . . . . . . .           396               --            396              --
                                                    -----------      -----------    -----------     -----------
Net cash provided by (used in) financing 
  activities. . . . . . . . . . . . . . . . . . .     8,053,936        2,264,401     (4,787,276)    (16,620,224)
                                                    -----------      -----------    -----------     -----------
Cash, net change. . . . . . . . . . . . . . . . .    (1,316,915)         543,661      1,070,375         128,895
Cash at beginning of period . . . . . . . . . . .     3,658,884        1,654,451      1,271,594       2,069,217
                                                    -----------      -----------    -----------     -----------
Cash at end of period . . . . . . . . . . . . . .   $ 2,341,969      $ 2,198,112    $ 2,341,969     $ 2,198,112
                                                    -----------      -----------    -----------     -----------
                                                    -----------      -----------    -----------     -----------
Supplemental cash flow disclosures - cash paid 
  during the period for:
   Interest. . . . . . .  . . . . . . . . . . . .   $ 1,662,198      $ 1,921,067    $ 4,388,219     $ 5,852,823
   Income taxes and Illinois replacement tax. . .   $        --      $    91,082    $     1,925     $ 1,625,282

</TABLE>
                   See accompanying notes to financial statements.


                                        6
<PAGE>


                                 EAGLE FINANCE CORP.

                            NOTES TO FINANCIAL STATEMENTS


1.  The financial statements of Eagle Finance Corp., a Delaware corporation 
(the "Company"), are unaudited, but in the opinion of management reflect all 
necessary adjustments, consisting only of normal recurring accruals, for a 
fair presentation of results as of the dates and for the periods covered by 
the financial statements. The results for the interim periods are not 
necessarily indicative of the results of operations that may be expected for 
the fiscal year.  Management suggests that the unaudited interim financial 
statements contained herein be read in conjunction with the financial 
statements and the accompanying notes to the financial statements included in 
the Company's 1996 Annual Report on Form 10-K.

2.  Net income (loss) per common share amounts are based on the weighted 
average number of common shares and common stock equivalents outstanding as 
reflected on Exhibit 11 to this Quarterly Report on Form 10-Q.

3.  As of January 1, 1997, the Company adopted Financial Accounting Standards 
Board Statement ("FASB") No.  125, "Accounting for Transfers and Servicing of 
Financial Assets and Extinguishments of Liabilities" ("FASB 125").  FASB 125 
is effective for transfers and servicing of financial assets and retirements 
of liabilities occurring after December 31, 1996, and is to be applied 
prospectively.  FASB 125 provides accounting and reporting standards for 
transfers and servicing of financial assets and retirements of liabilities 
based on consistent application of a financial components approach that 
focuses on control.  It distinguishes transfers of financial assets that are 
sales from transfers that are secured borrowings.  Adoption of FASB 125 is 
expected to have a material impact on the Company's financial position and 
results of operations.

4.  In February 1997, FASB Statement No. 128, "Earnings Per Share" ("FASB 
128"), was issued. FASB 128 supersedes APB Opinion No. 15, Earnings Per Share 
and specifies the computation, presentation, and disclosure requirements for 
earnings per share (EPS) for entities with publicly held common stock or 
potential common stock.  FASB 128 was issued to simplify the computation of 
EPS and to make the U.S. standard more compatible with the EPS standards of 
other countries and that of the International Accounting Standards Committee. 
It replaces the presentation of primary EPS with a presentation of basic EPS 
and fully diluted EPS with diluted EPS.  It also requires dual presentation 
of basic and diluted EPS on the face of the income statement for all entities 
with complex capital structures and requires a reconciliation of the 
numerator and denominator of the basic EPS computation to the numerator and 
denominator of the diluted EPS computation.

    Basic EPS, unlike primary EPS, excludes dilution and is computed by 
dividing income available to common stockholders by the weighted-average 
number of common shares outstanding for the period.  Diluted EPS reflects the 
potential dilution that could occur if securities or other contracts to issue 
common stock were exercised or converted into common stock or resulted in the 
issuance of common stock that then shared in the earnings of the entity.  
Diluted EPS is computed similarly to fully diluted EPS under APB 15.

    FASB 128 is effective for financial statements for both interim and 
annual periods ending after December 15, 1997.  Earlier application is not 
permitted (although pro forma EPS disclosure in the footnotes for periods 
prior to required adoption is permitted).  After adoption, all prior-period 
EPS data 


                                        7
<PAGE>

presented must be restated to conform with FASB 128.  Although no assurances 
can be provided, the Company does not expect adoption of FASB 128 to have a 
significant impact on the Company's financial condition or results of 
operations.

    In June 1997, FASB issued FASB Statement No. 130, "Reporting 
Comprehensive Income", which is effective for fiscal years beginning after 
December 15, 1997 ("FASB 130").  The statement establishes standards for 
reporting and display of comprehensive income and its components (revenues, 
expenses, gains and losses) in a full set of general-purpose financial 
statements.  This statement requires that all items that are required to be 
recognized under accounting standards as components of comprehensive income 
be reported in a financial statement that is displayed with the same 
prominence as other financial statements.  Although no assurances can be 
provided, the Company does not expect adoption of FASB 130 to have a 
significant impact on the Company's financial condition or results of 
operations.

THIS REPORT MAY CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING 
OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF 
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.  THE COMPANY INTENDS SUCH 
FORWARD-LOOKING STATEMENTS TO BE COVERED BY THE SAFE HARBOR PROVISIONS FOR 
FORWARD-LOOKING STATEMENTS CONTAINED IN THE PRIVATE SECURITIES REFORM ACT OF 
1995, AND IS INCLUDING THIS STATEMENT FOR PURPOSES OF INDICATING SUCH INTENT. 
FORWARD-LOOKING STATEMENTS THAT ARE BASED ON CERTAIN ASSUMPTIONS, AND 
DESCRIBE FUTURE PLANS, STRATEGIES AND EXPECTATIONS OF THE COMPANY, ARE 
GENERALLY IDENTIFIABLE BY USE OF THE WORDS "BELIEVE," "EXPECT," "INTEND," 
"ANTICIPATE," "ESTIMATE," "PROJECT" OR SIMILAR EXPRESSIONS.  THE COMPANY'S 
ABILITY TO PREDICT RESULTS OR THE ACTUAL EFFECT OF FUTURE PLANS OR STRATEGIES 
IS INHERENTLY UNCERTAIN. FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON 
THE OPERATIONS AND FUTURE PROSPECTS OF THE COMPANY INCLUDE, BUT ARE NOT 
LIMITED TO, CHANGES IN INTEREST RATES, GENERAL ECONOMIC CONDITIONS, 
LEGISLATIVE/REGULATORY CHANGES, MONETARY AND FISCAL POLICIES OF THE U.S. 
GOVERNMENT, INCLUDING POLICIES OF THE U.S. TREASURY AND THE FEDERAL RESERVE 
BOARD, THE QUALITY OR COMPOSITION OF THE COMPANY'S PORTFOLIO OF FINANCE 
RECEIVABLES, THE ABILITY OF THE COMPANY TO OBTAIN DEBT OR OTHER FINANCING, 
COMPETITION, DEMAND FOR FINANCIAL SERVICES IN THE COMPANY'S MARKET AREA AND 
ACCOUNTING PRINCIPLES, POLICIES AND GUIDELINES. THESE RISKS AND UNCERTAINTIES 
SHOULD BE CONSIDERED IN EVALUATING FORWARD-LOOKING STATEMENTS AND UNDUE 
RELIANCE SHOULD NOT BE PLACED ON SUCH STATEMENTS.  FURTHER INFORMATION 
CONCERNING THE COMPANY AND ITS BUSINESS, INCLUDING ADDITIONAL FACTORS THAT 
COULD MATERIALLY AFFECT THE COMPANY'S FINANCIAL RESULTS, IS INCLUDED IN OTHER 
COMPANY FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.






                                        8
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

    The Company is a specialized financial services company engaged primarily 
in acquiring and servicing automobile retail installment sales contracts 
("Installment Contracts") for purchases of late model used automobiles by 
"non-prime" consumers, who typically have limited access to traditional 
sources of consumer credit.  To a lesser extent, the Company also makes 
direct consumer loans and finance leases and purchases other retail 
installment sale contracts (collectively "Other Loans") and offers, as agent, 
insurance and other products related to consumer finance transactions 
(collectively "Insurance Products"). The Company maintains its corporate 
headquarters and a regional office near Chicago in Gurnee, Illinois, and 
operates two other regional offices in Tampa and Orlando, Florida.

    As of September 30, 1997, the Company had active relationships (I.E., the 
Company purchased Installment Contracts from such dealers during the 
preceding 90 days) with approximately 380 dealers located primarily in 
Florida, Illinois, South Carolina, Georgia and Wisconsin, and, to a lesser 
extent, in Indiana, Ohio, Utah, Texas, New Mexico, Tennessee, Wyoming and 
Colorado.

    The following is management's discussion and analysis of the financial 
condition of the Company at September 30, 1997 (unaudited) as compared to 
September 30, 1996 (unaudited) and December 31, 1996, and the results of 
operations for the three and nine months ended September 30, 1997 and 1996 
(unaudited).  This discussion should be read in conjunction with the 
Company's financial statements and notes thereto appearing elsewhere in this 
quarterly report. Data for the three months ended September 30, 1997 are not 
necessarily indicative of results expected for the full fiscal year.  The 
ratios and percentages provided below are calculated using the detailed 
financial information contained in the Company's financial statements and the 
financial data included elsewhere in this Form 10-Q.  References to "net" 
finance receivables or Installment Contracts shall mean finance receivables 
or Installment Contracts, as appropriate, net of unearned finance charges.

RECENT DEVELOPMENTS

    On August 29, 1997, the Company sold approximately $6.2 million (net) of 
Installment Contracts to General Electric Capital Corporation ("GECC") under 
an Asset Purchase Agreement dated as of June 25, 1996, between the Company 
and GECC (the "GECC Agreement").  As of September 30, 1997, the Company 
serviced approximately $67.3 million (net) of Installment Contracts sold 
pursuant to the GECC Agreement.  Additionally, on October 29, 1997, the 
Company sold approximately $429,000 (net) of Wisconsin originated Installment 
Contracts to Wisconsin Finance Company.  SEE "--Liquidity and Capital 
Resources."  

    In late October, the Company entered into that certain Fourth Amendment 
dated as of October 30, 1997, to the amended and restated Revolving Credit 
Agreement (as amended and restated, the "Revolving Credit Agreement")  which 
provides for a revolving credit facility from a group of nine commercial 
banks. The Fourth Amendment modifies certain terms of the Revolving Credit 
Agreement and provides for the extension of the revolving credit facility 
through January 30, 1998.  SEE "Liquidity and Capital Resources."

    In early November, the Company consolidated regional operations for its 
southeastern region into its Tampa, Florida location.  Accounts formerly 
serviced from the Orlando office will be serviced at the Tampa location.


                                        9
<PAGE>

GENERAL

    Installment Contracts represented over 99% of the Company's net finance 
receivables at September 30, 1997.  Installment Contracts are purchased on a 
non-recourse basis from automobile dealers and are typically secured by 
medium-priced used automobiles.  The automobiles are purchased by non-prime 
consumers at retail prices typically ranging from approximately $5,000 to 
$15,000. Installment Contracts financing such purchases typically have annual 
percentage rates of interest ("APRs") ranging from 21% to 33% and repayment 
terms ranging from 12 to 60 months.  The average original principal amount 
financed under Installment Contracts outstanding at September 30, 1997 was 
approximately $7,800, at an average APR of approximately 25.2%, with an 
average original term of approximately 39 months.  The Company's experience 
has shown, however, that the average life of the Company's Installment 
Contracts is substantially less than 39 months due to payoffs and 
repossessions that occur prior to contract maturity.

    The Company's outstanding balance of owned or serviced (i.e., managed) 
Installment Contracts declined to $131.4 million at September 30, 1997 from 
$151.6 million at December 31, 1996 and from $164.7 million at September 30, 
1996.  This decline reflects the Company's emphasis on addressing credit 
losses (rather than portfolio growth) during 1996 and 1997.

    Interest and servicing income on managed Installment Contracts accounts 
for most of the Company's revenue.  The net amount of Installment Contracts 
purchased declined to $54.0 million during the nine months ended September 
30, 1997 from $87.1 million during the nine months ended September 30, 1996.  
As reflected in the following table, the finance receivables (purchased or 
originated) by the Company during the periods presented below consist 
primarily of Installment Contracts. 

    The decrease in Installment Contract purchases in the third quarter and 
nine months ended September 30, 1997, relative to comparable periods in 1996, 
was primarily attributable to adjustments to the Company's credit guidelines 
implemented during January 1997 through the adoption of the Eagle Credit 
Index, a proprietary risk management tool developed for the Company.  These 
changes were directed toward reducing the rate of future charge-offs and 
delinquencies. Management expects that contract purchase volume for the 
remainder of 1997 will continue to be well below corresponding 1996 levels.  
Accordingly, reduced Installment Contract volume combined with increases in 
costs associated with borrowings or securitization activity will have a 
material adverse effect on the Company's future profitability.

<TABLE>
<CAPTION>
                            FOR THE THREE MONTHS ENDED SEPTEMBER 30,   FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                            ----------------------------------------   ---------------------------------------
                                    1997                1996                  1997             1996
                            ------------------  --------------------   ----------------   --------------------
                                        % OF               % OF                   % OF              % OF
                              AMOUNT    TOTAL    AMOUNT    TOTAL        AMOUNT    TOTAL    AMOUNT   TOTAL
                            ---------   -----   -------    -----       -------    -----   -------   -----
                                                        (DOLLARS IN THOUSANDS)
<S>                           <C>       <C>      <C>       <C>         <C>       <C>      <C>
Net Installment
   Contracts
   purchased (1) . . . . . .  $22,980     99%    $29,654    100%       $53,994    100%    $87,131   100%

Net Other 
   Loans originated (1). . .      136      1%        210      0%           252      0%       385      0%
                              -------    ----    -------    ----       -------    ----    ------    ----
Total. . . . . . . . . . . .  $23,116    100%    $29,864    100%       $54,246    100%    $87,516   100%
                              -------    ----    -------    ----       -------    ----    ------    ----
                              -------    ----    -------    ----       -------    ----    ------    ----

</TABLE>
----------------
(1) Net of unearned finance charges



                                        10
<PAGE>


SECURITIZATION TRANSACTIONS

    The Company sells or securitizes (each, a "Securitization" or 
"Securitization Transaction") Installment Contracts on a regular basis in 
order to generate liquidity and to enable the Company to purchase additional 
Installment Contracts.  Securitization Transactions include the sale of 
distinct portfolios of Installment Contracts with the servicing of the 
Installment Contracts retained by the Company.  The servicing arrangements 
generally provide for the Company to earn a base servicing fee, computed as a 
percentage of the outstanding balance of the Installment Contracts, as 
compensation for its duties as servicer.  In addition, the servicing 
arrangements typically provide that the Company is entitled to certain bonus 
and excess servicing fees, which represent collections on the securitized 
portfolio of Installment Contracts in excess of the amounts corresponding to 
(i) principal reductions on the securitized Installment Contracts, (ii) an 
agreed upon rate of return and (iii) certain expenses (including, primarily, 
base servicing fees).  Base servicing fees, bonus servicing fees and excess 
servicing fees are referred to herein, collectively, as "Servicing Fees."

    The Company generally recognizes a gain at the time that it engages in a 
Securitization Transaction.  Gains are determined based upon the difference 
between the sale proceeds and the Company's recorded investment in the 
Installment Contracts included in a Securitization Transaction.  
Additionally, gains are also comprised of the Company's estimates of excess 
servicing receivables ("ESRs") for each Securitization Transaction.  ESRs 
represent the present value of the anticipated Servicing Fees on a 
securitized portfolio of Installment Contracts.  Aggregate ESRs are recorded 
as an asset, and a corresponding gain is recorded in the period the 
Securitization occurs.  To the extent that the actual future performance of 
the subject Installment Contracts results in lower Servicing Fees than 
estimated, the recorded ESRs will be adjusted (at least quarterly) with 
corresponding charges made against income in the period in which the 
adjustment is made.  To the extent that the actual Servicing Fees are greater 
than estimated, the Company will record additional servicing fee income over 
the periods in which excess Servicing Fees are collected during the life of 
the subject portfolios.

    During the quarter ended September 30, 1997, the Company sold (with 
servicing retained) $6.2 million of Installment Contracts to GECC.  
Consistent with the Company's adoption of FASB 125, a gain of $469,000 was 
recognized and capitalized in the quarter ended September 30, 1997.  The 
Company intends to continue to record gains or losses, as appropriate, 
resulting from future Securitizations in a manner consistent with generally 
accepted accounting principles.  The net amount of Installment Contracts 
serviced by the Company for third parties was $84.9 million and $46.7 million 
at September 30, 1997 and 1996, respectively.  SEE "--Profitability" and 
"--Liquidity and Capital Resources."

PROFITABILITY

    The following table sets forth certain data relating to the Company's net 
income for the three and nine months ended September 30, 1997 and 1996 and 
for the year ended December 31, 1996:



                                        11
<PAGE>

<TABLE>
<CAPTION>

                                                   FOR THE THREE MONTHS           FOR THE NINE MONTHS
                                                    ENDED SEPTEMBER 30,           ENDED SEPTEMBER 30,
                                                 ------------------------        ----------------------     FOR THE YEAR ENDED
                                                   1997           1996             1997          1996        DECEMBER 31, 1996
                                                 ---------      ---------        --------      --------     ------------------
                                                                                 (DOLLARS IN THOUSANDS)
<S>                                               <C>            <C>             <C>           <C>
Average net finance receivables
    Owned. . . . . . . . . . . . . . . . . . . .  $ 43,555       $121,806        $50,257       $132,576          $116,797
    Serviced . . . . . . . . . . . . . . . . . .    90,195         51,520         89,882         44,995            56,041
                                                  --------       --------        -------       --------          --------
    Managed. . . . . . . . . . . . . . . . . . .   133,750        173,326        140,139        177,571           172,838
Average interest bearing 
    liabilities. . . . . . . . . . . . . . . . .    40,906        103,865         34,380        110,441            98,202
Total interest and fee income (owned). . . . . .     2,738          6,949          9,344         22,309            26,653
Total interest expense (owned) . . . . . . . . .     1,312          2,406          4,072          7,279             9,059
                                                  --------       --------        -------       --------          --------
Net interest income before
    provision for credit losses
    (owned). . . . . . . . . . . . . . . . . . .  $  1,426        $ 4,543        $ 5,272       $ 15,030          $ 17,594
                                                  --------       --------        -------       --------          --------
Average interest rate earned on 
    net finance receivables (owned). . . . . . .     25.15%         22.82%         24.79%         22.44%            22.82%
Average interest rate on interest
    bearing liabilities (owned). . . . . . . . .     12.83%          9.27%         11.56%          8.79%             9.23%
                                                  --------       --------        -------       --------          --------
Net interest spread (owned). . . . . . . . . . .     12.32%         13.55%         13.23%         13.65%            13.59%
                                                  --------       --------        -------       --------          --------
Net interest margin (owned) (1). . . . . . . . .     13.10%         14.92%         13.99%         15.12%            15.06%
                                                  --------       --------        -------       --------          --------

</TABLE>
_____________________________
(1) Net interest margin represents net interest income on an annualized basis
divided by average net finance receivables.


    A principal component of the Company's net income is its net interest 
spread.  Net interest spread represents the difference between interest 
earned on finance receivables and interest paid for borrowed funds.  The laws 
of certain states establish the maximum interest rates, and prescribe the 
types and maximum amounts of fees, insurance premiums and other amounts that 
consumers may be charged.  As is common in its market segment, the Company's 
Installment Contracts generally bear the maximum allowable interest rates, 
fees, premiums and other charges permitted under state law.  As a result, the 
Company has limited ability to offset increases in its cost of funds.

    An increasingly larger component of the Company's profitability is the 
servicing income earned on Securitization Transactions by the Company. 
Servicing income is derived from base servicing fees for Installment Contract 
administration and collection services and bonus or excess servicing fees 
paid based on the performance of the securitized Installment Contracts.  The 
increase in servicing income was due to higher levels of Installment 
Contracts serviced by the Company.  The following table sets forth certain 
data relating to servicing fees for the periods shown:



                                        12
<PAGE>

<TABLE>
<CAPTION>
                                       FOR THE THREE MONTHS ENDED       FOR THE NINE MONTHS ENDED
                                       --------------------------       --------------------------
                                              SEPTEMBER 30,                    SEPTEMBER 30,
                                              -------------                    -------------         FOR THE YEAR ENDED
                                             1997            1996           1997          1996       DECEMBER 31, 1996
                                       --------------------------       --------------------------   -------------------
<S>                                      <C>             <C>            <C>            <C>              <C>
Base servicing fees . . . . . . . . . .     $690,704       $402,075     $2,065,872     $1,022,754       $1,712,437
Bonus/excess servicing fees(1). . . . .      898,050      1,356,114      2,751,505      3,088,845        3,705,841
Amortization of ESRs(1) . . . . . . . .   (1,063,977)            --     (1,853,028)            --         (310,693)
                                          ----------     ----------     ----------     ----------       ----------
Net servicing fees. . . . . . . . . . .     $524,777     $1,758,189     $2,964,349     $4,111,599       $5,107,585
                                          ----------     ----------     ----------     ----------       ----------
                                          ----------     ----------     ----------     ----------       ----------
</TABLE>
_____________________________

(1) Servicing Fees in respect of pre-1997 Securitization Transactions with 
    GECC are recorded as income when received (I.E., on a cash-flow basis).  
    As a result, there is no amortization of ESRs with respect to Installment 
    Contracts included in such Securitization Transactions.  A portion of the 
    bonus/excess servicing fees reflects cash flows from pre-1997 
    Securitization Transactions with GECC.

    The Company maintains credit loss reserves to absorb potential losses in 
its finance receivables portfolio.  Credit loss reserves for the Company's 
Installment Contracts portfolio are comprised of nonrefundable acquisition 
discount and allowance for credit losses.  SEE "--Credit Loss Experience."

    The Company's liabilities are generally more interest-rate sensitive than 
its finance receivables.  As a result, significant increases in the Company's 
cost of funds borrowed under its Revolving Credit Agreement are having an 
adverse effect on profitability.  SEE "--Liquidity and Capital Resources."

    For the three and nine months ended September 30, 1997, the average 
interest rate earned on net finance receivables (owned) increased 2.33% and 
2.35%, respectively, over comparable 1996 periods.  Generally, it would be 
anticipated that improved margins would result in improved profitability; 
however, due to significant increases in funding costs resulting from 
subordinated debt representing a higher proportion of outstanding debt and 
actions taken by lenders that are party to the Revolving Credit Agreement, 
the average interest rate on interest bearing liabilities increased 3.56% and 
2.77% for the three and nine months ended September 30, 1997, respectively, 
over comparable 1996 periods.  The effective cost of borrowing under the 
Revolving Credit Agreement increased 5.25% to 14.24% and 3.58% to 11.97% for 
the three and nine months ended september 30, 1997 over comparable 1996 
periods.  The effective cost of borrowing under the Credit Agreement may also 
increase in the event that interest rates generally increase.  The Company 
has attempted to mitigate the adverse effect of these increases in interest 
rates by entering into interest rate protection agreements.  The Company has 
purchased an interest rate cap and interest rate collars that provide limited 
interest rate protection.  Hedging activity provides benefit when market 
changes occur in relation to the index rate; however, hedging activities are 
not intended to provide the Company protection from increases to the 
Company's base borrowing rate as established by the Company's Lenders.  SEE 
"--Liquidity and Capital Resources." The Company may utilize alternative 
financing structures, such as a fixed rate senior or subordinated debt, 
securitizations, whole loan sales or portfolio sales to attempt to mitigate 
the adverse effect of interest rate increases.

    Another significant component of the Company's profitability is the level
of its operating expenses.  Operating expenses are influenced by the level of
volume and delinquency in the Company's installment contracts.  The Company is
reducing the number of its employees, operating expenses and increasing
workloads in light of improving asset quality and reduced levels of managed
receivables.


                                        13
<PAGE>

FINANCIAL CONDITION

    Total assets decreased $9.2 million (14.4%) to $54.6 million at September 
30, 1997 from $63.8 million at December 31, 1996 primarily due to a decrease 
in net finance receivables (net of dealer reserves, nonrefundable acquisition 
discount and allowance for credit losses) to $41.7 million at September 30, 
1997 from $47.2 million at December 31, 1996.  This decline in assets and 
finance receivables is, in part, attributable to the securitization of 
Installment Contracts and lower Installment Contract acquisition levels 
resulting in reduced receivables outstanding.  The Securitization of 
Installment Contracts was part of the Company's financing plan.  SEE 
"--Liquidity and Capital Resources."  The net amount of owned or serviced 
Installment Contracts decreased to $131.4 million at September 30, 1997 from 
$151.6 million at December 31, 1996.  The net amount of owned or serviced 
Installment Contracts was $164.2 million at September 30, 1996. 

    Total liabilities decreased $4.8 million (9.2%) to $48.6 million at 
September 30, 1997 from $53.5 million at December 31, 1996, primarily due to 
a decrease in total debt to $45.6 million at September 30, 1997 from $50.8 
million at December 31, 1996.  The decrease in total debt was primarily the 
result of a reduction in borrowings under the Revolving Credit Agreement to 
$28.0 million at September 30, 1997 from $31.8 million at December 31, 1996.  
SEE "--Liquidity and Capital Resources." Total liabilities and stockholders' 
equity decreased $9.2 million (14.4%) to $54.6 million at September 30, 1997 
from $63.8 million at December 31, 1996.

RESULTS OF OPERATIONS

    The following table sets forth certain data relating to the Company's 
results of operations for the three and nine months ended September 30, 1997 
and 1996:

<TABLE>
<CAPTION>
                                                       FOR THE THREE MONTHS ENDED    FOR THE NINE MONTHS ENDED
                                                       --------------------------    -------------------------
                                                               SEPTEMBER 30,                SEPTEMBER 30,
                                                               -------------                -------------
                                                           1997          1996            1997          1996
                                                        --------        -------         ------        -------
                                                                        (DOLLARS IN THOUSANDS)
<S>                                                       <C>            <C>            <C>           <C>
Automobile portfolio interest and fee 
  income . . . . . . . . . . . . . . . . . . . . . . .    $2,643         $6,878         $9,168        $22,181
                                                         -------         ------         ------        -------
Total interest and fee income. . . . . . . . . . . . .    $2,738         $6,949         $9,344        $22,309
Total interest expense . . . . . . . . . . . . . . . .     1,312          2,406          4,072          7,279
                                                         -------         ------         ------        -------
Net interest income before provision for 
  credit losses. . . . . . . . . . . . . . . . . . . .     1,426          4,543          5,272         15,030
Provision for credit losses. . . . . . . . . . . . . .     1,297          1,730          4,466          6,626
                                                         -------         ------         ------        -------
Net interest income after provision for 
  credit losses. . . . . . . . . . . . . . . . . . . .       129          2,813            806          8,404
                                                         -------         ------         ------        -------
Other Income:
  Servicing income (from Installment
        Contracts) . . . . . . . . . . . . . . . . . .       525          1,758          2,964          4,111
  Gain on securitization . . . . . . . . . . . . . . .       469             --          3,090             --
  Insurance products commissions . . . . . . . . . . .        --              9              5             44
                                                         -------         ------         ------        -------
Total other income . . . . . . . . . . . . . . . . . .       994          1,767          6,059          4,155
                                                         -------         ------         ------        -------
Salaries and related costs . . . . . . . . . . . . . .     1,942          2,034          5,928          5,916
Other operating expenses . . . . . . . . . . . . . . .     1,633          2,199          5,348          6,006
                                                         -------         ------         ------        -------
Total operating expenses . . . . . . . . . . . . . . .     3,575          4,233         11,276         11,922
                                                         -------         ------         ------        -------
Income (loss) before taxes . . . . . . . . . . . . . .    (2,453)           347         (4,411)           637
Taxes    . . . . . . . . . . . . . . . . . . . . . . .        --            133             --            212
                                                         -------         ------         ------        -------
Net income (loss). . . . . . . . . . . . . . . . . . .   $(2,453)          $214        $(4,411)          $425
                                                         -------         ------         ------        -------
                                                         -------         ------         ------        -------
</TABLE>


                                        14
<PAGE>

    COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1997 TO NINE MONTHS ENDED 
SEPTEMBER 30, 1996.  The Company experienced a net loss of $4.4 million for 
the nine months ended September 30, 1997 compared to net income of $425,000 
for the comparable 1996 period, primarily due to the decrease in net interest 
income before provision for credit losses.  Net interest income before the 
provision for credit losses decreased 64.6% or $9.8 million to $5.3 million 
for the nine months ended September 30, 1997 from $15.0 million for the 
comparable 1996 period, primarily as a result of a decline in the outstanding 
balance of net finance receivables owned by the Company.  The reduction in 
net interest income was only partially offset by a $3.1 million gain recorded 
as a result of securitization activity.

    Total interest expense decreased to $4.1 million for the nine months 
ended September 30, 1997 from $7.3 million for the nine months ended 
September 30, 1996.  The decrease resulted from a decrease in the amount of 
average debt outstanding, which was partially offset by higher borrowing 
rates.  The total debt outstanding at September 30, 1997 decreased to $45.6 
million from $102.5 million at September 30, 1996.  The average debt 
outstanding for the nine months ended September 30, 1997 decreased to $47.0 
million from $110.4 million for the nine months ended September 30, 1996.  
The weighted average interest rate paid for borrowed funds increased to 11.6% 
for the nine months ended September 30, 1997 from 8.8% for the nine months 
ended September 30, 1996.  This is a result of the subordinated debt 
representing a higher proportion of total debt and the impact of higher 
borrowing costs under the Revolving Credit Agreement which increased 42.7% 
from the comparable period to 12.0% for the nine months ended September 30, 
1997.

    The provision for credit losses decreased $2.1 million to $4.5 million 
for the nine months ended September 30, 1997 from $6.6 million for the nine 
months ended September 30, 1996.  The decline in the provision for credit 
losses was due, in part, to the decline in the outstanding balance of net 
finance receivables owned by the Company.  SEE "--Credit Loss Experience."

    Other income, consisting primarily of income from Servicing Fees and 
gains on Securitization Transactions, increased 88.1% to $7.9 million for the 
nine months ended September 30, 1997 from $4.2 million for the nine months 
ended September 30, 1996.  Servicing income, net of ESR amortization, was 
$3.0 million and $4.1 million for the nine months ended September 30, 1997 
and 1996, respectively.  Gains on sale of $3.1 million were recognized for 
the nine months ended September 30, 1997.  No comparable gain was recognized 
for the nine months ended September 30, 1996.  This increase reflects the 
increased amount of servicing-retained Securitizations of finance receivables 
by the Company.   SEE "--Profitability."

    Total operating expenses decreased 5.0% to $11.3 million for the nine 
months ended September 30, 1997 compared to $11.9 million for the nine months 
ended September 30, 1996.  The number of full time equivalent employees 
decreased 23.9% at September 30, 1997 when compared to September 30, 1996.  
The full financial impact of staffing reductions will be reflected in future 
periods.  The Company's other operating expenses decreased 11.0% to $5.3 
million for the nine months ended September 30, 1997 compared to $6.0 million 
the nine months ended September 30, 1996.  Total operating expenses 
(annualized) as a percentage of average net finance receivables owned or 
serviced increased to 10.7% for the nine months ended September 30, 1997 as 
compared to 8.9% for the nine months ended September 30, 1996, principally as 
a result of a decrease in owned or serviced finance receivables.

    No income tax expense was recorded for the nine months ended September 30,
1997, while $212,000 was recorded for the nine months ended September 30, 1996. 
The decrease was due to the net 


                                        15
<PAGE>

loss experienced for the nine months ended September 30, 1997 as compared to 
a net profit for the corresponding period in 1996.

    COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1997 TO THREE MONTHS ENDED 
SEPTEMBER 30, 1996.  The Company experienced a net loss of $2.5 million for 
the three months ended September 30, 1997 compared to net income of $214,000 
for the comparable 1996 period.

    Net interest income before the provision for credit losses decreased 
68.9% to $1.4 million for the three months ended September 30, 1997 from $4.5 
million for the comparable 1996 period, primarily as a result of a decline in 
the outstanding balance of net finance receivables owned by the Company.  

    Total interest expense decreased to $1.3 million for the three months 
ended September 30, 1997 from $2.4 million for the three months ended 
September 30, 1996.  The decrease in interest expense resulted from a 
reduction in the amount of average debt outstanding, partially offset by 
higher borrowing rates.  The weighted average interest rate paid for borrowed 
funds increased to 12.8% for the three months ended September 30, 1997 from 
9.3% for the three months ended September 30, 1996, primarily as a result of 
a higher proportion of subordinated debt and the impact of higher borrowing 
costs under the Revolving Credit Agreement, which increased 58.4% from the 
comparable 1996 period to 14.2% for the three months ended September 30, 1997.

    The provision for credit losses decreased $0.4 million to $1.3 million 
for the three months ended September 30, 1997 from $1.7 million for the three 
months ended September 30, 1996.  SEE "--Credit Loss Experience."

    Other income, consisting primarily of income from Servicing Fees and 
gains on Securitization Transactions, decreased 43.8% to 993,000 for the 
three months ended September 30, 1997 from $1.8 million for the three months 
ended September 30, 1996.  Servicing income, net of ESR amortization, was 
$525,000 and $1.8 million for the three months ended September 30, 1997 and 
1996, respectively. Gains on sale of $469,000 were recognized for the three 
months ended September 30, 1997.  No comparable gain was recognized for the 
three months ended September 30, 1996. This increase reflects the increased 
amount of servicing-retained Securitizations of finance receivables by the 
Company.  SEE "--Profitability."

    Total operating expenses decreased to $3.6 million for the three months 
ended September 30, 1997 compared to $4.2 million for the three months ended 
September 30, 1996.  Salaries and related costs decreased 4.5% or $92,000 
from the corresponding period in 1996 to $1.9 million for the three months 
ended September 30, 1997, due primarily to a decrease in the number of 
employees and corresponding benefit costs as offset by normal pay increases.  
The Company's other operating expenses decreased 25.7% to $1.6 million for 
the three months ended September 30, 1997 compared to $2.2 million the three 
months ended September 30, 1996.  Total operating expenses (annualized) as a 
percentage of average net finance receivables owned or serviced increased to 
10.7% for the three months ended September 30, 1997 as compared to 9.5% for 
the three months ended September 30, 1996.

    No income tax expense was recorded for the three months ended September 
30, 1997, while $133,000 was recorded for the three months ended September 
30, 1996. The decrease was due to the cumulative net loss experienced for the 
1997 tax year as compared to a net profit for the corresponding period in 
1996.


                                        16
<PAGE>

CREDIT LOSS EXPERIENCE

    The Company's credit loss reserves are comprised of three components: 
nonrefundable acquisition discount, allowance for credit losses and 
refundable dealer reserves.  The total of allowance for credit losses, 
nonrefundable acquisition discount and dealer reserves equaled 11.0% and 
10.2% of net owned finance receivables at September 30, 1997 and 1996, 
respectively. 

    NONREFUNDABLE ACQUISITION DISCOUNT AND DEALER RESERVES.  In order to 
achieve an acceptable rate of return and appropriately reflect credit risks 
generally associated with the Company's automobile finance business, the 
Company purchases Installment Contracts from dealers at a discount from their 
principal amount.  The Company negotiates the amount of the discount with 
dealers based upon various criteria, including the credit risk associated 
with the contracts being purchased and market pricing factors.  The discount 
is nonrefundable, is equal to the difference between (a) the total principal 
amount to be repaid under the Installment Contract and (b) net funds paid to 
the dealer, and is allocated to the nonrefundable acquisition discount 
account.  As part of the Company's financing of retail installment sales 
contracts (other than Installment Contracts), refundable dealer reserves may 
be established to protect the Company from losses associated with such 
contracts, and are shown as a liability of the Company. 

    The following table presents a reconciliation of the changes in 
nonrefundable acquisition discount and dealer reserves for the three and nine 
months ended September 30, 1997 and 1996

<TABLE>
<CAPTION>

                                               FOR THE THREE MONTHS ENDED     FOR THE NINE MONTHS ENDED
                                               --------------------------     -------------------------
                                                      SEPTEMBER 30,                 SEPTEMBER 30,
                                                      -------------                 -------------
                                                    1997           1996           1997           1996 
                                                  -------        ------         -------       --------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                                <C>            <C>            <C>           <C>
Balance at beginning of period. . . . . . . . .    $1,070         $5,649         $1,730        $ 9,721
Additions applicable to new volume. . . . . . .     1,843          3,261          4,945          8,642
Reductions applicable to accounts sold. . . . .      (749)            --         (3,853)        (3,982)
Losses charged, net of recoveries . . . . . . .    (1,123)        (4,842)        (1,781)       (10,313)
                                                   ------         ------         ------        -------
Balance at end of period. . . . . . . . . . . .    $1,041         $4,068         $1,041        $ 4,068
                                                   ------         ------         ------        -------
                                                   ------         ------         ------        -------
Balance at end of period as a percentage
  of net finance receivables (owned) at 
  end of period . . . . . . . . . . . . . . . .     2.24%          3.45%          2.24%          3.45%

</TABLE>

    ALLOWANCE AND PROVISION FOR CREDIT LOSSES/CHARGE-OFFS.  The Company 
maintains an allowance for credit losses at a level that management believes 
is adequate to absorb potential losses in its finance receivables portfolio. 
Management evaluates the adequacy of the allowance for credit losses by 
reviewing credit loss experience and delinquency trends using static pool 
analysis, the value of the underlying collateral and general economic 
conditions and trends.  If the amount of nonrefundable acquisition discount 
associated with a specific pool of Installment Contracts is determined to be 
insufficient, in the opinion of management, to absorb projected losses for 
that pool, a provision for credit losses would be charged against earnings.  
The Company's general policy is to charge-off delinquent accounts when they 
are deemed uncollectible, and in any event prior to their becoming 90 days 
contractually delinquent.  The Company's charge-offs through nonrefundable 
acquisition discount and allowance for credit losses, as a percentage of 
average owned Installment Contracts (net) annualized, was $2.6 million, or 
21.2%, during the three months ended September 30, 1997, and $7.5 million, or 
22.7%, during the corresponding period in 1996.


                                        17
<PAGE>

    The following table reflects the Company's allowance and provision for 
credit losses for the three and nine months ended September 30, 1997 and 
1996: 

<TABLE>
<CAPTION>

                                               FOR THE THREE MONTHS ENDED     FOR THE NINE MONTHS ENDED
                                               --------------------------     -------------------------
                                                      SEPTEMBER 30,                 SEPTEMBER 30,
                                                      -------------                 -------------
                                                    1997           1996           1997           1996 
                                                  -------        ------         -------       --------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                                <C>            <C>            <C>           <C>
Balance at beginning of period . . . . . . .    $4,296         $8,892         $6,046        $10,807
Provision charged to expense . . . . . . . .     1,297          1,730          4,466          6,626
Losses charged net of recoveries . . . . . .    (1,518)        (2,672)        (6,437)        (9,483)
                                                ------         ------         ------        -------
Balance at end of period . . . . . . . . . .    $4,075         $7,950         $4,075         $7,950
                                                ------         ------         ------        -------
                                                ------         ------         ------        -------
Allowance as a percentage of net
   finance receivables (owned) at end of 
   period. . . . . . . . . . . . . . . . . .     8.76%          6.47%          8.76%          6.47%
</TABLE>

DELINQUENCIES

    The Company monitors delinquencies in the managed finance receivables 
portfolio to gauge overall credit trends.  Managed finance receivables that 
were 30 days and greater contractually delinquent (net of unearned finance 
charges) were $11.4 million, $16.6 million and $15.4 million, representing 
8.7%, 11.0% and 9.3% of net managed finance receivables, as of September 30, 
1997, December 31, 1996, and September 30, 1996, respectively.  Managed 
finance receivables that were 60 days and greater contractually delinquent 
(net of unearned finance charges) were $3.1 million, $3.1 million and $3.3 
million, representing 2.4%, 2.2% and 1.9% of net managed finance receivables 
as of September 30, 1997, December 31, 1996, and September 30, 1996, 
respectively.

LIQUIDITY AND CAPITAL RESOURCES

    The Company finances its operations through cash flow from operations, 
borrowings under the Revolving Credit Agreement, proceeds from subordinated 
indebtedness and from the periodic sale or securitization of Installment 
Contracts and other finance receivables.

    Net cash provided by (used in) operating activities totaled ($2.6) 
million and ($3.2) million during the three months ended September 30, 1997 
and 1996, respectively.  For the nine months ended September 30, 1997 and 
1996, net cash provided by (used in) operating activities totaled ($2.3) 
million and ($11.0) million, respectively.  During these periods, the primary 
source of net cash provided by (used in) operating activities has been net 
income for the 1996 periods, and the net changes in the provision for credit 
losses and the nonrefundable acquisition discount accounts.  Net cash 
provided by operating activities was affected by reductions in income tax 
receivables and repossessed assets for the three and nine months ended 
September 30, 1997.  Net cash used in operating activities for the three and 
nine months ended September 30, 1997 and 1996 was affected by the significant 
decline in the nonrefundable acquisition discount account and by the net 
change in the allowance for credit losses.

    Net cash provided by (used in) investing activities represents the net 
investment in, or liquidation of, finance receivables, which for the 
three-month period ended September 30, 1997 and 1996 was ($6.8) million and 
$1.5 million, respectively.  For the nine months ended September 30, 1997 and 
1996, net cash provided by (used in) investing activities was $8.2 million 
and $27.7 million, respectively.  During the three months ended September 30, 
1997 and 1996, cash provided from the sale/securitization of Installment 
Contracts was $9.5 million and $6.2 million, respectively.  Cash provided 
from the 


                                        18
<PAGE>

sale/securitization of Installment Contracts was $37.0 million and $43.8 
million for the nine months ended September 30, 1997 and 1996, respectively.

    Net cash provided by (used in) financing activities for the three and 
nine months ended September 30, 1997 and the comparable 1996 periods largely 
result from borrowings and repayments under the Revolving Credit Agreement.  
Net cash provided by (used in) financing activities for the three months 
ended September 30, 1997 was $8.1 million and net cash provided by financing 
activities for the three months ended September 30, 1996 was $2.3 million.  
For the nine months ended September 30, 1997 and 1996, net cash provided by 
(used in) financing activities was ($4.8) million and ($16.6) million, 
respectively.

    The self-liquidating nature of Installment Contracts and Other Loans 
enables the Company to maintain higher debt-to-equity ratios than in most 
other businesses.  The amount of debt the Company incurs from time to time 
depends on the Company's need for cash and its ability to borrow under the 
terms of the Revolving Credit Agreement.  Although no assurances can be 
provided in this regard, the Company intends to meet its short- and long-term 
liquidity needs with cash flow from operations, borrowings under the 
Revolving Credit Agreement, the sale or securitization of finance receivables 
and the proceeds from the issuance of securities in the capital markets.

    The maximum availability under the Revolving Credit Agreement was $2.0 
million at September 30, 1997 and, pursuant to the Fourth Amendment to the 
Resolving Credit Agreement, the facility matures January 30, 1998.  The 
Company has the right to borrow funds under the Revolving Credit Agreement at 
an interest rate equal to the prime rate of the agent bank plus 3.0% (which 
rate represents an increase from the borrowing rate that was available to the 
Company through September 30, 1997).  The prime rate was 8.5% on September 
30, 1997.

    The Company must comply with customary financial and other covenants 
under the Revolving Credit Agreement.  At September 30, 1997, the Company was 
in breach of the tangible net worth, interest coverage ratio and subordinated 
debt limitation covenant under the Revolving Credit Agreement and the 
interest coverage ratio covenant under its agreements with GECC.  The Company 
has received waivers with respect to the breaches under the Revolving Credit 
Agreement for all periods through September 30, 1997 and, as of the date of 
this filing, the Company is negotiating with GECC for waivers with respect to 
the breaches under the GECC Agreement.  The Fourth Amendment also provides 
for, among other things: (i) a total facility of $30 million; (ii) 
incremental stepdowns in the total amount of the facility; and (iii) a 
reduction in the borrowing base, generally, to 75% of eligible receivables.  
The Company expects to remain in violation of these covenants.

    The Company is continuing negotiations with its current lenders and 
alternative lenders to provide financing.  In any event, the Company 
anticipates relying more heavily upon alternative funding sources, such as 
Securitization Transactions.  No assurance can be given that an equivalent 
facility to the Revolving Credit Agreement will be available, or that 
alternative funding transactions will be successfully completed.

    At September 30, 1997, the Company had total debt of $45.6 million as 
compared to $50.8 million at December 31, 1996 and $102.5 million at 
September 30, 1996.  At September 30, 1997, $2.0 million was available under 
the Revolving Credit Agreement.


                                        19
<PAGE>

The following table presents the Company's debt instruments and the weighted 
average interest rates on such instruments for the periods indicated:

<TABLE>
<CAPTION>

                                         FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                         ---------------------------------------       AS OF AND FOR THE TWELVE MONTHS
                                               1997                 1996                   ENDED DECEMBER 31, 1996
                                         -----------------    ------------------       -------------------------------
                                         BALANCE     RATE      BALANCE      RATE            BALANCE       RATE
                                         -------     -----     -------     -----            -------      -----
                                                                 (DOLLARS IN THOUSANDS)
<S>                                      <C>         <C>        <C>        <C>              <C>          <C>
SENIOR:
  Revolving Credit Agreement. . . . . .  $27,986     11.97%     $83,018     8.39%           $31,763       8.86%
  Loan from Commonly Controlled
     Company. . . . . . . . . . . . . .       10      4.12%       1,473     4.88%             1,065       5.62%
SUBORDINATED: 
  Notes payable . . . . . . . . . . . .   17,598     11.04%      18,007    11.04%            17,978      11.05%
                                         -------               --------                     -------
  Total debt. . . . . . . . . . . . . .  $45,594     11.56%    $102,498     8.79%           $50,806       9.23%
                                         -------               --------                     -------
                                         -------               --------                     -------
</TABLE>

    The following table sets forth information with respect to maturities of 
senior and subordinated debt at September 30, 1997;

                                            LOANS FROM
                                             COMMONLY
                             SENIOR BANK    CONTROLLED  SUBORDINATED
    YEAR                   LINES OF CREDIT   COMPANY    NOTES PAYABLE    TOTAL
    ----                   ---------------  ----------  -------------  --------
                                          (DOLLARS IN THOUSANDS)
    1997 . . . . . . . . . .   $10,000         $10         $    58     $10,068
    1998 . . . . . . . . . .    17,986                          14      18,000
    1999 . . . . . . . . . .                                   812         812
    2000 . . . . . . . . . .                                   808         808
    2001 . . . . . . . . . .                                   872         872
    Thereafter . . . . . . .                                15,034      15,034
                              ---------      ------       ---------   --------
       Total . . . . . . . .   $29,986         $10         $17,598     $45,594
                              ---------      ------       ---------   --------
                              ---------      ------       ---------   --------

    The Company has purchased interest rate caps and interest rate collars in 
an aggregate notional amount of $35 million.  The interest rate cap purchased 
by the Company in an aggregate notional amount of $15 million protects the 
Company against increases in the interest rate of a portion of its revolving 
debt if the three-month LIBOR rate exceeds 10.5%.  The interest rate cap 
expires in July, 1998.

    The interest rate collars purchased by the Company in an aggregate 
notional amount of $20 million protect the Company against increases in the 
interest rate of its revolving debt when the three-month LIBOR rate exceeds 
8%.  The Company must make payments to the counterparties to the interest 
rate collars if three-month LIBOR falls below 5%.  The interest rate collars 
expire in September, 2000.

    The GECC Agreement provides for the purchase by GECC of Installment 
Contracts, on a revolving basis, having a maximum principal amount of up to 
$80 million (net) outstanding at any time.  As of September 30, 1997, $67.3 
million (net) principal amount of Installment Contracts was outstanding 
pursuant to the GECC Agreement.  The term of the GECC Agreement expires June 
25, 1998; however, GECC has verbally indicated to the Company that it would 
not make additional Installment Contract purchases until an adequate 
replacement is found for the Revolving Credit Agreement.


                                        20
<PAGE>

    Total stockholders' equity at September 30, 1997 was $6.0 million as 
compared to $10.3 million at December 31, 1996 and $16.1 million at September 
30, 1996.  The Company's ability to pay dividends is limited by the Revolving 
Credit Agreement.

                          PART II - OTHER INFORMATION


ITEM 1.       LEGAL PROCEEDINGS

    In addition to the lawsuits described below, the Company is involved in
litigation in the normal course of business.  The Company believes that the
resolution of such normal-course-of-business matters will not have a material
adverse effect on its financial position or results of operations.  The Company
regularly initiates legal proceedings as a plaintiff in connection with its
routine collection activities.

    The company has been named as a defendant in the following described 
lawsuits:

    1.   REHM V. EAGLE FINANCE CORP. is pending in the United States District 
Court for the Northern District of Illinois and is designated by case number 
96 C 2455.  The plaintiff has filed a class action complaint alleging that 
the Company and three of its directors and officers have violated Section 
10(b) of the Securities and Exchange Act and Rule 10b-5 promulgated 
thereunder.  The litigation is now proceeding with discovery, although no 
depositions have been taken.  The Company intends to defend vigorously the 
claims made in the complaint.

    2.   CLEVELAND V. WALLACE AUTO SALES, INC. ET AL. was filed on September 
19, 1996 in the United States District Court for the Northern District of 
Illinois and is designated by Case Number 96 C 6045.  The complaint alleges 
that the Company has violated the Illinois Consumer Fraud Act, the Illinois 
Sales Finance Agency Act and the Federal Racketeer Influenced and Corrupt 
Organizations Act arising out of the Company's purchase of retail installment 
sales contracts through which the plaintiffs purchased a used automobile.  
The complaint is alleged as a class action, and includes unnamed, and still 
unknown, directors and officers of the Company.  The Company has filed a 
Motion to Dismiss, and the parties are awaiting a ruling from the court.  
Written discovery has been taken.  The Company intends to defend vigorously 
the claims made in the complaint.

    3.   SOLARMAR SYSTEMS CORP V. EAGLE FINANCE CORP., RONALD B. CLONTS ET 
AL. was filed on September 14, 1995 in Circuit Court of the Eleventh Judicial 
Circuit, Dade County, Florida, and is designated as Case No. 95-18056-CA-01. 
This suit arose out of a settlement agreement entered in 1988 between the 
plaintiff and the predecessor to the Company (the "Settlement Agreement"), 
following the plaintiff's bankruptcy.  The Company (E.F. Wonderlic & 
Associates, Inc.) purchased promissory notes from the plaintiff that the 
plaintiff had received in connection with the sale of hot water heating 
systems to Florida homeowners.  The complaint filed against the Company 
alleges that the Company breached the Settlement Agreement and fraudulently 
induced the plaintiff to enter into it.  The plaintiff's complaint was 
dismissed in June, 1996, with leave to amend, primarily on the grounds that 
the claims were time-barred by the applicable Florida statute of limitations. 
The plaintiff filed an amended complaint in June, 1996, which asserted 
essentially the same claims of fraud, violations of the Federal Racketeer 
Influenced and Corrupt Organizations Act and fraud in the inducement.  The 
Company intends to defend vigorously the claims made in the complaint.

    4.   DRAKE V. EAGLE FINANCE CORP., was filed on June 13, 1997 in the 
Circuit Court of Cook County, Illinois, and is designated as Case No. 97 L 
6521. The class action Complaint alleges that he 


                                        21
<PAGE>

Company has violated the Uniform Commercial Code, the Illinois Consumer Fraud 
Act and the Illinois Sales Finance Agency Act arising out of the notice that 
the Company sent to the plaintiff's after the Company repossessed their car.  
The case is in the initial pleading stages with the plaintiff recently filing 
an amended complaint, and written discovery has begun.  The Company intends 
to defend vigorously the claims made in the Complaint.

    5.   HALL V. EAGLE FINANCE CORP., was filed on July 28, 1997 in the 
Circuit Court of Cook County, Illinois, and is designated as Case No. 97 CH 
9328.  The class action Complaint alleges that the Company has violated the 
Illinois Wage Assignment Act arising out of the Company's attempt to enforce 
the wage assignment that the plaintiff executed when he purchased a car.  The 
case is in its initial pleading stage, and no discovery has been taken.  
During October, 1997, the Company began preliminary settlement discussions 
with the Plaintiff's attorney which are ongoing.  The Company believes 
settlement will be less costly than trial.

ITEM 2.       CHANGES IN SECURITIES

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None

ITEM 5.       OTHER INFORMATION - None

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

             (a)  Exhibits

             Exhibit
               No.        Description
            --------      ----------- 
             10.1         Fourth Amendment to Amended and Restated 
                          Revolving Credit Agreement dated as of
                          October 30, 1997
 
             11           Statement re computation of per share earnings
 
             27           Financial Data Schedule
 
             (b)  Reports on Form 8-K - The Company did not file any reports on
                  Form 8-K during the three months ended September 30, 1997


                                        22
<PAGE>


                                      SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.


                                      EAGLE FINANCE CORP.



Date:  November 13, 1997              ROBERT J. BRAASCH 
                                      --------------------------------
                                      Robert J. Braasch
                                      President and Chief Financial Officer
                                      (Duly Authorized Officer and Principal
                                       Financial Officer)


                                       S-1
<PAGE>


                                  EXHIBIT INDEX


Exhibit
   No.      Description
-------     -----------
10.1        Fourth Amendment to Amended and Restated Revolving Credit Agreement
            dated as of October 30, 1997

11          Statement re computation of per share earnings

27          Financial Data Schedule