<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, DC  20549

                                   FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended:                                 Commission File Number:
 September 30, 1996                                            0-9539

             S E A R C H    C A P I T A L    G R O U P,    I N C .
             -----------------------------------------------------
             (Exact name of Registrant as specified in its charter)

         Delaware                                          41-1356819
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

                           700 North Pearl, Suite 400
                              Dallas, Texas 75201
                              -------------------
          (Address of principal executive offices, including zip code)

                                  214-965-6000
                                  ------------
              (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 [ ]

       APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
                       DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                            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:

                                                   Number of Shares Outstanding
        Class                                          at November 11, 1996
----------------------------                       ----------------------------
Common Stock, $.01 par value                                28,634,870




                                       1
<PAGE>   2
                           SEARCH CAPITAL GROUP, INC.
                                FORM 10-Q INDEX


<TABLE>
<CAPTION>

PART I                    FINANCIAL INFORMATION                                                       PAGE
------                                                                                                ----
<S>                       <C>                                                                           <C>
Item 1.                   Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . .  3

Item 2.                   Management's Discussion and Analysis of Financial
                          Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . 10

PART II                   OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------                                                                                                   

Item 1.                   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Item 2.                   Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Item 3.                   Default Upon Senior Securities  . . . . . . . . . . . . . . . . . . . . . . . 18

Item 4.                   Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . 18

Item 5.                   Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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

SIGNATURES                  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>

The financial information for the interim periods presented herein is
unaudited. In the opinion of management, all adjustments necessary (which are
of a normal recurring nature) have been included for a fair presentation of the
results of operations.  The results of operations for an interim period are not
necessarily indicative of the results that may be expected for a full year or
any other interim period.

                        SAFE HARBOR STATEMENT UNDER THE
                PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Form 10-Q for quarter ended September 30, 1996 contains certain
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995, which may be identified by the use of forward-looking
terminology such as "may," "will," "expect," "anticipate," "estimate," "goal,"
" continue," or comparable terminology, that involve risks or uncertainties and
that are qualified in their entirety by the cautions and risk factors contained
in the Company's 10-K Transition Report for the six months ended March 31, 1996
and in other Company documents filed with the Securities and Exchange
Commission.


                                       2
<PAGE>   3
PART I.  FINANCIAL INFORMATION
   
ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

                  SEARCH CAPITAL GROUP, INC. AND SUBSIDIARIES
                          Consolidated Balance Sheets

<TABLE>
<CAPTION>                                                                     
                                                 September 30,                March 31, 1996
                                                     1996          ----------------------------------                         
                                                ---------------                         Pro forma
ASSETS                                             Unaudited          Historical         (Note 3)
------                                          ---------------    ---------------   ----------------
<S>                                             <C>                <C>                <C>            
Gross contract receivables (Note 2)             $    61,945,000    $    37,086,000    $    37,086,000
Unearned interest                                   (12,877,000)        (6,435,000)        (6,435,000)
                                                ---------------    ---------------    ---------------
Net contracts receivable                             49,068,000         30,651,000         30,651,000
Allowance for credit losses                         (13,431,000)       (13,353,000)       (13,353,000)
Net, loan origination costs                             366,000            406,000            406,000
                                                ---------------    ---------------    ---------------
   Net contract receivables - after allowance
     for credit losses & other costs                 36,003,000         17,704,000         17,704,000
                                                ---------------    ---------------    ---------------

Cash and cash equivalents                            13,194,000         17,817,000         21,582,000
Vehicles held for resale                                362,000            566,000            566,000
Property and equipment, net                           1,168,000          1,062,000          1,062,000
Goodwill, net                                        11,153,000               --                 --
Notes receivable and other assets, net                1,640,000            197,000            197,000
                                                ---------------    ---------------    ---------------

   Total assets                                 $    63,520,000    $    37,346,000    $    41,111,000
                                                ===============    ===============    ===============


LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Lines of credit                                 $    20,189,000    $     2,283,000    $          --
Accrued settlements                                     500,000            688,000            688,000
Dividends payable                                     1,532,000               --                 --
Accounts payable and other liabilities                1,532,000          7,356,000          7,356,000
Accrued interest                                         13,000             15,000               --
                                                ---------------    ---------------    ---------------
   Total liabilities                                 23,766,000         10,342,000          8,044,000
                                                ---------------    ---------------    ---------------


Stockholders' Equity
--------------------
Preferred stock                                         199,000            154,000            174,000
Common stock                                            317,000            259,000            300,000
Additional paid-in capital                           93,308,000         81,784,000         87,786,000
Accumulated deficit                                 (52,920,000)       (54,043,000)       (54,043,000)
Treasury stock                                       (1,150,000)        (1,150,000)        (1,150,000)
                                                ---------------    ---------------    ---------------
   Total stockholders' equity                        39,754,000         27,004,000         33,067,000
                                                ---------------    ---------------    ---------------
   Total liabilities and stockholders' equity   $    63,520,000    $    37,346,000    $    41,111,000
                                                ===============    ===============    ===============
</TABLE>


          See accompanying notes to consolidated financial statements.





                                       3
<PAGE>   4
                  SEARCH CAPITAL GROUP, INC. AND SUBSIDIARIES
                     Consolidated Statements of Operations
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                               Six Months Ended      Six Months Ended
                                                              September 30, 1996    September 30, 1995
                                                              ------------------    ------------------
<S>                                                           <C>                   <C>               
Interest revenue                                              $        3,898,000    $        4,778,000
Interest expense                                                         290,000             4,768,000
                                                              ------------------    ------------------
Net interest income                                                    3,608,000                10,000

Recovery of prior credit losses                                        3,438,000             2,209,000
                                                              ------------------    ------------------
Net interest income after recoveries of prior credit losses            7,046,000             2,219,000
                                                              ------------------    ------------------

General and administrative expense                                     5,922,000             8,660,000
Settlement                                                                  --               2,837,000
Reorganization                                                              --                 315,000
                                                              ------------------    ------------------
Operating and other expense                                            5,922,000            11,812,000
                                                              ------------------    ------------------

Net income (loss) before dividends                                     1,124,000            (9,593,000)
Preferred stock dividends                                              2,946,000               120,000
                                                              ------------------    ------------------

Net loss to common stockholders                               $       (1,822,000)   $       (9,713,000)
                                                              ------------------    ------------------

Primary net loss per share attributable to common             
   stockholders                                               $             (.07)   $            (1.11)
                                                              ==================    ==================

Weighted average common shares outstanding                            27,214,000             8,764,000
                                                              ==================    ==================
</TABLE>



<TABLE>
<CAPTION>
                                                             Three Months Ended    Three Months Ended
                                                             September 30, 1996    September 30, 1995
                                                             ------------------    ------------------
<S>                                                          <C>                   <C>               
Interest revenue                                             $        2,239,000    $          609,000
Interest expense                                                        290,000             1,813,000
                                                             ------------------    ------------------
Net interest income                                                   1,949,000            (1,204,000)

Recovery of (provision for) credit losses                             2,056,000             2,633,000
                                                             ------------------    ------------------
Net interest income after recoveries of (provisions for)    
credit losses                                                         4,005,000             1,429,000
                                                             ------------------    ------------------

General and administrative expense                                    3,394,000             4,808,000
Settlement                                                                 --               2,837,000
Reorganization                                                             --                 315,000
                                                             ------------------    ------------------
Operating and other expense                                           3,394,000             7,960,000
                                                             ------------------    ------------------

Net income (loss) before dividends                                      611,000            (6,531,000)
Preferred stock dividends                                             1,542,000                60,000
                                                             ------------------    ------------------
Net loss to common stockholders                              $         (931,000)   $       (6,591,000)
                                                             ------------------    ------------------

Primary loss per share attributable to common stockholders   $             (.03)   $             (.76)
                                                             ==================    ==================

Weighted average number of common shares outstanding                 26,628,000             8,671,000
                                                             ==================    ==================
</TABLE>



          See accompanying notes to consolidated financial statements.





                                       4
<PAGE>   5
                  SEARCH CAPITAL GROUP, INC. AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                               SIX MONTHS ENDED      SIX MONTHS ENDED
                                                              SEPTEMBER 30, 1996    SEPTEMBER 30, 1995
                                                              ------------------    ------------------
<S>                                                           <C>                   <C>                
OPERATING ACTIVITIES:
Net income (loss)                                             $        1,124,000    $       (9,593,000)
  Adjustments to reconcile net income (loss) to cash used
    in operations:
    Provision for recovery of credit losses                           (1,691,000)           (2,209,000)
    Amortization of deferred offering costs                                6,000             1,391,000
    Amortization of loan origination costs                               242,000               615,000
    Depreciation                                                         281,000               253,000
  Changes in assets and liabilities:
    Decreases (increases) in other assets                               (256,000)              (63,000)
    Increases (decreases) in accounts payable                         (4,466,000)            3,739,000
                                                              ------------------    ------------------
Cash used in operations                                               (4,760,000)           (5,867,000)
                                                              ------------------    ------------------

INVESTING ACTIVITIES:
    Purchase of contracts receivable                                 (14,793,000)          (14,160,000)
    Principal payments on contracts receivables
         including proceeds from sales of vehicles                    11,524,000            25,092,000
    Purchase of property and equipment                                  (388,000)             (354,000)
    Decrease in restricted cash                                             --              (1,692,000)
                                                              ------------------    ------------------
Cash provided by investing activities                                 (3,657,000)           10,578,000
                                                              ------------------    ------------------

FINANCING ACTIVITIES:
    Borrowings under line of credit                                    4,400,000
    Repayments under lines of credit                                  (2,283,000)           (1,217,000)
    Notes payable repayments                                                --              (1,690,000)
    Deferred offering costs                                              (82,000)
    Capital lease principal payments                                     (30,000)              (58,000)
    Net proceeds from debt conversion and sale of stock                4,346,000                  --
    Loans for stock purchases                                         (1,099,000)                 --
    Purchase of treasury stock                                              --              (1,125,000)
    Payment of dividends on preferred stock                           (1,680,000)             (120,000)
                                                              ------------------    ------------------
Cash provided by (used in) financing activities                        3,572,000            (4,210,000)
                                                              ------------------    ------------------

CHANGE IN CASH AND CASH EQUIVALENTS:
    Change in cash and cash equivalents                               (4,845,000)              501,000
    Cash and cash equivalents - beginning                             17,817,000             1,633,000
    Net cash acquired                                                    222,000                  --
                                                              ------------------    ------------------
    Cash and cash equivalents - ending                        $       13,194,000    $        2,134,000
                                                              ==================    ==================

------------------------------------------------------------------------------------------------------

Supplemental Information:
           Cash Paid for Interest                             $          292,000    $        3,725,000
                                                              ==================    ==================
</TABLE>





                                       5
<PAGE>   6
                  SEARCH CAPITAL GROUP, INC. AND SUBSIDIARIES
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

1.       BASIS OF PRESENTATION

         The consolidated financial statements of Search Capital Group, Inc.
("Search") and together with its subsidiaries ("Company") are unaudited and
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission applicable to quarterly reports on Form 10-Q.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
management believes that the disclosures present fairly, in all material
respects, the financial position of the Company for the periods presented.

         During the quarter ended September 30, 1996, the Company recorded
adjustments which it considers not of a normal recurring nature.  These
adjustments include a gain related to the closure of the Company's retail lots
and related make ready facility of $124,000, the reduction of an amount
previously reported as a liability under a terminated warranty program for the
Company's previously purchased contracts in the amount of $136,000, and
reversal of previously recorded expenses associated with a self-funded
insurance program in the amount of $36,000.

         These financial statements should be read in conjunction with the
audited consolidated financial statements and related notes and schedules
included in the Company's Form 10-K Transition Report for the six months ended
March 31, 1996.  The consolidated financial statements include the accounts of
the Company.  All significant intercompany accounts and transactions have been
eliminated.  Certain reclassifications have been made to prior periods'
balances to conform to current period presentation.

2.       CONTRACT RECEIVABLES, ALLOWANCE FOR CREDIT LOSSES AND INTEREST INCOME

         The Company records contract purchases at cost with any premium paid
recorded as an acquisition cost and amortized over the remaining life of the
related loans.  Generally, an initial reserve is recorded for any acquisition
discount, which is the difference between the amount financed at the time of
acquisition and the acquisition cost.  Contractual finance charges are
initially recorded to unearned interest and recorded to interest income using
the interest method.  The Company evaluates the impairment of loans based on
contractual delinquency and other factors.  Reserves are established for
impaired loans to reduce the net receivable to the lower of cost or estimated
net realizable value.  Interest income is not recognized on loans where the
contractual delinquency exceeds sixty days or concerns otherwise exist
regarding the collectibility of the account.  Reserve requirements in excess of
the initial reserve are provided, as needed, through a charge to the provision
for credit losses.  Recorded reserves in excess of anticipated losses are
recorded as reductions in the allowance for loan losses.




                                       6
<PAGE>   7
         Most of the Company's contracts receivable are due from individuals in
metropolitan areas of southern and western states.  To some extent, collection
of the receivables will be dependent on local economic conditions.  In the
opinion of management, a portion of the receivables will be repaid or extended
either before or past the contractual maturity date. Therefore, the tabulations
below should not be regarded as a forecast of future cash collections nor
indicators of future performance.

CONTRACTUAL DELINQUENCIES

         The following tables set forth certain information related to the
contractual delinquency of the Company's receivables as of September 30, 1996
and March 31, 1996.

<TABLE>
<CAPTION>
                                                           AS OF SEPTEMBER 30, 1996
                               --------------------------------------------------------------------------------
                                                    % OF
                                NUMBER OF          TOTAL            TOTAL
         CONTRACTUAL              ACTIVE           ACTIVE          UNPAID          UNEARNED             NET
         DELINQUENCY           CONTRACTS (1)      CONTRACTS     INSTALLMENTS       INTEREST         RECEIVABLES
         -----------           -------------      ---------     ------------      -----------       -----------
<S>                               <C>              <C>          <C>               <C>               <C>
Current to 60 days past due        9,873             93%        $57,487,000       $12,144,000      $ 45,343,000
61-over days past due                769              7%          4,458,000           733,000         3,725,000
                                  ------            ----        -----------       -----------      ------------
                   Total          10,642            100%        $61,945,000       $12,877,000        49,068,000
                                  ======            ====        ===========       ===========      
Allowance for credit losses                                                                         (13,431,000)
                                                                                                   ------------
Receivables, net of allowance for credit losses                                                    $ 35,637,000
                                                                                                   ============
</TABLE>


<TABLE>
<CAPTION>
                                                             AS OF MARCH 31, 1996
                              -----------------------------------------------------------------------------------
                                                    % OF
                                 NUMBER OF          TOTAL            TOTAL
         CONTRACTUAL              ACTIVE           ACTIVE           UNPAID           UNEARNED            NET
         DELINQUENCY           CONTRACTS (1)       CONTRACTS      INSTALLMENTS       INTEREST        RECEIVABLES
         -----------           -------------       ---------      ------------       --------        -----------
<S>                                <C>              <C>         <C>                <C>             <C>
Current to 60 days past due        7,575             95%        $34,995,000        $6,055,000      $ 28,940,000
61-over days past due                421              5%          2,091,000           380,000         1,711,000
                                   -----            ----        -----------        ----------      ------------
                   Total           7,996            100%        $37,086,000        $6,435,000        30,651,000
                                   =====            ====        ===========        ==========      
Allowance for credit losses                                                                         (13,353,000)
                                                                                                   ------------
Receivables, net of allowance for credit losses                                                    $ 17,298,000
                                                                                                   ============
</TABLE>

(1)      Excludes 245 and 333 accounts which were reclassified to vehicles held
         for resale as of September 30, 1996 and March 31, 1996, respectively.


                                      7

<PAGE>   8
ALLOWANCE FOR CREDIT LOSSES

         The following table shows the changes in the Company's allowance for
loan losses for the six months ending September 30, 1996.

<TABLE>
<CAPTION>
                                                           SIX MONTHS ENDING
                                                           SEPTEMBER 30, 1996
                                                           ------------------
<S>                                                            <C>
Balance at beginning of period                                 $13,353,000
Allowance recorded on acquisition of loans                       5,869,000
Provision for loan losses                                               -
Recovery of prior credit losses                                  1,747,000
Reduction in allowance for credit losses                        (3,438,000)
Loans charged off against allowance                             (4,100,000)
                                                               -----------
Balance at end of period                                       $13,431,000
                                                               ===========
</TABLE>

CONTRACTUAL MATURITIES

         The following tables set forth certain information related to the
contractual maturities of the Company's contract receivables as of September
30, 1996 and March 31, 1996.

<TABLE>
<CAPTION>
                                                                AS OF SEPTEMBER 30, 1996
                                            ---------------------------------------------------------------------
                                                             12 MONTHS ENDING SEPTEMBER 30,
                                                                                     1999 AND
                                                1997               1998               BEYOND             TOTAL
                                            -----------        -----------          -----------       -----------
<S>                                         <C>                <C>                  <C>               <C>
Future payments receivable                  $32,621,000        $18,947,000          $10,377,000       $61,945,000
Less unearned interest                        8,450,000          3,876,000              551,000        12,877,000
                                            -----------        -----------          -----------       -----------
Net contractual maturities                  $24,171,000        $15,071,000           $9,826,000       $49,068,000
                                            ===========        ===========           ==========       ===========
</TABLE>


<TABLE>
<CAPTION>
                                                                  AS OF MARCH 31, 1996
                                            ---------------------------------------------------------------------
                                                               12 MONTHS ENDING MARCH 31,
                                                                                      1999 AND
                                               1997                1998                BEYOND            TOTAL
                                            -----------        -----------          -----------       -----------
<S>                                         <C>                <C>                   <C>              <C>
Future payments receivable                  $23,445,000        $11,507,000           $2,134,000       $37,086,000
Less unearned interest                        4,886,000          1,450,000               99,000         6,435,000
                                            -----------        -----------          -----------       -----------
Net contractual maturities                  $18,559,000        $10,057,000           $2,035,000       $30,651,000
                                            ===========        ===========           ==========       ===========
</TABLE>





                                       8
<PAGE>   9
GENERAL CONTRACT CHARACTERISTICS
  
         The following sets forth certain general information related to the
contract receivables of the Company as of September 30, 1996 and March 31,
1996.


<TABLE>
<CAPTION>
                                                                         AS OF                     AS OF
                                                                   SEPTEMBER 30, 1996          MARCH 31, 1996
<S>                                                                      <C>                      <C>
Unearned as a percent of gross receivables                               20.79%                   17.35%
                                                                         ======                   ======
Allowance for loan losses as percent of  net receivables                 27.37%                   43.56%
                                                                         ======                   ======
Average Original Loan Amount                                             $7,433                   $6,997
                                                                         ======                   ======
Average Net Receivable Remaining Balance                                 $4,610                   $3,833
                                                                         ======                   ======
Weighted Average APR                                                     20.71%                   23.81%
                                                                         ======                   ======
Weighted Average Original Term in Months                                  36.94                    32.42
                                                                         ======                   ======
Weighted Average Remaining Term in Months                                 26.68                    19.09
                                                                         ======                   ======
</TABLE>


3.       TRANSACTIONS WITH HALL AND AFFILIATES

         On November 30, 1995, Search entered into a Funding Agreement
("Funding Agreement") with Hall Financial Group, Inc. ("HFG").  Pursuant to the
Funding Agreement, HFG made loans totaling $2,283,000 ("HFG Notes") to Search.
The HFG Notes could, at the election of HFG or its assigns, be converted into a
maximum 2,500,000 shares of Search common stock.  Effective April 2, 1996,
Hall/Phoenix Inwood, Ltd. ("HPIL"), as assignee from HFG of the HFG Notes,
fully exercised the rights of the holder of the HFG Notes to convert the Notes
into 2,500,000 shares of Search common stock.  Because the conversion price
specified in the HFG Notes for these shares was less than the full amount due
HFG, Search paid to HPIL the remaining portion of the debt evidenced by the HFG
Notes in cash.

         The Funding Agreement also provided to HFG the option to purchase
common stock, 9%/7% convertible preferred stock, and warrants.  Effective April
2, 1996, HPIL, as assignee of HFG, fully exercised this purchase option by
paying $4,346,000 cash to Search for which Search issued 1,638,400 shares of
common stock, 2,032,800 shares of 9%/7% preferred stock, and warrants to
purchase 676,000 shares of common stock to HPIL.

         Pursuant to the Funding Agreement, HFG was entitled to elect one
director to Search's Board if HFG converted the HFG Notes into common stock and
to elect another director if  HFG purchased at least $1,000,000 Present Value
of securities from Search.  As a result of satisfaction of these conditions,
two HFG officers were appointed to Search's Board.





                                       9
<PAGE>   10
4.       ACQUISITION OF DEALERS ALLIANCE CREDIT CORPORATION

         Effective August 2, 1996, Search Funding IV, Inc. ("SFIV"), a
wholly-owned subsidiary of Search, acquired all of the assets and assumed
certain liabilities of Dealers Alliance Credit Corporation ("DACC").  DACC
conducted purchasing and servicing of used motor vehicle receivables in
Atlanta, Georgia.  DACC had purchased loans from over 1,000 new and used car
dealers primarily in Georgia, Texas, Tennessee, and Florida. The acquisition
was accounted for under the purchase method of accounting.  Accordingly, their
results of operations have been included in the consolidated financial
statements since the date of acquisition.  The purchase price was allocated to
the net assets acquired based upon their estimated fair value.  This allocation
was based on preliminary estimates and may be revised at a later date.  The
excess of cost over fair value of the net assets, of approximately $11,300,000,
acquired relating to the purchase is being amortized over fifteen years on the
straight line method.  Under the terms of the transaction, SFIV assumed
approximately $17,500,000 in bank debt under a restructured line of credit and
acquired assets of approximately $23,000,000.  The Company gave in exchange for
the net assets, a combination of common stock, Series B 9%/7% Preferred Stock,
and warrants to purchase common stock.  The Company plans to use the office as
a regional marketing branch for southeastern states and  a collection center.

5.       LINE OF CREDIT


         On September 11, 1996, Search Funding II, Inc. ("SFII"), a
wholly-owned subsidiary of Search, entered into a revolving line of credit
agreement (the "line")  with Hibernia National Bank (HNB).  The line bears
interest at the prime rate plus one percentage point, currently 9.25% as of
October 31, 1996.  The line has a maximum borrowing commitment of $25,000,000
and is limited to a percentage of eligible contracts held by SFII.  The line is
secured by all SFII assets and expires on September 11, 1999.  Search has
guaranteed the line.  Search and SFII must comply with various covenants that
require the maintenance of certain financial ratios and other financial
conditions.

6.       RELATED PARTY INFORMATION

         A director of the Company is a principal in a securities firm which
will receive fees for its services to be rendered in connection with obtaining
potential subordinate debt and senior debt financing for the Company. The
Company will pay a marketing fee of $60,000 and a placement fee of 3.0% related
to the subordinated debt offering and a .375% agency fee for the senior debt.

         A director of the Company is a managing director of an investment
banking firm retained by the Company to act as its financial advisor. The
Company is obligated to pay $50,000 per year under this agreement to the firm.
Additionally, the Company has retained this director's firm to provide a
fairness opinion with respect to the Company's acquisition of certain assets and
liabilities of DACC and U.S. Lending Corporation. In connection with these
opinions, the Company will pay $100,000 and $125,000, respectively.


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

GENERAL

         The Company specializes in the purchase and servicing of used motor
vehicle receivables.  These receivables are secured by medium-priced, used
automobiles and light trucks which typically have been purchased by consumers
with substandard credit histories at retail prices generally ranging from
$5,000 to $15,000.  The Company generally purchases these receivables from a
network of unaffiliated new and used automobile dealers (the "Dealer Network").
The Company from time to time makes bulk acquisitions of these receivables.
The members of the Dealer Network generate the receivables and offer them for
sale on a non-exclusive basis to the Company.  Members of the Dealer Network
forego some future profit on each receivable sold to the Company in exchange
for an immediate return of their invested capital.  The Company administers its
receivables purchasing, servicing and management





                                       10
<PAGE>   11
activities utilizing a receivables management system developed by Norwest
Financial Information Systems Group, Inc. in conjunction with the Company's
proprietary Auto Note Management System software.  The Company commenced its
used motor vehicle receivables purchasing and servicing business in 1991.

         The Company opened its first consumer finance office on November 1,
1996 in Baton Rouge, Louisiana.  The Company intends to open more branch
offices in the near future.  These offices will make and collect retail sales
finance loans, second mortgage real estate loans, and other consumer loans.

         Prior to November 4, 1994, the Company primarily financed the purchase
of used motor vehicle receivables through the private and public sale of
interest-bearing notes (the "Notes) issued by wholly owned subsidiaries
organized specifically for this purpose (the "Fund Subsidiaries") and through
reinvestment of operating cash flow.  Until March 1996, the purchasing of
receivables for the Fund Subsidiaries was governed by trust indentures (the
"Trust Indentures") which restricted management's ability to alter its
receivables purchasing criteria.  In March 1996, following confirmation of the
Fund Subsidiaries' plan of reorganization under Chapter 11 of the bankruptcy
code, the Notes and the indebtedness represented by the Notes, together with
their related Trust Indentures, were canceled.  At that time, the Company
implemented its new purchasing program (the "Preferred Program").  The
Preferred Program continues to focus on the purchasing of used motor vehicle
receivables whose obligors have non-prime credit histories, but places more
emphasis on job, income and residence stability and re-established positive
credit of the obligor than the Company's earlier programs.

         The Company anticipates lower repossession rates and higher
repossession sale proceeds as a result of the Preferred Program.  If the
Company is unable to select the proper dealers, purchase contracts with
obligors which meet its credit criteria, and realize collection proceeds in
adequate amounts, the repossession rate and sale proceeds could be higher and
lower, respectively. The terms of loans under the Preferred Program generally  
range from 30 months to 60 months.

RESULTS OF OPERATIONS

Comparison of Six Month Periods Ended September 30, 1996 and 1995

         The Company purchased 509 non-bulk contracts during the six months
ended September 30, 1996 compared to 2,659 non-bulk contracts during the six
months ended September 30, 1995.  The cost of non-bulk contracts purchases was
$5,076,000 ($9,972 per contract) compared to $14,160,000 ($5,325 per contract)
for the six month periods in 1996 and 1995, respectively.  The Company
purchased 1,098 bulk contracts at a cost of $9,717,000 ($8,849 per contract)
during the six months ended September 30, 1996 compared to 112 bulk contracts
at a cost of  $513,000 ($4,580 per contract) for the six months ended September
30, 1995.  The increase in cost of non-bulk contracts is due to a higher
purchase price per contract under the Preferred Program generally due to a
lower mileage vehicle, higher credit quality customers and higher wholesale and
retail value per vehicle.  The increase in cost of bulk contracts is due to the





                                       11
<PAGE>   12
Company purchasing contracts that involve a higher credit quality obligors or
higher value vehicle collateral than the contracts previously purchased by the
Company, or both. The Company expects to continue to see an increase in its per
contract cost under its Preferred Program when compared to purchases under its
old program.  Additionally, during the three months ended September 30, 1996,
the Company purchased 725 non-auto consumer finance contracts which were not
secured by automobiles at a cost of $278,000.  The Company is also planning to
expand into other areas of consumer finance.

         Interest revenue decreased from $4,778,000 for the six months ended
September 30, 1995 to $3,898,000 for the six months ended September 30, 1996.
The decrease of $880,000, or 18%, is primarily a result of higher average 
interest earning net receivables for the six month period ended September 30, 
1995 of $48,894,000 compared to $27,251,000 average interest earning net 
receivables for the period ended September 30, 1996.

         Interest expense decreased from $4,768,000 to $290,000 for the six
months ended September 30, 1996 compared to the same six month period ended
September 30, 1995.  The decrease in interest expense is a result of
confirmation and effectiveness of the Fund Subsidiaries' plan of reorganization
during the first calendar quarter of 1996.  Additionally, as a result of the
plan's effectiveness, the Company paid the balance owing on its outstanding
lines of credit.

         The provision for credit losses increased from a recovery of
$2,209,000 for the six months ended September 30, 1995 to a recovery of
$3,438,000 for the six months ended September 30, 1996.  The increase in the
recovery of prior credit losses is due to increased recoveries of prior credit
losses from previously charged off accounts.  During the six month period ended
September 30, 1996, the Company recovered $1,747,000 of proceeds from accounts
previously charged off.  During the same three month period in the six months
ended September 1995, the Company did not recover any proceeds.  The Company's
remote collections facilities, which were opened during the second calendar
quarter of 1995, have been successful in contacting and collecting some of the
chronically delinquent and charged-off accounts and locating previously
identified skips.  Additionally, the acquisition of DACC provided the Company
with a new pool of deficiency balances to collect of which the Company
collected approximately $300,000 in the quarter ended September 30, 1996.  In
the future, management anticipates a lower amount of recovery of prior credit
losses as these collections decrease.  During the six months ended September
30, 1996, the Company received a one-time settlement of $115,000 from a car
dealer for deficiencies on sales of repossessed cars purchased from that
dealer.  Additionally, during the six months ended September 30, 1996, the
Company reduced its loan loss provision by an additional $1,691,000 to reflect
a reduction in  anticipated loan losses.

         General and administrative expenses decreased from $8,660,000 to
$5,922,000, or $2,738,000 for the six months ended September 30, 1995, compared
to the same six month period in September 30, 1996.  The decrease  in general
and administrative expenses is primarily related to reduced expenses associated
with processing repossessions, personnel cost, and professional fees.  The
Company closed all three of its retail lots, which were used to process
repossessions, by December 31, 1995.  The six month period ended September 30,
1995 contains





                                       12
<PAGE>   13
general and administrative expenses, related to these retail lots whereas the
six months ended September 30, 1996 contain none of the same expenses.  The
Company's employee count averaged 115 persons for the six months ended
September 30, 1996 compared to 127 persons for the six months ended September
30, 1995.

         Preferred stock dividends increased $2,826,000 from $120,000 for the
six months ended September 30, 1995 to $2,946,000 for the six months ended
September 30, 1996.  The increase in preferred stock dividends is related to
the issuance of 17,064,000 shares of the Company's 9%/7% Convertible Preferred
Stock upon confirmation of the Fund Subsidiaries' plan of reorganization and
2,554,000 shares of Series B 9%/7% Convertible Preferred Stock in the
acquisition of DACC.  The Company had 400,000 shares of its 12% Convertible
Preferred Stock outstanding and no 9%/7% Convertible Preferred Stock during the
six months ended September 30, 1995, compared to 400,000 and an average of
17,915,000 shares of 12% Convertible Preferred Stock, 9%/7% Convertible
Preferred Stock and Series B 9%/7% Convertible Preferred Stock, respectively,
outstanding during the six months ended September 30, 1996.

         Net loss per share decreased from $(1.11) per share for the six months
ended September 30, 1995 to $(.07) per share for the six months ended September
30, 1996.  The decrease is due to lower net loss per share attributable to
common stockholders of $7,891,000 and an increased number of weighted average
shares outstanding from 8,764,000 to 27,214,000, for the six months ending
September 30, 1995 and 1996, respectively.  In addition to the above, the
Company experienced significant costs related to the Fund Subsidiaries plan of
reorganization and settlement of claims of a non-reoccurring nature of
$3,152,000 during 1995.

Comparison of Three Month Periods Ended September 30, 1996 and 1995

         The Company purchased 236 non-bulk contracts during the three months
ended September 30, 1996 compared to 1,254 non-bulk contracts during the same
three months ended September 30, 1995.  The cost of non-bulk contract purchases
was $2,645,000 ($11,207 per contract) compared to $7,508,000 ($5,987 per
contract) for the three month periods in 1996 and 1995, respectively.  The
Company purchased 1,098 bulk contracts at a cost of $10,514,000 ($9,576 per
contract) during the three months ended September 30, 1996 compared to 112 bulk
contracts at a cost of $513,000 ($4,580 per contract) during the three month
period ended September 30, 1995.  The increase in cost in non-bulk contracts of
$5,220 per contract is due to a higher purchase price per contract under the
Preferred Program compared to its old program. The Company expects to continue
to see an increase in its per contract cost under its Preferred Program when
compared to purchases under its old program.  The increase in cost per bulk
contract of $4,996 per contract is due to a generally higher credit quality
customer and or collateral than what was previously purchased by the Company.
The Company expects to continue to see an increase in its non-bulk and bulk
contract cost when compared to previous non-bulk and bulk purchases.





                                       13
<PAGE>   14
         Interest revenue increased from $609,000 for the three  months ended
September 30, 1995 to $2,239,000 for the three months ended September 30, 1996.
The difference arises primarily from a reclassification of interest revenue and
provision for credit losses which was made during third calendar quarter of
1995 and had no effect on earnings per share.  Average interest earning
contracts were $29,429,000 for the three months ended September 30, 1996
compared to $45,662,000 for the three month period ended September 30, 1995.

         Interest expense decreased from $1,813,000 to $290,000 for the three
months ended September 30, 1995 compared to the same three month period ended
September 30, 1996.  The decrease in interest expense is a result of
confirmation and effectiveness of the Fund Subsidiaries' plan of reorganization
during the first calendar quarter of 1996.  Additionally, as a result of the
plan's effectiveness, the Company paid the balance owing on its outstanding
lines of credit.  The Company anticipates an increase in the amount of interest
expense in the foreseeable future as it will access its credit line to fund
contract purchases.

         The provision for credit losses decreased from a recovery of
$2,633,000 for the three months ended September 30, 1995 to a recovery of
$2,056,000 for the three months ended September 30, 1996.  The decrease in the
recovery of prior credit losses is due to lower anticipated loan losses in this
three month period compared to the same three month period in 1995.
Additionally, the difference arises primarily from a reclassification of
interest revenue and provision for credit losses which were made during third
calendar quarter of 1995 and had no effect on earnings per share.  The
Company's remote collections facilities, which were opened during the second
calendar quarter of 1995, have been successful in contacting and collecting
some of the chronically delinquent and charged-off accounts and locating
previously identified skips.  In the future, management anticipates a lower
amount of recovery of prior credit losses as these collections decrease.

         General and administrative expenses decreased from $4,808,000 to
$3,394,000 for the three months ended September 30, 1995, compared to the same
three month period ended in September 30, 1996.  The decrease in general and
administrative expenses is primarily related to reduced expenses associated
with processing repossessions, personnel cost, and professional fees.  The
Company closed all three of its retail lots, which were used to process
repossessions, by December 31, 1995.  The three-month period ended September
30, 1995 contains general and administrative expenses, related to these retail
lots whereas the three months ended September 30, 1996 contain none of the same
expenses.  The Company's employee count averaged 127 persons for the three
months ended September 30, 1995, compared to 130 persons for the three months
ended September 30, 1996.

         Preferred stock dividends increased from $60,000 for the three months
ended September 30, 1995 to $1,542,000 for the three months ended September 30,
1996.  This increase in preferred stock dividends is related to the issuance of
17,064,000 shares of the Company's 9%/7% Convertible Preferred Stock upon
confirmation of the Fund Subsidiaries' plan of reorganization and 2,554,000
shares of Series B 9%/7% Convertible Preferred Stock in the acquisition of DACC.
The Company had outstanding 400,000 shares of its 12% Convertible Preferred
Stock outstanding and no 9%/7% Convertible Preferred Stock during the three
months ended September 30, 1995, compared to 400,000 and an average of
18,767,000 shares of 12%





                                       14
<PAGE>   15
Convertible Preferred Stock, 9%/7% Convertible Preferred Stock and Series B
9%/7% Convertible Preferred Stock , respectively, outstanding during the three
months ended September 30, 1996.

         Net loss per share decreased from $(.76) per share for the three
months ended September 30, 1995 to $(.03) per share for the three months ended
September 30, 1996.  The decrease is due to lower net loss per share
attributable to common stockholders of $5,720,000 and an increased number of
weighted average shares outstanding from 8,671,000 to 26,628,000, for the three
months ending September 30, 1995 and 1996, respectively. In addition to the
above, the Company experienced significant costs related to the Fund
Subsidiaries' plan of reorganization and settlement of claims which are of a
non-recurring nature of $3,152,000 during 1995.


LIQUIDITY AND CAPITAL RESOURCES

General

         The Company's business will have an ongoing requirement to raise
substantial amounts of cash to support its activities.  Currently, the
principal cash requirements include amounts to purchase receivables, cover
operating expenses, and pay preferred stock dividends.  The Company has a
significant amount of cash on hand as of September 30, 1996, which it considers
adequate to meet its reasonably anticipated needs.  The Company intends to
invest a portion of this cash into receivables.  In the future, additional
liquidity will be necessary to support growth of the Company's loan portfolio
and operations.

         Because the used motor vehicle and consumer finance industries require
the purchase, origination and carrying of receivables, a relatively high ratio
of borrowings to net worth is customary and will be an important element in the
Company's operations.  The Company intends to leverage its net worth and any
subordinated debt in the future to enhance its liquidity.  Additionally, the
Company will endeavor to maximize its liquidity by diversifying its sources of
funds which it is anticipated  will include (a) cash from operations, (b) the
securitization of receivables, (c) lines of credit available from commercial
banks and other financing sources, and (d) a possible subordinated
debt offering.

         The Company has obtained a commitment for a warehouse line of credit
to purchase receivables which would then be assigned to special purpose
entities for future securitization. As of November 11, 1996, this commitment is
subject to completion of definitive documentation.  The Company is continuing
preparation of a private placement memorandum to issue $25,000,000 to
$30,000,000 of senior subordinated notes with warrants to purchase common
stock.  Additionally, the Company is discussing with several other commercial
lenders which include investment banking firms and brokerage firms to provide
additional financing, which would be utilized for the purchases of receivables
and/or the purchases of other operating entities.  The Company is also seeking
several additional participants to expand  its $25,000,000





                                       15
<PAGE>   16
line of credit with Hibernia Bank.  As of November 11, 1996, the Company had
approximately $23,700,000 outstanding under its line with Hibernia Bank.

         The Company intends to evaluate and pursue acquisition opportunities
that the Company anticipates will enable it to grow its receivable base.  The
Company will consider all forms of financing available to it with respect to
any particular acquisition, including additional borrowings and sales or
exchanges of equity or debt securities.

OPERATING ACTIVITIES

Principal Sources and Uses of Cash in Operating Activities

         The principal source of cash from operating activities is provided by
net interest income.  The principal uses of cash in operations are for general
and administrative expenses, other non-recurring types of expenses and payments
relating to previously accrued expenses.

Comparison of Operating Cash Flows for the Six Months Ended September 30, 1996
to the Six Months Ended September 30, 1995

         During the six months ended September 30, 1996, the Company utilized
$4,760,000 of cash in its operations compared to $5,867,000 of cash being
utilized in operations in the six months ended September 30, 1995.  The
decrease of $1,107,000 is primarily a result of reduction in expense accruals
of $4,466,000 related to the Fund Subsidiaries' plan of reorganization during
the six months ended September 30, 1996 compared to an increase in accruals of
$3,739,000 in the same period ended September 30, 1995.  The change in offering
cost authorization of $1,385,000 was due primarily to the confirmation of the
Fund Subsidiaries' plan of reorganization.

         The Company anticipates having negative cash flows in the foreseeable
future as it continues to expand its Dealer Network, expands into consumer
finance, and grows its receivable base.


INVESTING ACTIVITIES

Principal Sources and Uses of Cash Provided by Investing Activities

         The principal sources of cash from investing activities include cash
from principal payments on receivables and proceeds from the sale of
repossessed vehicles.  The principal uses of cash in investing activities
include cash used for purchasing receivables and property and equipment.





                                       16
<PAGE>   17
Comparison of Investing Cash Flows for the Six Months Ended September 30, 1996
to the Six Months Ended September 30, 1995.

         Cash provided by investing activities decreased $14,235,000 from
$10,578,000 for the six months ended September 30, 1995 to a use of $3,657,000
for the six months ended September 30, 1996.  The decrease is primarily due to
a decrease of $13,568,000 in principal payments and sale proceeds.

         The Company anticipates encountering negative cash flows from
investing activities in the foreseeable future as it continues to expand its
non-prime automobile receivable base by expanding into more states and greater
market penetration in existing states and expands into consumer finance.

FINANCING ACTIVITIES

Principal Sources and Uses of Cash Provided by Financing Activities

         The principal sources of cash from financing activities are from
borrowings under line of credit agreements, debt offerings proceeds, and sales
of equity securities.  The principal uses of cash in financing activities
include cash for the repayment of amounts borrowed under lines of credit,
repayment of debt offerings, and payment of dividends on preferred stock.


Comparison of Financing Cash Flows for the Six Months Ended September 30, 1996
to the Six Months Ended September 30, 1995.

         During the six months ended September 30, 1996, the Company's
financing activities provided $3,572,000 of cash compared to utilizing cash of
$4,210,000 during the same six month period ended September 30, 1995.  The
change of $7,782,000 was caused primarily by borrowings exceeding payments
under its line of credit, proceeds from sale of stock during the six months
ended September 30, 1996 and a lack of a purchase of treasury stock such as
occurred in the six months ended September 30, 1995.

         The Company's annual dividend requirements on the outstanding shares
of its 12% Preferred Stock and 9%/7% Preferred Convertible Stock, as of
September 30, 1996, were $240,000 and $6,155,000, respectively.  The annual
dividend requirement on the Company's 9%/7% Convertible Preferred Stock will
remain at the 9% level until March 31, 1999 and then decrease to the 7% level,
or $4,787,000, until March 2003.  Any conversion to Common Stock would reduce
these dividend requirements.

         During the quarter ended September 30, 1996, the Company implemented a
loan program for its directors and certain officers to finance the purchase of
the Company's common and preferred stock in open market transactions.  The
loans bear interest at the prime rate and require quarterly interest payments
and mature at the end of three years.  As of September 30, 1996, the Company
had advanced $1,099,000 to ten of the eligible participants to fund stock
purchases.





                                       17
<PAGE>   18
Currently, the maximum allowed to be funded for any participant is $150,000.
During the quarter ended September 30, 1996, the Company recorded $16,000 of
interest revenue from participants under this program. The loans are
evidenced by notes from participants and the Company holds the stock as
collateral under security agreements.

         The Company has potential obligation to purchase 812,127 shares from a
trust formed by  a former director of the Company under a stock purchase
agreement dated May 5, 1995.  The trust, at its option, can elect to have the
Company purchase 812,127 shares of stock at $2.25 per share.  This purchase
would require  cash on hand or borrowings under its existing line of credit
unless an additional source is available.

         The Company anticipates an increase in cash flows from financing
activities due to its anticipated subordinated debt offering, completion and
utilization of warehouse lines, and other debt and stock offerings. The Company
will require additional cash flow to grow its receivable base and expand into
consumer finance.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On October 24, 1996, Search initiated legal action in state District
Court, Dallas County, Texas against two of its directors, Craig Hall and Larry
E. Levey, and Hall Phoenix/Inwood Ltd., a company controlled by Mr. Hall that
is Search's largest stockholder.  The defendants have filed an answer seeking
dismissal of the action. Additionally, Messrs. Hall and Levey seek recovery
from Search of all legal fees, disbursements and other reasonable expenses
incurred by them in defending the action.  The suit alleges fraud,
misrepresentation and breach of fiduciary duty by the defendants.  No opinion
can be given as to the final outcome. Messrs. Hall and Levy filed suit against
Search in the Court of Chancery, New Castle County, Delaware on October 16,
1996 seeking access as directors to certain of Search's books and records.

         On October 25, 1996, Search's subsidiary, Automobile Credit Acceptance
Corp. ("ACAC"), was served with an Original Class Action Petition lawsuit
commenced in the County Court at Law of Nueces County, Texas.  The lawsuit,
styled William Bourland and Rolando H. Trevino v. Automobile Credit Acceptance
Corp., alleges that ACAC contracted for delinquency charges greater than those
authorized by the Texas Consumer Credit Code and seeks certification of a class
of all persons who purchased a motor vehicle in Texas with financing from ACAC
within the last four years.  The suit seeks statutory penalties, attorneys'
fees and interest.  ACAC has not yet filed its answer in the lawsuit and no
opinion can be given as to its final outcome.  ACAC believes the lawsuit is
without merit and intends to vigorously defend itself.

ITEM 2.  CHANGES IN SECURITIES-NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES-NONE

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





                                       18
<PAGE>   19
ITEM 5.  OTHER INFORMATION

         On November 1, 1996, Susan A. Brown resigned as a director of the
Company.

         On November 5, 1996, the Company entered into an amendment to the
Asset Purchase Agreement between the Company and U.S. Lending Corporation
("USLC"), a company subject to Chapter 11 bankruptcy proceedings, providing for
the Company to purchase all of USLC's used motor vehicle retail installment
sales contracts and repossessed motor vehicles, and a portion of USLC's cash,
on the closing date.  In consideration for the transfer of assets, the Company
will issue shares of its Common Stock, Series B 9%/7% Convertible Preferred
Stock ("Series B Stock") and warrants based on a purchase price to be 
determined at the closing equal to the cash received from USLC, 59% of the total
unpaid installments of USLC's active contracts, plus the wholesale value of
USLC's repossessed vehicles.  The number of shares of Common Stock and Series B
Stock will equal 25% and 100%, respectively, of the purchase price divided by
the weighted average of the high bid and low asked trading prices for those
securities for the 20 trading days preceding the closing.  The Company will also
issue at the closing five-year warrants to purchase Common Stock at $2.00 per
share (increasing by $0.25 per year).  The number of shares of Common Stock
purchasable under the warrants will equal 20% of the total Common Stock
equivalents represented by the Series B Stock and Common Stock issued at the
closing.  If certain proposed clarifying amendments to the terms of the
Company's 9%/7% Convertible Preferred Stock are approved by the Company's
stockholders, the shares of Series B Stock issued by the Company in the
acquisition will be automatically converted, on a one-for-one basis, into newly
issued shares of the Company's 9%/7% Convertible Preferred Stock.  If that
conversion does not occur by April 1, 1997, the Company will be required to pay
USLC $.08 for each share of Series B Stock issued at the closing.

         As of November 1, 1996, USLC had cash of approximately $3,400,000,
active contracts with total unpaid installments of approximately $2,222,000 and
repossessed vehicles with a wholesale value of approximately $53,000.


                                       19
<PAGE>   20
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)     Exhibits:

                 The following exhibits are filed in response to Item 601 of
Regulation S-K.

<TABLE>
<CAPTION>

Exhibit
 Number                                   Description
---------  --------------------------------------------------------------------
<S>        <C>
 2.1       Motor Vehicle Installment Sales Contract Assignment and Purchase
           Agreement dated as of November 1, 1996 between MS Financial, Inc. and
           Search Funding Corp. (excluding the schedule of contracts that is
           Exhibit A, a copy of which will be furnished to the Commission
           supplementally upon request.
 2.2       Letter agreement between the Registrant and MS Financial, Inc. dated
           November 4, 1996.
 3.1       Certificate of Amendment of Certificate of Designation of 9%/7%
           Convertible Preferred Stock.
 3.2       Certificate of Designation Series B 9%/7% Convertible Preferred Stock.
 3.3       Certificate of Corrections to the Restated Certificate of Incorporation
           of Search.
 3.4       Certificate of Amendment of Certificate of Designation of 9%/7%
           Convertible Preferred Stock.
 3.5       Certificate of Amendment of Certificate of Designation of Series B 9%/7%
           Convertible Preferred Stock.
10.1       Second Amendment dated November 5, 1996 to Asset Purchase Agreement
           among U.S. Lending Corporation, as Debtor-In-Possession, and Search
           Capital Group, Inc. and Search Funding III, Inc., dated July 17, 1996
27.0       Financial Data Schedule
</TABLE>

         (b)     Reports on Form 8-K:

                 The Company filed a Current Report on Form 8-K, dated
         September 27, 1996 reporting the acquisition of a portfolio of
         non-prime automobile retail installment sales contracts from Eagle
         Finance Corp.

                 The Company filed a Current Report on Form 8-K, dated August
         6, 1996 reporting the acquisition of substantially all of the assets,
         and assumption of certain liabilities, of Dealers Alliance Credit
         Corp.





                                       20
<PAGE>   21
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.

                           SEARCH CAPITAL GROUP, INC.

<TABLE>
<CAPTION>

SIGNATURE              TITLE                                DATE
---------              -----                                ----
<S>                    <C>
/s/ George C. Evans                                         November 11, 1996
---------------------                                       -----------------
George C. Evans        Chairman of the Board, President,
                       Chief Executive Officer, Chief
                       Operating Officer and Director


/s/ Robert D. Idzi                                          November 11, 1996
---------------------                                       -----------------
Robert D. Idzi         Senior Executive Vice President,
                       Chief Financial Officer and 
                       Treasurer


/s/ Andrew D. Plagens                                       November 11, 1996
---------------------                                       -----------------
Andrew D. Plagens      Vice President, Controller and 
                       Chief Accounting Officer
</TABLE>





                                       21
<PAGE>   22
                              INDEX TO EXHIBITS



<TABLE>
<CAPTION>

Exhibit
Number                                   Description
---------- --------------------------------------------------------------------
<S>        <C>
 2.1       Motor Vehicle Installment Sales Contract Assignment and Purchase
           Agreement dated as of November 1, 1996 between MS Financial, Inc. and
           Search Funding Corp. (excluding the schedule of contracts that is
           Exhibit A, a copy of which will be furnished to the Commission
           supplementally upon request.
 2.2       Letter agreement between the Registrant and MS Financial, Inc. dated
           November 4, 1996.
 3.1       Certificate of Amendment of Certificate of Designation of 9%/7%
           Convertible Preferred Stock.
 3.2       Certificate of Designation Series B 9%/7% Convertible Preferred Stock.
 3.3       Certificate of Corrections to the Restated Certificate of Incorporation
           of Search.
 3.4       Certificate of Amendment of Certificate of Designation of 9%/7%
           Convertible Preferred Stock.
 3.5       Certificate of Amendment of Certificate of Designation of Series B 9%/7%
           Convertible Preferred Stock.
10.1       Second Amendment dated November 5, 1996 to Asset Purchase Agreement
           among U.S. Lending Corporation, as Debtor-In-Possession, and Search
           Capital Group, Inc. and Search Funding III, Inc., dated July 17, 1996
27.0       Financial Data Schedule

</TABLE>