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                                                                   EXHIBIT 10.18

                               FIRST AMENDMENT TO
                               SERVICING AGREEMENT

        This FIRST AMENDMENT TO SERVICING AGREEMENT, dated as of September 1,
2001 (this "Amendment"), is among MicroFinancial Incorporated, a Massachusetts
corporation, as Servicer (the "Servicer"), MFI Finance Corp. I, a Massachusetts
corporation, as Issuer (the "Issuer"), and Wells Fargo Bank Minnesota, National
Association, a national banking association (successor to Norwest Bank
Minnesota, National Association, "Wells Fargo"), as Indenture Trustee (in such
capacity, the "Indenture Trustee") and as Back-up Servicer (in such capacity,
the "Back-up Servicer").

        WHEREAS, the Servicer, the Issuer, the Indenture Trustee and the Back-up
Servicer have entered into an Indenture, dated as of March 1, 2000 (the
"Indenture"), providing for, among other things, the issuance of Issuer's Notes
issuable;

        WHEREAS, the Issuer has requested, and the Servicer and Wells Fargo have
agreed to, certain modifications to the provisions of the Indenture and, in
connection therewith, will enter into an Amended and Restated Indenture, dated
as of, September 1, 2001;

        WHEREAS, in furtherance of such requested modifications, the Issuer has
requested, and the Servicer and Wells Fargo have agreed to, certain
modifications to the provisions of the Servicing Agreement, dated as of March 1,
2000 (the "Servicing Agreement"), among the Servicer, the Issuer, the Indenture
Trustee and the Back-up Servicer;

        WHEREAS, pursuant to Section 8.02 of the Servicing Agreement, the
parties may amend the Servicing Agreement with the consent of Ambac Assurance
Corporation ("Ambac"); and

        WHEREAS, pursuant to that certain Consent, dated as of August 31, 2001,
among the Issuer, Wells Fargo, the Servicer, Leasecomm Corporation, Ambac and
certain purchasers named therein, Ambac has provided its consent to this
Amendment.

        NOW, THEREFORE, in exchange for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
covenant and agree as follows:

SECTION 1.     DEFINITIONS.

        Each capitalized term used and not otherwise defined herein has the
meaning ascribed thereto in the Servicing Agreement.

SECTION 2.     AMENDMENT TO SERVICING AGREEMENT.

        (a)     Exhibit A of the Servicing Agreement is hereby amended by
deleting it in its entirety and substituting in its place the Monthly Servicer's
Report attached hereto as Annex 1. Such Monthly Servicer's Report shall be
designated Exhibit A to the Servicing Agreement.

        (b)     Exhibit D to the Servicing Agreement is hereby amended by
deleting it in its entirety and substituting in its place the Agreed Upon
Procedures attached hereto as Annex 2. Such Agreed Upon Procedures shall be
designated Exhibit D to the Servicing Agreement.

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SECTION 3.     REPRESENTATIONS AND WARRANTIES.

        Each party by executing this Amendment hereby represents and warrants
that the person executing this Amendment on behalf of such party is duly
authorized to do so, such party has full right and authority to enter into this
Amendment and to consummate the transaction described in this Amendment, and
this Amendment constitutes the valid and legally binding obligation of such
party and is enforceable against such party in accordance with its terms.

SECTION 4.     MISCELLANEOUS.

        (a)     Ratification of Servicing Agreement. The terms and provisions
set forth in this Amendment shall modify and supersede all inconsistent terms
and provisions set forth in the Servicing Agreement and, except as expressly
modified and superseded by this Amendment, the Servicing Agreement is ratified
and confirmed in all respects and shall continue in full force and effect.

        (b)     References. The Servicing Agreement and any and all other
agreements, documents or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Servicing Agreement
as amended hereby, are hereby amended so that any reference in such agreements
to the Servicing Agreement shall mean a reference to the Servicing Agreement as
amended hereby, mutatis mutandis.

        (c)     Counterparts. This Amendment may be executed in two or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Amendment by telecopier shall by as
effective as delivery of a manually executed counterpart of this Agreement.

        (d)     Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
application of choice of law principles of any jurisdiction.

        (e)     Binding Agreement. This Amendment shall be binding upon and
inure to the benefit of the Issuer, the Servicer, the Indenture Trustee, the
Back-up Servicer, Ambac, and the Noteholders and their respective successors and
permitted assigns.

        (f)     Notice to Rating Agencies. Promptly after the execution of this
Amendment, the Servicer shall mail a copy of this executed Amendment to the
Rating Agencies, Indenture Trustee, the Note Insurer and each Noteholder.

                                   * * * * *



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        IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to Servicing Agreement to be executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.

                                            MFI FINANCE CORP. I, as Issuer

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

                                            MICROFINANCIAL INCORPORATED, as
                                            Servicer

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

                                            WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION, as Indenture
                                            Trustee and as Back-up Servicer

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



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                                    ANNEX 1

                           Monthly Servicer's Report

                                 [see attached]






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                                     ANNEX 2

                             Agreed Upon Procedures

    (Can be changed with mutual agreement of Controlling Party and Servicer)

        1.      The Independent Accountant will determine the aggregate amount
of all collections received by the Servicer during three Due Periods selected by
Independent Accountant per year (each such Due Period referred to herein as a
"Review Period"). Such amounts will be compared against the amounts specified in
the Monthly Servicer's Reports and to the aggregate amount of collections
indicated on the Servicer's or the Issuer's automated lease accounting systems
or a "tape" derived from the lease accounting system ("Lease Accounting
Systems") noting any exceptions. Independent Accountant will review and
recalculate Monthly Servicer's Report for accuracy.

        2.      Independent Accountant will select to perform these procedures
on a total of 50 individual cash receipts posted to the Collection Account
during the Review Periods (each such cash receipt being a "Selected Receipt").
Using information contained on a copy of the check or in computer records (in
the case of payments made through ACH) and the remittance advice relating to
such Selected Receipts, the Independent Accountant will determine the amount of
contract payments included in each such Selected Receipt. Such amounts will be
compared against the amounts reflected on the Lease Accounting Systems noting
any exceptions.

        3.      For each of the Selected Receipts, the Independent Accountant
will compare the amount of the contract payment posted to the Lease Accounting
Systems to the amount of the contract payment indicated in the relevant Contract
and the Contract Files maintained by the Issuer or the Servicer, noting any
exceptions. The Independent Accountant will verify that any related Servicing
Charges in respect of sample Contracts are also being posted to the Collection
Account.

        4.      For any of the Selected Receipts which indicate a remittance of
sales tax, the Independent Accountant will determine whether such sales tax
remittances are included in a schedule prepared by the management of the Issuer
or the Servicer (the "Management Schedule") detailing tax payments received by
tax jurisdiction, noting any exceptions. Independent Accountant will also
determine whether the sales tax remittance is included in the supporting
schedules included in the applicable sales tax return, noting any exceptions.
Independent Accountant will recalculate the summation amounts on three of the
ten largest sales tax returns and additionally determine that the dates on the
Issuer's or the Servicer's checks remitting payment to the respective states is
within the required filing period.

        5.      Independent Accountant will recalculate the interest expense by
using (i) the outstanding principal balance of each Series of Notes at the
beginning of one Review Period, (ii) the amount shown as the interest due for
such Series with respect to the Payment Date relating to such Review Period. The
amount of interest expenses so recalculated will be compared against the
information provided in the Monthly Servicer's Reports noting any exceptions.
Independent Accountant will compare the stated outstanding principal amounts of
each series of Notes as set forth in the related Monthly Servicer's Report and
confirm with Indenture Trustee's records.

        6.      Independent Accountant will confirm the amount of early pay-offs
received during each Review Period and whether such payoffs are at least equal
to the then Implicit Principal Balance using information contained in the
relevant Monthly Servicer's Reports.


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        7.      Management Schedule will include a list of all early pay-off
Contracts during each of the Review Periods. Independent Accountant will select
a total of five Contracts listed as "early pay-offs" from the Management
Schedule. For each Contract so selected, Independent Accountant will compare the
amount deposited into the Collection Account in respect of such Contract with
the amount of early pay-off specified in the Management Schedule, noting any
exceptions.

        8.      Using the dates reflected on the copy of the check (or top
portion of the check) or in computer records (in the case of payments made
through ACH) and remittance advice, Independent Accountant will determine if the
respective Selected Receipt posting or effective date related to the underlying
contract transaction in the Lease Accounting Systems is the same month as
reflected on the copy of the check (or top portion of the check) or in computer
records (in the case of payments made through ACH) and the remittance advice
noting any exceptions.

        9.      Independent Accountant will compare the Implicit Principal
Balance of each Contract which has become a Defaulted Contract during each
Review Period, using information from the related Monthly Servicer's Reports,
the Management Schedule and/or the Lease Accounting Systems, noting any
exceptions.

        10.     Using information contained in the bank reconciliation for the
Collection Account, Independent Accountant will recalculate the amounts listed
in the bank reconciliation and compare to Monthly Servicer's Report, noting any
exceptions.

        11.     The Independent Accountant will select one monthly bank
reconciliation for the ACH Account and the Operating Account. Using information
contained in the bank reconciliations, Independent Accountant will recalculate
the amounts listed in the bank reconciliations and compare to Monthly Servicer's
Report, and will verify that required cash sweeps pursuant to the Servicing
Agreement are being done on a timely basis as required.

        12.     Independent Accountant will verify whether the Servicer has
procedures in place to monitor and make or cause to be made UCC financing or
continuation statements, based on reasonable details provided by the Servicer.

        13.     The Independent Accountant will determine the Aggregate Implicit
Principal Balance of the Contracts as of the close of business on the last day
of each Review Period and will compare such amount to the information indicated
in the Lease Accounting Systems, noting any exceptions.

        14.     The Independent Accountant will determine whether the Lease
Accounting Systems correctly identifies the ownership interest of the Issuer in
the related receivables for the Selected Receipts.

        15.     The Independent Accountant will verify or recalculate the
numeric information used in determining whether a Trigger Event or financial
covenant violation exists as set forth in the Servicer's records and the related
Monthly Servicer's Report.

        16.     Independent Accountant will compare 50 Contracts by delinquency
category against the information in the Lease Accounting Systems for accuracy.

        17.     The Independent Accountant will compare the number of Contracts
indicated in the related Monthly Servicer's Report against the information
indicated in the Lease Accounting Systems.


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        18.     The Independent Accountant will compare the stated balances in
the Collection Account and the Cash Collateral Account on the related Monthly
Servicer's Reports against the information indicated in the related bank
statements and investment statements.

        19.     The Independent Accountant will check the Monthly Servicer's
Reports for adherence to the 10% substitution limit.


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