RESTATED AND AMENDED LOAN AGREEMENT


                                     between


                           BUSINESS LOAN CENTER, INC.,
                             a Delaware corporation,

                                  as Borrower,


                          BLC FINANCIAL SERVICES, INC.,
                             a Delaware corporation,

                                   as Parent,


                                       and


                  TRANSAMERICA BUSINESS CREDIT CORPORATION,
                             a Delaware corporation,

                                    as Lender


$25,000,000.00                                     Dated as of August 27, 1997
<PAGE>

                                TABLE OF CONTENTS


RECITALS...................................................................  1

AGREEMENT..................................................................  2

ARTICLE 1   GENERAL TERMS..................................................  2
      1.1   Defined Terms..................................................  2
      1.2   Accounting Principles.......................................... 15
      1.3   Other Terms.................................................... 16
      1.4   Certain Matters of Construction................................ 16

ARTICLE 2   AMOUNT AND TERMS OF LOAN....................................... 16
      2.1   The Loans and Commitments...................................... 16
      2.2   Notice of Borrowing; Disbursement of Advances.................. 18
      2.3   Interest Rate.................................................. 18
      2.4   Computation.................................................... 19
      2.5   Fees........................................................... 19
      2.6   Borrower's Termination of Agreement............................ 20
      2.7   Mandatory Prepayments.......................................... 21
      2.8   Reserves Against Liabilities................................... 21
      2.9   All Loans to Constitute One Loan............................... 21
      2.10  Loan Purpose................................................... 21
      2.11  Term of Agreement.............................................. 22
      2.12  Payment Procedure.............................................. 22
      2.13  Collection of Borrower's Loans and Payments.................... 22
      2.14  Collections; Lender's Right to Notify Account
            Debtors........................................................ 25
      2.15  Application of Payments and Collections........................ 26
      2.16  Refund of Excess Interest; Statement of Account................ 26
      2.17  Business Days.................................................. 26
      2.18  Sales of and Participations in Non-Guaranteed
            Notes Receivable............................................... 26
      2.19  Effectiveness of Provisions Regarding SBA
            Guaranteed Notes Receivable.................................... 27

ARTICLE 3   SECURITY....................................................... 27
      3.1   Borrower's Liabilities......................................... 27
      3.2   Further Assurances............................................. 27

ARTICLE 4   REPRESENTATIONS AND WARRANTIES................................. 28
      4.1   Corporate Existence............................................ 28


                                     2
<PAGE>

      4.2   Corporate Power and Authorization.............................. 28
      4.3   Ownership of Property; Permitted Liens......................... 28
      4.4   Capital Structure.............................................. 29
      4.5   Binding Obligations............................................ 29
      4.6   No Legal Bar; No Lien.......................................... 29
      4.7   No Consent..................................................... 29
      4.8   Liabilities; Litigation........................................ 30
      4.9   Taxes; Governmental Charges.................................... 30
      4.10  Defaults....................................................... 30
      4.11  Use of Proceeds; Margin Stock.................................. 30
      4.12  Compliance with the Law........................................ 31
      4.13  ERISA.......................................................... 31
      4.14  No Material Misstatements...................................... 31
      4.15  Investment Company Act......................................... 31
      4.16  No Financing of Corporate Takeovers............................ 31
      4.17  Location of Borrower........................................... 31
      4.18  Use of Proceeds................................................ 32
      4.19  Hazardous Materials............................................ 32
      4.20  Insurance Policies............................................. 33
      4.21  Schedule of Deposit Accounts................................... 33
      4.22  Labor Matters.................................................. 34
      4.23  Employment and Labor Agreements................................ 34
      4.24  Solvent Financial Condition.................................... 34
      4.25  Brokers........................................................ 34
      4.26  True Sales of Notes Receivable................................. 34
      4.27  No Material Intellectual Property.............................. 34
      4.28  Automatic Warranty and Reaffirmation of Warranties
            and Representations; Survival of Warranties and
            Representations................................................ 35

ARTICLE 5   AFFIRMATIVE COVENANTS.......................................... 35
      5.1   Financial Statements and Reports and Other Data................ 35
      5.2   Taxes and Other Liens.......................................... 38
      5.3   Maintenance.................................................... 38
      5.4   Further Assurances............................................. 38
      5.5   Performance of Obligations..................................... 39
      5.6   Insurance; Payment of Premiums................................. 39
      5.7   Accounts and Records........................................... 40
      5.8   Right of Inspection............................................ 40
      5.9   Notice of Certain Events....................................... 40
      5.10  ERISA Information and Compliance............................... 41
      5.11  Financial Covenants............................................ 41
      5.12  Bad Debt Reserve............................................... 42


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<PAGE>

      5.13  Charges; Liens................................................. 42
      5.14  Communication With Accountants................................. 43
      5.15  Notes Receivable Documents..................................... 43
      5.16  Subordination Agreement........................................ 44
      5.17  Right of First Refusal for Securitization
            Transaction Subordinated Certificates.......................... 44

ARTICLE 6   NEGATIVE COVENANTS............................................. 44
      6.1   Debt........................................................... 44
      6.2   Loans and Compensation......................................... 44
      6.3   Liens.......................................................... 45
      6.4   Capital Expenses............................................... 45
      6.5   Dividends, Distributions and Redemptions....................... 45
      6.6   Capital Structure.............................................. 45
      6.7   Transactions with Affiliates................................... 45
      6.8   Change of Business............................................. 45
      6.9   Name of Borrower............................................... 46
      6.10  Location of Collateral......................................... 46
      6.11  Proceeds of Loans.............................................. 46
      6.12  ERISA Compliance............................................... 46
      6.13  Sale or Discount of Receivables................................ 46
      6.14  Compensation and Bonuses....................................... 47
      6.15  Payments on Subordinated Debt.................................. 47
      6.16  Affiliates..................................................... 47
      6.17  Consulting and Brokerage Services.............................. 47
      6.18  Modification of Sterling Documents............................. 48
      6.19  Survival of Obligations Upon Termination of
            Agreement...................................................... 48

ARTICLE 7   EVENTS OF DEFAULT.............................................. 48
      7.1   Events......................................................... 48
      7.2   Termination of Agreement and Acceleration of the
            Liabilities.................................................... 51
      7.3   Remedies....................................................... 51
      7.4   Notice of Sale or Other Action................................. 54
      7.5   Marshalling; Payments Set Aside................................ 54
      7.6   Effect of Multi-Party Agreement and Intercreditor
            Agreement...................................................... 54

ARTICLE 8   CONDITIONS OF LENDING.......................................... 54
      8.1   Initial Advance................................................ 54
      8.2   All Advances................................................... 57



                                     4
<PAGE>

ARTICLE 9   MISCELLANEOUS.................................................. 58
      9.1   Notices........................................................ 58
      9.2   Modification of Agreement; Sale of Interest.................... 60
      9.3   Lien Release Prior to Sale of SBA Guaranteed Notes
            Receivable..................................................... 60
      9.4   Fees and Expenses.............................................. 60
      9.5   Severability................................................... 61
      9.6   Waiver by Lender............................................... 62
      9.7   Successors and Assigns......................................... 62
      9.8   Conflict of Terms.............................................. 62
      9.9   Waivers by Borrower and Parent................................. 62
      9.10  Cumulative Rights.............................................. 63
      9.11  GOVERNING LAW.................................................. 63
      9.12  Taxes, etc..................................................... 63
      9.13  Governmental Regulation........................................ 63
      9.14  Titles of Articles and Sections................................ 63
      9.15  Authorized Signatures.......................................... 64
      9.16  Publicity...................................................... 64
      9.17  Counterparts................................................... 64
      9.18  Entire Agreement............................................... 64
      9.19  WAIVER OF JURY TRIAL........................................... 64



                                     5
<PAGE>

                                LIST OF EXHIBITS

      Exhibit A - Form of Revolving Credit Note

      Exhibit B - Form of Borrowing Request

      Exhibit C - Form of Borrowing Base Report

      Exhibit D - Form of Compliance Certificate

      Exhibit E - Schedule of Documents

      Exhibit F - Certificate of Validity of Collateral

      Exhibit G - Form of Letter to Parent's and Borrower's
                  Accountant

      Exhibit H - Form of Note Sale Report


                                LIST OF SCHEDULES

      Schedule 1.1(a)   Net Eligible Non-Guaranteed Notes Receivable

      Schedule 1.1(b)   Net Eligible SBA Guaranteed Notes Receivable

      Schedule 4.3(a)   Ownership of Property

      Schedule 4.3(b)   Permitted Liens

      Schedule 4.4      Capital Structure

      Schedule 4.8      Borrower's Liabilities and Litigation

      Schedule 4.20     Insurance Policies

      Schedule 4.21     Deposit Accounts

      Schedule 4.23     Employment Agreements

      Schedule 4.27     Intellectual Property


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<PAGE>

                       RESTATED AND AMENDED LOAN AGREEMENT

            THIS RESTATED AND AMENDED LOAN AGREEMENT is made as of this 27th day
of August, 1997, by and between BUSINESS LOAN CENTER, INC., a Delaware
corporation with its principal offices located at 919 Third Avenue, 17th Floor,
New York, New York 10022 ("Borrower"), BLC FINANCIAL SERVICES, INC., a Delaware
corporation with its principal offices located at 919 Third Avenue, 17th Floor,
New York, New York 10022 ("Parent"), and TRANSAMERICA BUSINESS CREDIT
CORPORATION, a Delaware corporation with its principal place of business located
at 9399 West Higgins Road, Suite 600, Rosemont, Illinois 60018 ("Lender"), with
reference to the following facts:

                                    RECITALS

      A. Borrower, Parent and Business Loan Center, a New York general
partnership (collectively, the "Original Borrowers"), and Sterling National Bank
(formerly known as Sterling National Bank & Trust Company of New York), a
national banking association ("Sterling"), have entered into that certain
Revolving Credit Agreement dated as of December 19, 1994, as amended, restated,
supplemented or otherwise modified from time to time (the "Original Credit
Agreement"), pursuant to which Sterling has made certain advances to Original
Borrowers prior to the date hereof.

      B. Sterling and Lender have entered into that certain Partial Assignment
Agreement of even date herewith, pursuant to which Sterling has assigned to
Lender all of Sterling's right, title and interest to and all of its obligations
under the portions of the "Revolving Credit Loans" (as defined in the Original
Credit Agreement) previously advanced by Sterling to Original Borrowers against
the "Unguaranteed Portions" of "Eligible SBA Loans" (each as defined in the
Original Credit Agreement), and certain related rights, obligations, collateral
and other assets (the "Assignment").

      C. After the Assignment, Sterling will continue to make Revolving Credit
Loans to Borrower and Parent against the "Guaranteed Portions" (as defined in
the Original Credit Agreement) of Eligible SBA Loans, but will no longer make
Revolving Credit Loans against the Unguaranteed Portions of


                                     1
<PAGE>

Eligible SBA Loans, and Sterling, Borrower and Parent are entering into that
certain Amended and Restated Revolving Credit Agreement of even date herewith
(as amended, restated, supplemented or otherwise modified from time to time, the
"Restated Sterling Credit Agreement") to amend and restate the Original Credit
Agreement to reflect the foregoing and to make certain other amendments to the
financing arrangements thereunder.

      D. After the Assignment, Lender, Borrower and Parent intend for Lender to
continue making Revolving Credit Loans to Borrower against the Unguaranteed
Portions of Eligible SBA Loans, and Lender and Borrower are entering into this
Agreement to also restate and amend the Original Credit Agreement to reflect the
foregoing and to make certain other amendments to the financing arrangements
thereunder.

      E. Lender, Borrower and Parent also wish to include in this Agreement the
terms and provisions under which Lender would also make Revolving Credit Loans
to Borrower against the Guaranteed Portions of Eligible SBA Loans if Lender
subsequently receives SBA approval to provide such loans to Borrower either
through an assignment of Sterling's rights under the Restated Sterling Credit
Agreement or otherwise.

                                    AGREEMENT

            NOW, THEREFORE, in consideration of the terms and conditions set
forth herein, and of any extension of credit contemplated hereby, now or
hereafter made by the Lender to Borrower, Borrower, Parent and Lender hereby
restate and amend the Original Credit Agreement as follows:

                                    ARTICLE 1

                                  GENERAL TERMS

      1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings, unless the context otherwise requires (terms
defined in the singular to have the same meaning when used in the plural and
visa versa):



                                     2
<PAGE>

            "Accounts" shall mean all accounts, accounts receivable, other
receivables, contract rights, and notes (other than forms of obligations
evidenced by chattel paper, documents or instruments), whether now owned or
hereafter acquired by Borrower and whether or not earned by performance.

            "Accountant" shall have the meaning ascribed to that term in Section
5.1(a).

            "Account Debtor" shall mean any Person who is or who may become
obligated to Borrower under, with respect to, or on account of, an Account.

            "Affiliate" shall mean, with respect to any Person, (a) each other
Person that, directly or indirectly, owns or controls, on an aggregate basis,
including all beneficial ownership and ownership or control as a trustee,
guardian or other fiduciary, at least five percent (5%) of the outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors (irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) of such Person, (b) each Person that controls,
is controlled by or is under common control with such Person, (c) each of such
Person's officers, directors, joint venturers and partners, and (d) in the case
of Borrower or Parent, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of Borrower of Parent; provided,
that in no case shall Lender be deemed to be an Affiliate of Borrower or Parent
for purposes of this Agreement. For the purpose of this definition, "control"
means the possession, directly or indirectly, of the power to direct or to cause
the direction of management and policies, whether through the ownership of
voting securities, by contract or otherwise.

            "Agreement" shall mean this Restated and Amended Loan Agreement,
including all amendments, modifications and supplements hereto and any
appendices, exhibits or schedules to any of the foregoing, and shall refer to
the Agreement as the same may be in effect at the time such reference becomes
operative.



                                     3
<PAGE>

            "Allocated Payment Portion" shall have the meaning ascribed to such
term in Section 2.13(c).

            "Assignment" shall have the meaning ascribed to such term in the
Recitals hereto.

            "Bankruptcy Code" shall mean 11 U.S.C. ss. 101 et seq. as the same
may be modified, amended or supplemented from time to time.

            "Blocked Account" shall have the meaning ascribed to such term in
Section 2.13(a).

            "Borrower" shall mean Business Loan Center, Inc., a Delaware
corporation, and its successors and permitted assigns.

            "Borrowing Base Report" shall mean the report by Borrower with
respect to calculation of the Maximum Commitment, to be substantially in the
form attached as Exhibit C hereto.

            "Borrowing Request" shall mean the request by Borrower for advances
under the Agreement, to be substantially in the form attached as Exhibit B
hereto.

            "Broker-Dealer Confirmation" shall mean, with respect to any sale of
an SBA Guaranteed Note Receivable, the written communication from a securities
broker-dealer to Borrower confirming the date on which all funds to be paid by
the purchaser of such SBA Guaranteed Note Receivable will be disbursed to
Intermediary for the account of Borrower.

            "Business Day" shall mean a day other than a Saturday, Sunday or
legal holiday for commercial banks under the laws of the State of New York or
the State of Illinois.

            "Change of Control" shall mean any transaction or event as a result
of which (a) Parent ceases to own 100% of the Stock of Borrower, or (b) Robert
F. Tannenhauser sells or otherwise ceases to retain the control over and
beneficial interest in any of the Stock of Parent owned or under his beneficial
control as of April 24, 1997, or (c) Robert F. Tannenhauser ceases to be an
executive officer of both Borrower and Parent.



                                     4
<PAGE>

            "Charges" shall mean all taxes, levies, assessments, charges, Liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Liabilities, (c) the employees, payroll, income or gross receipts of Borrower,
(d) the ownership or use of any of the assets of Borrower, or (e) and any other
aspect of Borrower's business.

            "Collateral" shall mean all of the property and interests in
property described in the Security Agreement and the other Security Documents
and all other property and interests in property which shall, from time to time,
secure the Liabilities.

            "Compliance Certificate" shall mean the certificate evidencing
Borrower's and Parent's compliance with the terms of this Agreement, to be
substantially in the form attached as Exhibit D hereto.

            "Current Portion of Net Eligible Non-Guaranteed Notes Receivable"
shall mean, at any particular time, that portion of the aggregate principal
amount then outstanding of Non-Guaranteed Notes Receivable conforming to each of
the requirements set forth in Schedule 1.1(a).

            "Default" shall mean any event that, with the passage of time, the
giving of notice or both, would become an Event of Default, unless cured or
waived as specifically provided in this Agreement.

            "Defaulted Portion of Net Eligible Non-Guaranteed Notes Receivable"
shall mean, at any particular time, that portion of the aggregate principal
amount then outstanding of Non-Guaranteed Notes Receivable conforming to each of
the requirements set forth in Schedule 1.1(a), other than paragraphs J or K
thereof, and with respect to which either (a) payment of interest, principal, or
other amount due thereunder is more than 120 days past due, or (b) the SBA has
designated it as "liquidation accounts."

            "Delinquent Portion of Net Eligible Non-Guaranteed Notes Receivable"
shall mean, at any particular time, that portion of the aggregate principal
amount then outstanding of Non-Guaranteed Notes Receivable conforming to each of
the requirements set forth in Schedule 1.1(a), other than paragraph K thereof,
and with respect to which no payment of interest,


                                     5
<PAGE>

principal, or other amount due thereunder is more than 120 days past due.

            "Dollars" shall mean lawful money of the United States of America.

            "EBITDA" shall mean, with respect to any Person, its net income plus
interest, cash taxes as measured by income, depreciation and amortization
(excluding, for each item, gains and losses resulting from transactions
occurring outside the ordinary course of business); provided, that EBITDA shall
(i) include gross premiums received on Sold Notes Receivable, and (ii) exclude
recognition of income from valuation of future servicing rights.

            "Effective Date" shall mean the first date on which all conditions
precedent set forth in Section 8.1 have been satisfied in a manner acceptable to
Lender or waived in writing by Lender as provided therein and Lender makes or is
prepared to make the initial Revolving Loan under this Agreement.

            "Environmental Claim" shall mean any written accusation, allegation,
notice of violations, claim, demand, abatement or other judicial or
administrative order or direction (conditional or otherwise) by any governmental
authority or any Person for any damage, including personal injury (including
sickness, disease or death), tangible or intangible property damage,
contribution, indemnity, indirect or consequential damages, damage to the
environment, nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions, resulting from or based
upon (a) the existence, or the continuation of the existence, of a Release
(whether sudden or non-sudden or accidental or non-accidental), of, or exposure
to, any Hazardous Material, in, into or onto the environment at, in or by, from
or related to any Real Property, (b) the use, handling, transportation, storage,
treatment or disposal of Hazardous Materials in connection with the operation of
any Property, or (c) the violation, or alleged violation, of any Environmental
Laws or Governmental Authorization relating to environmental matters with
respect to any Property.



                                     6
<PAGE>

            "Environmental Laws" shall mean all statutes, ordinances, judicial
or administrative orders, rules, regulations or decrees relating to (a) fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of Hazardous
Materials, (b) the generation, use, storage, transportation or disposal of
Hazardous Materials, (c) occupational safety and health, industrial hygiene,
land use in connection with environmental matters for the protection of health
or welfare, in any manner applicable to Borrower or any of its Subsidiaries or
any of their respective properties, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. ss.ss. 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. ss.ss. 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss.ss. 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. ss.ss. 1251 et seq.),
the Clean Air Act (42 U.S.C. ss.ss. 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. ss.ss. 2601 et seq.), the Occupational Safety and Health Act (29
U.S.C. ss.ss. 651 et seq.) and the Emergency Planning and Community
Right-To-Know-Act (42 U.S.C. ss.ss. 11001 et seq.), each as amended or
supplemented, and any analogous future or present local, state and Federal
statutes and regulations promulgated pursuant thereto.

            "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.

            "ERISA Affiliate" shall mean any Person that is now or at any time
in the future required to be treated as a single employer with Borrower under
IRC Sections 414(b) or (c).

            "Event of Default" shall mean the occurrence of any of the events
specified in Section 7.1 hereof, provided that any requirement for notice or
lapse of time or any other condition precedent has been satisfied.

            "Execution Date" shall mean August 27, 1997.

            "GAAP" shall mean the generally accepted accounting principles in
the United States of America as in effect from time to time.



                                     7
<PAGE>

            "GECC Participated Notes Receivable" shall mean the Notes Receivable
in which Borrower has sold a pro rata participation in the non-guaranteed
portion thereof to General Electric Capital Corporation pursuant to the
Participation Agreements dated May 30, 1996 and March 20, 1997.

            "Governmental Authorization" shall mean any permit, license,
authorization, consent order or consent decree of or from any Federal, state or
local governmental authority, agency or court.

            "Governmental Requirement" shall mean, to the extent any violation
thereof or failure to comply therewith would have a Material Adverse Effect, any
law, statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or other
direction or requirement (including any of the foregoing which relate to lender
licensing, environmental standards or controls, energy regulations and
occupational, safety and health standards or controls) of any federal, state,
county, municipal or other domestic or foreign government, department,
commission, board, court, agency or any other instrumentality of any of them,
which exercises jurisdiction over Borrower.

            "Hazardous Materials" shall mean (a) any oil, petroleum or petroleum
derived substance, any drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil, any
flammable substances or explosives, any radioactive materials, any hazardous
wastes or substances, any toxic wastes or substances or any other materials or
pollutants which (i) pose a hazard to any property or to any Persons on or about
such property or (ii) cause such property to be in violation of any
Environmental Laws; (b) asbestos in any form which is or could become friable,
urea formaldehyde foam insulation, electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million; (c) any chemical, material or substance regulated or
defined as or included in the definition "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous waste," "restricted
hazardous wastes," or "toxic substances" or any other formulations intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity,


                                     8
<PAGE>

carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws;
and (d) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority pursuant to any
Environmental Law.

            "Highest Lawful Rate" shall mean the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Revolving Credit Note or on other
Liabilities, as the case may be, under the law of the State of Illinois (or the
law of any other jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of this Agreement), or law of the United States
of America applicable to Lender and the Transactions which would permit Lender
to contract for, charge, take, reserve or receive a greater amount of interest,
than under Illinois (or such other jurisdiction's) law.

            "Indebtedness" shall mean all liabilities, obligations and
indebtedness of any and every kind and nature whether heretofore, now or
hereafter owing, arising, due, or payable from Borrower or Parent to any Person
and howsoever evidenced, created, incurred, acquired, or owing, whether primary,
secondary, direct, contingent, fixed, or otherwise.

            "Index Rate" shall mean the higher of: (i) the latest published
prime rate which normally appear in the "Money Rates" section of The Wall Street
Journal, or (ii) the latest published annualized rate of 90 day dealer
commercial paper which normally appears in the "Money Rates" section of The Wall
Street Journal.

            "Intangible Assets" shall mean, with respect to any Person,
collectively, organizational expenses, financing expenses, prepaid expenses,
goodwill (including any amounts however designated, representing the excess of
the purchase price paid for assets or stock acquired subsequent to the date
hereof over the value assigned thereto on the books of such Person), patents,
trademarks, tradenames, copyrights and other intangible assets of such Person.

            "Intercreditor Agreement" shall mean the Intercreditor Agreement of
even date herewith, by and between Sterling and


                                     9
<PAGE>

Lender, as amended, restated, supplemented or otherwise modified from time to
time.

            "Intermediary" shall mean Colson Services Corp., as fiscal and
transfer agent for the SBA, or any other Person designated by the SBA to perform
the same or similar functions.

            "Items of Payment" shall have the meaning ascribed to such term in
Section 2.13(a).

            "Lender" shall mean Transamerica Business Credit Corporation, a
Delaware corporation, together with its successors and permitted assigns.

            "Lender's Agent" shall mean North Fork Bank, a New York state
chartered commercial bank formerly known as Bank of Great Neck, in its capacity
as agent for Sterling and Lender to hold the original SBA 7(a) Loan Notes in
which a security interest can be perfected only by possession pursuant to the
Multi-Party Agreement, or any of its successors or assigns.

            "Liabilities" shall mean all of Borrower's liabilities, obligations
and indebtedness to Lender of any and every kind and nature (including interest,
charges, expenses, attorneys' fees and other sums chargeable to Borrower by
Lender and future advances made to or for the benefit of Borrower), whether
arising under this Agreement, under any of the other Loan Documents or acquired
by Lender from any other source, whether heretofore, now or hereafter owing,
arising, due, or payable from Borrower to Lender and howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed, or otherwise, including obligations of performance.

            "Lien" shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on the common law, statute or contract, and including but
not limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term "Lien" shall
include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions,


                                     10
<PAGE>

leases and other title exceptions and encumbrances affecting Property.

            "Loan Documents" shall mean this Agreement, the Revolving Credit
Note, the Security Agreement, the Security Documents, the Parent Guaranty, the
Multi-Party Agreement and all agreements, instruments and documents, including
notes, guaranties, mortgages, deeds of trust, chattel mortgages, pledges, powers
of attorney, consents, assignments, contracts, notices, security agreements,
leases, financing statements, subordination agreements, trust account
agreements, and all other written matter whether heretofore, now, or hereafter
executed by or on behalf of Borrower or Parent or delivered to Lender, with
respect to this Agreement.

            "Loan Guaranty Agreement" shall mean any Loan Guaranty Agreement
(Deferred Participation) (SBA Form 750) or similar agreement in force and effect
between Borrower and the SBA from time to time (including, with respect to any
SBA Guaranteed Note Receivable originated by a predecessor in interest of
Borrower, the Loan Guaranty Agreement (Deferred Participation) (SBA Form 750) or
similar agreement under which such SBA Guaranteed Note Receivable was guaranteed
by SBA).

            "Loan Participation Agreement" shall mean the Loan Participation
Agreement between Borrower and Lender dated as of May 1, 1997, including all
amendments, modifications and supplements thereto and any appendices, exhibits
or schedules to any of the foregoing, and shall refer to the Loan Participation
Agreement as the same may be in effect at the time such reference becomes
operative.

            "Material Adverse Effect" shall mean any material and adverse effect
on (i) the assets, liabilities, financial condition, business, operations,
affairs or circumstances of Borrower or Parent, or (ii) the ability of Borrower
or Parent to carry out its business as at the date of this Agreement or as
proposed at the date of this Agreement to be conducted or meet its obligations
under the Revolving Credit Note, this Agreement, or the other Loan Documents on
a timely basis.

            "Maximum Commitment" shall have the meaning ascribed to such term in
Section 2.1.


                                     11
<PAGE>

            "Maximum Credit Line" shall mean $25,000,000.

            "Multi-Party Agreement" shall mean the Multi-Party Agreement
(Relating to SBA Loan Documentation and Administration) by and among Borrower,
Sterling, the SBA, and Lender's Agent, dated as of December 19, 1994, as the
same may be supplemented, modified, or amended from time to time, and to which
Lender has, pursuant to the Assignment, succeeded to Sterling's rights and
obligations thereunder with respect to the "Retained Portions" of any "BLC Loan"
(as such terms are defined in the Multi-Party Agreement).

            "Net Eligible Non-Guaranteed Notes Receivable" shall mean, at any
particular time, the sum of (a) the Current Portion of Net Eligible
Non-Guaranteed Notes Receivable, (b) the Delinquent Portion of Net Eligible
Non-Guaranteed Notes Receivable, and (c) the Defaulted Portion of Net Eligible
Non-Guaranteed Notes Receivable.

            "Net Eligible SBA Guaranteed Notes Receivable" shall mean, at any
particular time, the aggregate principal amount then outstanding of SBA
Guaranteed Notes Receivable conforming to the requirements set forth in Schedule
1.1(b).

            "Net Sale Proceeds" shall mean the proceeds payable to or for the
account of Borrower from the sale of any SBA Guaranteed Notes Receivable, net of
any fees or commissions payable to Intermediary with respect thereto.

            "Net Worth" shall mean, with respect to any Person, at any time for
the determination thereof, the sum of its capital stock, capital in excess of
par or stated value of shares of its capital stock, retained earnings, loan loss
reserve, and any other account which, in accordance with GAAP, constitutes
stockholder's equity, less treasury stock.

            "Non-Guaranteed Note Receivable" shall mean that portion of any Note
Receivable that is not guaranteed by the SBA and in which Lender has been
granted a first priority security interest pursuant to the Security Agreement.

            "Non-Guaranteed Pro Rata Participation" shall mean a loan
participation with respect to a Note Receivable, sold by


                                     12
<PAGE>

Borrower after the Effective Date pursuant to documentation acceptable to
Lender, which participation represents an undivided pro rata interest in the
Non-Guaranteed Note Receivable portion thereof and is entitled to be paid pro
rata with payment of both any SBA Guaranteed Note Receivable portion thereof and
the Non-Guaranteed Note Receivable portion thereof retained by Borrower.

            "Note Participation Amount" shall mean the proceeds payable to or
for the account of Borrower from the sale of any Non-Guaranteed Pro Rata
Participation, which shall be a cash amount equal to not less than 100% of the
buyer's or participant's pro rata share of the outstanding principal amount of
the Participated Note Receivable.

            "Note Receivable" shall mean the obligation of any Term Loan Debtor
to pay any term loan or similar form of financial accommodation made or extended
by Borrower to such Term Loan Debtor, whether or not evidenced by a promissory
note or other instrument.

            "Note Receivable Documents" shall mean, with respect to any Note
Receivable, all original documents, instruments, and chattel paper, executed or
delivered to Borrower by the applicable Term Loan Debtor and evidencing such
Note Receivable.

            "Note Sale Reserve" shall mean, for purposes of calculating the
Maximum Commitment, a reserve equal to one hundred percent (100%) of the
outstanding principal amount of any SBA Guaranteed Note Receivable proposed to
be sold by Borrower, which, at Lender's option, Lender may establish as of the
close of Lender's business on the Business Day immediately preceding the
proposed Settlement Date for such sale, to be maintained until the Business Day
on which the Net Sale Proceeds payable on account of such SBA Guaranteed Note
Receivable are credited against the Liabilities pursuant to Section 2.13(a).

            "Original Credit Agreement" shall mean the Revolving Credit
Agreement dated as of December 19, 1994, as amended, restated, supplemented or
otherwise modified from time to time prior to the date hereof, by and between
Sterling and Borrower, Parent and Business Loan Center, a New York general
partnership.



                                     13
<PAGE>

            "Parent" shall mean BLC Financial Services, Inc., a Delaware
corporation, and its successors and assigns.

            "Parent Debentures" shall mean debentures in the original principal
amount of up to $3,000,000 that may be issued by Parent after the Effective
Date, which shall have a fixed interest rate of not more than ten percent (10%),
a term of not less than three (3) years with interest only payable prior to
maturity, be subordinated to payment of the Liabilities, and otherwise be in
form and substance acceptable to Lender, and all debentures issued or delivered
by Parent in substitution or exchange therefor and meeting the same criteria, in
each case as the same may be supplemented, modified, or amended from time to
time with the consent of Lender.

            "Parent Guaranty" shall mean the Guaranty Agreement dated as of the
date hereof executed by Parent in favor of Lender pursuant to which Parent
guarantees to Lender the payment and performance of the Liabilities.

            "Participated Notes Receivable" shall mean the Non-Guaranteed Notes
Receivable in which Borrower has sold a Non-Guaranteed Pro Rata Participation.

            "Permitted Liens" shall have the meaning ascribed to such term in
Section 4.3(b).

            "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any other form of
entity.

            "Plan" shall mean, with respect to Borrower or any ERISA Affiliate,
at any time, an employee benefit plan, as defined in Section 3(3) of ERISA,
which Borrower maintains, contributes to, or has an obligation to contribute to
on behalf of participants who are or were employed by any of them.

            "Prepayment Fee" shall have the meaning ascribed to that term in
Section 2.6.



                                     14
<PAGE>

            "Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.

            "Release" shall mean any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, the abandonment or disposal of any barrels, containers
or other closed receptacles containing any Hazardous Materials) or into or out
of any Property, including the movement of any Hazardous Material through the
air, soil, surface water, groundwater or property.

            "Restated Sterling Credit Agreement" shall mean the Amended and
Restated Revolving Credit Agreement of even date herewith, by and between
Sterling and Borrower and Parent, as amended, restated, supplemented or
otherwise modified from time to time.

            "Revolving Credit Note" shall mean the promissory note of Borrower
described in Section 2.1, substantially in the form of the note attached as
Exhibit A, together with any and all renewals, extensions for any period,
increases or rearrangements thereof.

            "Revolving Loans" shall have the meaning ascribed to such term in
Section 2.1.

            "SBA" shall mean the United States Small Business Administration or
any other Federal agency administering the SBI Act.

            "SBA Guaranteed Note Receivable" shall mean that portion of any Note
Receivable that is actually and fully guaranteed by the SBA and in which Lender
has been granted a first priority security interest as set forth in the Security
Agreement.

            "SBA Owned Notes Receivable" shall mean any SBA Guaranteed Notes
Receivable that are from time to time held by SBA.



                                     15
<PAGE>

            "SBA 7(a) Loans" shall mean any loans made by Borrower to small
businesses and guaranteed by SBA pursuant to the authorization contained in
Section 7(a) of the Small Business Act of 1953 and the rules and regulations
promulgated thereunder, as in effect from time to time.

            "SBA 7(a) Loan Notes" shall mean any promissory notes that at any
time evidence SBA 7(a) Loans.

            "SBI Act" shall mean the Small Business Investment Act of 1958 or
any similar or successor federal statute and the rules and regulations
promulgated thereunder, as in effect from time to time.

            "Schedule of Documents" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information required to be delivered in connection with this Agreement and the
other Loan Documents and the transactions contemplated hereunder and thereunder,
substantially in the form attached hereto as Exhibit E.

            "Schedule of Eligible Notes Receivable" shall have the meaning
ascribed to such term in Section 5.1(c).

            "Secondary Participation Agreement" shall mean any Secondary
Participation Guaranty Agreement (SBA Form 1086) or similar agreement among
Borrower, the SBA, and any purchaser or potential purchaser of any SBA
Guaranteed Note Receivable from
time to time.

            "Securitization Transaction" shall mean any transaction effected in
a manner acceptable to Lender and through documentation in form and substance
acceptable to Lender, pursuant to which Borrower sells all or a specific portion
of its portfolio of Non-Guaranteed Notes Receivable by pooling and transferred
them to a trust that issues and sells certificates representing the entire
beneficial interest in such trust.

            "Security Agreement" shall mean the Security Agreement dated as of
the date hereof executed by Borrower for the benefit of Lender.



                                     16
<PAGE>

            "Security Documents" shall mean the Security Agreement, the Parent
Guaranty, deeds of trust, financing statements, and any and all other agreements
or instruments now or hereafter executed and delivered by Borrower or any other
Person in connection with, or as security for the payment or performance of the
Revolving Credit Note or this Agreement, as such agreements may be amended or
supplemented from time to time.

            "Servicer Account" shall have the meaning ascribed to such term in
Section 2.13(b).

            "Settlement Date" shall mean the date specified for the settlement
of the sale of any SBA Guaranteed Note Receivable pursuant to a Broker-Dealer
Confirmation.

            "Sold Notes Receivable" shall mean the SBA Guaranteed Notes
Receivable sold by Borrower to purchasers in the secondary market.

            "Solvent" shall mean, with respect to any Person, (a) the present
fair value of such Person's assets is in excess of the total amount of such
Person's liabilities, (b) such Person is able to pay its debts as they become
due, and (c) such Person does not have unreasonably small capital to carry on
its business.

            "Stated Index Rate" shall have the meaning assigned to it in Section
2.3(b).

            "Sterling" shall mean Sterling National Bank, formerly known as
Sterling National Bank & Trust Company of New York, a national banking
association.

            "Sterling Documents" shall mean the Original Credit Agreement, the
Restated Sterling Credit Agreement, the Multi-Party Agreement and all other
agreements and documents executed in connection with the financing arrangements
contemplated thereby, including all amendments, modifications and supplements
thereto and any appendices, exhibits or schedules to any of the foregoing, and
shall refer to such agreements and documents as the same may be in effect at the
time such reference becomes operative.



                                     17
<PAGE>

            "Stock" shall mean all shares, options, warrants, interests,
participation or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including common
stock, preferred stock, convertible debentures and all agreements, instruments
and documents convertible, in whole or in part, into any one or more or all of
the foregoing.

            "Subordinated Debt" shall mean that portion of the Indebtedness
which is subordinated in a manner satisfactory in form and substance to Lender
as to right and time of payment of principal and interest thereon to any and all
of the Liabilities, including all intercompany accounts and borrowings.

            "Subsidiary" shall mean any corporation of which more than fifty
percent (50%) of the outstanding capital Stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned by Borrower or one or
more Subsidiaries.

            "Tangible Net Worth" shall mean, with respect to any Person, the
remainder of (a) the sum of the Net Worth of such Person plus the principal
amount of Subordinated Debt, minus (b) Intangible Assets; provided, that for
purposes of this definition only, Intangible Assets shall not include the Loan
Guaranty Agreement.

            "Term Loan Debtor" shall mean any Person, other than the SBA, who is
or may become obligated to Borrower for a term loan or other financial
accommodation provided to or for the benefit of such Person.

            "Termination Date" shall mean the earliest of: (a) August 26, 1999;
(b) the date that Borrower elects to terminate this Agreement and repays the
Liabilities in full in accordance with the terms of Section 2.6; and (c) the
date Lender elects to terminate Borrower's right to receive Revolving Loans in
accordance with Section 7.2.



                                     18
<PAGE>

            "Transactions" shall mean the transactions provided for in and
contemplated by this Agreement and the other Loan Documents.

            "UCC" shall have the meaning ascribed to such term in Section 1.3.

            "Voting Stock" shall mean securities of any class or classes of the
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).

      1.2 Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or other
accounting computation is required to be made for the purposes of this
Agreement, this shall be done in accordance with GAAP, except where such
principles are inconsistent with the specific requirements of this Agreement.

      1.3 Other Terms. All other terms contained in this Agreement shall have,
when the context so indicates, the meanings provided for by the Uniform
Commercial Code as adopted and in force in the State of Illinois, as from time
to time in effect (the "UCC"); provided, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of, or the remedies with respect to, Lender's security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Illinois, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions of any Loan Document relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions.

      1.4 Certain Matters of Construction. The terms "herein", "hereof" and
"hereunder" and other words of similar import shall refer to this Agreement as a
whole and not to any particular section, paragraph or subdivision. Any reference
to a "Section", "Exhibit", "Article" or "Schedule" shall refer to the relevant
Section or Article of or Exhibit or Schedule to this Agreement, unless
specifically indicated to the contrary. Any pronoun used


                                     19
<PAGE>

shall be deemed to cover all genders. The term "including" shall not be limiting
or exclusive, unless specifically indicated to the contrary. All references to
statutes and related regulations shall include any amendments of same and any
successor statutes and regulations.

                                    ARTICLE 2

                            AMOUNT AND TERMS OF LOAN

      2.1 The Loans and Commitments.

            (a) General. Subject to the terms and conditions set forth herein
and relying on the representations and warranties contained in this Agreement,
Lender hereby agrees that it will make available to Borrower, from time to time
prior to the Termination Date and so long as no Default or Event of Default has
occurred and is continuing, advances pursuant to Section 2.2 (collectively, the
"Revolving Loans"), and Borrower may make borrowings, payments, and reborrowings
in respect thereof. On the Effective Date, all outstanding obligations of
Original Borrowers under the Original Credit Agreement that have been assigned
to Lender pursuant to the Partial Assignment Agreement shall be deemed to be
Revolving Loans under this Agreement. If Lender makes advances to Borrower from
such line of credit, all advances shall be repayable as provided in Sections
2.12 and 2.13, and shall be used by Borrower only for legal and proper portfolio
development and working capital requirements consistent with all applicable laws
and statutes.

            (b) Maximum Commitment. The aggregate outstanding principal amount
of the Revolving Loans made to Borrower at any one time (the "Maximum
Commitment") shall not exceed the least of:

                  (i)   the Maximum Credit Line; or

                  (ii)  the amount by which the sum of (w) up to one hundred
                        percent (100%) of the Net Eligible SBA Guaranteed Notes
                        Receivable, plus (x) subject to Section 2.18(b), up to
                        seventy-five percent (75%) of the Current Portion of Net
                        Eligible Non-Guaranteed Notes


                                     20
<PAGE>

                        Receivable, plus (y) subject to Section 2.18(b), up to
                        fifty percent (50%) of the Delinquent Portion of Net
                        Eligible Non-Guaranteed Notes Receivable, plus (z)
                        subject to Section 2.18(b), up to fifty percent (50%) of
                        the Defaulted Portion of Net Eligible Non-Guaranteed
                        Notes Receivable (not exceeding sixty-five percent (65%)
                        of the estimated remaining value of such Defaulted
                        Portion of Net Eligible Non-Guaranteed Notes Receivable
                        as determined by Borrower and accepted by Lender),
                        exceeds the sum of (A) the aggregate amount of Note Sale
                        Reserves then outstanding, and (B) twenty-five percent
                        (25%) of the aggregate amount of all undisbursed binding
                        lending commitments of Borrower for which all lending
                        conditions have been met; or

                  (iii) the maximum amount that Borrower could borrow hereunder
                        without creating a breach of the Liabilities to Tangible
                        Net Worth ratio covenant in Section 5.11(c).

            (c) Revolving Credit Note. To evidence the loans made by Lender
pursuant to this Section 2.1, Borrower has issued, executed, and delivered to
Lender the Revolving Credit Note in the principal amount of Twenty-Five Million
Dollars ($25,000,000). Interest on the Revolving Credit Note shall be payable to
Lender on the first Business Day of each calendar month, as it accrues on the
principal amount from time to time outstanding, at the rates provided in Section
2.3 herein, commencing on the first day of the month next succeeding the month
in which the Effective Date falls.

      2.2 Notice of Borrowing; Disbursement of Advances.

            (a) Notice. The amount and date of each advance hereunder shall be
designated by Borrower's execution of and delivery to Lender of a Borrowing
Request by no later than 12:00 noon (Central Time) on the proposed funding date.



                                     21
<PAGE>

            (b) Disbursement. Upon receipt of a Borrowing Request pursuant to
Section 2.2(a) and satisfaction of all of the other conditions precedent set
forth in Article 8, subject to the provisions of, and satisfaction of the
conditions set forth in, Section 2.1, Lender shall, on or after the Effective
Date, make advances to Borrower on a revolving basis up to a maximum aggregate
outstanding principal amount equal to the Maximum Commitment.

      2.3 Interest Rate.

            (a) Borrower shall pay interest to Lender (i) monthly in arrears
commencing on the first Business Day of the month next succeeding the month in
which the Effective Date falls, and on the first Business Day of each subsequent
calendar month, (ii) on the Termination Date, and (iii) if any interest accrues
or remains payable after the Termination Date, or during the continuance of an
Event of Default, upon demand by Lender.

            (b) Interest shall accrue on the Revolving Loans at a floating rate
equal to the Index Rate plus two percent (2%) per annum, adjusted by Lender on
the same day as each change in the Index Rate (the "Stated Index Rate").

            (c) All computations of interest shall be made by Lender on the
basis of a three hundred and sixty (360) day year, in each case for the actual
number of days occurring in the period for which such interest is payable. The
Index Rate shall be determined as of the last Business Day of each month for use
in calculating the interest that is payable for the following calendar month.
Each determination by Lender of an interest rate hereunder shall be conclusive
and binding for all purposes, absent manifest error or bad faith.

            (d) After and during the continuation of an Event of Default beyond
the applicable cure period, and at the sole discretion of Lender, the interest
rate of the Revolving Credit Note shall be increased to six percent (6%) per
annum above the Index Rate. To the extent that any change in the Highest Lawful
Rate would affect the interest rate in effect hereunder, then the interest rate
hereunder shall be adjusted on the effective date of such change in order to
reflect such change in the Highest Lawful Rate.


                                     22
<PAGE>

      2.4 Computation.

            (a) In no event shall the interest rate on the Revolving Credit Note
exceed the Highest Lawful Rate. In the event that the interest rate on the
Revolving Credit Note would, without giving effect to the previous sentence,
exceed the Highest Lawful Rate under the terms of this Agreement, then, should
any interest payable hereunder thereafter fall below the Highest Lawful Rate,
interest shall continue to accrue at the Highest Lawful Rate until such time as
Lender has received an amount of interest equal to what Lender would have
received but for the operation of this Section 2.4(a), at which time the
interest payable shall again accrue at the rate otherwise provided for under
Section 2.3 until such rate under Section 2.3 again exceeds the Highest Lawful
Rate, in which event the terms of this Section 2.4(a) shall again apply.

            (b) In the event that at maturity or final payment of the Revolving
Credit Note, the total amount of interest paid or accrued thereon is less than
the total amount of interest which would have accrued if a varying rate per
annum equal to the applicable interest rate had at all times been in effect,
then Borrower agrees, to the fullest extent permitted by law, to pay to Lender
an amount equal to the difference between (a) the lesser of (i) the amount of
interest which would have accrued on the Revolving Credit Note if the Highest
Lawful Rate had at all times been in effect or (ii) the amount of interest which
would have accrued on the Revolving Credit Note if a varying rate per annum
equal to the applicable interest rate had at all times been in effect as of such
maturity or final payment date, and (b) the amount of interest otherwise accrued
on the Revolving Credit Note in accordance with the provisions of Section 2.3
hereof and this Section 2.4.

      2.5 Fees.

            (a) Commitment Fees. Borrower agrees to pay Lender on the Effective
Date, solely as consideration for Lender agreeing to enter into this Agreement,
a fully earned and non-refundable closing fee equal to Two Hundred Fifty
Thousand Dollars ($250,000). The One Hundred Twenty-Five Thousand Dollars
($125,000) paid by Borrower to Lender on May 1, 1997 as a closing


                                     23
<PAGE>

fee under the Loan Participation Agreement shall be credited against such
commitment fee. The remaining One Hundred Twenty-Five Thousand Dollars
($125,000) of such commitment fee shall be paid by Borrower to Lender by either
wire transfer or cash on the Effective Date.

            (b) Unused Credit Line Fee. As additional compensation for Lender's
costs and risks in making the advances hereunder available to Borrower, Borrower
agrees to pay to Lender, commencing on the Effective Date, in arrears on the
last date of each month and at maturity, a facility fee for Borrower's non-use
of the available Maximum Credit Line in an amount equal to one-quarter of one
percent (0.25%) per annum of the average daily difference between (i) the
Maximum Credit Line and (ii) the aggregate outstanding principal amount of the
Revolving Loans; provided, that the fee described in this Section 2.5(b) shall
not be payable with respect to any month in which the average daily amount of
the aggregate outstanding principal amount of the Revolving Loans is equal to or
greater than Five Million Dollars ($5,000,000); and further provided, that if a
Securitization Transaction has been completed and Lender has purchased the
subordinated certificates issued thereunder, then the fee described in this
Section 2.5(b) shall not be payable with respect to any month including or after
the date of such purchase.

      2.6 Borrower's Termination of Agreement. Upon at least sixty (60) days
prior written notice to Lender, Borrower may, at its option, terminate only the
entirety of this Agreement and not any single section thereof. In order for such
termination by Borrower to become effective, Borrower shall, on or before such
termination date, pay to Lender all of the then outstanding Liabilities;
provided, that if Borrower terminates this Agreement within any of the time
periods listed below using the proceeds of financing from any source other than
a Securitization Transaction, or if this Agreement is terminated pursuant to
Section 7.2, then Borrower shall also pay to Lender, as


                                     24
<PAGE>

liquidated damages for the loss of the bargain and not as a penalty, a
prepayment premium equal to the following amounts (the "Prepayment Fee"):

        If Prepayment is Made
        Between the Following
        Dates, Inclusive:                    The Premium Shall Be:
        -----------------                    ---------------------

        Effective Date to                    Two Percent (2%)
        August 26, 1998                      of the Maximum Credit
                                             Line

        August 27, 1998 to                   One Percent (1%)
        August 26, 1999                      of the Maximum Credit
                                             Line

and further provided, that if (a) new reserves established by Lender after the
Effective Date pursuant to Section 2.8 result in a reduction of the Maximum
Commitment that is greater than the greater of (i) Five Hundred Thousand Dollars
($500,000), and (ii) ten percent (10%) of the Maximum Commitment immediately
prior to the implementation of such new reserves, (b) Borrower notifies Lender
in writing, within thirty (30) days of Borrower's receipt of notice from Lender
of the implementation of such new reserves, of Borrower's intention to terminate
this Agreement by reason thereof, and (c) no Default or Event of Default has
occurred and is continuing at the actual time of termination, then the
Prepayment Fee shall be reduced to Fifty Thousand Dollars ($50,000).

      2.7 Mandatory Prepayments. If at any time the sum of the Revolving Loans
exceeds the Maximum Commitment, then Borrower shall immediately prepay to Lender
the amount of such excess for application towards the reduction of the
outstanding principal balance of the Revolving Credit Note. Such prepayments
shall be without premium or penalty.

      2.8 Reserves Against Liabilities. Lender shall have the right to refuse to
make Revolving Loans when the refusal is necessary to enable Lender, in its sole
discretion, exercised in a commercially reasonable manner, to establish reserves
applied on account of the Liabilities hereunder in determining collateral
eligibility. Any and all such reserves shall become effective


                                     25
<PAGE>

immediately upon their establishment for purposes of calculating the Maximum
Commitment.

      2.9 All Loans to Constitute One Loan. Notwithstanding the limitations on
the Maximum Credit Line set forth in Section 2.1, all advances made by Lender to
Borrower under this Agreement and the other Loan Documents shall constitute one
loan to Borrower and all Liabilities of Borrower under this Agreement and the
other Loan Documents shall constitute one general obligation of Borrower secured
by Lender's security interest in all the Collateral and by all other security
interests, Liens, claims and encumbrances heretofore, now, or at any time
hereafter granted to or obtained by Lender with respect to any property or
assets of Borrower. All of the rights of Lender set forth in this Agreement
shall apply to any modification of or supplement to this Agreement and the other
Loan Documents.

      2.10 Loan Purpose. Borrower shall use the advances provided for hereunder
solely to (a) refinance Borrower's existing indebtedness to Sterling under the
Sterling Loan Documents with respect to SBA 7(a) Loans, (b) repurchase from
Lender the loan participation previously sold to Lender by Borrower in certain
SBA 7(a) Loans pursuant to the Loan Participation Agreement, and (c) fund
Borrower's SBA 7(a) Loan portfolio development (including expenses related
thereto) after the Effective Date. Borrower's use of such advances shall be only
for legal purposes (duly authorized by Borrower's Board of Directors),
consistent with all applicable laws, statutes and regulations.

      2.11 Term of Agreement. Subject to Lender's right to cease making advances
to Borrower, as set forth in Section 7.2 or otherwise, the provisions of this
Agreement shall be in effect until the Termination Date; provided, that in the
event of a prepayment of the entire principal amount then outstanding under the
Revolving Credit Note prior to the Termination Date other than with the proceeds
of a Securitization Transaction, Borrower shall simultaneously therewith pay to
Lender, in immediately available funds, all outstanding Liabilities in full, in
accordance with the terms of the agreements creating and instruments evidencing
such Liabilities, together with the Prepayment Fee, if any; and, provided
further, that from and after any Termination Date until full and final payment
of the


                                     26
<PAGE>

Liabilities, Lender shall retain all rights and remedies provided under this
Agreement and each of the other Loan Documents.

      2.12 Payment Procedure. Except as otherwise provided in Section 2.13, all
payments to Lender shall be payable at Lender's address set forth above or at
such other place or places as Lender may designate from time to time in writing
to Borrower. That portion of the Liabilities consisting of:

            (a) interest payable pursuant to this Agreement shall be due on the
first Business Day of each month (for the preceding month), and shall be charged
through the last calendar day of each month;

            (b) costs, fees and expenses payable pursuant to this Agreement
shall be payable as and when provided in this Agreement and, if not specified,
on demand;

            (c) principal payable pursuant to this Agreement shall be due and
payable to the extent and on the date of any collections of the Collateral or
from any other source, to the extent consisting of cleared funds, except to the
extent such collections are applied to other Liabilities;

            (d) the balance of the Liabilities, if any, shall be payable as and
when provided in this Agreement or the other Loan Documents and, if not
specified, on the Termination Date;

            (e) With respect to the payment of any Liability, including
interest, costs, fees or expenses which become due hereunder, Borrower
authorizes and directs Lender, at Lender's option, to cause such Liability to be
paid on such due date by charging such Liability as an advance hereunder. Lender
shall use commercially reasonable efforts to notify Borrower prior to or
concurrently with such payments pursuant to Section 2.15.

      2.13 Collection of Borrower's Loans and Payments.

            (a) Blocked Account; Deposits by Intermediary. Borrower shall
establish a bank account, by lock-box arrangement or otherwise, from which
Lender alone has power of access and withdrawal except to such limited extent as
may otherwise be provided in the agreement or as otherwise agreed to in writing
by


                                     27
<PAGE>

Lender, in form and substance satisfactory to Lender and Borrower, governing
such bank account (the "Blocked Account"). Borrower shall deposit or cause to be
deposited to the Blocked Account all checks, drafts, cash and other remittances
in payment, or on account of payment, with respect to any of the Notes
Receivable (collectively referred to as "Items of Payment"), except for such
portion, if any, of any Item of Payment that is an Allocated Payment Portion.
Borrower shall deposit or cause to be deposited to the Servicer Account that
portion of each Item of Payment that constitutes an Allocated Payment Portion.
Borrower shall deposit all Items of Payment received by Borrower, or the
appropriate portions thereof, in the Blocked Account or the Servicer Account, as
the case may be, on the same day of receipt thereof. If the entire amount of an
Item of Payment is being deposited in either the Blocked Account or the Servicer
Account, then it shall be deposited in precisely the form received, except for
the endorsements of Borrower where necessary to permit the collection of any
such Items of Payment, which endorsements Borrower hereby agrees to make.
Without limiting the generality of the foregoing, Borrower shall cause
Intermediary to deposit by wire transfer to the Blocked Account, immediately
upon the receipt thereof by Intermediary, all Net Sale Proceeds, and Borrower
shall cause payment of all Note Participation Amounts to be made directly to the
Blocked Account. The depository holding the Blocked Account and the Servicer
Account shall be instructed to advise Borrower of any deposits made to the
Blocked Account or the Servicer Account. Subject to the provisions of Sections
2.13(c) and (d) and Section 2.15, amounts deposited in the Blocked Account
(including deposits through transfers from the Servicer Account) shall be
credited against the Liabilities as follows:

                  (i) if and to the extent such deposits are made and accepted
      into the Blocked Account not later than 2:00 p.m. Central Time on such
      Business Day, and Borrower notifies Lender of the making of such deposits
      pursuant to the provisions of Section 9.1(a) not later than 2:00 p.m.
      Central Time on such Business Day, as of the same Business Day on which
      such deposits are made; and

                  (ii) otherwise, as of the next Business Day following the date
      of such deposit;



                                     28
<PAGE>

provided, that solely for the purpose of calculating interest due to Lender
under this Agreement, such deposits shall be credited two (2) days after the
applicable date specified by (i) or (ii) above.

            (b) Servicer Account. Commencing immediately upon the Effective Date
and continuing until all Liabilities have been paid in full, Borrower shall
establish and maintain a depository account, with the same bank or institution
at which the Blocked Account is located, in Borrower's capacity as servicer for
the benefit of the purchasers of the Sold Notes Receivable, the GECC
Participated Notes Receivable, the Participated Notes Receivable and the SBA
Owned Notes Receivables, and, to the extent of Borrower's retained interest in
any such Notes Receivable, Lender (the "Servicer Account"). The agreement(s)
governing the Servicer Account must be in form and substance satisfactory to
Lender and Borrower.

            (c) Allocation of Payments on Sold and Participated Notes
Receivable. Contemporaneously with the deposit of any Items of Payment into the
Blocked Account or the Servicer Account, Borrower shall deliver to Lender
information detailing, with respect to each Item of Payment, the specific Note
Receivable to which such Item of Payment relates and (i) the amount, if any, of
such Item of Payment that relates to a Sold Note Receivable and that Borrower
has determined is payable to Intermediary for the benefit of the purchaser of
such Sold Note Receivable, (ii) the amount, if any, of such Item of Payment that
relates to a GECC Participated Note Receivable or a Participated Note Receivable
and that Borrower has determined is payable to GECC or the purchaser of such
Participated Note Receivable, (iii) the amount, if any, of such Item of Payment
that relates to a SBA Owned Note Receivable and that Borrower has determined is
payable to SBA, (iv) the amount, if any, of such Item of Payment that relates to
a Guaranteed Portion of Eligible SBA Loans under and as defined in the Restated
Sterling Credit Agreement and that Borrower has determined is payable to
Sterling (any such amount described in clauses (i), (ii), (iii) or (iv) above
being the "Allocated Payment Portion"), and (v) the amount of such Item of
Payment that relates to Borrower's retained interest in a Note Receivable and
that Borrower has determined is payable to Borrower. The Allocated Payment
Portion, if any, of each Item of Payment originally deposited in the Blocked
Account shall be held


                                     29
<PAGE>

by Lender for the benefit of Borrower (in Borrower's capacity as servicer of the
Sold Notes Receivable, the GECC Participated Notes Receivable, the Participated
Notes Receivable, the SBA Owned Notes Receivable, or the Guaranteed Portion of
Eligible SBA Loans, as the case may be) and shall, subject to final collection,
(x) in the case of all Allocated Payment Portions with respect to Sold Notes
Receivables, be transferred by Lender to the Servicer Account within one (1)
Business Day after receipt of cleared funds, and (y) in the case of all
Allocated Payment Portions with respect to GECC Participated Notes Receivables,
Participated Notes Receivables, SBA Owned Notes Receivable, or the Guaranteed
Portion of Eligible SBA Loans, be transferred by Lender to GECC, the purchaser
of such Participated Note Receivable, SBA or Sterling, as the case may be, in
accordance with the written instructions of Borrower within one (1) Business Day
after receipt of cleared funds or, if requested by Borrower, to the Servicer
Account. The portion payable to Borrower of each Item of Payment originally
deposited in the Servicer Account shall be held by Borrower for the benefit of
Lender, and Borrower shall cause any such portion to be transferred by Borrower
to the Blocked Account within one (1) Business Day after receipt of cleared
funds.

            (d) Application of Items of Payment. Except as otherwise provided in
Section 2.13(c), all Items of Payment shall be applied to the outstanding
Liabilities in the order in which they are deposited in the Blocked Account.
Prior to deposit into the Blocked Account or the Servicer Account in the manner
required by this Agreement, Borrower shall not commingle any such Items of
Payment with any of its other funds or property, but shall hold them separate
and apart therefrom in trust and for the account of, and as the property of,
Lender. Lender may, subject to the Multi-Party Agreement, revoke the collection
privilege given to Borrower by either giving notice of its assignment of, and
lien on, the collateral to the Term Loan Debtors or giving notice of such
revocation to Borrower.

            (e) Borrower as Servicer. Borrower shall at its own expense service
all of the Notes Receivable, including (i) the billing, posting and maintaining
of complete records applicable thereto, and (ii) subject to applicable SBA rules
and regulations, the taking of such action with respect thereto as Lender may
request or in the absence of such request, as Borrower


                                     30
<PAGE>

may deem advisable. Borrower agrees to pay to Lender any and all reasonable
fees, costs and expenses incurred in connection with opening and maintaining the
Blocked Account, the Servicer Account, and any other collection arrangement
described above.

      2.14 Collections; Lender's Right to Notify Account Debtors. Subject to the
Multi-Party Agreement and applicable SBA rules and regulations, Borrower hereby
authorizes Lender, now and at any time or times hereafter, whether or not a
Default or an Event of Default has occurred, to open Borrower's mail and collect
any and all amounts due to Borrower from Account Debtors; provided, that Lender
shall use commercially reasonable efforts not to open Borrower's private,
personal or confidential mail that does not, on its face, relate to the
Collateral or the Account Debtors. Borrower hereby further authorizes Lender, at
any time after the occurrence of a Default or an Event of Default, (a) to notify
any or all Account Debtors that the Accounts have been assigned to Lender and
that Lender has a security interest therein, and (b) to direct such Account
Debtors to make all payments due from them to Borrower upon the Accounts
directly to Lender or to the Blocked Account or the Servicer Account. Borrower
irrevocably makes, constitutes and appoints Lender (and all Person designated by
Lender for that purpose) as Borrower's true and lawful attorney (and
agent-in-fact) to endorse Borrower's name on any checks, notes, drafts, or any
other form of payment relating to the Collateral or proceeds of the Collateral
that come into Lender's possession or under Lender's control. Borrower hereby
agrees that any such notice, in Lender's sole discretion, may be sent on
Borrower's stationery and, upon request of Lender, Borrower shall co-sign such
notice with Lender.

      2.15 Application of Payments and Collections. Except to the extent
otherwise provided in Section 2.13(c), Borrower irrevocably waives the right to
direct the application of any and all payments and collections at any time or
times hereafter received by Lender from or on behalf of Borrower. Borrower
irrevocably agrees that Lender shall have the continuing exclusive right to
apply and reapply any and all such payments and collections received at any time
or times hereafter by Lender or its agents against the Liabilities in such
manner as Lender may in its reasonable discretion deem advisable,
notwithstanding any entry by Lender on its books and records.



                                     31
<PAGE>

      2.16 Refund of Excess Interest; Statement of Account. Lender shall provide
Borrower with a statement of account relating to the Liabilities on a monthly
basis. Each such statement of account shall be presumed correct and accurate and
shall, except for Lender's right to reapply payments, constitute an account
stated between Borrower and Lender, unless thereafter waived in writing by
Lender or unless, within thirty (30) days after Borrower's receipt thereof,
Borrower delivers to Lender, by registered or certified mail, written objection
thereto specifying the error or errors contained therein.

      2.17 Business Days. If any payment on the Revolving Loans or any other
payment due hereunder becomes due and payable on a day other than a Business
Day, then for all purposes of the Loan Documents, the maturity of such payment
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during such extension.

      2.18 Sales of and Participations in Non-Guaranteed Notes Receivable.

            (a) Proposed Sales or Participations. So long as a Securitization
Transaction has not been consummated, after the Effective Date Borrower may
propose to sell a Non-Guaranteed Pro Rata Participation in any Non-Guaranteed
Notes Receivable.

            (b) Notice to Lender; Lender's Option to Purchase. Borrower shall
notify Lender in writing at least ten (10) Business Days prior to the proposed
sale of any Non-Guaranteed Pro Rata Participation, which notice shall identify
the specific Non-Guaranteed Note Receivable affected and the proposed buyer or
participant, and describe the material terms of the proposed sale or
participation, including the amount thereof, proposed purchase price therefor,
any premium payable therefor and interest rate payable thereunder and any other
matters reasonably requested by Lender. Lender shall have the option (but not
the obligation) to purchase the proposed Non-Guaranteed Pro Rata Participation
on the terms set forth in such notice. If Lender fails to notify Borrower of
Lender's election to exercise such option within five (5) Business Days after
Lender's receipt of such notice from Borrower, Borrower may complete the
proposed sale of the Non-Guaranteed Pro Rata Participation to the buyer or
participant


                                     32
<PAGE>

identified in such notice on the terms set forth in such notice, provided that
(i) Lender receives the Note Participation Amount with respect thereto, (ii)
Borrower shall at all times retain for its own account not less than ten percent
(10%) of the outstanding principal amount of the total Note Receivable affected
(provided, that such ten percent (10%) requirement may be reduced with the
written consent of Lender so long as Borrower would not violate any applicable
SBA rules or regulations), and (iii) such sale is made in full conformity with
all applicable provisions of the SBI Act and other governing law.

      2.19 Effectiveness of Provisions Regarding SBA Guaranteed Notes
Receivable. None of the provisions of this Agreement relating to Revolving Loans
with respect to SBA Guaranteed Notes Receivable shall be effective unless and
until both (a) Lender receives SBA approval to provide Revolving Loans to
Borrower with respect to SBA Guaranteed Notes Receivable, either through an
assignment of Sterling's rights under the Restated Sterling Credit Agreement or
otherwise, and (b) Lender has received an assignment of Sterling's rights under
the Restated Sterling Credit Agreement or the Restated Sterling Credit Agreement
has been terminated and all obligations of Borrower and Parent thereunder fully
satisfied. So long as the Restated Sterling Credit Agreement is in effect, all
rights of Lender with respect to SBA Guaranteed Notes Receivable and the
collections and proceeds thereof shall be subject to the terms of the
Intercreditor Agreement.

                                    ARTICLE 3

                                    SECURITY

      3.1 Borrower's Liabilities. The Liabilities of Borrower to pay all sums
due to Lender and to perform all other covenants and agreements under this
Agreement, the Revolving Credit Note, and the other Loan Documents to which
Borrower is a party, shall be secured to the extent provided by the Security
Documents.

      3.2 Further Assurances. Provided that such action would not violate
applicable SBA rules or regulations, Borrower shall, at its sole cost and
expense, execute and deliver to Lender all such further documents, instruments
and agreements and agree to perform all such other acts which may be required in
the opinion


                                     33
<PAGE>

of Lender to enable Lender to exercise and enforce its rights as the secured
party or beneficiary under the Security Documents. To the extent permitted by
applicable law, Borrower hereby authorizes Lender to file financing statements
and continuation statements with respect to the security interests granted under
the Security Documents in favor of Lender and to execute such financing
statements and continuation statements on behalf of Borrower.

                                    ARTICLE 4

                         REPRESENTATIONS AND WARRANTIES

      In order to induce Lender to provide the financial accommodations to
Borrower provided for herein and in the other Loan Documents, Borrower and
Parent make the following warranties and representations to Lender, each of
which will be correct and true as of the Effective Date and on the date that
each advance is requested by Borrower:

      4.1 Corporate Existence. Each of Borrower and Parent (i) is a corporation
duly organized, legally existing and in good standing under the laws of the
State of Delaware; (ii) is duly qualified or licensed to do business in all
other jurisdictions wherein the business transacted by it makes such
qualification necessary, except where the failure to so qualify would not have a
Material Adverse Effect; (iii) has the requisite corporate power and authority
and the legal right to conduct its business as now, heretofore and proposed to
be conducted; and (iv) is in compliance with its Certificate of Incorporation
and By-Laws.

      4.2 Corporate Power and Authorization. Borrower is duly authorized and
empowered to create and issue the Revolving Credit Note; and each of Borrower
and Parent is duly authorized and empowered to execute, deliver and perform the
Loan Documents, including this Agreement, to which it is a party; and all
corporate action on Borrower's or Parent's part requisite for the due creation
and issuance of the Revolving Credit Note and for the due execution, delivery
and performance of the Loan Documents, including this Agreement, to which it is
a party has been duly and effectively taken.

      4.3 Ownership of Property; Permitted Liens.


                                     34
<PAGE>

            (a) Except as set forth in Schedule 4.3(a), and except for fixtures
and improvements in which Borrower has good and marketable title, Borrower does
not own any real property and is not a lessor or lessee under any lease other
than those leases that have been previously disclosed to Lender.

            (b) Except for the permitted Liens, if any, set forth on Schedule
4.3(b) (the "Permitted Liens"), no Property of Borrower is subject to any Lien.

      4.4 Capital Structure. The number and nature of all outstanding securities
of each of Borrower and Parent, and the holder of all outstanding securities of
Borrower, each as of the date hereof, and the holder of all outstanding
securities of Parent as of April 24, 1997, are set forth on Schedule 4.4. All
such shares have been duly issued and are fully paid and non-assessable. There
are not outstanding any options to purchase, or any rights or warrants to
subscribe for, or any commitments or agreements to issue or sell, or any
securities or obligations convertible into, or any powers of attorney relating
to, shares of the capital Stock of Borrower, except as set forth on Schedule
4.4. Except as set forth on Schedule 4.4, there are no outstanding agreements or
instruments binding upon any of Borrower's shareholders relating to the
ownership of its shares of capital Stock.

      4.5 Binding Obligations. This Agreement does, and the Revolving Credit
Note and other Loan Documents to which Borrower or Parent is a party upon their
creation, issuance, execution and delivery will, constitute valid and binding
obligations of such Person, enforceable in accordance with their terms except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally or by
principles of equity pertaining to the availability of equitable remedies.

      4.6 No Legal Bar; No Lien. Based upon and subject to the provisions of the
Multi-Party Agreement and the Loan Guaranty Agreement, (a) the Revolving Credit
Note and each of the Loan Documents, including this Agreement, to which Borrower
or Parent is a party do not and will not violate any provisions of its articles
or certificate of incorporation, bylaws, or any contract, agreement, instrument
or Governmental Requirement to


                                     35
<PAGE>

which Borrower is subject; and (b) neither the execution, delivery, or
performance of the Revolving Credit Note or the other Loan Documents, including
this Agreement, shall create, or constitute cause for the creation of, any Lien
on any asset of Borrower or Parent, other than the Liens granted in favor of
Lender.

      4.7 No Consent. Except for the consent of the SBA provided under the
Multi-Party Agreement and the consent of Sterling provided under the
Intercreditor Agreement, Borrower's and Parent's execution, delivery and
performance of the Revolving Credit Note and each of the Loan Documents,
including this Agreement, to which it is a party do not require the consent or
approval of any other Person (unless such consent has otherwise been obtained),
including any regulatory authority or governmental body of the United States of
America or any state thereof or any political subdivision of the United States
of America or any state thereof.

      4.8 Liabilities; Litigation. Neither Borrower nor Parent has, as of the
Effective Date, any material (individually or in the aggregate) liabilities,
direct or contingent, except as disclosed in Schedule 4.8. Except as disclosed
in Schedule 4.8, as of the Effective Date, there is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of Borrower or Parent, threatened against or
affecting Borrower or Parent that would have a Material Adverse Effect on
Borrower or Parent or challenge any Transaction contemplated hereunder.

      4.9 Taxes; Governmental Charges. As of the Effective Date or the date each
advance is requested by Borrower, as applicable, each of Borrower and Parent has
filed all tax returns and reports required to be filed prior to such date and
has paid all taxes, assessments, fees and other governmental charges levied upon
it or its income which are due and payable, including interest and penalties, or
has provided adequate reserves for the payment thereof.

      4.10 Defaults. Neither Borrower nor Parent is in default nor has any event
or circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default under any loan or credit agreement,


                                     36
<PAGE>

indenture, mortgage, deed of trust, security agreement or other agreement or
instrument evidencing or pertaining to any debt of Borrower or Parent, or under
any material agreement or instrument to which Borrower or Parent is a party or
by which it is bound or which would have a Material Adverse Effect on Borrower
or Parent or its business. No Default or Event of Default hereunder has occurred
and is continuing.

      4.11 Use of Proceeds; Margin Stock. The proceeds of the Revolving Credit
Note will be used by Borrower to fund Borrower's commercial lending activities
and for other purposes permitted by Section 2.10. None of such proceeds will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 221), or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning of
such Regulation U. Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stocks. Neither Borrower,
Parent nor any Person acting on behalf of Borrower or Parent has taken or will
take any action which might cause the Revolving Credit Note or any of the Loan
Documents, including this Agreement, to violate Regulation U or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
Section 7 of the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect.

      4.12  Compliance with the Law.  Based upon and subject to the
provisions of the Multi-Party Agreement, neither Borrower nor
Parent:

            (a) is in violation of any Governmental Requirement;

            (b) has failed to obtain any license, permit, franchise or other
governmental authorization necessary to the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse Effect.
Without limiting the generality of the foregoing, Borrower has obtained the Loan
Guaranty Agreement and has complied and will continue to comply with all
statutory, and other regulatory


                                     37
<PAGE>

requirements necessary to obtain and maintain the Loan Guaranty Agreement.

      4.13 ERISA. Each of Borrower and Parent is in compliance in all material
respects with the applicable provisions of ERISA, and no "reportable event," as
such term is defined in Section 4043 of ERISA, has occurred with respect to any
Plan of Borrower of Parent.

      4.14 No Material Misstatements. No information, exhibit or report
furnished to Lender by Borrower or Parent in connection with the negotiation or
execution of this Agreement contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statement
contained therein not misleading.

      4.15 Investment Company Act. Neither Borrower nor Parent is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.

      4.16 No Financing of Corporate Takeovers. No proceeds of any advances
hereunder will be used to acquire any security in any transaction which is
subject to Sections 13 or 14 of the Securities Exchange Act of 1934, including,
Sections 13(d) and 14(d) thereof.

      4.17 Location of Borrower. Borrower's and Parent's principal place of
business and chief executive offices are located at the address stated in the
preamble of this Agreement; provided, that after the Effective Date such
principal place of business and chief executive offices may be relocated if
Lender and Parent comply with the requirements of Section 6.10.

      4.18 Use of Proceeds. Borrower's use of the proceeds of any advances and
re-advances made by Lender to Borrower pursuant to this Agreement are, and will
continue to be, legal and proper corporate uses duly authorized by its Board of
Directors and such uses are consistent with all applicable laws and statutes, as
in effect as of the date hereof.



                                     38
<PAGE>

      4.19 Hazardous Materials.

            (a) the operations of Borrower and Parent comply in all material
respects with all Environmental Laws;

            (b) each of Borrower and Parent has obtained all material
Governmental Authorizations under Environmental Laws necessary to its
operations, and all such Governmental Authorizations are in good standing in all
material respects, and each of Borrower and Parent is in compliance with all
material terms and conditions of such Governmental Authorizations;

            (c) (i) Neither Borrower nor Parent has received (A) any notice or
claim to the effect that it is or could reasonably be expected to be subject to
a material liability to any Person as a result of the Release or threatened
Release of any Hazardous Materials or (B) any letter or request for information
under Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss.ss. 9604 et seq.) or comparable state laws, and (ii)
to Borrower's and Parent's knowledge, none of its operations is the subject of
any Federal or state investigation evaluating whether any remedial action is
needed to respond to a Release or threatened Release of any Hazardous Material
at any Property;

            (d) none of the operations of Borrower or Parent is the subject of
any pending judicial or administrative proceeding alleging the violation of or
liability under any Environmental Laws which if adversely determined could
reasonably be expected to have a Material Adverse Effect;

            (e) Neither Borrower nor Parent is subject to any outstanding
written order or agreement with any governmental authority or private party
(other than lease agreements entered into in the ordinary course of business
containing standard provisions relating to environmental matters) respecting (i)
any liabilities which have arisen or may arise under any Environmental Laws or
(ii) any Environmental Claims;

            (f) Neither Borrower or Parent, nor, to the knowledge of Borrower or
Parent, any predecessor of Borrower or Parent has filed any notice under any
Environmental Law indicating past or present treatment, storage, or disposal of


                                     39
<PAGE>

Hazardous Materials at any Property, and none of the operations of Borrower or
Parent involves the generation, transportation, treatment or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent (other than hazardous materials used in the ordinary course of
business, the use of which is not reasonably likely to materially adversely
affect any Property), and neither Borrower or Parent, nor, to the knowledge of
Borrower or Parent, any predecessor in title to Borrower or Parent or any third
party at any time occupying any Property has at any time used, generated,
disposed of, stored, transported to or from, released or threatened the release
of any Hazardous Materials, in any form, quantity or concentration on, from,
under or affecting such Property in a manner that could reasonably be expected
to result in material liability of or material claim against Borrower or Parent;

            (g) Neither Borrower nor Parent has filed any notice or report of a
Release of any Hazardous Materials that could reasonably be expected to give
rise to an Environmental Claim having a Material Adverse Effect and, to the
knowledge of Borrower or Parent, no Hazardous Materials exist on, under or about
any Property in a manner that could reasonably be expected to give rise to an
Environmental Claim having a Material Adverse Effect;

            (h) neither Borrower or Parent, nor, to the knowledge of Borrower or
Parent, any of its predecessors, has disposed of any Hazardous Materials in a
manner that could reasonably be expected to give rise to an Environmental Claim
having a Material Adverse Effect;

            (i) to the knowledge of Borrower or Parent, no underground storage
tanks or surface impoundments are on or at any Property owned or used by
Borrower or Parent, which could reasonably be expected to give rise to any
Environmental Claim materially adversely effecting such Property; and

            (j) no Lien in favor of any governmental authority for (i) any
liability under Environmental Laws, or (ii) damages arising from or costs
incurred by such governmental authority in response to a Release has been filed
or attached to any Property owned or used by Borrower or Parent.



                                       40
<PAGE>

      4.20 Insurance Policies. Schedule 4.20 lists all insurance of any nature
maintained for current occurrences by Borrower or Parent, as well as a summary
of the terms of such insurance. All of such policies are in full force and
effect and provide coverage of such risks and for such amounts as is customarily
maintained for businesses of the scope and size of Borrower and Parent.

      4.21 Schedule of Deposit Accounts. Schedule 4.21 lists all banks and other
financial institutions at which Borrower maintains or will maintain deposit
and/or other accounts, and such exhibit correctly identifies the name and
address of each depository, the name in which the account is held, the purpose
of the account, and the complete account number.

      4.22 Labor Matters. There are no labor disputes against Borrower or Parent
pending or, to Borrower's or Parent's knowledge, overtly threatened, that would
have a Material Adverse Effect. Hours worked by and payment made to the
employees of Borrower have not been in violation of the Fair Labor Standards Act
or any other applicable law dealing with such matters, which violation would
have a Material Adverse Effect. All payments due from Borrower or Parent on
account of employee health and welfare insurance which would have a Material
Adverse Effect if not paid will be paid or, if not due, will be accrued as a
liability on the books of Borrower or Parent.

      4.23 Employment and Labor Agreements. Except as listed in Schedule 4.23,
there are no employment agreements and no agreements for the payment of deferred
compensation, severance, or change in control pay covering the officers and
managers of Borrower or Parent, and there are no collective bargaining
agreements or other labor agreements covering any employees of Borrower or
Parent. A true and complete copy of each such agreement has been furnished to
Lender.

      4.24 Solvent Financial Condition. Each of Borrower and Parent is now and,
after giving effect to the advances to be made hereunder, at all times will be,
Solvent.

      4.25 Brokers. There are no claims for brokerage commissions, finder's fees
or investment banking fees in connection with the transactions contemplated by
this Agreement,


                                     41
<PAGE>

except for the fees payable solely by Parent and Borrower to Rothschild, Inc. in
the amount of $150,000 and to D'Loren, Levin & Company in the amount of $75,000
(which is in addition to the $50,000 fee paid to D'Loren, Levin & Company at the
closing of the Loan Participation Agreement), each of which will be paid by
Borrower on the Effective Date.

      4.26 True Sales of Notes Receivable. Borrower now intends and at all times
will intend that its transfers of Sold Notes Receivable and Participated Notes
Receivable to the purchasers thereof constitute true sales and not financing
devices.

      4.27 No Material Intellectual Property. Neither Borrower nor Parent holds
or owns, or employs in its business operations, any material rights in, to, or
under copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, or tradenames (collectively, "Intellectual Property"),
except as set forth on Schedule 4.27. Neither Borrower nor Parent is a party to
or the subject of any agreement or dispute respecting Intellectual Property
which, if resolved unfavorably to Borrower or Parent, would have a Material
Adverse Effect.

      4.28 Automatic Warranty and Reaffirmation of Warranties and
Representations; Survival of Warranties and Representations. Each request for an
advance made by Borrower pursuant to this Agreement or the other Loan Documents
shall constitute (a) a warranty and representation by Borrower and Parent to
Lender that there does not then exist a Default or an Event of Default, except
as otherwise disclosed in writing by Borrower to Lender, and (b) a reaffirmation
as of the date of said request of the representations and warranties of Borrower
and Parent contained in Sections 4.1 through and including 4.27. All
representations and warranties of Borrower and Parent contained in this
Agreement and the other Loan Documents shall survive the execution, delivery and
acceptance thereof by the parties thereto and the closing of the transactions
described therein or related thereto. Upon the Effective Date, and at such other
times as Lender in its sole discretion may request, Borrower shall deliver to
Lender Certificates of Validity of Collateral in the form of Exhibit F, executed
by Borrower's President and Chief Financial Officer, respectively, or such other
officers of Borrower as Lender may require.



                                     42
<PAGE>

                                    ARTICLE 5

                              AFFIRMATIVE COVENANTS

      Borrower and Parent will at all times comply with the covenants contained
in this Article 5, from the date hereof and for so long as any part of the
Liabilities are outstanding.

      5.1 Financial Statements and Reports and Other Data. Borrower and Parent
will promptly furnish to Lender from time to time upon request such information
regarding the business affairs and financial condition of Borrower or Parent as
Lender may reasonably request, which information shall be certified by the
President and Chief Financial Officer of Borrower or Parent to be true and
correct as of the date provided. The information that may be requested by Lender
includes the following reports:

            (a) Annual Reports

                  (i) Promptly after becoming available and in any event within
ninety (90) days after the close of each fiscal year of Parent, Parent and
Borrower shall provide to Lender audited fiscal year end financial statements of
Parent, Borrower, and Parent's other consolidated Subsidiaries, prepared on a
consolidated and consolidating basis by Richard A. Eisner & Company, LLP, or
other independent public accountants selected by Parent and Borrower and
acceptable to Lender (the "Accountant"), showing the balance sheet as at the end
of such year, the income statement for such year, and the statement of cash
flows for such year, setting forth in each case in comparative form (for periods
for which available) the corresponding figures for the preceding fiscal year,
accompanied by the related report of the Accountant, which report shall be to
the effect that such statements have been prepared in accordance with GAAP
consistently followed throughout the period indicated except for such changes in
such principles with which the Accountant shall have concurred along with a
certificate certifying to Lender that, based upon Accountant's examination of
the affairs of Parent, Borrower, and Parent's other consolidated Subsidiaries
performed in connection with the preparation of said statements, Accountant is
not aware of the existence of any condition or event which constitutes or would,
upon notice or lapse of time or both, constitute an Event


                                     43
<PAGE>

of Default under Section 7.1(c) or, if it is aware of such condition or event,
the nature thereof; and

                  (ii) As soon as available, but not later than thirty (30) days
prior to the close of each fiscal year, Parent and Borrower's annual business
and financial plans in form and substance satisfactory to Lender, as approved by
Parent's and Borrower's Board of Directors, which plans shall include the budget
and cash flow projections for Parent and Borrower for the following fiscal year;

            (b) Monthly Reports

                    (i) Promptly after becoming available and in any event
within twenty (20) days after the end of each month in each fiscal year of
Parent, unaudited internally prepared interim financial statements of Parent,
Borrower, and Parent's other consolidated Subsidiaries, prepared on a
consolidated and consolidating basis, that are satisfactory to Lender in scope
and detail and which include, but are not limited to, the balance sheets as at
the end of such period, and the income statements and the statements of cash
flows for such month and for the period from the beginning of the fiscal year to
the close of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding fiscal year,
certified by the principal financial officers of Parent and Borrower to have
been prepared in accordance with GAAP consistently followed throughout the
period indicated except to the extent stated therein, subject to normal changes
resulting from quarterly or year-end adjustments;

                  (ii) At the time of each delivery of the monthly financial
statements referred to in Section 5.1(b)(i), a Compliance Certificate duly and
properly executed and completed by either the President or the Chief Financial
Officer of Borrower and either the President or the Chief Financial Officer of
Parent;

                  (iii) Promptly after becoming available and in any event
within twenty (20) days after the end of each month in each fiscal year of
Borrower, such other information as Lender shall reasonably request with respect
to the Notes Receivable; and



                                     44
<PAGE>

                  (iv) Promptly after becoming available and in any event within
twenty (20) days after the end of each month in each fiscal year of Borrower,
all audit reports prepared by Borrower with respect to any Term Loan Debtor.

            (c) Daily Reports. Accompanying each request for a Revolving Loan
hereunder, and in any event no less frequently than each Business Day, Borrower
shall provide Lender with a report listing, by name of obligor and other
identifying information ordinarily employed by Borrower, each of the Notes
Receivable then constituting the Net Eligible SBA Guaranteed Notes Receivable,
the Net Eligible Non-Guaranteed Notes Receivable (including the breakdown among
the Current Portion of Net Eligible Non-Guaranteed Notes Receivable, the
Delinquent Portion of Net Eligible Non-Guaranteed Notes Receivable and the
Defaulted Portion of Net Eligible Non-Guaranteed Notes Receivable), along with
the outstanding principal amount, payment schedule, and collection and
delinquency history thereof, and such other collateral information as reasonably
requested by Lender (each a "Schedule of Eligible Notes Receivable").

            (d) Other Reports.

                  (i) Audit Reports. Promptly upon receipt thereof, one copy of
each management letter or other report submitted to Borrower or Parent by its
accountants in connection with any annual, interim or special audit made by them
of the books of Borrower or Parent.

                  (ii) Borrowing Base Report. Together with any Borrowing
Request and in any event no less frequently than on a weekly basis, Borrower
shall deliver to Lender a Borrowing Base Report.

                  (iii) Reports Respecting Sale of SBA Guaranteed Notes
Receivable. No later than 2:00 p.m. (Central Time) of the Business Day
immediately prior to any Settlement Date, Borrower shall deliver to Lender a
Note Sale Report in substantially the form of Exhibit H, accompanied by the
Broker-Dealer Confirmation and the Secondary Participation Agreement reflecting
the anticipated sale of the subject SBA Guaranteed Note Receivable and all
instructions of Borrower to Intermediary with respect


                                     45
<PAGE>

thereto. On the request of Lender, Borrower shall deliver to Lender copies of
any other documents related to such sale.

                  (iv) SEC Filings. Promptly after the filing by Parent or
Borrower with the SEC of any report on Form 10Q or 10K, or any other material
disclosure, Borrower shall deliver a copy of such filing to Lender.

                  (v) Collateral Appraisals on Defaulted Loans. Promptly after a
request by Lender with respect to any Non-Guaranteed Note Receivable that is
part of the Defaulted Portion of Net Eligible Non-Guaranteed Notes Receivable,
Borrower shall obtain and deliver to Lender a copy of a current appraisal,
prepared by an appraiser acceptable to Lender, of the underlying collateral for
such Non-Guaranteed Note Receivable.

                  (vi) Other Data. Promptly upon receipt thereof, copies of such
other financial or other data as Lender may, in its sole discretion, reasonably
request.

      5.2 Taxes and Other Liens. Each of Borrower and Parent will pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income as well as all claims of any kind
(including claims for labor, materials, supplies and rent) which, if unpaid,
might become a Lien upon any or all of its Property; provided, that neither
Borrower nor Parent shall be required to pay any such tax, assessment, charge,
levy or claim to the extent that the amount, applicability or validity thereof
shall currently be contested in good faith by appropriate proceedings diligently
conducted by or on behalf of Borrower or Parent.

      5.3 Maintenance.

            (a) Each of Borrower and Parent shall (i) maintain its corporate
existence, rights and franchises; and (ii) observe and comply with all
Governmental Requirements.

            (b) Each of Borrower and Parent shall maintain in full force and
good standing all licenses, permits, franchises or other governmental
authorizations necessary to the conduct of its business, the failure to maintain
which could reasonably be expected to have a Material Adverse Effect. Without
limiting the


                                     46
<PAGE>

generality of the foregoing, Borrower and Parent shall continue to comply with
all statutory and other regulatory requirements necessary to maintain in full
force and good standing the Loan Guaranty Agreement, to the extent such
requirements have not been waived or become inapplicable pursuant to the terms
of the Multi-Party Agreement.

      5.4 Further Assurances. Each of Borrower and Parent will promptly cure any
defects in the creation and issuance of the Revolving Credit Note and the
execution and delivery of the Loan Documents, including this Agreement. Provided
that such action would not violate applicable SBA rules or regulations, each of
Borrower and Parent at its expense will promptly execute and deliver to Lender
upon request all such other and further documents, agreements and instruments as
shall reasonably be necessary in compliance with or accomplishment of the
covenants and agreements of Borrower in the Loan Documents, including this
Agreement, or to further evidence and more fully describe the collateral
intended as security for the Revolving Credit Note, or to correct any omissions
in the Loan Documents, or more fully to state the security obligations set out
herein or in any of the Loan Documents, or to perfect, protect or preserve any
Liens created pursuant to any of the Loan Documents, or to make any recordings,
to file any notices, or obtain any consents, all as may be deemed necessary or
appropriate in connection therewith by Lender in its sole and absolute
discretion.

      5.5 Performance of Obligations. Borrower will pay the Revolving Credit
Note according to the reading, tenor, and effect thereof. To the fullest extent
permitted by applicable law, each of Borrower and Parent will do and perform
every act and discharge all of the obligations provided to be performed and
discharged by it under the Loan Documents, including this Agreement, at the time
or times and in the manner specified.

      5.6 Insurance; Payment of Premiums. To the extent available on terms and
conditions reasonably acceptable to Borrower, Borrower shall, at its sole cost
and expense, keep and maintain the Collateral (other than accounts, cash and
other items not generally insured) insured for its full insurable value against
loss or damage by fire, theft, explosion, sprinklers and all other hazards and
risks ordinarily insured against by other owners or users of such properties in
similar businesses and


                                     47
<PAGE>

notify Lender promptly of any occurrence causing a material loss or decline in
value of the Collateral and the estimated (or actual, if available) amount of
such loss or decline. All policies of insurance on the Collateral shall be in
form and with insurers reasonably acceptable to Lender and all such policies
shall be in such amounts as may be satisfactory to Lender. Borrower shall
deliver to Lender the original (or certified copy) of each policy of insurance
and such evidence of payment of all premiums therefor as may reasonably be
requested by Lender. Such policies of insurance shall contain an endorsement, in
form and substance acceptable to Lender, showing loss payable to Lender, as its
interests may appear (including, naming Lender as an additional insured under
Borrower's fidelity insurance policies). Such endorsement, or an independent
instrument furnished to Lender, shall provide that the insurance companies will
give Lender at least thirty (30) days prior written notice before any such
policy or policies of insurance shall be altered or canceled and that no act or
default of Borrower or any other person shall affect the right of Lender to
recover under such policy or policies of insurance in case of loss or damage,
and Lender shall be included as an additional insured on all liability policies.
Borrower hereby directs all insurers under such policies of insurance to pay all
proceeds payable thereunder directly to Lender, as its interests may appear. If
no Default or Event of Default has occurred, Lender shall disburse to Borrower
the insurance proceeds received by Lender to the extent Borrower requests such
proceeds to repair or replace the damaged or destroyed Collateral that
originally gave rise to such insurance claim or claims. Borrower irrevocably
makes, constitutes and appoints Lender (and all officers, employees or agents
designated by Lender) as Borrower's true and lawful attorney (and agent-in-fact)
for the purpose of, upon the occurrence and during the continuation of an Event
of Default, making, settling and adjusting claims under such policies of
insurance, endorsing the name of Borrower on any check, draft, instrument or
other items of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect to such policies of
insurance. In the event Borrower, at any time hereafter, shall fail to obtain or
maintain any of the policies of insurance required above or to pay any premium
in whole or in part relating thereto, then Lender, without waiving or releasing
any obligations or default by Borrower hereunder, may at any time thereafter
(but shall be under no obligation to) obtain and


                                     48
<PAGE>

maintain such policies of insurance and pay such premium and take any other
action with respect thereto which Lender deems advisable. All sums so disbursed
by Lender, including reasonable attorneys' fees, court costs, expenses and other
reasonable charges relating thereto, shall be payable on demand by Lender and
shall be additional Liabilities hereunder secured by the Collateral.

      5.7 Accounts and Records. Each of Borrower and Parent will keep books of
record and account in which full, true and correct entries will be made of all
dealings or transactions in relation to its business and activities, in
accordance with GAAP, consistently applied except only for changes in accounting
principles or practices with which Borrower's and Parent's Accountant concurs.

      5.8 Right of Inspection. Each of Borrower and Parent will permit any
officer, employee or agent of Lender to examine Borrower's and Parent's books of
record and accounts, take copies and extracts therefrom, and discuss the
affairs, finances and accounts of Borrower and Parent with Borrower's and
Parent's officers, accountants and auditors, all at such reasonable times and as
often as Lender may desire. Borrower and Parent acknowledges that Lender
presently anticipates performing a minimum of four (4) audits in each fiscal
year of Borrower and Parent.

      5.9 Notice of Certain Events. Each of Borrower and Parent shall promptly
notify Lender if it learns of the occurrence of: (i) any event which constitutes
a Default or an Event of Default, together with a detailed statement by a
responsible officer of Borrower or Parent of the steps being taken to cure the
effect of such Default or Event of Default; or (ii) the receipt of any notice
from, or the taking of any other action by, the holder of any promissory note,
debenture or other evidence of Indebtedness of Borrower or Parent or of any
security (as defined in the Securities Act of 1933, as amended) of Borrower or
Parent with respect to a claimed default, together with a detailed statement by
a responsible officer of Borrower or Parent specifying the notice given or other
action taken by such holder and the nature of the claimed default and what
action Borrower or Parent is taking or proposes to take with respect thereto; or
(iii) any legal, judicial or regulatory proceedings affecting Borrower or


                                     49
<PAGE>

Parent or any of the Collateral in which the amount involved is material and is
not covered by insurance or which, if adversely determined, would have a
Material Adverse Effect; or (iv) any dispute between Borrower or Parent and any
governmental or regulatory body, any Term Loan Debtor, or any other Person
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect; or (v) any event or condition, including any event or condition
affecting the credit of a Term Loan Debtor, that could reasonably be expected to
have a Material Adverse Effect.

      5.10 ERISA Information and Compliance. Each of Borrower and Parent will
promptly furnish to Lender (i) after the filing thereof with the United States
Secretary of Labor or the Pension Benefit Guaranty Corporation, copies of each
annual and other report with respect to each Plan or any trust created
thereunder, and (ii) immediately upon becoming aware of the occurrence of any
"reportable event," as such term is defined in Section 4043 of ERISA, or of any
"prohibited transaction," as such term is defined in Section 4975 of the
Internal Revenue Code of 1954, as amended, in connection with any Plan or any
trust created thereunder, a written notice signed by the President or the Chief
Financial Officer of Borrower or Parent specifying the nature thereof, what
action Borrower or Parent is taking or, proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service with respect
thereto. Each of Borrower and Parent will fund all current service pension
liabilities as they are incurred under the provisions of all Plans from time to
time in effect for the benefit of its employees, and comply with all applicable
provisions of ERISA.

      5.11  Financial Covenants.  From and after the Effective Date
and until the Liabilities are fully satisfied, Borrower and
Parent shall:

            (a) Tangible Net Worth. Maintain, on a consolidated basis, Tangible
Net Worth of not less than $3,000,000 as of the end of their fiscal quarter
ending September 30, 1997, and $3,500,000 as of the end of each of their
subsequent fiscal quarters.

            (b) EBITDA Ratio. Unless otherwise agreed in writing by Lender,
achieve, on a consolidated basis, as measured as of


                                     50
<PAGE>

the end of their fiscal quarters indicated below, a minimum ratio of EBITDA for
the twelve-month period ending on the date of measurement to total, actual,
interest expense for such twelve-month period, of not less than the ratio set
forth below for such measurement date:

Measurement Date                                      EBITDA Ratio
----------------                                      ------------

Fiscal Quarter Ending June 30, 1997                    1.1 to 1.0
Fiscal Quarter Ending September 30, 1997               1.1 to 1.0
Fiscal Quarter Ending December 31, 1997                1.1 to 1.0
Fiscal Quarter Ending March 31, 1998                   1.1 to 1.0
Fiscal Quarter Ending June 30, 1998                    1.1 to 1.0
Fiscal Quarter Ending September 30, 1998               1.2 to 1.0
Fiscal Quarter Ending December 31, 1998                1.2 to 1.0
Fiscal Quarter Ending March 31, 1999                   1.2 to 1.0
Fiscal Quarter Ending June 30, 1999                    1.2 to 1.0
                                           
            (c) Liabilities to Tangible Net Worth Ratio. Maintain, on a
consolidated basis, a maximum ratio of (i) the Liabilities to (ii) Tangible Net
Worth, each as measured as of the end of each fiscal quarter, of not more than
5.0 to 1.0.

            (d) Delinquency Percentage. As measured as of the end of each month,
not cause or allow the Delinquent Portion of Net Eligible Non-Guaranteed Notes
Receivable to be more than five percent (5%) of Borrower's Non-Guaranteed Notes
Receivable (measured by the respective aggregate outstanding principal amounts)
 .

            (e) Default Percentage. As measured as of the end of each month, not
cause or allow the Defaulted Portion of Net Eligible Non-Guaranteed Notes
Receivable to be more than ten percent (10%) of Borrower's Non-Guaranteed Notes
Receivable (measured by the respective aggregate outstanding principal amounts).

      5.12 Bad Debt Reserve. Borrower shall maintain on its books, at all times,
a bad debt reserve equal to at least two and one-half percent (2.5%) of the
aggregate outstanding principal amount of all Non-Guaranteed Notes Receivable.

      5.13 Charges; Liens.


                                     51
<PAGE>

            (a) Borrower shall pay, and cause its Affiliates and Subsidiaries to
pay, promptly when due, all of the Charges, and promptly discharge any Liens,
encumbrances or other claims against the Collateral. Except for Liens in favor
of Lender and any other Permitted Liens, if Borrower, at any time or times
hereafter, shall fail to pay any Charges when due or promptly obtain the
discharge of such Charges or of any Lien, claim or encumbrance asserted against
the Collateral, subject to the provisions of Section 5.13(b) below, Lender may,
without waiving or releasing any obligation or liability of Borrower hereunder
or any Event of Default, in its sole discretion, at any time or times
thereafter, make such payment, or any part thereof, or obtain such discharge and
take any other action with respect thereto which Lender deems advisable. All
sums so paid by Lender and any expenses, including attorneys' fees, court costs,
expenses and other reasonable charges relating thereto, shall be payable, upon
demand, by Borrower to Lender and shall be additional Liabilities hereunder
secured by the Collateral.

            (b) Borrower may in good faith contest, by proper legal actions or
proceedings, the validity or amount of any Charges or claims, and provided that
Borrower gives Lender advance notice of its intention to contest the validity or
amount of any such Charge or claim, Lender will forebear from making any payment
or otherwise obtaining the discharge of such Charge or claim if at the time of
the commencement of any such action or proceeding, and during the pendency
thereof (i) no Event of Default shall have occurred and be continuing, (ii)
reserves with respect thereto are maintained on the books of Borrower in an
amount reasonably acceptable to Lender, (iii) such contest operates to suspend
collection of the contested Charges or claims and is maintained and prosecuted
continuously with diligence, (iv) none of the Collateral will be subject to
forfeiture or loss of any Lien in favor of Lender by reason of the institution
or prosecution of such contest, (v) no Lien that may reasonably be expected to
prime the Liens of Lender shall exist for such Charges or claims during such
action or proceeding, (vi) Borrower shall promptly pay or discharge such
contested Charges and all additional charges, interests, penalties and expenses,
if any, and shall deliver to Lender evidence reasonably acceptable to Lender of
such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to Borrower, and (vii) Lender has not advised Borrower in
writing that Lender


                                     52
<PAGE>

reasonably believes that non-payment or non-discharge thereof would have a
Material Adverse Effect.

      5.14 Communication With Accountants. Each of Borrower and Parent shall
cooperate with Lender to permit reasonable access to Accountant and authorizes
Accountant to disclose to Lender any and all financial statements and other
supporting financial data, including matters relating to the conduct of the
annual audit and copies of any management letter with respect to Borrower's or
Parent's business, pending litigation, financial condition and other affairs. On
or before the Effective Date, Parent and Borrower shall deliver to Lender a
letter addressed to such accountants in the form of Exhibit G.

      5.15 Notes Receivable Documents. Pursuant to the Multi-Party Agreement,
Borrower shall deliver to Lender's Agent all original SBA 7(a) Loan Notes, with
all necessary endorsements, within three (3) Business Days of the execution or
delivery to Borrower thereof. Borrower shall simultaneously deliver to Lender
copies of all Notes Receivable Documents, whether or not required to be
delivered to Lender's Agent. Borrower shall at all times comply with the terms
and conditions of the Multi-Party Agreement and the Loan Guaranty Agreement.

      5.16 Subordination Agreement. Prior to incurring any Subordinated Debt
other than with respect to the Parent Debentures, Borrower shall cause to be
delivered to Lender a subordination agreement executed by such Person in form
and substance satisfactory to Lender.

      5.17 Right of First Refusal for Securitization Transaction Subordinated
Certificates. Parent and Borrower shall cause Lender to be given a right of
first refusal to purchase any subordinated certificates issued in connection
with a Securitization Transaction.



                                     53
<PAGE>

                                    ARTICLE 6

                               NEGATIVE COVENANTS

      Without Lender's prior written consent, which Lender may or may not in its
sole discretion give, each of Borrower and Parent covenants that it shall not:

      6.1 Debt. Create, incur, assume or have outstanding any Indebtedness,
except for: (i) Indebtedness owing to Lender; (ii) Indebtedness incurred by
Borrower or Parent in the ordinary course of business, other than Indebtedness
for borrowed money; (iii) Subordinated Debt, including Subordinated Debt with
respect to the Parent Debentures; or (iv) Indebtedness to Sterling under the
Restated Sterling Credit Agreement.

      6.2 Loans and Compensation. Make any loans, distributions, payments, asset
transfers, or advances of money and/or extensions of credit to any Persons,
including officers, directors, employees, stockholders, or Affiliates and
Subsidiaries of Borrower or Parent, other than (a) reasonable advances made in
the ordinary course of business on account of salary, commissions, and routine
travel and business expenses, (b) loans made in the ordinary course of business
to Term Loan Debtors, and (c) so long as no Default or Event of Default has
occurred and is continuing or would result therefrom, (i) reasonable amounts
with respect to payment to Borrower, Parent or their respective Subsidiaries of
servicing fees, reimbursement of origination expenses, and funding of operating
expenses in the ordinary course of business, and (ii) payment to Parent of the
amount actually used by Parent to make interest payments on the Parent
Debentures, to the extent Parent is permitted pursuant to Section 6.15 to make
such interest payments to the holders of the Parent Debentures.

      6.3 Liens. Except as otherwise expressly permitted herein or in the other
Loan Documents, encumber, pledge, mortgage, or grant a security interest in
(except for Permitted Liens), or assign, sell (except for the sale of SBA
Guaranteed Notes Receivable to the extent permitted by Section 6.13 and the sale
of other property in the ordinary course of business), lease or otherwise
dispose of or transfer, whether by sale, merger,


                                     54
<PAGE>

consolidation, liquidation, dissolution, or otherwise, any of Borrower's or
Parent's assets.

      6.4 Capital Expenses. Make capital expenditures (including capitalized
leases) during any fiscal year of Parent and Borrower which, in the aggregate,
exceed $150,000 in the fiscal year ending June 30, 1998 (provided, that if
Borrower and Parent relocate their principal place of business in compliance
with Section 6.10 during such fiscal year, such limit will be increased to
$250,000), or $100,000 in any subsequent fiscal year.

      6.5 Dividends, Distributions and Redemptions. Except as otherwise
permitted under Section 6.2, declare or pay any dividend, purchase, redeem or
otherwise acquire for value any of its Stock now or hereafter outstanding,
return any capital to its stockholders, or make any distribution of its assets
to its stockholders or Affiliates or Subsidiaries.

      6.6 Capital Structure. Make any material change in Borrower's or Parent's
capital structure or in any of its business objectives, purposes and operations
which might in any way adversely affect the repayment of the Liabilities.

      6.7 Transactions with Affiliates. Enter into, or be a party to, any
transaction with any Affiliate or stockholder of Borrower or Parent, except in
the ordinary course of and pursuant to the reasonable requirements of Borrower's
or Parent's business and upon fair and reasonable terms which are no less
favorable to Borrower or Parent than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate or stockholder of Borrower or
Parent; provided, that such transactions involving, (i) in any individual
instance, transfers of Property the value of which exceeds $100,000, or (ii) in
the aggregate, transfers of Property the value of which exceeds $500,000 in any
Fiscal Year, must be fully disclosed to and approved by Lender.

      6.8 Change of Business. Enter into any new business or make any material
change in any of Borrower's or Parent's business objectives, purposes or
operations.



                                     55
<PAGE>

      6.9 Name of Borrower. Use any corporate name (other than its own) or any
fictitious name, tradestyle or "d/b/a" other than "Business Loan Center."

      6.10 Location of Collateral. Remove its books and records or the
Collateral from the location listed in the preamble to this Agreement, or keep
any of such books and records and/or the Collateral at any other office(s) or
location(s) unless (i) Borrower gives Lender written notice thereof and of the
new location of said books and records at least thirty (30) days prior thereto
and (ii) the other office or location is within the continental United States of
America.

      6.11 Proceeds of Loans. Permit the proceeds of any of the Revolving Loans
to be used for any purpose other than those permitted by Section 2.10 hereof.

      6.12 ERISA Compliance. At any time permit any Plan maintained by it to:

            (a) engage in any "prohibited transaction" as such term is defined
in Section 4975 of the Internal Revenue Code of 1954, as amended;

            (b) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA; or

            (c) terminate any such Plan in a manner which could result in the
imposition of a Lien on the Property of Borrower pursuant to Section 4068 of
ERISA.

      6.13 Sale or Discount of Receivables. Discount or sell any portion of its
Notes Receivable or its Accounts; provided, that so long as no Event of Default
shall have occurred and be continuing, Borrower may:

            (a) sell SBA Guaranteed Notes Receivable to the extent that such
sales are made (i) at par or at a premium, (ii) on ordinary business terms,
(iii) by or through the Intermediary, (iv) in full conformity with all
applicable provisions of the SBI Act and other governing law, and (v) in
accordance with the Settlement Date reporting requirements of Section
5.1(d)(iii);



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<PAGE>

            (b) sell Non-Guaranteed Notes Receivable pursuant to a
Securitization Transaction, to the extent that such sales are made (i) in full
conformity with all applicable provisions of the SBI Act and other governing
law, and (ii) on terms (including with respect to the amount and timing of
payment of the purchase price therefor) and in a manner acceptable to Lender;

            (c) sell Non-Guaranteed Pro Rata Participations to the extent
permitted by Section 2.18; and

            (d) sell to SBA the SBA Owned Notes Receivable, or otherwise dispose
of Notes Receivable or the collateral therefor, to the extent required by SBA as
part of the servicing or liquidation thereof.

      6.14 Compensation and Bonuses. (i) Pay annual salaries or bonuses or any
other direct or indirect compensation (including through the payment of
directors' fees) to any of Parent's or Borrower's executive officers in an
aggregate amount exceeding (A) the respective amounts currently scheduled to be
paid to such Persons in their fiscal year ending June 30, 1997, (B) $2,500,000
for all of such Persons in their fiscal year ending June 30, 1998, or (C)
$3,000,000 for all of such Persons in any subsequent fiscal year, or (ii) pay
directors' fees in an aggregate amount exceeding $50,000 for all directors in
any fiscal year of Borrower.

      6.15 Payments on Subordinated Debt. Prepay any Subordinated Debt or make
any payment of principal or interest thereof or interest thereon or any other
payment or distribution in respect thereof, except that Parent may make payments
of interest on the Parent Debentures regularly scheduled thereunder provided
that no Default or Event of Default has occurred or is continuing under this
Agreement or would result from such interest payment. All Subordinated Debt
shall have a maturity date after the Termination Date and shall be unsecured and
subordinated to Lender in liquidation and repayment on terms that are acceptable
to Lender.

      6.16 Affiliates. Hereafter create any Affiliate or Subsidiary or divest
itself of any material assets by transferring them to any Affiliate or
Subsidiary. Lender shall not unreasonably withhold its consent to a written
request by


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<PAGE>

Borrower or Parent for Lender's consent to a transaction by Borrower or Parent
that would otherwise violate this Section 6.16.

      6.17 Consulting and Brokerage Services. Provide, or enter into any
contract or agreement to provide, or allow any Affiliate or Subsidiary of
Borrower or Parent to provide, or enter into any contract or agreement to
provide, to any Term Note Debtor or purchaser of Notes Receivable, any advisory,
consulting, brokerage, or similar services, other than (a) the advisory or
consulting services, if any, Borrower or Parent provides in the ordinary course
of business to prospective and actual Term Note Debtors or purchasers of SBA
Guaranteed Notes Receivable in connection with (i) the marketing, structuring,
documentation, and closing of Note Receivable transactions and (ii) the
servicing of any Notes Receivable, and (b) consulting services provided to Term
Loan Debtors or prospective borrowers in the ordinary course of business that
result in (i) a referral by Borrower or Parent to another funding source that is
not an Affiliate or Subsidiary of Borrower or Parent, and (ii) the receipt by
Borrower or Parent of a reasonable referral fee in an arm's-length relationship
with such other funding source.

      6.18 Modification of Sterling Documents. Amend or modify any of the
Sterling Documents.

      6.19 Survival of Obligations Upon Termination of Agreement. Except as
otherwise expressly provided for in this Agreement and in the other Loan
Documents, no termination or cancellation (regardless of cause or procedure) of
this Agreement or the other Loan Documents shall in any way affect or impair the
powers, obligations, duties, rights, and Liabilities of Borrower, Parent or
Lender relating to (a) any transaction or event occurring prior to such
termination or cancellation, (b) the Collateral, or (c) any of the undertakings,
agreements, covenants, warranties and representations of Borrower, Parent or
Lender contained in this Agreement or the other Loan Documents. All such
undertakings, agreements, covenants, warranties and representations shall
survive such termination or cancellation and be effective until the full and
final payment of the Liabilities, at which time Lender shall take all reasonable
steps deemed necessary by Borrower to effect the release of Lender's


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<PAGE>

Liens; provided, that all indemnity claims of Lender under the Loan Documents
shall survive such full and final payment.

                                    ARTICLE 7

                                EVENTS OF DEFAULT

      7.1 Events. Any of the following events shall be considered an "Event of
Default" as that term is used herein:

            (a) Payments. Default is made in the payment or prepayment when due
of any installment of principal or interest on the Revolving Credit Note or any
other Liabilities; or

            (b) Loan Balance. Lender notifies Borrower that the outstanding
balance of the Loans hereunder exceeds the Maximum Commitment, and such
condition is not corrected within three (3) Business Days after such notice; or

            (c) Financial Covenants. Borrower or Parent fails to satisfy any
financial covenant set forth in Section 5.11 hereof; or

            (d) Representations and Warranties. Borrower or Parent fails to
perform, keep or observe any material representation or warranty made by it
herein or in any other Loan Document or in any certificate, request or other
document furnished pursuant to or under this Agreement or any other Loan
Document, or any such representation or warranty proves to have been incorrect
in any material respect as of the date when made or deemed made; or

            (e) Covenants. Borrower or Parent fails to perform, keep or observe
any of the covenants or agreements contained in Article 5 and Article 6 (other
than any failure to make any payment when due, or any failure to perform any of
the covenants in Section 5.11), or in any other Loan Document, and such default
continues unremedied for a period of five (5) Business Days after the earlier of
(i) written notice thereof being given by Lender to Borrower, or (ii) such
default otherwise becoming known to Borrower; or



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<PAGE>

            (f) Other Obligations. A default shall occur under any agreement,
document or instrument, other than this Agreement or the other Loan Documents,
to which Borrower or Parent is a party, the consequences of which could have a
Material Adverse Effect, and which default is not cured within ten (10) Business
Days after Borrower becomes aware of such default; or

            (g) Breach of Agreement with SBA. Borrower shall breach in any
material respect its servicing or any other obligations under the Multi-Party
Agreement or under any Loan Guaranty Agreement; or

            (h) Default Under Sterling Documents. Any "Event of Default" under
and as defined in the Sterling Documents shall have occurred.

            (i) Default Under Parent Guaranty. Any event of default shall occur
under the Parent Guaranty; or

            (j) Misrepresentations. Any statement, report, financial statement
or certificate made or delivered by Borrower or Parent, or any of its officers,
employees or agents, to Lender is untrue, incomplete or incorrect in any
material respect at the time when made and the same shall remain untrue for five
(5) Business Days after Borrower shall receive written notice of such fact from
Lender or five (5) Business Days after Borrower becomes aware of such default;
or

            (k) Involuntary Bankruptcy or Other Proceedings. The filing of a
petition with a court having jurisdiction over Borrower or Parent to commence an
involuntary case for Borrower or Parent under the Bankruptcy Code, as now
constituted or hereafter amended, or any other applicable Federal or state
bankruptcy, insolvency or similar law; or the appointment of a receiver,
liquidator, assignee, custodian, trustee, agent, sequestrator or other similar
official for Borrower's or Parent's affairs; and the failure to obtain the
dismissal of such petition or appointment within, or the continuance of such
decree or order unstayed and in effect for, a period of thirty (30) days from
the date of such filing or appointment or the entry of such order or decree; or



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<PAGE>

            (l) Voluntary Petitions, etc. The commencement by Borrower or Parent
of a voluntary case under the Bankruptcy Code, as now constituted or hereafter
amended, or any other applicable Federal or state bankruptcy, insolvency or
similar law; the consent by Borrower or Parent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, agent or other similar
official for Borrower or Parent or for any material part of Borrower's or
Parent's property; the making by Borrower or Parent of an assignment for the
benefit of creditors; any case of proceeding is commenced by Borrower or Parent
for Borrower's or Parent's dissolution, liquidation or termination; or the
taking of any action by or on behalf of Borrower or Parent in furtherance of any
of the foregoing; or

            (m) Uninsured Loss. There shall occur any uninsured damage to, or
loss, theft, or destruction of, any of the Collateral, if the amount of such
damages or loss, or the value of the stolen or destroyed Collateral is in excess
of $50,000; provided, that for purposes of this Section 7.1(m), Collateral shall
be deemed not to include tangible personal property, and the loan losses not
covered by credit insurance shall not constitute damage, loss, or destruction of
Collateral; or

            (n) Discontinuance of Business. Borrower or Parent ceases to conduct
its business as now conducted or is enjoined, restrained or in any way prevented
by court order from conducting all or any material part of its business affairs;
or

            (o) ERISA Notices. Borrower or Parent fails to (i) furnish Lender,
within fifteen (15) days thereafter, with written notice upon the occurrence of
any of the following events: (A) the happening of a Reportable Event with
respect to any pension plan of Borrower or Parent governed by ERISA, as to which
the requirement of notice has not been waived by PBGC, (B) the termination of
any such plan, (C) the appointment of a trustee by an appropriate United States
District Court to administer any such plan, or (D) the institution of any
proceedings by the Pension Benefit Guaranty Corporation to terminate any such
plan or to appoint a trustee to administer any such plan; or (ii) notify Lender
promptly upon receipt by Borrower or Parent of any notice of the institution of
any proceeding or other action which may result in the termination of such plan;
or



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<PAGE>

            (p) Loan Documents. The Loan Documents, after delivery thereof,
shall for any reason, except to the extent permitted by the terms thereof, cease
to be in full force and effect and valid, binding and enforceable in accordance
with their terms, or cease to create a valid and perfected Lien of the priority
required thereby on any of the Collateral purported to be covered thereby, or
Borrower or Parent (or any other Person who may have granted or purported to
grant such Lien) shall so state in writing; or

            (q) Material Adverse Event. A Default or any other event shall have
occurred which would have a Material Adverse Effect on Borrower, which event
continues for five (5) days after written notice to Borrower; or

            (r) Change of Control. A Change of Control shall have occurred; or

            (s) Merger. Borrower or Parent shall merge or consolidate with or
acquire the Stock or assets of any Person; or

            (t) Solvency. Borrower or Parent is no longer Solvent.

      7.2 Termination of Agreement and Acceleration of the Liabilities. During
any period of grace afforded Borrower or Parent under this Article 7 after which
an act or omission of Borrower or Parent will become an Event of Default, Lender
shall have no obligation to make any Revolving Loan hereunder. Upon the
occurrence and continuation of an Event of Default, all of the Liabilities may,
at the option of Lender and without demand, notice, or legal process of any
kind, be declared, and immediately shall become, due and payable, and Lender,
at its option, may terminate this Agreement; provided, that all of the
Liabilities shall immediately become due and payable, and this Agreement shall
be terminated upon the occurrence and continuation of an Event of Default set
forth in Section 7.1(k) or Section 7.1(l); and further provided, that Lender's
rights and remedies under this Agreement shall survive any such termination.

      7.3 Remedies. Upon the occurrence and at any time during the continuance
of any Event of Default specified in Section 7.1, and subject at all times to
Lender's compliance with all applicable terms of the Multi-Party Agreement,
including those


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<PAGE>

relating to the transfer of authority for collection, servicing, and liquidation
of Notes Receivable, Lender shall have the following rights and remedies:

            (a) Rights of Setoff. Upon the occurrence and during the continuance
of any Event of Default, Lender and each subsequent holder of the Revolving
Credit Note is hereby authorized by Borrower at any time and from time to time,
without notice to Borrower (any such notice being expressly waived by Borrower),
to setoff and to appropriate and, to the extent permitted by applicable law, to
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by Lender or
any subsequent holder of the Revolving Credit Note to or for the credit or the
account of Borrower against any and all of the Liabilities of Borrower,
irrespective of whether or not the Lender or any subsequent holder of the
Revolving Credit Note shall have made any demand under this Agreement, the
Revolving Credit Note or under any other Loan Documents and although such
obligations may be unmatured; provided, that Lender shall have no right of
setoff with respect to funds deposited or held in the Servicer Account. Lender
and any subsequent holder of the Revolving Credit Note agrees promptly to notify
Borrower in writing after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of Lender or any subsequent holder of the Revolving
Credit Note under this Section 7.3(a) are in addition to other rights and
remedies (including other rights of setoff) now or hereafter granted under
applicable law which Lender or any subsequent holder of the Revolving Credit
Note may have.

            (b) Notes Receivable and Accounts. The right to: (i) monitor,
manage, and, subject to the terms of the Multi-Party Agreement, transfer the
collection, servicing, and liquidation of any or all of Notes Receivable and
Borrower's lending relationship with Term Note Debtors; (ii) unless and until
the SBA takes over or transfers to another SBA-participating lender, designated
by the SBA and acceptable to Lender, the collection, servicing and liquidation
functions of the Notes Receivable in accordance with the Multi-Party Agreement,
enforce and demand payment of the Accounts and the Notes Receivable, in
accordance with their terms, by legal proceedings or otherwise;


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<PAGE>

(iii) exercise all of Borrower's rights and remedies with respect to the
collection of the Accounts and Notes Receivable; (iv) settle, adjust,
compromise, extend, or renew the Accounts and Notes Receivable; (v) settle,
adjust or compromise any legal proceedings brought to collect the Accounts and
Notes Receivable; (vi) if permitted by applicable law, sell or assign the
Accounts and Notes Receivable upon such terms, for such amounts and at such time
or times as Lender deems advisable; (vii) discharge and release the Accounts or
Notes Receivable; (viii) take control, in any manner, of any Item of Payment;
(ix) prepare, file and sign Borrower's name on any Proof of Claim in Bankruptcy
or similar document against any Account Debtor or Term Loan Debtor; (x) prepare,
file and sign Borrower's name on any notice of lien, assignment or satisfaction
of lien or similar document in connection with the Accounts or Notes Receivable;
(xi) do all acts and things necessary, in Lender's sole discretion, to fulfill
Borrower's obligations under this Agreement; (xii) endorse the name of Borrower
upon any chattel paper, document, instrument, invoice, or similar document or
agreement relating to the Accounts or Notes Receivable; (xiii) open Borrower's
mail and collect any and all amounts due Borrower from Account Debtors and Term
Loan Debtors; and (xiv) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the Accounts
and Notes Receivable, to which Borrower has access;

            (c) Sell Collateral. The right to: (i) require Borrower to assemble
the Collateral and make it available to Lender at a place to be designated by
Lender, in its sole discretion; (ii) sell or to otherwise dispose of all or any
Collateral at public or private sale or sales, with such notice as may be
required by law, in lots or in bulk, for cash or on credit, all as Lender, in
its sole discretion, may deem advisable; (iii) adjourn such sales from time to
time with or without notice; and (iv) conduct such sales on Borrower's premises
or elsewhere and use Borrower's premises without charge for such sales for such
time or times as Lender may see fit. Lender is hereby granted a license or other
right to use, without charge, Borrower's labels, patents, copyrights, rights of
use of any name, trade secrets, trade names, trademarks and advertising matter,
or any property of a similar nature, as it pertains to the Collateral, in
advertising for sale and selling any Collateral and Borrower's rights under all
licenses and all


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<PAGE>

franchise agreements shall inure to Lender's benefit. Lender shall have the
right to sell, lease or otherwise dispose of the Collateral, or any part
thereof, for cash, credit or any combination thereof, and Lender may purchase
all or any part of the Collateral at public or, if permitted by law, private
sale and, in lieu of actual payment of such purchase price, may setoff the
amount of such price against the Liabilities. The proceeds realized from the
sale of any Collateral shall be applied first to the reasonable costs, expenses
and attorneys' fees and expenses incurred by Lender for collection and for
acquisition, completion, protection, removal, storage, sale and delivery of the
Collateral; second to interest due upon any of the Liabilities; and third to the
principal of the Liabilities. If any deficiency shall arise, Borrower shall
remain liable to Lender therefor;

            (d) Servicing of SBA Loans. The right, directly or through its
designee, to monitor, manage, and service any or all of the Notes Receivable,
including the Sold Notes Receivable, the GECC Participated Notes Receivable, the
Participated Notes Receivable, and the SBA Owned Notes Receivable, and
Borrower's relationship with its Term Loan Debtors and other customers;
provided, that Lender, or its designee, shall have been approved by the SBA (as
a participating lender under the Small Business Act of 1953, as described in 13
CFR ss. 120.302.1, or otherwise) to perform such functions; and further
provided, that with respect to the GECC Participated Notes Receivable such
rights of Lender shall be subject to any servicing rights of GECC therein. Upon
the transfer of the servicing obligations of Borrower's Notes Receivable from
Borrower to Lender or its designee, Borrower shall immediately deliver to Lender
or its designee all loan documents then held by Borrower or any other Person
relating to all of the outstanding Notes Receivable. Borrower consents to any
action taken by Lender or its designee pursuant to this Section 7.3(d), and
agrees that such action shall not release or relieve Borrower of its obligations
to Lender whether arising under this Agreement, or any of the other Loan
Documents. In carrying out the provisions of this Section 7.3(d), Lender or its
designee may rely and act upon any notice or instruction given to Lender or its
designee by the SBA, and in so doing, neither Lender nor its designee shall
incur any liability or obligation to Borrower by reason thereof; and



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            (e) UCC Remedies. In addition to any other rights and remedies
contained in this Agreement and in all of the other Loan Documents, all of the
rights and remedies of a secured party under the UCC or other applicable law,
all of which rights and remedies shall be cumulative and non-exclusive, to the
extent permitted by law.

      7.4 Notice of Sale or Other Action. Any notice required to be given by
Lender of a sale, lease, other disposition of the Collateral or any other
intended action by Lender, if given five (5) Business Days prior to such
proposed action, shall constitute commercially reasonable and fair notice
thereof to Borrower.

      7.5 Marshalling; Payments Set Aside. Lender shall be under no obligation
to marshall any assets in favor of Borrower or any other party or against or in
payment of any or all of the Liabilities. To the extent that Borrower makes a
payment or payments to Lender or Lender enforces its security interests or
exercises its rights of set-off, and such payment or payments or the proceeds of
such enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set-aside and/or required to be
repaid to a trustee, receiver or any other party under the Bankruptcy Code, or
any State or Federal law, common law or equitable cause, then to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set-off had not occurred.

      7.6 Effect of Multi-Party Agreement and Intercreditor Agreement.
Notwithstanding any other provision of this Article 7, all rights and remedies
of Lender under this Article 7 shall be subject to the provisions of the
Multi-Party Agreement and the Intercreditor Agreement.


                                    ARTICLE 8

                              CONDITIONS OF LENDING

            The obligations of Lender to make Revolving Loans pursuant to this
Agreement are subject to the conditions precedent stated in this Article 8.


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<PAGE>

      8.1 Initial Advance. The obligation of Lender to make the initial
Revolving Loan under this Agreement is, in addition to the conditions precedent
specified in Section 8.2 hereof, subject to the following conditions precedent
wherein each document to be delivered to Lender shall be in form and substance
satisfactory to Lender:

            (a) Closing. Borrower and Parent shall have executed and delivered
to Lender this Agreement. Lender shall have received such documents, instruments
and agreements as Lender shall request in connection with the Transactions
contemplated by this Agreement, including all documents, instruments, agreements
and schedules listed in the Schedule of Documents, each in form and substance
satisfactory to Lender.

            (b) Notes. Borrower shall have duly and validly issued, executed and
delivered the Revolving Credit Note to Lender as of the Effective Date.

            (c) Opinion of Borrower's and Parent's Counsel. Lender shall have
received from counsel for Borrower and Parent a written opinion in form and
substance acceptable to Lender as to such matters as Lender may require,
including opinions regarding (i) the validity, creation, and attachment of the
Liens under the Security Documents, (ii) Borrower's and Parent's corporate
authorization to enter into the Transactions contemplated by this Agreement,
(iii) Borrower's and Parent's compliance with all Federal, state and local laws,
(iv) the existence of litigation against Borrower or Parent that may result in a
Material Adverse Effect, and (v) as to such other matters which may materially
impact the legal and credit risks associated with the Transactions.

            (d) No Material Adverse Change. Since December 31, 1996 and through
the Effective Date, there shall have been (a) no material adverse change in the
business, financial or other conditions of Borrower or Parent, or any Affiliate
or Subsidiary of Borrower or Parent, or in the Collateral, or in the prospects
or projections of Borrower, Parent or their Affiliates and Subsidiaries, (b) no
material increase in the liabilities (absolute or contingent) of Borrower,
Parent or their Affiliates and Subsidiaries, whether or not disclosed or
required to be reserved against on any pro forma balance sheet, other than


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<PAGE>

i liabilities incurred by Borrower or Parent in the ordinary course of its
business in connection with the execution, delivery, and performance of loan
documents by Borrower, as lender to its customers, and (ii) the Parent
Debentures, (c) no material decrease in the assets of Borrower, Parent or their
Affiliates and Subsidiaries, and (d) no distribution by Borrower or Parent of
capital Stock either by dividends or otherwise.

            (e) Recordings. The Security Documents, or other notices related
thereto if necessary or appropriate, shall have been duly delivered to the
appropriate offices for filing or recording, and Lender shall have received
confirmations of receipt thereof from the appropriate filing or recording
offices.

            (f) [Intentionally Omitted.]

            (g) Fees. Lender shall have received the fees described in Section
2.5 hereof.

            (h) Certificate of Validity of Collateral. Lender shall have
received a "Certificate of Validity of Collateral" executed by the President and
Chief Financial Officer of Borrower in substantially the form attached as
Exhibit F hereto.

            (i) Schedule of Documents. Lender shall have received all other
documents, agreements and items set forth on the Schedule of Documents.

            (j) Borrower's Guidelines and Operations Manual. Borrower shall have
delivered to Lender Borrower's written operating guidelines and written
operations manuals, detailing Borrower's business development and underwriting
processes, credit granting procedures, loan documentation, and procedures for
packaging and SBA approval, loan closing and servicing, collections,
account/portfolio administration, and liquidation, and such materials shall be
in a form satisfactory to Lender.

            (k) Borrower's Credit Request and Field Examination Forms. Borrower
shall have delivered to Lender Borrower's credit request, loan report and
analysis, and field examination/site visit forms, and such materials shall be in
a form satisfactory to Lender.



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<PAGE>

            (l) Borrower's Form Loan Documents. Borrower shall have submitted to
Lender the standard form loan agreement, security agreement, note, deed of
trust, guaranty, subordination agreement, and other form loan documents employed
by Borrower (including, where applicable, standard forms prescribed or supplied
by the SBA), and all such loan documents shall be satisfactory to Lender and its
counsel.

            (m) Chief Financial Officer. Robert F. Tannenhauser shall be serving
as the Chief Financial Officer of Parent and Jennifer Napier shall be serving as
the Chief Financial Officer of Borrower, or replacements acceptable to
Participant shall be serving in such positions.

            (n) SBA Approval; Loan Guaranty Agreement. Borrower shall have
provided Lender with evidence satisfactory to Lender that the SBA shall have (i)
entered into the Loan Guaranty Agreement with Borrower and (ii) through its
execution of the Multi-Party Agreement, consented to Borrower's entering into
this Agreement and the other Loan Documents.

            (o) Effectiveness of Assignment and Restated Sterling Credit
Agreement. Sterling and Lender shall have entered into the Partial Assignment
Agreement, and Sterling, Borrower and Parent shall have entered into the
Restated Sterling Credit Agreement, all conditions precedent to the
effectiveness of each of such agreements shall have been satisfied or waived,
and each of such agreements shall have become effective.

            (p) Repurchase Under Loan Participation Agreement. Borrower shall
have agreed, by its execution of this Agreement (i) to repurchase from Lender
the loan participation previously sold to Lender by Borrower with respect to
certain Notes Receivable pursuant to the Loan Participation Agreement and
satisfy all of Borrower's other obligations to Lender thereunder, on or before
October 1, 1997, and (ii) to reimburse Lender for any loss incurred by Lender
with respect to such Notes Receivable prior to such repurchase.

            (q) Other. Lender shall have received such other documents as it may
reasonably have requested at any time at or prior to the Effective Date.



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<PAGE>

      8.2 All Advances. The obligation of Lender to make Revolving Loans under
this Agreement is subject to the following further conditions precedent:

            (a) Borrowing Requests and Reports. Before each advance, Lender
shall have received a Borrowing Request, a Borrowing Base Report, and a Schedule
of Eligible Notes Receivable, each of which shall be true and correct and shall
be duly and properly executed and completed by either the President
or the Chief Financial Officer of Borrower.

            (b) Possession of Notes Receivables Documents. All original SBA 7(a)
Loan Notes shall have been physically delivered to the possession of Lender's
Agent and copies of the Notes Receivables Documents shall have been delivered to
Lender.

            (c) Loan Documents. Borrower shall provide Lender's Agent with the
original duly and properly executed SBA 7(a) Loan Notes, and shall provide
Lender with copies of the duly and properly executed Note Receivable Documents,
as set forth in Section 5.15.

            (d) No Default. No Default or Event of Default shall have occurred
and be continuing or would result from the funding of the advance.

            (e) Representations and Warranties. All of the representations and
warranties of Borrower or Parent contained herein shall be correct in all
material respects as of the date of each such advance as though made on and as
of such date, except (i) to the extent that any such representation or warranty
expressly relates to an earlier date, and (ii) for changes therein permitted or
contemplated by this Agreement. All of the representations and warranties of
Borrower or Parent contained in any of the other Loan Documents shall be correct
in all material respects as of the date delivered, except to the extent that any
such representation or warranty expressly relates to an earlier date.

            (f) No Material Adverse Change. There shall have occurred no change
in the condition, financial or otherwise, of Borrower which Lender reasonably
deems to be a Material Adverse Effect.


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<PAGE>

            (g) Key Officers. Each of Borrower and Parent shall continue to
employ as its President and its Chief Financial Officer the Persons holding such
positions as of the Effective Date, or shall have hired replacements for such
officers acceptable to Lender.

            (h) Escrow Arrangements Regarding Concurrent Fundings. To the extent
that, pursuant to the proviso contained in either paragraph A of Schedule 1.1(a)
or paragraph A of Schedule 1.1(b), the requested advance is being made based
upon new loans by Borrower that have not yet actually been disbursed to the Term
Loan Debtor, the conditions of and escrow arrangements for the disbursement of
such new loans shall be satisfactory in form and substance to Lender.

            The acceptance by Borrower of the proceeds of any advance hereunder
shall be deemed to constitute, as of the date of such acceptance, (i) a
representation and warranty by Borrower that the conditions in this Section 8.2
have been satisfied, and (ii) a confirmation by Borrower of the granting and
continuance of Lender's Lien pursuant hereto.

                                    ARTICLE 9

                                  MISCELLANEOUS

      9.1 Notices. Except as otherwise provided herein, whenever this Agreement
provides that any notice, demand, request, consent, approval, declaration or
other communication shall or may be given to or served upon any of the parties
by another, or whenever any of the parties desires to give or serve upon another
any communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be delivered (i) in person with receipt acknowledged, or (ii)
by facsimile with receipt confirmed, or (iii) by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:



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<PAGE>

            (a)   If to Lender, at:

                        Transamerica Business Credit Corporation
                        8750 W. Bryn Mawr Avenue, Suite 720
                        Chicago Illinois  60631
                        Attention: Account Executive - BLC
                        Facsimile: (773) 380-6169

                        and

                        Transamerica Business Credit Corporation
                        9399 West Higgins Road, Suite 600
                        Rosemont, Illinois 60018
                        Attention: Mary F. Krakowski, Esq.
                        Facsimile: (847) 685-1142

                        With copies to:

                        Murphy, Weir & Butler
                        101 California Street, 39th Floor
                        San Francisco, California 94111
                        Attention:  Hill Blackett, III, Esq.
                        Facsimile: (415) 421-7879

provided, that notice to Lender for purposes of Section 2.13(a)(i) shall be
given to Sam V. LoBosco by telephone at (773) 864-3993 or by facsimile at (773)
380-6169, and no copy of such transmission is required to be sent to any other
Person.

            (b)   If to Borrower or Parent, at:

                        Business Loan Center, Inc.
                        919 Third Avenue, 17th Floor
                        New York, New York 10022
                        Attention: Mr. Robert Tannenhauser
                                   President
                        Facsimile: (212) 751-9345



                                     72
<PAGE>

                        With copies to:

                        Weil, Gotshal & Manges, LLP
                        767 Fifth Avenue, 31st Floor
                        New York, New York 10153
                        Attention: Simeon Gold, Esq.
                        Facsimile: (212) 310-8007

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered or
sent by facsimile, with receipt acknowledged or confirmed, or three (3) Business
Days after the same shall have been deposited in the United States mail. Failure
or delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to the persons designated above to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.

      9.2 Modification of Agreement; Sale of Interest. This Agreement and the
other Loan Documents may not be modified, altered or amended, except by an
agreement in writing signed by Borrower and Lender. Borrower may not sell,
assign or transfer this Agreement, or the other Loan Documents or any portion
thereof, including Borrower's rights, title, interests, remedies, powers, or
duties hereunder or thereunder. Each of Borrower and Parent hereby consents to
Lender's participation, sale, assignment, transfer or other disposition, at any
time or times hereafter, of this Agreement, or the other Loan Documents, or of
any portion hereof or thereof, including Lender's rights, title, interests,
remedies, powers, or duties hereunder or thereunder, subject to the provisions
of the Multi-Party Agreement and provided that Lender shall not sell its entire
interest in all of the Revolving Loans without the prior written consent of SBA,
which consent shall not be unreasonably withheld. Lender agrees that prior to
any such disposition it will make a good faith effort to provide Borrower with
notice of such disposition; provided, that the failure of Lender to provide such
notice shall not prevent Lender from making such disposition.


                                     73
<PAGE>

      9.3 Lien Release Prior to Sale of SBA Guaranteed Notes Receivable.
Lender's security interest in any SBA Guaranteed Note Receivable shall be deemed
to be automatically released on any Settlement Date established with respect to
such SBA Guaranteed Note Receivable (or other date of settlement established
pursuant to any applicable Broker-Dealer Confirmation) concurrently with the
receipt by Intermediary of the purchase price therefor. Notwithstanding any
release of a security interest by Lender under this Section 9.3, Lender shall
not release, but rather shall retain without interruption, its security interest
in and to the Net Sale Proceeds of such sale.

      9.4 Fees and Expenses. Borrower shall reimburse Lender for all reasonable
out-of-pocket expenses of Lender in connection with the negotiation,
preparation, execution, interpretation and administration of this Agreement and
the other Loan Documents (including the reasonable fees and expenses of all of
Lender's counsel retained in connection with the Transactions contemplated
hereby). If, at any time or times, regardless of the existence of an Event of
Default, Lender shall employ counsel or other professional advisors, including
management consultants, for advice or other representation or shall incur
reasonable legal, appraisal, accounting, consulting or other costs and expenses
in connection with:

            (a) any interpretation, amendment, modification or waiver of, or
consent with respect to, this Agreement or the other Loan Documents;

            (b) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Lender, Borrower, Parent or any other Person) in any way
relating to the Collateral, this Agreement or the other Loan Documents,
including any litigation, contest, dispute, suit, case, proceeding or action,
and any appeal or review thereof, in connection with a case commenced by or
against Borrower, Parent or any other Person that may be obligated to Lender by
virtue of this Agreement or the other Loan Documents, under the Bankruptcy Code,
or any other applicable Federal, state, or foreign bankruptcy or other similar
law;

            (c) any attempt to enforce any rights of Lender against Borrower,
Parent or any other Person that may be


                                     74
<PAGE>

obligated to Lender by virtue of this Agreement or the other Loan Documents; or

            (d) any attempt to appraise, inspect, verify, protect, collect,
sell, liquidate or otherwise dispose of the Collateral, then, and in any such
event, a $500 per day per auditor charge in connection with any audit of the
Collateral by Lender and the reasonable fees of such attorneys and other
professional advisors and consultants arising from such services, including
those of any appellate proceedings, and all reasonable expenses, costs, charges
and other fees incurred by such auditors, counsel or other professionals in any
way or respect arising in connection with or relating to any of the events or
actions described in this Section 9.4, shall be payable, on demand, by Borrower
to Lender and shall be additional Liabilities secured by the Collateral. Without
limiting the generality of the foregoing, such reasonable expenses, costs,
charges and fees may include: paralegal fees, costs and expenses; accountants'
fees, costs and expenses; appraisers' fees, costs and expenses; management and
other consultants' fees, costs and expenses; court costs and expenses;
photocopying and duplicating expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other professional
services.

      9.5 Severability. In the event that any one or more of the provisions
contained in the Revolving Credit Note, this Agreement or in any other Loan
Documents shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of the Revolving Credit Note, this Agreement or any other
Loan Document.

      9.6 Waiver by Lender. Lender's failure, at any time or times hereafter, to
require strict performance by Borrower or Parent of any provision of this
Agreement shall not waive, affect or diminish any right of Lender thereafter to
demand strict compliance and performance. Any suspension or waiver by Lender of
an Event of Default by Borrower or Parent under this Agreement or the other Loan
Documents shall not suspend, waive or affect


                                     75
<PAGE>

any other Event of Default by Borrower or Parent under this Agreement or the
other Loan Documents, whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of Borrower or Parent
contained in this Agreement or the other Loan Documents and no Event of Default
by Borrower or Parent under this Agreement or the other Loan Documents shall be
deemed to have been suspended or waived by Lender, unless such suspension or
waiver is by an instrument in writing signed by an officer of Lender and
directed to Borrower or Parent specifying such suspension or waiver.

      9.7 Successors and Assigns. All covenants and agreements by or on behalf
of Borrower or Parent contained in the Revolving Credit Note, this Agreement and
any other Loan Documents shall bind its successors and assigns and shall inure
to the benefit of Lender. Neither Borrower nor Parent shall, however, have the
right to assign its rights under this Agreement or any interest herein, without
the prior written consent of Lender.

      9.8 Conflict of Terms. The other Loan Documents and all Schedules and
Exhibits hereto are incorporated in this Agreement by this reference thereto.
Except as otherwise provided in this Agreement and except as otherwise provided
in the other Loan Documents by specific reference to the applicable provision of
this Agreement, if any provision contained in this Agreement is in conflict
with, or inconsistent with, any provision in the other Loan Documents, the
provision contained in this Agreement shall govern and control. Notwithstanding
the foregoing, in the event any provision of this Agreement conflicts or is
inconsistent with the Multi-Party Agreement, the relevant provisions of the
Multi-Party Agreement shall be controlling.

      9.9 Waivers by Borrower and Parent. Except as otherwise provided herein,
each of Borrower and Parent waives: (a) presentment, demand and protest and
notice of presentment, protest, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Lender on which Borrower or Parent may in any way be liable
and hereby ratifies and confirms whatever Lender may do in this regard; (b) all
rights to notice of a hearing prior to Lender's taking possession or control of,


                                     76
<PAGE>

or to Lender's replevy, attachment or levy upon, the Collateral or any bond or
security which might be required by any court prior to allowing Lender to
exercise any of Lender's remedies; and (c) the benefit of all valuation,
appraisement and exemption laws. Each of Borrower and Parent acknowledges that
it has been advised by counsel with respect to this Agreement and the
transactions evidenced by this Agreement.

      9.10 Cumulative Rights. The rights and remedies of Lender under the
Revolving Credit Note, this Agreement and each other Loan Document shall be
cumulative, and the exercise or partial exercise of any such right or remedy
shall not preclude the exercise of any other right or remedy.

      9.11 GOVERNING LAW. THIS AGREEMENT, THE OTHER SECURITY INSTRUMENTS AND THE
REVOLVING CREDIT NOTE ARE CONTRACTS MADE UNDER AND SHALL, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY, AND PERFORMANCE, AND ALL CLAIMS
AND CAUSES OF ACTION RELATED HERETO AND THERETO, WHETHER SOUNDING IN CONTRACT OR
IN TORT, BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE UNITED
STATES OF AMERICA AND THE STATE OF ILLINOIS, AS SUCH LAWS ARE NOW IN EFFECT
(WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS) AND, WITH
RESPECT TO USURY LAWS, IF ANY, APPLICABLE TO LENDER AND TO THE EXTENT ALLOWED
THEREBY, AS SUCH LAWS MAY HEREAFTER BE IN EFFECT WHICH ALLOW A HIGHER MAXIMUM
NONUSURIOUS INTEREST RATE THAN SUCH LAWS NOW ALLOW; PROVIDED, THAT IF ANY OF THE
COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN ILLINOIS, THE LAWS OF
SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE
OF LENDER'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF LENDER'S OTHER
REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH
JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF ILLINOIS. IT IS
THE INTENT OF ALL OF THE PARTIES HERETO THAT THE LAWS OF THE STATE OF ILLINOIS
SHALL GOVERN THIS AGREEMENT, THE REVOLVING CREDIT NOTE, AND THE OTHER LOAN
DOCUMENTS, AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

      9.12 Taxes, etc. Any taxes (excluding income taxes) payable or ruled
payable by federal or state authority in respect of the Revolving Credit Note,
this Agreement or the other Loan Documents shall be paid by Borrower, together
with interest and penalties, if any.


                                     77
<PAGE>

      9.13 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, Lender shall not be obligated to extend credit to
Borrower in an amount in violation of any limitation or prohibition provided by
any applicable statute or regulation.

      9.14 Titles of Articles and Sections. All titles or headings to articles
and sections or other divisions of this Agreement or the exhibits hereto are
only for the convenience of the parties and shall not be construed to have any
effect or meaning with respect to the other content of such articles, sections
or other divisions, such other content being controlling as to the agreement
between the parties hereto.

      9.15 Authorized Signatures. Until Lender is notified by Borrower to the
contrary in writing as provided by Section 9.1, the signature upon this
Agreement or any of the other Loan Documents of an individual designated in
Borrower's incumbency resolutions of even date herewith shall bind Borrower and
be deemed to be the act of Borrower affixed pursuant to and in accordance with
resolutions duly adopted by Borrower's Board of Directors.

      9.16 Publicity. Each of Borrower and Parent hereby agrees that, except as
required by law (including by reason of Borrower or Parent being required to
file any report with the SEC), (a) this Agreement and its contents and (b) the
Transactions contemplated by this Agreement, will not be disclosed publicly
without the prior written consent of Lender; provided, that so long as Borrower
or Parent does not (i) employ or cause to be employed the name or logo of Lender
or its affiliates, or (ii) purport to represent Lender or its affiliates in any
capacity, Borrower or Parent may disclose (x) any matters of public record
relating to the Transactions contemplated by this Agreement in the ordinary
course of business to prospective and actual employees, Term Note Debtors, and
purchasers of SBA Guaranteed Notes Receivable in connection with the employment
relationship or the marketing, structuring, documentation, closing, and
servicing of Note Receivable transactions, as applicable, and (y) other matters
relating to the Transactions contemplated by this Agreement in oral
communications with select potential investors in Borrower or Parent. Each of
Borrower and Parent hereby consents to Lender issuing a press release or
publishing a


                                     78
<PAGE>

tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement.

      9.17 Counterparts. This Agreement may be executed in counterparts, and it
shall not be necessary that the signatures of all parties hereto be contained on
any one counterpart hereof; each counterpart shall be deemed an original, but
all of such counterparts together shall constitute one and the same instrument.

      9.18 Entire Agreement. The Revolving Credit Note, the Security Documents,
and this Agreement represent the final agreement between the parties with
respect to the subject matter hereof and may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties.

      9.19 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, BORROWER, PARENT AND LENDER HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE
REVOLVING CREDIT NOTE, OR ANY OF THE LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY AND THE RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. LENDER, BORROWER AND PARENT EACH ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. LENDER,
BORROWER AND PARENT FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS


                                     79
<PAGE>

JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS,
OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN DOCUMENTS, THE REVOLVING CREDIT
NOTE, OR ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LIABILITIES. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.



                                     80
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Restated and
Amended Loan Agreement to be duly executed as of the date first above written.

                                    BORROWER:

                                    BUSINESS LOAN CENTER, INC.,
                                    a Delaware corporation


                                    By:     /s/Jennifer Napier
                                          ---------------------------------
                                          Jennifer Napier
                                          Chief Financial Officer


                                    PARENT:

                                    BLC FINANCIAL SERVICES, INC.,
                                    a Delaware corporation



                                    By:    /s/Robert F. Tannenhauser
                                          ---------------------------------
                                          Robert F. Tannenhauser
                                          President


                                     LENDER:

                                    TRANSAMERICA BUSINESS CREDIT
                                    CORPORATION, a Delaware corporation


                                    By:    /s/Sam V. LoBosco
                                          ---------------------------------
                                          Sam V. LoBosco
                                          Vice President - Credit


                                     81
<PAGE>

                          ACKNOWLEDGMENT OF INSTRUMENTS



STATE OF _______________)
                        )     SS.
COUNTY OF _____________ )


      On __________________________ before me, the undersigned notary public in
and for said state, personally appeared ________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.


      WITNESS my hand and official seal.



Signature __________________________ (Seal)



                                     82
<PAGE>

                          ACKNOWLEDGMENT OF INSTRUMENTS


STATE OF _______________)
                        )     SS.
COUNTY OF _____________ )


      On __________________________ before me, the undersigned notary public in
and for said state, personally appeared ________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.


      WITNESS my hand and official seal.



Signature __________________________ (Seal)



                                     83
<PAGE>

                                 Schedule 1.1(a)

            Net Eligible Non-Guaranteed Notes Receivable

            Upon delivery to Lender of a Schedule of Eligible Notes Receivable,
Lender shall determine, in its sole discretion, which Non-Guaranteed Notes
Receivable, if any, shall be deemed to be "Net Eligible Non-Guaranteed Notes
Receivable" for purposes of determining the amounts to be advanced pursuant to
Section 2.1. In making this determination, Lender shall be generally guided by
the following requirements with respect to each Non-Guaranteed Note Receivable
and its underlying Note Receivable (collectively, in each instance, a "Loan"):

      .A. All conditions precedent to the effectiveness of the SBA guaranty with
respect to the Loan have been met, and either (i) the Loan has been fully
disbursed by Borrower to or for the account of the Term Loan Debtor, or (ii) in
the event the Loan has been made with respect to any Loan that has not been
fully or partially funded, only that portion of such Loan that has actually been
funded and disbursed by Borrower to or for the account of the Term Loan Debtor
shall be eligible under this paragraph A; provided, that at the discretion of
Lender, the disbursement requirements of this paragraph A may be deemed
satisfied on the condition subsequent that the subject disbursements are
actually made to the Term Loan Debtor on the same Business Day as the date of
the advance made by Lender;

      .B. Borrower has perfected its security interests and liens in all
underlying collateral for the Loan required to be obtained as a condition of
obtaining the SBA guaranty with respect thereto;

      .C. No event or condition subsequent that would release the SBA from its
obligations to Borrower with respect to the Loan or any recovery with respect
thereto has occurred, and the SBA has not rejected the Loan or the Note
Receivable Documents in any respect;

      .D. Not later than three (3) Business Days after the issuance of the Loan,
the original SBA 7(a) Loan Notes are in the physical possession of Lender's
Agent and are endorsed by Borrower to Lender in a manner acceptable to Lender;

                                                                 Schedule 1.1(a)


                                     1
<PAGE>

      .E. The Loan conforms to Borrower's written credit and underwriting
guidelines, copies of which have been previously delivered to Lender; provided,
that to the extent the original principal amount of any Non-Guaranteed Note
Receivable exceeds $750,000, such excess shall not constitute any part of the
Net Eligible Non-Guaranteed Notes Receivable;

      .F. The Loan does not exceed fifteen percent (15%) of the aggregate amount
of Non-Guaranteed Notes Receivable; provided, that such Loan will be ineligible
only to the extent of such excess;

      .G. The Loan does not cause the aggregate amount of Non-Guaranteed Notes
Receivable owed by Term Loan Debtors whose business activities fall within a
single industry, as defined by the Standard Industrial Classification then in
effect, to exceed thirty percent (30%) of the aggregate amount of all
Non-Guaranteed Notes Receivable; provided, that if the industry is the
hotel/motel industry (SIC #7011), such percentage shall be increased to
forty-five percent (45%) during the first six months after the Effective Date,
forty percent (40%) during the seventh month after the Effective Date, and
thirty-five percent (35%) during the eighth month after the Effective Date; and
provided further, that in either case such Loan will be ineligible only to the
extent of such excess;

      .H. The Term Loan Debtor is neither the United States of America nor any
subdivision, department, or agency thereof, except to the extent that Borrower
has delivered to Lender all documents necessary to comply with the Federal
Assignment of Claims Act of 1940, as amended from time to time;

      .I. The Term Loan Debtor is not a state or subdivision, department, or
agency thereof, unless Borrower gives prompt notice to Lender of any Notes
Receivable with respect to these entities;

      .J. The Term Loan Debtor is not insolvent or the subject of an insolvency
proceeding or a case commenced under the Bankruptcy Code; provided, that the
failure of a Non-Guaranteed Note Receivable to meet this requirement shall not
preclude its being included in the Defaulted Portion of Net Eligible
Non-Guaranteed Notes Receivable;

                                                                 Schedule 1.1(a)


                                     2
<PAGE>

      .K. No payment of interest and principal, or other amount due under the
Loan is more than sixty (60) days past due; provided, that the failure of a
Non-Guaranteed Note Receivable to meet this requirement (i) shall not preclude
its being included in the Delinquent Portion of Net Eligible Non-Guaranteed
Notes Receivable if no payment of interest, principal, or other amount due
thereunder is more than 120 days past due, and (ii) shall, in any case, not
preclude its being included in the Defaulted Portion of Net Eligible
Non-Guaranteed Notes Receivable;

      .L. The Loan is a valid, legally enforceable obligation of the Term Loan
Debtor and is not subject to any offset or other defense on the part of such
Term Loan Debtor or to any claim on the part of the Term Loan Debtor denying
liability;

      .M. The subject Note Receivable is subject to no lien or security
interest, except for the security interest of Lender;

      .N. The Loan is evidenced by legal documentation in form and substance
satisfactory to Lender; provided, that (i) legal documentation that conforms in
all material respects to forms provided by the SBA shall be presumed to be
satisfactory to Lender, and (ii) any Loan evidenced by legal documentation that
does not satisfy clause (i) above must have been reviewed by Borrower's legal
counsel for legal sufficiency and the perfection of Borrower's liens in any
collateral thereunder, with the written results of such review being
satisfactory to Lender;

      .O. The Loan does not arise out of transactions with an employee, officer,
agent, director, stockholder, or Affiliate of Borrower or any Affiliate of any
thereof;

      .P. With respect to the Non-Guaranteed Note Receivable, Borrower has made
or reaffirmed the warranties and representations set forth in the Loan
Agreement, at the time the most recent Schedule of Eligible Notes Receivable was
provided to Lender;

      .Q. The Loan has not been turned over to the SBA or any other Person for
servicing or collection;

      .R. The Loan and the respective rights of the SBA, Lender, Borrower, and
Lender's Agent with respect thereto are subject to

                                                                 Schedule 1.1(a)


                                     3
<PAGE>

the terms of the Multi-Party Agreement or such other agreement with SBA and
Borrower which Lender, in its sole discretion, deems acceptable; and

      .S. The Loan is determined by Lender, in its business judgment, to
constitute adequate collateral to support the advance requested by Borrower.

            Notwithstanding any other provision of this Schedule or the Loan
Agreement, Lender shall retain the right, in its sole discretion, to revise or
further restrict the criteria for advances, if any, to be made against Net
Eligible Non-Guaranteed Note Receivables and, in the event such criteria are
further restricted for any reason, the restriction shall become effective
immediately for purposes of calculating new advances.

                                                                 Schedule 1.1(a)


                                     4
<PAGE>

                                 Schedule 1.1(b)

            Net Eligible SBA Guaranteed Notes Receivable

            Upon delivery to Lender of a Schedule of Eligible Notes Receivable,
Lender shall determine, in its sole discretion, which SBA Guaranteed Notes
Receivable, if any, shall be deemed to be "Net Eligible SBA Guaranteed Notes
Receivable" for purposes of determining the amounts to be advanced pursuant to
Section 2.1. In making this determination, Lender shall be generally guided by
the following requirements with respect to each SBA Guaranteed Note Receivable
and its underlying Note Receivable (collectively, in each instance, a "Loan"):

      .A. All conditions precedent to the effectiveness of the SBA guaranty with
respect to the Loan have been met, and either (i) the Loan has been fully
disbursed by Borrower to or for the account of the Term Loan Debtor, or (ii) in
the event the Loan has been made with respect to any Loan that has not been
fully or partially funded, only that portion of such Loan that has actually been
funded and disbursed by Borrower to or for the account of the Term Loan Debtor
shall be eligible under this paragraph A; provided, that at the discretion of
Lender, the disbursement requirements of this paragraph A may be deemed
satisfied on the condition subsequent that the subject disbursements are
actually made to the Term Loan Debtor on the same Business Day as the date of
the advance made by Lender;

      .B. Borrower has perfected its security interests and liens in all
underlying collateral for the Loan required to be obtained as a condition of
obtaining the SBA guaranty with respect thereto, but the SBA guaranteed portion
thereof has not yet been sold by Borrower;

      .C. The Loan conforms to all requirements of the SBA applicable to the
initial approval and guaranty of the SBA;

      .D. No event or condition subsequent that would release the SBA from its
obligations to Borrower with respect to the Loan or any recovery with respect
thereto has occurred, and the SBA has not rejected the Loan or the Note
Receivable Documents in any respect;

                                                                 Schedule 1.1(b)


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<PAGE>

      .E. Not later than three (3) Business Days after the issuance of the Loan,
the original SBA 7(a) Loan Notes are in the physical possession of Lender's
Agent and are endorsed by Borrower to Lender in a manner acceptable to Lender;

      .F. The Loan conforms to Borrower's written credit and underwriting
guidelines, copies of which have been previously delivered to Lender; provided,
that to the extent the original principal amount of any Note Receivable exceeds
$1,500,000, such excess shall not constitute any part of the Net Eligible SBA
Guaranteed Notes Receivable;

      .G. The Term Loan Debtor is neither the United States of America nor any
subdivision, department, or agency thereof, except to the extent that Borrower
has delivered to Lender all documents necessary to comply with the Federal
Assignment of Claims Act of 1940, as amended from time to time;

      .H. The Term Loan Debtor is not a state or subdivision, department, or
agency thereof, unless Borrower gives prompt notice to Lender of any Notes
Receivable with respect to these entities;

      .I. The Term Loan Debtor is not insolvent or the subject of an insolvency
proceeding or a case commenced under the Bankruptcy Code;

      .J. The Loan is a valid, legally enforceable obligation of the Term Loan
Debtor and is not subject to any offset or other defense on the part of such
Term Loan Debtor or to any claim on the part of the Term Loan Debtor denying
liability;

      .K. The subject Note Receivable is subject to no lien or security
interest, except for the security interest of Lender;

      .L. The Loan is evidenced by legal documentation in form and substance
satisfactory to Lender; provided, that (i) legal documentation that conforms in
all material respects to forms provided by the SBA shall be presumed to be
satisfactory to Lender, and (ii) any Loan evidenced by legal documentation that
does not satisfy clause (i) above must have been reviewed by Borrower's legal
counsel for legal sufficiency and the perfection

                                                                 Schedule 1.1(b)


                                     2
<PAGE>

of Borrower's liens in any collateral thereunder, with the written results of
such review being satisfactory to Lender;

      .M. The Loan does not arise out of transactions with an employee, officer,
agent, director, stockholder, or Affiliate of Borrower or any Affiliate of any
thereof;

      .N. With respect to the SBA Guaranteed Note Receivable, Borrower has made
or reaffirmed the warranties and representations set forth in the Loan
Agreement, at the time the most recent Schedule of Eligible Notes Receivable was
provided to Lender;

      .O. The Loan has not been turned over to the SBA or any other Person for
servicing or collection;

      .P. The Loan and the respective rights of the SBA, Lender, Borrower, and
Lender's Agent with respect thereto are subject to the terms of the Multi-Party
Agreement or such other agreement with SBA and Borrower which Lender, in its
sole discretion, deems acceptable; and

      .Q. The Loan is determined by Lender, in its business judgment, to
constitute adequate collateral to support the advance requested by Borrower.

            Notwithstanding any other provision of this Schedule or the Loan
Agreement, Lender shall retain the right, in its sole discretion, to revise or
further restrict the criteria for advances, if any, to be made against Net
Eligible SBA Guaranteed Note Receivables and, in the event such criteria are
further restricted for any reason, the restriction shall become effective
immediately for purposes of calculating new advances.

                                                                 Schedule 1.1(b)


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