THIRD AMENDMENT TO LOAN AGREEMENT



                 THIS THIRD AMENDMENT TO LOAN AGREEMENT ("Third  Amendment") is
entered into as of October 1, 1998, by and between BUSINESS LOAN CENTER, INC., a
Delaware  corporation  ("Borrower"),  BLC FINANCIAL  SERVICES,  INC., a Delaware
corporation,   and  TRANSAMERICA   BUSINESS  CREDIT   CORPORATION,   a  Delaware
corporation ("Lender"), with reference to the following facts:


                                    RECITALS

         A. Pursuant to the Loan  Agreement  dated as of March 25, 1998 executed
by  Borrower,  Parent and  Lender,  as amended  by the First  Amendment  to Loan
Agreement dated as of June 24, 1998, and the Second  Amendment to Loan Agreement
dated as of September  __, 1998 (the "Loan  Agreement"),  Lender  agreed to make
certain  financial  accommodations  to or for the benefit of  Borrower  upon the
terms and  conditions set forth therein.  Unless  otherwise  noted in this Third
Amendment,  (i) capitalized terms used herein shall have the meanings attributed
to them in the Loan  Agreement,  (ii)  references  to  Sections  shall  refer to
Sections of the Loan Agreement or Schedules  thereto,  as applicable,  and (iii)
references to Schedules shall refer to Schedules to the Loan Agreement.

         B.  Borrower has  requested,  and Lender has agreed,  to amend  certain
provisions  of the Loan  Agreement,  all on the terms and  conditions  set forth
below.

                  NOW, THEREFORE,  in consideration of the continued performance
by Borrower of its promises and  obligations  under the Loan  Agreement  and the
other Loan Documents, and for other good and valuable consideration, the receipt
and  sufficiency  of which are hereby  acknowledged,  Borrower and Lender hereby
agree as follows:

                                A G R E E M E N T

         1. Incorporation of Loan Agreement and Other Loan Documents.  Except as
expressly  modified under this Third Amendment,  all of the terms and conditions
set forth in the Loan  Agreement and the other Loan  Documents are  incorporated
herein by this  reference,  and  Borrower  hereby  acknowledges,  confirms,  and
ratifies its obligations under the Loan Agreement and the other Loan Documents.

         2.  Amendments to Loan  Agreement and other Loan  Documents.  As of the
date of this Third  Amendment,  the Loan  Agreement and the other Loan Documents



<PAGE>

are hereby amended in the following manner:

                  2.1   Amendments   to   Definitions.    The   definitions   of
"Securitization  Transaction,"  "Subordinated  Debt," and "Termination  Date" in
Section 1.1 of the Loan  Agreement  are amended by deleting  the  existing  text
thereof in their entirety and  substituting  therefor the following  amended and
restated versions thereof:

                           "Securitization   Transaction"  shall  mean  (a)  the
                  accounts  receivable   securitization   transaction   effected
                  pursuant to the Pooling and  Servicing  Agreement  dated as of
                  December 1, 1997 between  Marine  Midland  Bank, as "Trustee,"
                  and  Borrower,  as "Seller" and  "Servicer,"  or (b) any other
                  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 in
                  a manner that generates  aggregate net proceeds to Borrower of
                  not less than $5,000,000 by pooling and transferred  them to a
                  trust that  issues  and sells  certificates  representing  the
                  entire  beneficial  interest  in such  trust.  Lender will not
                  unreasonably withhold its acceptance or approval of a proposed
                  Securitization Transaction.

                           "Subordinated  Debt"  shall mean that  portion of the
                  Indebtedness  that  is  subordinated  in a  manner  reasonably
                  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.

                           "Termination  Date" shall mean the  earliest  of: (a)
                  August 26,  2001  (unless a later date is agreed to in writing
                  by Borrower,  Parent and Lender);  (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.

                  2.2  Amendment  to Add New Defined  Terms.  Section 1.1 of the
Loan Agreement is amended by adding the following new definitions in appropriate
alphabetical order:

                           "Eurodollar  Reserve  Percentage"  shall mean, in the
                  event  that any  portion of the  Revolving  Loans is held by a
                  member  bank of the  Federal  Reserve  System,  a  percentage,
                  determined  by  Lender  to be in  effect  from time to time as


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<PAGE>

                  prescribed by the Federal Reserve Board (or any successor) for
                  determining the maximum  reserve  requirement for member banks
                  of the  Federal  Reserve  System in  respect  of  Eurocurrency
                  liabilities.

                           "Governing   Rate"  shall  mean  that  interest  rate
                  published  daily  in the  "Money  Rates"  section  of The Wall
                  Street  Journal as the "LIBOR" rate being offered for a period
                  of one (1) month plus the Eurodollar  Reserve  Percentage,  if
                  any;  provided,  however,  that if such newspaper ceases to be
                  published or ceases to publish a one-month "LIBOR" rate, then,
                  "Governing   Rate"  shall  mean  such  alternate,   equivalent
                  published  index rate as shall be selected by Lender plus,  if
                  then still applicable,  the Eurodollar Reserve Percentage,  if
                  any. The  Governing  Rate shall be set each month on the first
                  day of such calendar month,  based on the aforesaid index rate
                  as so  published  on the  first  day of  such  calendar  month
                  (unless on such day such rate is not published, in which event
                  the Governing Rate shall be based on the aforesaid  index rate
                  as  published  on the next closest day prior to such first day
                  of such calendar month),  plus the then applicable  Eurodollar
                  Reserve Percentage, if any.

                           "Prior   Year   Annual    Portfolio    Securitization
                  Requirement"  shall mean,  with respect to the 12-month period
                  commencing on March 1, 1999, or any subsequent 12-month period
                  commencing on March 1, the  requirement  that  Borrower  shall
                  have completed one or more Securitization  Transactions within
                  the preceding 12-month period (or, in the case of the 12-month
                  period   commencing  on  March  1,  1999,  within  the  period
                  commencing  on the date of the Third  Amendment  and ending on
                  February  28,  1999)  that  generate  aggregate  net  proceeds
                  available  to pay  Indebtedness  of  Borrower of not less than
                  $15,000,000  (provided,  that if the  Maximum  Credit  Line is
                  increased  after  the date of the Third  Amendment,  then such
                  $15,000,000  amount shall  automatically  also increase in the
                  same proportion as such increase in the Maximum Credit Line).

                           "Third  Amendment"  shall mean the Third Amendment to
                  Loan  Agreement  dated as of October 1,  1998,  amending  this
                  Agreement.

                  2.3 Amendment to Maximum Commitment. Section 2.1(b)(ii) of the
Loan  Agreement is amended by deleting the existing text thereof in its entirety


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<PAGE>

and substituting therefor the following amended and restated version thereof:

                           (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) up to eighty percent (80%) of the
                  Current   Portion  of  Net   Eligible   Non-Guaranteed   Notes
                  Receivable (provided, that Lender, in its sole discretion, may
                  increase such percentage to up to eighty-five  percent (85%)),
                  plus (y) up to fifty percent (50%) of the  Delinquent  Portion
                  of Net Eligible  Non-Guaranteed Notes Receivable,  plus (z) 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,
                  and provided that the maximum amount of the Defaulted  Portion
                  of Net Eligible  Non-Guaranteed  Notes  Receivable that may be
                  used for purposes of the borrowing availability calculation in
                  this  Section  2.1(b)(ii)  shall be subject to any  applicable
                  limitation set forth on Schedule 2.1(b)(ii)),  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;  provided,  that  during the period from the date of
                  the Third  Amendment to this  Agreement  through  February 28,
                  1999, the percentage in clause (x) above shall be increased to
                  eighty-five  percent  (85%);  and provided  further,  that the
                  percentage   in  clause  (x)  above  shall  be   increased  to
                  eighty-five  percent  (85%)  during each  subsequent  12-month
                  period  commencing on March 1 for which Borrower has satisfied
                  the Prior Year Annual Portfolio Securitization Requirement; or

                  2.4  Amendment to Interest  Rate.  Section  2.3(b) of the Loan
Agreement  is amended  by  deleting  the words  "Interest  shall  accrue" at the
beginning  of the  existing  text  thereof and  substituting  therefor the words
"Subject to Section 2.3(e), interest shall accrue".

                  2.5 Further  Amendment  to Interest  Rate.  Section 2.3 of the
Loan  Agreement is amended by adding the following new Section  2.3(e) after the
existing text thereof:

                           (e)  Notwithstanding  Section  2.3(b)  or  any  other
                  provision of this Agreement,  during the period from September
                  1, 1998 through  February 28, 1999,  interest  shall accrue on
                  the  Revolving  Loans at a  floating  rate equal to either (i)


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<PAGE>

                  with  respect  to those  Revolving  Loans  made based upon Net
                  Eligible SBA Guaranteed Notes  Receivable,  the Governing Rate
                  plus two percent  (2.00%) per annum,  and (ii) with respect to
                  those   Revolving   Loans  made   based   upon  Net   Eligible
                  Non-Guaranteed  Notes Receivable,  the Governing Rate plus two
                  and one-half percent (2.50%) per annum; provided,  that if the
                  Defaulted  Portion  of  Net  Eligible   Non-Guaranteed   Notes
                  Receivable,  as reported in the most recent  weekly  Borrowing
                  Base  Report  delivered  prior  to the  end of any  month,  is
                  greater than ten percent  (10%) of  Borrower's  Non-Guaranteed
                  Notes  Receivable   (measured  by  the  respective   aggregate
                  outstanding  principal  amounts),  then with  respect  to that
                  portion of the  Revolving  Loans made based upon the Defaulted
                  Portion  of  Net  Eligible  Non-Guaranteed  Notes  Receivable,
                  interest shall accrue during the following month at a floating
                  rate  equal to the Index  Rate plus one and  one-half  percent
                  (1.50%) per annum,  adjusted by Lender on the same day as each
                  change  in the  Index  Rate;  and  provided  further,  that if
                  Borrower  fails to  satisfy  the Prior Year  Annual  Portfolio
                  Securitization  Requirement for the 12-month period commencing
                  on March 1, 1999,  Lender shall  retroactively  calculate  the
                  amount, if any, by which (x) the amount of interest that would
                  have   accrued   during  such  period  if  interest  had  been
                  calculated  based on the  Index  Rate  under  Section  2.3(b),
                  exceeds (y) the amount of interest  that  accrued  during such
                  period  due to its  calculation  based on the  Governing  Rate
                  pursuant to this Section  2.3(e),  and Borrower  shall pay the
                  amount of any such excess to Lender upon demand.  With respect
                  to the 12-month  period  commencing on March 1, 1999, and each
                  subsequent  12-month period commencing on March 1, if Borrower
                  satisfies  the  Prior  Year  Annual  Portfolio  Securitization
                  Requirement  for such 12-month  period,  then  interest  shall
                  accrue  during such period  pursuant to this  Section  2.3(e),
                  subject  to the same  retroactive  interest  recalculation  if
                  Borrower  fails to  satisfy  the Prior Year  Annual  Portfolio
                  Securitization Requirement for the subsequent 12-month period.

                  2.6  Amendment  to  Prepayment  Fee.  Section  2.6 of the Loan
Agreement is amended by deleting  the existing  text thereof in its entirety and
substituting therefor the following amended and restated version thereof:

                           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


                                      -5-
<PAGE>

                  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 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%) of the
                  August 26, 1998                    Maximum Credit Line

                  August 27, 1998 to                 One Percent (1%) of the
                  August 26, 2000                    Maximum Credit Line

                  August 27, 2000 to                 One-half Percent (0.5%)
                  August 26, 2001                    of the Maximum Credit Line

                  provided,  however,  that (a) if Lender  refuses a request  by
                  Borrower  solely to increase the Maximum Credit Line after the
                  date of the Third  Amendment to any amount not exceeding Fifty
                  Million Dollars ($50,000,000), (b) Borrower notifies Lender in
                  writing,  within  thirty  (30) days of  Borrower's  receipt of
                  notice from Lender of such refusal, 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 time
                  such request is refused or at the actual time of  termination,
                  then the applicable Prepayment Fee provided for above shall be
                  reduced by fifty percent (50%); 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


                                      -6-
<PAGE>

                  termination, then the Prepayment Fee shall be reduced to Fifty
                  Thousand Dollars ($50,000).

                  2.7 Amendment to Collection  of Payments.  Section  2.13(a) of
the Loan  Agreement  is amended by deleting  the  existing  text  thereof in its
entirety and  substituting  therefor the following  amended and restated version
thereof:

                           (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 Lender, in form and substance satisfactory to
                  Lender and Borrower, governing such bank account (the "Blocked
                  Account").  Borrower shall deposit in the Blocked  Account all
                  Items of  Payment.  Borrower  shall  deposit  in the  Servicer
                  Account any and all checks, drafts, cash and other remittances
                  received by Borrower in payment or on account of payment, with
                  respect to any of the Notes Receivable,  and shall transfer to
                  the Blocked  Account  from the  Servicer  Account all Items of
                  Payment  within  one (1)  Business  Day of  receipt of cleared
                  funds; provided,  that until Borrower is otherwise notified by
                  Lender or unless an Default or Event of Default  has  occurred
                  and is continuing,  Borrower may retain or use  collections of
                  Items of Payment for  purposes  permitted  by this  Agreement,
                  provided  that  Borrower  promptly  transfers  to the  Blocked
                  Account  any  amounts   necessary  to  keep  the   outstanding
                  Liabilities  from  exceeding  the Maximum  Commitment  at such
                  time.  The  deposits  made in the  Servicer  Account  shall be
                  deposited  in  precisely  the form  received,  except  for the
                  endorsements   of  Borrower  where  necessary  to  permit  the
                  collection of any such payments,  which endorsements  Borrower
                  hereby agrees to make. Notwithstanding 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;  provided,  that until  Borrower  is
                  otherwise  notified by Lender or unless an Default or Event of
                  Default has occurred and is continuing, Borrower may cause Net
                  Sales  Proceeds  to be  deposited  in  the  Servicer  Account,
                  provided that Borrower transfers to the Blocked Account within
                  one Business Day thereafter  such portion thereof equal to the
                  principal  amount of the sold SBA Guaranteed Note  Receivable.
                  The  depository  holding the Blocked  Account and the Servicer
                  Account shall be instructed to advise Borrower of any deposits


                                      -7-
<PAGE>

                  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;

                  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.

                  2.8 Further  Amendment  to  Collection  of  Payments.  Section
2.13(c) of the Loan  Agreement is amended by deleting the existing  text thereof
in its entirety and  substituting  therefor the  following  amended and restated
version thereof:

                           (c)  Allocation of Payments on Sold and  Participated
                  Notes Receivable. Promptly after becoming available and in any
                  event  within  five (5)  Business  Days  after the end of each
                  month,  or more  frequently as may be reasonably  requested by
                  Lender  (and,  if an  Event of  Default  has  occurred  and is
                  continuing,  such  request  may be made as  often  as  daily),
                  Borrower shall deliver to Lender information  detailing,  with
                  respect to each deposit made to the Servicer  Account pursuant
                  to Section 2.13(a), the specific Note Receivable to which such
                  deposit  relates and (i) the amount,  if any, of such  deposit
                  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 deposit 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 deposit that relates to a SBA Owned Note  Receivable  and
                  that  Borrower  has  determined  is  payable  to SBA (any such
                  amount  described in clauses (i),  (ii),  or (iii) above being
                  the "Allocated Payment Portion"),  and (iv) the amount of such


                                      -8-
<PAGE>

                  deposit that relates to Borrower's retained interest in a Note
                  Receivable  and that  Borrower  has  determined  is payable to
                  Borrower.  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.

                  2.9  Amendment  to Reporting  Obligations.  Section 5.1 of the
Loan  Agreement  is  amended  by adding  after the first  sentence  thereof  the
following new sentence:

                  Notwithstanding   anything  contained  in  this  Section  5.1,
                  Borrower  shall not be  required  to  furnish  to  Lender  any
                  marketing  or  personnel   information  that  is  not  already
                  available to the public generally.

                  2.10  Amendment  to Financial  Covenants.  Section 5.11 of the
Loan  Agreement is amended by deleting the existing text thereof in its entirety
and substituting therefor the following amended and restated version thereof:

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

                           (a) Tangible Net Worth.  Parent shall maintain,  on a
                  consolidated  basis,  Tangible  Net  Worth  of not  less  than
                  $3,500,000 as of the end of each of its fiscal quarters.

                           (b)  EBITDA  Ratio.   Parent  shall  achieve,   on  a
                  consolidated  basis,  as measured as of the end of each of its
                  fiscal   quarters,   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 1.1 to 1.0.

                           (c)  Consolidated  Liabilities  to Tangible Net Worth
                  Ratio.  Parent shall  maintain,  on a  consolidated  basis,  a
                  maximum ratio of (i) the sum of (A) the  Liabilities,  and (B)
                  all other  liabilities  of  Parent or any of its  consolidated
                  subsidiaries to Lender, including those arising under the Loan
                  Agreement  dated  as of May 7,  1998  between  Lender  and BLC
                  Commercial  Capital Corp., to (ii) Tangible Net Worth, each as
                  measured  as of the end of each  fiscal  quarter,  of not more
                  than 6.0 to 1.0.

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<PAGE>

                           (d) Delinquency Percentage. As measured as of the end
                  of  each  month,   Borrower  shall  not  cause  or  allow  the
                  Delinquent  Portion  of  Net  Eligible   Non-Guaranteed  Notes
                  Receivable  to be more than four  percent  (4%) of  Borrower's
                  Non-Guaranteed  Notes  Receivable  (measured by the respective
                  aggregate outstanding principal amounts).  Solely for purposes
                  of  this  Section  5.11(d),  the  respective  calculations  of
                  Borrower's  Delinquent Portion of Net Eligible  Non-Guaranteed
                  Notes   Receivable   and   Borrower's   Non-Guaranteed   Notes
                  Receivable  shall be made without regard to any disposition of
                  Non-Guaranteed Notes Receivable by Borrower.

                           (e) Default Percentage.  As measured as of the end of
                  each  month,  Borrower  shall not cause or allow the amount of
                  the  Defaulted  Portion of Net Eligible  Non-Guaranteed  Notes
                  Receivable to exceed $3,750,000.

                  2.11 Amendment to Affirmative Covenant Regarding Subordination
Agreement.  Section  5.16 of the Loan  Agreement  is  amended  by  deleting  the
existing  text thereof in its entirety and  substituting  therefor the following
amended and restated version thereof:

                           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 reasonably satisfactory to Lender.

                  2.12 Amendments to Negative Covenants. Sections 6.2, 6.4, 6.8,
6.14,  6.15 and 6.16 of the Loan  Agreement are amended by deleting the existing
text thereof in their entirety and substituting  therefor the following  amended
and restated versions thereof:

                           6.2 Loans and  Compensation.  Borrower shall not 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


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                  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,  (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, and (iii) loans made to Parent or other Affiliates
                  of Borrower whose financial  statements are consolidated  with
                  those of Parent,  for the purpose of providing  financing  for
                  capital  expenditures  made by Parent or such other  Affiliate
                  that are permitted pursuant to Section 6.4.

                           6.4 Capital Expenses.  On a consolidated  basis, make
                  capital expenditures (including capitalized leases) during any
                  fiscal  year  of  Parent  which,  in  the  aggregate,   exceed
                  $750,000.  Lender shall not unreasonably  withhold its consent
                  to a  written  request  by  Borrower  or Parent  for  Lender's
                  consent to an increase in such annual dollar limit if Borrower
                  or Parent reasonably  believes that such increase is necessary
                  due to the  expansion  of the business or  operations  of such
                  Person or its consolidated Subsidiaries.

                           6.8 Change of Business. Borrower shall not enter into
                  any  new  business  or  make  any  material  change  in any of
                  Borrower's business objectives, purposes or operations. Parent
                  shall not enter  into any  business  other than that of making
                  commercial loans within the asset-based lending industry.

                           6.14     [Intentionally Omitted.]

                           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 (a)
                  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,  and (b)  completely
                  refinance  the Parent  Debentures  so long as the terms of the
                  refinanced  Subordinated  Debt,  taken as a whole, are no less
                  favorable  to  Borrower or Lender than the terms of the Parent
                  Debentures.  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  reasonably  acceptable  to  Lender.  Conversion  of


                                      -11-
<PAGE>

                  Subordinated  Debt of a Person into an equity interest in such
                  Person pursuant to the exercise of a conversion option held by
                  the holder of such  Subordinated  Debt shall not  constitute a
                  payment or distribution with respect to such Subordinated Debt
                  so long as no cash is paid by such  Person to such  holder and
                  such conversion does not reduce the Tangible Net Worth of such
                  Person.

                           6.16  Affiliates.  Hereafter  create any Affiliate or
                  Subsidiary  or  divest  itself  of  any  material   assets  by
                  transferring    them   to   any   Affiliate   or   Subsidiary.
                  Notwithstanding the foregoing, Lender consents to the creation
                  of (a) a Subsidiary or Subsidiaries to acquire the subordinate
                  tranche of certificates or  participating  interests issued in
                  connection  with  any  Securitization  Transaction,   and  (b)
                  additional   Subsidiaries  engaged  in  the  loan  origination
                  business so long as none of such Subsidiaries  originates SBA-
                  guaranteed loans.  Lender shall not unreasonably  withhold its
                  consent  to a  written  request  by  Borrower  or  Parent  for
                  Lender's  consent to a transaction  by Borrower or Parent that
                  would otherwise  violate this Section 6.16.  Without  limiting
                  the generality of the foregoing, Lender shall not withhold its
                  consent to the  reorganization  of the corporate  structure of
                  Parent and its  Subsidiaries  to merge other loan  origination
                  Subsidiaries  into  Borrower or to make them  Subsidiaries  of
                  Borrower  so  long  as  any  such  reorganization   could  not
                  reasonably be expected to have a Material Adverse Effect.

                  2.13  Amendments  to Event of  Default.  Sections  7.1(b)  and
7.1(q) of the Loan  Agreement  are amended by deleting the existing text thereof
in their entirety and substituting  therefor the following  amended and restated
versions thereof:

                           (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;  provided,  that if such
                  condition is caused solely by the fact that the  percentage in
                  Section 2.1(b)(ii)(x) has been reduced to eighty percent (80%)
                  due to  Borrower's  failure to satisfy  the Prior Year  Annual
                  Portfolio Securitization  Requirement for any 12-month period,
                  then Borrower  shall have 30 days after such notice to correct
                  such condition; or

                           (q) Merger.  Except as permitted under Section 6.16,
                  Borrower or Parent shall merge or consolidate with or acquire
                  the Stock or assets of any Person; or

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                  2.14 Addition of New Schedule  2.1(b)(ii).  The Loan Agreement
is amended by adding in appropriate  numerical order the new Schedule 2.1(b)(ii)
attached as Schedule 2.1(b)(ii) to this Third Amendment.

         3. Conditions to  Effectiveness.  The amendments set forth in Section 2
of this Third  Amendment  are subject to  satisfaction  of each of the following
conditions:

        (a)receipt by Lender of a copy of this Third Amendment, duly executed by
Borrower, Parent, and Lender;

        (b)receipt by Lender of such officer's certificates, board of directors'
resolutions,  or other evidence satisfactory to Lender of each of Borrower's and
Parent's corporate  authority and legal ability to execute,  deliver and perform
this Third Amendment and to consummate the transaction  contemplated  hereunder;
and

        (c)the absence of any Defaults or Events of Default.

         4.  Entire  Agreement.  This Third  Amendment,  together  with the Loan
Agreement  and the other Loan  Documents,  is the entire  agreement  between the
parties hereto with respect to the subject matter hereof.  This Third  Amendment
supersedes  all  prior  and  contemporaneous  oral and  written  agreements  and
discussions  with  respect to the subject  matter  hereof.  Except as  otherwise
expressly  modified  herein,  the Loan Documents  shall remain in full force and
effect.

         5.  Representations  and Warranties.  Borrower hereby confirms that the
representations  and  warranties  contained in the Loan  Agreement were true and
correct in all material  respects when made and, except to the extent (a) that a
particular  representation or warranty by its terms expressly applies only to an
earlier  date,  or (b)  Borrower  has  previously  advised  Lender in writing as
contemplated  under the Loan  Agreement,  are true and  correct in all  material
respects as of the date hereof.  The Loan Agreement shall continue in full force
and effect in accordance with the provisions thereof on the date hereof.

         6.       Miscellaneous.

                  6.1  Counterparts.  This Third  Amendment  may be  executed in
identical  counterpart  copies,  each of which shall be an original,  but all of
which shall constitute one and the same agreement.

                  6.2 Headings. Section headings used herein are for convenience
of reference only, are not part of this Third Amendment, and are not to be taken


                                      -13-
<PAGE>

into consideration in interpreting this Third Amendment.

                  6.3 Recitals.  The recitals set forth at the beginning of this
Third Amendment are true and correct,  and such recitals are  incorporated  into
and are a part of this Third Amendment.

                  6.4 Governing Law. This Third  Amendment shall be governed by,
and construed and enforced in accordance with, the laws of the State of Illinois
applicable to contracts made and performed in such state,  without regard to the
principles thereof regarding conflict of laws.

                  6.5 No Novation. Except as specifically set forth in paragraph
2 of this Third  Amendment,  the execution,  delivery and  effectiveness of this
Third Amendment shall not (a) limit, impair, constitute a waiver of or otherwise
affect  any right,  power or remedy by Lender  under the Loan  Agreement  or any
other  Loan  Document,  (b)  constitute  a waiver of any  provision  in the Loan
Agreement or in any of the other Loan Documents,  or (c) alter, modify, amend or
in any way  affect  any of the  terms,  conditions,  obligations,  covenants  or
agreements  contained  in the Loan  Agreement,  all of which  are  ratified  and
affirmed in all respects and shall continue in full force and effect.

                  6.6  Conflict  of  Terms.  In the  event of any  inconsistency
between the  provisions  of this Third  Amendment  and any provision of the Loan
Agreement,  the terms and  provisions of this Third  Amendment  shall govern and
control.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -14-
<PAGE>

          IN WITNESS WHEREOF, this Third Amendment has been duly executed
as of the date first written above.


                                    BORROWER:

                                    BUSINESS LOAN CENTER, INC.,
                                    a Delaware corporation


                                    By:      ______________________________
                                             Jennifer Goldstein
                                             Chief Financial Officer


                                     PARENT:

                                     BLC FINANCIAL SERVICES, INC.,
                                     a Delaware corporation


                                    By:      ______________________________
                                             Robert F. Tannenhauser
                                             President


                                     LENDER:

                                     TRANSAMERICA BUSINESS CREDIT CORPORATION,
                                     a Delaware corporation


                                    By:      ______________________________
                                             Russell L. Bonder
                                             Senior Account Executive



                                      -15-
<PAGE>



                               SCHEDULE 2.1(b)(ii)

                  Availability Limitation re Defaulted Portion
                 of Net Eligible Non-Guaranteed Notes Receivable


                  Solely for purposes of the borrowing availability  calculation
in Section  2.1(b)(ii),  at any time when the Defaulted  Portion of Net Eligible
Non-Guaranteed  Notes  Receivable  is more than ten percent  (10%) of Borrower's
Non-Guaranteed   Notes   Receivable   (measured  by  the  respective   aggregate
outstanding  principal amounts as of the end of each month),  the maximum amount
of the Defaulted Portion of Net Eligible  Non-Guaranteed  Notes Receivable shall
not exceed the applicable limits set forth below:

Date or Period                      Maximum Amount

Prior to December 31, 1998          $2,500,000

As of December 31, 1998             PFQEDP + CFQO% - CFQEDP% + $100,000

As of March 31, 1999                PFQEDP + CFQO% - CFQEDP% + $75,000

As of June 30, 1999                 PFQEDP + CFQO% - CFQEDP% + $50,000

As of September 30, 1999            PFQEDP + CFQO% - CFQEDP% + $25,000

As of the end of each
subsequent fiscal quarter           PFQEDP + CFQO% - CFQEDP%

At all times after The maximum  amount  calculated as of December 31, 1998 other
the end of the most  recently  ended  than a date that is the  fiscal  quarter +
$300,000 end of a fiscal quarter


"PFQEDP"   means  the  amount  of  the   Defaulted   Portion  of  Net   Eligible
Non-Guaranteed Notes Receivable as of the end of the prior fiscal quarter.

"CFQO%" means the amount of the new Net Eligible Non-Guaranteed Notes Receivable
originated by Borrower during the current fiscal quarter, multiplied by 0.025.

"CFQEDP%"   means  the  amount  of  the   Defaulted   Portion  of  Net  Eligible
Non-Guaranteed  Notes  Receivable as of the end of the current  fiscal  quarter,
multiplied  by (a) 0.005 for each fiscal  quarter  during the fiscal year ending
June 30, 1999,  (b) 0.01 for each fiscal  quarter  during the fiscal year ending
June 30,  2000,  or (c) 0.015 for each  fiscal  quarter  during the fiscal  year
ending June 30, 2001.


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