Addendum to Confidential Private Placement Memorandum







                          BLC FINANCIAL SERVICES, INC.

                   9% Convertible Subordinated Notes Due 2003



                  This  Addendum,  dated  August  19,  1999 to the  Confidential
Private  Placement  Memorandum (this "Addendum") is supplementary to, and should
be read in conjunction  with, the  Confidential  Private  Placement  Memorandum,
dated  February 1, 1999 (the "Offering  Memorandum"),  issued in relation to the
issuance  of 9%  Convertible  Subordinated  Notes Due 2003 (the  "Notes") by BLC
Financial  Services,  Inc. (the  "Company"),  upon the terms and  conditions set
forth in the Offering Memorandum,  as the same may be amended from time to time.
Capitalized  terms used herein shall have the  meanings  ascribed to them in the
Offering Memorandum unless otherwise defined in this Addendum.

                  This  Addendum  modifies,  amends,  revises  and  supplements,
effective as of August 19,  1999,  the  following  terms and  provisions  of the
Offering Memorandum:

Conversion Price

                  The  Conversion  Price,  as defined  and used in the  Offering
Memorandum,  including,  without  limitation,  on the cover page of the Offering
Memorandum  and in the  sections  entitled  "Summary  - The  Offering - Optional
Redemption" and "Description of the Notes - Optional  Conversion",  with respect
to any Notes of a Holder  shall be deemed  to be equal to the  greater  of (i) $
2.75 and (ii) 130% of the  average  of the  Market  Price per share for the five
Business Days  immediately  preceding the date of the  subscription  executed by
such Holder for such Notes as accepted by the Company.

Termination Date of Offering

                  The Offering  will  terminate  on December  31,  1999,  unless
extended by the Company.


Use of Proceeds

                  In addition to the use of proceeds  described  in the sections
entitled "Summary - Use of Proceeds" and "Use of Proceeds",  the Company may pay
to Sidney Yoskowitz,  an amount up to 1% of the gross proceeds to the Company of
the Offering, as compensation for services in connection with the Offering.


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Certain Transactions

                  The  following   disclosure  is  included  under  the  section
entitled "Certain Transactions":


                  "Grant of Certain Warrants

                  The Company has granted to Sidney  Yoskowitz,  as compensation
for services in connection with the Offering, warrants to purchase 50,000 shares
of Common Stock of the Company at an exercise price of $2.75 per share."


                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

                  The  Company's  Annual Report on Form 10-K for the fiscal year
ended June 30, 1998 and  Quarterly  Reports on Form 10-Q for the fiscal  quarter
ended September 30, 1998,  December 31, 1998 and March 31, 1999, copies of which
have been furnished  herewith and have been filed with the Commission  (File No-
18185), are hereby incorporated by reference in the Offering Memorandum.

                  All documents filed by the Company  pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of the Offering Memorandum
and prior to the termination of the Offer contemplated hereby shall be deemed to
be incorporated by reference in the Offering  Memorandum and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference or deemed to be incorporated by reference herein shall
be  deemed  to be  modified  or  superseded  for all  purposes  of the  Offering
Memorandum  to  the  extent  that  a  statement   contained  herein  or  in  any
subsequently  filed  document  which  also  is  incorporated  or  deemed  to  be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded  shall not be deemed,  except as so modified
or superseded, to constitute a part of the Offering Memorandum.

                  The Company will provide without charge to each person to whom
a copy of the Offering  Memorandum has been delivered,  including any beneficial
owner,  on the written or oral request of such person,  a copy of any and all of
the documents  referred to above which have been or may be  incorporated  in the
Offering Memorandum by reference, other than exhibits to such documents,  unless
such exhibits are specifically  incorporated by reference therein.  Requests for
such copies  should be  directed to the  Corporate  Secretary  of BLC  Financial
Services,  Inc. at its  principal  executive  offices,  which are located at 645
Madison Avenue, New York, New York 10022 (telephone number (212) 751-5626).

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                  THE NOTES AND THE COMMON STOCK ISSUABLE UPON THEIR  CONVERSION
OFFERED  HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR APPLICABLE STATE SECURITIES LAWS, NOR HAS THE
UNITED  STATES  SECURITIES  AND  EXCHANGE  COMMISSION  OR ANY  STATE  REGULATORY
AUTHORITY  PASSED UPON THE ACCURACY OR ADEQUACY OF THIS  MEMORANDUM  OR ENDORSED
THE MERITS OF THE OFFERING MADE HEREBY.  ANY  REPRESENTATION  TO THE CONTRARY IS
UNLAWFUL.  THE SECURITIES ARE OFFERED PURSUANT TO EXEMPTIONS PROVIDED BY SECTION
4(2) OF THE SECURITIES ACT,  REGULATION D THEREUNDER,  CERTAIN STATE  SECURITIES
LAWS AND  CERTAIN  RULES  AND  REGULATIONS  PROMULGATED  PURSUANT  THERETO.  THE
SECURITIES MAY NOT BE  TRANSFERRED IN THE ABSENCE OF ANY EFFECTIVE  REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE  STATE  SECURITIES LAWS OR
AN  OPINION OF COUNSEL  ACCEPTABLE  TO THE  COMPANY  AND ITS  COUNSEL  THAT SUCH
REGISTRATION IS NOT REQUIRED.

                  This Addendum does not constitute, and may not be used for the
purposes of, an offer or  solicitation  by anyone in any  jurisdiction  in which
such  offer or  solicitation  is not  authorized  or to any person to whom it is
unlawful  to make such offer or  solicitation,  and no action is being  taken to
permit an offering  of the Notes of the  distributions  of this  Addendum in any
jurisdiction where such action is required.

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

                          BLC FINANCIAL SERVICES, INC.
                               645 Madison Avenue
                            New York, New York 10022
                                 (212) 751-5626





The date of this Addendum is August 19, 1999


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