Document:

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                                                                    Exhibit 10.3
                                                               EXECUTION VERSION

                FIRST AMENDMENT TO PLEDGE AND SECURITY AGREEMENT

        This First Amendment (this "AMENDMENT") to the Pledge and Security
Agreement referenced below is entered into as of December 23, 2004, by ABFS
Warehouse Trust 2004-2, a Delaware statutory trust (the "GRANTOR"), ABFS 2003-2,
Inc., a Delaware corporation ("2003-2, INC.") and The Patriot Group, LLC, a
Delaware limited liability company (the "SECURED PARTY").

                                R E C I T A L S:

        WHEREAS, the Grantor and the Secured Party are parties to the Pledge and
Security Agreement, dated as of November 15, 2004 (the "PLEDGE AGREEMENT"),
whereby the Grantor granted the Secured Party a security interest in the
Grantor's 100% ownership interest in the issued and outstanding capital stock of
2003-2, Inc.;

        WHEREAS, simultaneously with the execution of this First Amendment to
Pledge and Security Agreement, the Grantor, certain affiliates of the Grantor
and the Secured Party are entering into an amendment and restatement of the
Repurchase Agreement (such agreement, the "AMENDED AND RESTATED REPURCHASE
AGREEMENT"); and

        WHEREAS, the Grantor and the Secured Party have agreed that 2003-2, Inc.
shall: (i) become a party to the Pledge Agreement for the purpose of making the
covenants contained in paragraph 1(c) below in this Amendment, (ii) agree not to
pledge certain residual certificates described below collectively referred to as
the "2003-2 IO" (except pursuant to the existing pledge in favor of EMC), and
(iii) agree not to incur indebtedness or guarantees other than the existing
obligation to EMC, on the terms and subject to the conditions set forth in this
Amendment.

        NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

        1.      AMENDMENTS TO PLEDGE AGREEMENT

                (a)     2003-2, Inc. is hereby joined as a party to the Pledge
Agreement.

                (b)     SECTION 1 OF THE PLEDGE AGREEMENT. The following defined
term is hereby added to Section 1 of the Pledge Agreement in appropriate
alphabetical order:

                        "2003-2 IO" means, collectively, Certificate Nos. X-1,
                P-1 and R-1, issued by ABFS Mortgage Loan Trust 2003-2.

                (c)     SECTION 7A OF THE PLEDGE AGREEMENT. The following new
Section 7A is added to the Pledge Agreement:

                        SECTION 7A. COVENANTS OF 2003-2, INC. In addition to
                other covenants and agreements set forth herein and in the other
                Financing Documents, 2003-2, Inc. covenants and agrees as
                follows:

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                (a)     The 2003-2 IO shall not be pledged except pursuant to
the existing pledge in favor of EMC Mortgage Corporation.

                (b)     2003-2, Inc. shall not incur indebtedness or guarantees
other than the existing obligation to EMC Mortgage Corporation.

                (c)     2003-2, Inc. and the Grantor shall deliver a payment
direction letter, in form and substance satisfactory to the Secured Party in its
sole discretion, to the paying agent for the related securitization with respect
to all principal, interest, dividends or other distributions to be paid with
respect to the 2003-2 IO and shall not modify such letter without the prior
written consent of the Secured Party.

        2.      DEFINED TERMS. All capitalized terms used herein, unless
otherwise defined herein, have the same meanings provided herein or in the
Pledge Agreement.

        3.      MODIFICATION OF PLEDGE AGREEMENT. This Amendment is limited
precisely as written and shall not be deemed to (a) be a consent to a waiver or
modification of any other term or condition of the Pledge Agreement, the other
Program Documents or any of the documents referred to therein or executed in
connection therewith except as provided in Section 1 hereof or (b) prejudice any
right or rights the Secured Party may now have or may have in the future under
or in connection with the Pledge Agreement, the other Program Documents or any
documents referred to therein or executed in connection therewith.

        4.      CONSTRUCTION. This Amendment is a document executed pursuant to
the Pledge Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered or applied in accordance with the terms and provisions
thereof. Whenever the Pledge Agreement is referred to in any of the Program
Documents, it shall be deemed to mean the Pledge Agreement, as modified by this
Amendment.

        5.      COUNTERPARTS. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement. The
parties may execute facsimile copies of this Amendment and the facsimile
signature of any such party shall be deemed an original and fully binding on
said party.

        6.      GOVERNING LAW. This Amendment shall be governed and construed in
accordance with the applicable terms and provisions of Section 21 (Governing
Law) of the Pledge Agreement, which terms and provisions are incorporated herein
by reference.

        7.      AMENDMENT NOT A NOVATION. Except as hereby amended, no other
term, condition or provision of the Pledge Agreement shall be deemed modified or
amended, and this Amendment shall not be considered a novation.

        8.      SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

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        9.      ACKNOWLEDGMENT AND AGREEMENT. The Grantor and 2003-2, Inc.
hereby acknowledge and agree that the Secured Obligations include the Seller's
obligations to the Buyer under the Amended and Restated Repurchase Agreement.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGES FOLLOW.]

                                        3
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        IN WITNESS WHEREOF, the Grantor, 2003-2, Inc. and the Secured Party have
caused this First Amendment to the Pledge Agreement to be duly executed by their
respective authorized officers as of the day and year first written above.

                                GRANTOR

                                ABFS Warehouse Trust 2004-2

                                By:     WILMINGTON TRUST COMPANY not in its
                                individual capacity but solely as owner trustee
                                of the Grantor

                                By:     /s/ Jeffrey J. Rossi
                                   ---------------------------------------------
                                Name:  Jeffrey J. Rossi
                                Title: Senior Financial Services Officer

                                ABFS 2003-2, INC.

                                By:     /s/ Jeffrey M. Ruben
                                   ---------------------------------------------
                                Name:  Jeffrey M. Ruben
                                Title: Executive Vice President

                                SECURED PARTY

                                THE PATRIOT GROUP, LLC

                                By:     /s/ Jonathan Kane
                                   ---------------------------------------------
                                Name:  Jonathan Kane
                                Title: Senior Vice President

         First Amendment to Pledge Agreement for ABFS 2003-2, Inc. Stock<PAGE>

                                                                    Exhibit 10.4

                                                                       EXECUTION

                 AMENDMENT NO. 1 TO MASTER REPURCHASE AGREEMENT

        AMENDMENT NO. 1 (this "AMENDMENT") to the Amended and Restated Master
Repurchase Agreement referenced below is entered into as of January 14, 2005,
among ABFS Warehouse Trust 2004-2, as Seller (the "Seller"), American Business
Financial Services, Inc. (the "Parent"), ABFS Consolidated Holdings, Inc.
("Holdings"), American Business Credit, Inc. ("ABC"; the Seller, the Parent,
Holdings and ABC, collectively, the "ABFS ENTITIES"), and The Patriot Group, LLC
(the "Buyer").

                                R E C I T A L S:

        WHEREAS, the Seller, the other ABFS Entities and the Buyer are parties
to the Amended and Restated Master Repurchase Agreement dated as of November 15,
2004 and amended and restated as of December 21, 2004 (the "REPURCHASE
AGREEMENT") and

        WHEREAS, the Seller has requested that the Securities Purchase Price be
increased, and the Buyer has agreed to such an increase, on the terms and
subject to the conditions set forth in this Amendment.

        NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

        1.      AMENDMENTS TO REPURCHASE AGREEMENT.

                (a)     SECTION 1 (a) OF THE REPURCHASE AGREEMENT. The following
defined term is hereby added to Section 1(a) of the Repurchase Agreement
following the definition of the term "Additional Collateral":

                "ADDITIONAL SECURITIES PURCHASE PRICE": shall mean $750,000 to
                be paid by the Buyer to the Seller on January 14, 2005.

                (b)     SECTION 1(a) OF THE REPURCHASE AGREEMENT. The defined
term "SECURITIES PURCHASE PRICE" is hereby amended by inserting the phrase "plus
the Additional Securities Purchase Price" immediately after the phrase "Initial
Securities Purchase Price" contained therein.

                (c)     SECTION 2 OF THE REPURCHASE AGREEMENT. Section 2(d) of
the Agreement is hereby amended by renumbering such subsection as Section 2(e),
and the following new subsection is added as Section 2(d):

                (d)     As of January 14, 2005, the Seller has requested, and
the Buyer has agreed to pay to the Seller, the Additional Securities Purchase
Price.

                                        1
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        2.      CONDITION PRECEDENT. As a condition precedent to the
effectiveness of this Amendment, the Buyer shall have received, on or before the
date hereof, an acknowledgement to its letter of even date herewith addressed to
ABFS, duly executed by the Parent and the other parties noted in such letter,
describing the current state of the relationship between the ABFS Entities and
the Buyer concerning the Repurchase Agreement and the Obligations, and
confirming certain understandings between the parties thereto.

        3.      DEFINED TERMS. All capitalized terms used herein, unless
otherwise defined herein, have the same meanings provided herein or in the
Repurchase Agreement.

        4.      MODIFICATION OF REPURCHASE AGREEMENT. This Amendment is limited
precisely as written and shall not be deemed to (a) be a consent to a waiver or
modification of any other term or condition of the Repurchase Agreement, the
other Program Documents or any of the documents referred to therein or executed
in connection therewith or (b) prejudice any right or rights the Buyer may now
have or may have in the future under or in connection with the Repurchase
Agreement, the other Program Documents or any documents referred to therein or
executed in connection therewith.

        5.      CONSTRUCTION. This Amendment is a document executed pursuant to
the Repurchase Agreement and shall (unless otherwise expressly indicated
therein) be construed, administered or applied in accordance with the terms and
provisions thereof. Whenever the Repurchase Agreement is referred to in the
Repurchase Agreement or any of the instruments, agreements or other documents or
papers executed and delivered in connection therewith, it shall be deemed to
mean the Repurchase Agreement, as modified by this Amendment.

        6.      COUNTERPARTS. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement. The
parties may execute facsimile copies of this Amendment and the facsimile
signature of any such party shall be deemed an original and fully binding on
said party.

        7.      GOVERNING LAW. This Amendment shall be governed and construed in
accordance with the applicable terms and provisions of Section 31 (Governing
Law) of the Repurchase Agreement, which terms and provisions are incorporated
herein by reference.

        8.      AMENDMENT NOT A NOVATION. Except as hereby amended, no other
term, condition or provision of the Repurchase Agreement shall be deemed
modified or amended, and this Amendment shall not be considered a novation.

        9.      SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGES FOLLOW.]

                                        2
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        IN WITNESS WHEREOF, the Seller, the Buyer and the other ABFS Entities
parties hereto have caused their names to be signed to this Amendment by their
respective officers thereunto duly authorized as of the date first above written
to signing their acknowledgment of and agreement with the terms hereof.

                                ABFS WAREHOUSE TRUST 2004-2, as Seller

                                By:     Wilmington Trust Company, not in its
                                individual capacity but solely as trustee of
                                ABFS WAREHOUSE TRUST 2004-2

                                By:      /s/ Mary K. Pupillo
                                   ---------------------------------------------

                                Name:      Mary K. Pupillo
                                     -------------------------------------------

                                Title:   Assistant Vice President
                                      ------------------------------------------

                                THE PATRIOT GROUP, LLC, as Buyer

                                By:      /s/ Jonathan T. Kane
                                   ---------------------------------------------

                                Name:      Jonathan T. Kane
                                     -------------------------------------------

                                Title:   Senior Vice President
                                       -----------------------------------------

                                AMERICAN BUSINESS FINANCIAL SERVICE, INC.

                                By:      /s/ Anthony J. Santilli
                                   ---------------------------------------------

                                Name:      Anthony J. Santilli
                                     -------------------------------------------

                                Title:   Chairman, Chief Executive Officer,
                                         President
                                       -----------------------------------------

                                ABFS CONSOLIDATED HOLDINGS, INC.

                                By:      /s/ Jeffrey M. Ruben
                                   ---------------------------------------------

                                Name:      Jeffrey M. Ruben
                                     -------------------------------------------

                                Title:   Executive Vice President
                                       -----------------------------------------

                                AMERICAN BUSINESS CREDIT, INC.

                                By:      /s/ Jeffrey M. Ruben
                                   ---------------------------------------------

                                Name:      Jeffrey M. Ruben
                                     -------------------------------------------

                                Title:   Executive Vice President
                                       -----------------------------------------

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