Filed Pursuant to Rule 424(b)(3)
                                                              File No. 333-87333
- --------------------------------------------------------------------------------
American Business Financial Services, Inc.
Rate Supplement
Investment Notes

Prospectus Supplement Dated September 21, 2000

                   American Business Financial Services, Inc.

- ------------------------------------------------------------------------
      TERM      RATE      ANNUAL YIELD*    RENEWAL RATE   RENEWAL YIELD*
- ------------------------------------------------------------------------
    3-5 mos.    8.00%         8.32%           8.50%            8.87%

   6-11 mos.    9.00%         9.41%           10.10%          10.62%

   12-17 mos.  10.70%        11.29%           11.15%          11.79%

   18-23 mos.  10.35%        10.93%           11.25%          11.90%

   24-29 mos.  10.45%        11.01%           11.35%          12.01%

   30-35 mos.  11.50%        12.18%           11.50%          12.18%

   36-47 mos.  10.85%        11.45%           11.50%          12.18%

   48-59 mos.  11.15%        11.79%           11.50%          12.18%

  60-119 mos.  11.75%        12.46%           12.00%          12.74%

     120 mos.  12.00%        12.74%           12.15%          12.91%

Minimum for Investment Notes $100,000.

American Business Financial Services, Inc. is a NASDAQ listed Company (ABFI).

*The Effective Annual Yield assumes all interest remains invested for 365 days.

American Business Financial Services, Inc. is a publicly traded Company (NASDAQ,
ABFI). An offer can only be made by the Prospectus dated October 15, 1999
delivered in conjunction with this Rate Supplement dated September 21, 2000. See
"Risk Factors" in the Prospectus for a discussion of certain factors which
should be considered in connection with an Investment in the Notes. Interest is
compounded daily based on a 365-day year.

Subordinated Investment Notes represent obligations of the Company and are not
certificates of deposit or insured by the FDIC or any governmental or private
entity. This announcement is neither an offer to sell nor a solicitation of an
offer to buy Subordinated Investment Notes. This offer is made by prospectus
only. The rates are available through October 13, 2000. These rates are
available only to residents of the following states whose investment notes
automatically renew for the same term as the original note: AK, AL, AR, AZ, CA,
CO, CT, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, MA, MD, ME, MI, MN, MO, MS, MT,
NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WI,
WV, WY.

Updated Risks Related to the Offering of Debt Securities.

Since we have historically experienced negative cash flows from our operations
and expect to do so in the foreseeable future, our ability to repay the
investment notes could be impaired.

     We have historically experienced negative cash flow from operations since
1996 primarily because our strategy of selling loans through securitization
requires us to build an inventory of loans over time. During the period we are
building this inventory of loans, we incur costs and expenses. We do not
recognize a gain on the sale of loans until we complete a securitization, which
may not occur until a subsequent period. In addition, our gain on a
securitization results from our retained interests in the securitized loans,
consisting primarily of interest-only strips, which do not generate cash flow
immediately. We expect this negative cash flow from operations to continue in
the foreseeable future. Should we continue to experience negative cash flows
from operations, it could impair our ability to make principal and interest
payments due under the terms of the investor notes. At March 31, 2000, there was
$206.0 million of investment notes which will mature through June 30, 2001.

     We obtain the funds to repay the investment notes at their maturities by
securitizing our loans, selling whole loans and selling additional investment
notes. We may in the future generate cash flows by securitizing or selling
interest-only strips and selling servicing rights generated in past
securitizations. If we are unable in the future to securitize our loans, to sell
whole loans, or to realize cash flows from interest-only strips and servicing
rights generated in past securitizations, our ability to repay the investment
notes could be impaired.


Our estimates of the value of residual interests and servicing rights we retain
when we securitize loans could be inaccurate and could result in reduced profits
and impair our ability to repay the notes.

     We generally retain interest-only strips and servicing rights in the
securitization transactions we complete. We estimate the fair value of the
interest-only strips and servicing rights based upon discount rates established
by management of our company and prepayment and default assumptions. Together,
these two assets represent 61% of our total assets at March 31, 2000. The value
of our interest-only strips and residual strips totaled $259.0 million and the
value of our servicing rights totaled $66.0 million at March 31, 2000. Although
we believe that these amounts represent the fair value of these assets, the
amounts were estimated based on discounting the expected cash flows to be
received in connection with our securitizations using discount rates established
by us, prepayment rates and default rate assumptions. Changes in market interest
rates may impact our discount rate assumptions and our actual prepayment and
default experience may vary materially from these estimates. Even a small
unfavorable change in these assumptions utilized could have a significant
adverse impact on the value of these assets. In the event of an unfavorable
change in these assumptions, the fair value of these assets would be overstated,
requiring an adjustment which would adversely affect our income in the period of
adjustment and impair our ability to repay the notes. We anticipate recording a
write-down of our interest-only strips as a result of a contemplated change in
the discount rate used to value the interest-only strips. The adjustment to the
carrying value of the interest-only strips will be recorded as an expense and we
will have a loss for the fourth quarter of fiscal 2000.

     You may obtain an additional copy of the prospectus, dated October 15,
1999, free of charge from American Business Financial Services, Inc. by calling
(800) 776-4001.

[ABFS LOGO]
BalaPointe Office Centre, 111 Presidential Boulevard, Bala Cynwyd, PA 19004
2255 Glades Road, Suite 311E, Boca Raton, FL 33431
2425 East Camelback Road, Suite 1065, Phoenix, AZ 85016
www.abfsonline.com






                                                Filed Pursuant to Rule 424(b)(3)
                                                              File No. 333-87333
- --------------------------------------------------------------------------------
American Business Financial Services, Inc.
Rate Supplement
Investment Notes

Prospectus Supplement Dated September 21, 2000

                   American Business Financial Services, Inc.

- ------------------------------------------------------------------------
    TERM       RATE     ANNUAL YIELD*    RENEWAL RATE   RENEWAL YIELD*
- ------------------------------------------------------------------------

     3-5 mos.   7.75%         8.05%            8.25%           8.59%

    6-11 mos.   8.75%         9.14%            9.85%          10.35%

   12-17 mos.  10.45%        11.01%           10.90%          11.51%

   18-23 mos.  10.10%        10.62%           11.00%          11.62%

   24-29 mos.  10.20%        10.73%           11.10%          11.73%

   30-35 mos.  11.50%        12.18%           11.50%          12.18%

   36-47 mos.  10.60%        11.18%           11.50%          12.18%

   48-59 mos.  10.90%        11.51%           11.50%          12.18%

  60-119 mos.  11.50%        12.18%           11.75%          12.46%

     120 mos.  11.75%        12.46%           11.90%          12.63%

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

Minimum for Investment Notes $1,000.

Ask about our rates for larger investments. Please call (800) 776-4001 for more
information.

American Business Financial Services, Inc. is a NASDAQ listed Company (ABFI).

*The Effective Annual Yield assumes all interest remains invested for 365 days.

American Business Financial Services, Inc. is a publicly traded Company (NASDAQ,
ABFI). An offer can only be made by the Prospectus dated October 15, 1999
delivered in conjunction with this Rate Supplement dated September 21, 2000. See
"Risk Factors" in the Prospectus for a discussion of certain factors which
should be considered in connection with an Investment in the Notes. Interest is
compounded daily based on a 365-day year.

Subordinated Investment Notes represent obligations of the Company and are not
certificates of deposit or insured by the FDIC or any governmental or private
entity. This announcement is neither an offer to sell nor a solicitation of an
offer to buy Subordinated Investment Notes. This offer is made by prospectus
only. The rates are available through October 13, 2000. These rates are
available only to residents of the following states whose investment notes
automatically renew for the same term as the original note: AK, AL, AR, AZ, CA,
CO, CT, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, MA, MD, ME, MI, MN, MO, MS, MT,
NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WI,
WV, WY.

Updated Risks Related to the Offering of Debt Securities.

Since we have historically experienced negative cash flows from our operations
and expect to do so in the foreseeable future, our ability to repay the
investment notes could be impaired.

     We have historically experienced negative cash flow from operations since
1996 primarily because our strategy of selling loans through securitization
requires us to build an inventory of loans over time. During the period we are
building this inventory of loans, we incur costs and expenses. We do not
recognize a gain on the sale of loans until we complete a securitization, which
may not occur until a subsequent period. In addition, our gain on a
securitization results from our retained interests in the securitized loans,
consisting primarily of interest-only strips, which do not generate cash flow
immediately. We expect this negative cash flow from operations to continue in
the foreseeable future. Should we continue to experience negative cash flows
from operations, it could impair our ability to make principal and interest
payments due under the terms of the investor notes. At March 31, 2000, there was
$206.0 million of investment notes which will mature through June 30, 2001.

     We obtain the funds to repay the investment notes at their maturities by
securitizing our loans, selling whole loans and selling additional investment
notes. We may in the future generate cash flows by securitizing or selling
interest-only strips and selling servicing rights generated in past
securitizations. If we are unable in the future to securitize our loans, to sell
whole loans, or to realize cash flows from interest-only strips and servicing
rights generated in past securitizations, our ability to repay the investment
notes could be impaired.


Our estimates of the value of residual interests and servicing rights we retain
when we securitize loans could be inaccurate and could result in reduced profits
and impair our ability to repay the notes.

     We generally retain interest-only strips and servicing rights in the
securitization transactions we complete. We estimate the fair value of the
interest-only strips and servicing rights based upon discount rates established
by management of our company and prepayment and default assumptions. Together,
these two assets represent 61% of our total assets at March 31, 2000. The value
of our interest-only strips and residual strips totaled $259.0 million and the
value of our servicing rights totaled $66.0 million at March 31, 2000. Although
we believe that these amounts represent the fair value of these assets, the
amounts were estimated based on discounting the expected cash flows to be
received in connection with our securitizations using discount rates established
by us, prepayment rates and default rate assumptions. Changes in market interest
rates may impact our discount rate assumptions and our actual prepayment and
default experience may vary materially from these estimates. Even a small
unfavorable change in these assumptions utilized could have a significant
adverse impact on the value of these assets. In the event of an unfavorable
change in these assumptions, the fair value of these assets would be overstated,
requiring an adjustment which would adversely affect our income in the period of
adjustment and impair our ability to repay the notes. We anticipate recording a
write-down of our interest-only strips as a result of a contemplated change in
the discount rate used to value the interest-only strips. The adjustment to the
carrying value of the interest-only strips will be recorded as an expense and we
will have a loss for the fourth quarter of fiscal 2000.


     You may obtain an additional copy of the prospectus, dated October 15,
1999, free of charge from American Business Financial Services, Inc. by calling
(800) 776-4001.

[ABFS LOGO]
BalaPointe Office Centre, 111 Presidential Boulevard, Bala Cynwyd, PA 19004
2255 Glades Road, Suite 311E, Boca Raton, FL 33431
2425 East Camelback Road, Suite 1065, Phoenix, AZ 85016
www.abfsonline.com