Filed Pursuant to
                                                                  Rule 424(b)(3)
                                                             File No. 333-106476


                   AMERICAN BUSINESS FINANCIAL SERVICES, INC.

     SUPPLEMENT DATED DECEMBER 12, 2003 TO PROSPECTUS DATED NOVEMBER 7, 2003


         The following information supplements our prospectus dated November 7,
2003 related to the sale of our debt securities which we refer to in this
document as investment notes. You should review this information prior to making
a decision to purchase our investment notes. This supplement should be read in
conjunction with the prospectus dated November 7, 2003.

         The Exchange Offer

         On December 1, 2003, we mailed an Offer to Exchange to holders of up to
$200,000,000 of investment notes issued prior to April 1, 2003 which offers
holders of such notes the ability to exchange for their investment notes in
increments of $1,000 of principal amount (unless waived by us) for:

                  o equal amounts of senior collateralized subordinated notes,
which we refer to as the senior collateralized notes in this document, having
interest rates equal to 10 basis points above the investment notes tendered and
collateral in the form of a senior security interest in certain cash flows from
interest-only strips of our subsidiaries, with an aggregate value of at least
150% of the original principal amount of the senior collateralized notes on the
date of issuance (provided that such collateral coverage may not fall below 100%
of the outstanding principal balance of the notes as determined by us on any
quarterly balance sheet date), and shares of 10% Series A Convertible Preferred
Stock ,which we refer to as Series A preferred stock in this document; or

                  o solely shares of 10% Series A preferred stock.

         You are not eligible to participate in the exchange offer with respect
to investment notes you acquired pursuant to the prospectus dated November 7,
2003 because you purchased your investment notes after April 1, 2003.

Effects of the Exchange Offer on Investment Notes Purchased in this Offering

The investment notes you purchase on this offering will be impacted by the
senior collateralied notes issued in the exchange offer. In the event of our
liquidation, the investment notes you purchase in this offering would be repaid
only if funds remain after the repayment of our senior debt, subsidiary debt (to
the extent of the assets of the subsidiary), and the principal and interest on
the senior collateralized notes to be issued in the exchange offer to the extent
of the collateral for such notes. If this collateral is not sufficient to repay
the senior collateralized notes outstanding in full, the unpaid portion of the
senior collateralized notes will be equal in right of repayment with the
outstanding investment notes, including the investment notes purchased in this
offering.

         In connection with the exchange offer, we propose to issue senior
collateralized notes and Series A preferred stock with the characteristics
described above. The senior collateralized notes issued in the exchange offer
will be secured by a security interest in certain cash flows originating from
assets of our subsidiaries called interest-only strips.

         For each $1,000 of the principal amount of investment notes exchanged
for senior collateralized notes and Series A preferred stock, our total debt is
decreased by $500 and our stockholders' equity is increased by $500.

         In the event of our liquidation, holders of investment notes would be
repaid only if funds remain after the repayment of our senior debt, subsidiary
debt (to the extent of the assets of the subsidiary), and the principal and
interest on the senior collateralized notes to be issued in the exchange offer
to the extent of the collateral for such notes. In addition, in the event of our
liquidation, if the collateral securing the senior collateralized notes is not
sufficient to repay the senior collateralized notes outstanding (including
accrued and unpaid interest) in full, the unpaid portion of the senior
collateralized notes will be equal in right of repayment with the outstanding
investment notes and, therefore, will dilute the amount of assets available, if





any, to repay the principal and interest on the investment notes. The investment
notes and the senior collateralized notes will be senior in right of preference
to the Series A preferred stock to be issued in the exchange.

         The investment notes will continue to be subordinated, or junior in
right of repayment, to our senior debt and debt of our subsidiaries( to the
extent of the assets of our subsidiaries), whether now or hereafter incurred.
See "Description of the Debt Securities Offered and the Indenture - Provisions
Relating to All Securities" in our prospectus dated November 7, 2003 for further
information.

         The following table compares our senior and secured debt obligations
and unsecured subordinated debt obligations at September 30, 2003 to assets
which are available to repay those obligations (in thousands):



                                              Secured and              Unsecured
                                              Senior Debt             Subordinated
                                              Obligations                 Debt                  Total Debt
                                            -----------------       -----------------         ---------------
                                                                                   
Outstanding debt obligations...........      $       109,410  (f)    $       687,585  (f)      $     796,995
                                            =================       =================         ===============
    Assets available to repay debt: (a)
    Cash............................         $             -         $        17,640           $      17,640  (b)
    Loans..............................              123,230  (c)             39,458                 162,688
    Interest-only strips...............                    -                 545,583  (a)(e)         545,583  (a)(d)
    Servicing rights...................                    -                 106,072                 106,072  (d)
                                            -----------------       -----------------         ---------------
    Total assets available.............      $       123,230         $       708,753           $     831,983
                                            =================       =================         ===============


(a)  Security interests under the terms of the $250.0 million credit facility
     entered into subsequent to September 30, 2003 are not included in this
     table. This $250.0 million credit facility will be secured by loans when
     funded under this facility. At December 9, 2003, there was $34.5 million
     advanced under this facility with $36.0 million of loans securing the
     advance. In addition, interest-only strips secure obligations in an amount
     not to exceed 10% of the outstanding principal balance under this facility
     and the obligations due under the fee letter related to this facility.
     Assuming the entire $250.0 million available under this credit facility
     were utilized, the maximum amount secured by the interest-only strips would
     be approximately $60.0 million.

(b)  The amount of cash reflected in this table excludes restricted cash
     balances of $9.6 million at September 30, 2003.

(c)  Reflects the amount of loans specifically pledged as collateral against our
     advances under our credit facilities.

(d)  Reflects the fair value of our interest-only strips and servicing rights at
     September 30, 2003.

(e)  The grant of a lien on the collateral to secure the senior collateralized
     notes offered in the exchange offer is not a direct lien on any
     interest-only strips, but is, rather, a lien on the right to receive
     payments due from ABFS Warehouse Trust 2003-1 which is a special purpose
     entity which holds the majority of, but not all of, the interest-only
     strips directly or indirectly held by us.

(f)  The effects on this table of every $1,000,000 of existing subordinated debt
     that is exchanged in the exchange offer for a combination of $500,000 of
     senior collateralized notes and 500,000 shares of Series A preferred stock
     would be as follows: the column entitled "unsecured subordinated debt"
     would decrease by $1,000,000; the column entitled "senior and secured debt
     obligations" would increase by $500,000. In the event of a liquidation, the
     assets available to repay unsecured subordinated debt would decrease by the
     amount of the collateral for the then outstanding senior collateralized
     notes but not in excess of the principal and interest due on such notes and
     those assets would move from the unsecured subordinated debt column to the
     senior and secured debt obligations column.



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