SEARCH CAPITAL GROUP INC, S-3, 1997-01-28

SEARCH CAPITAL GROUP INC
S-3, 1997-01-28
SHORT-TERM BUSINESS CREDIT INSTITUTIONS

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<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON January 28, 1997

REGISTRATION NO. 33-_____________

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM S-3

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

SEARCH CAPITAL GROUP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 41-1356819
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

<TABLE>
<S> <C> <C>
ELLIS A. REGENBOGEN, ESQ.
EXECUTIVE VICE PRESIDENT AND Copy to:
GENERAL COUNSEL DARYL B. ROBERTSON
700 NORTH PEARL STREET SEARCH CAPITAL GROUP, INC. BRACEWELL & PATTERSON, L.L.P.
SUITE 400 700 NORTH PEARL STREET, SUITE 400 500 NORTH AKARD ST., SUITE 4000
DALLAS, TEXAS 75201 DALLAS, TEXAS 75201 DALLAS, TEXAS 75201
(214) 965-6000 (214) 965-6000 (214) 740-4000
(Address, including zip code and telephone (Name, address, including zip code and
number, including area code, of telephone number, including area code,
registrant's principal executive offices) of agent for service)
</TABLE>

Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME FOLLOWING THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=====================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount To Be Offering Price Aggregate Offering Amount of
To Be Registered Registered Per Unit (1) Price (1) Registration Fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share 159,628 (2) $24.00 (3) $3,831,072(3) $1,160.93
957,768 (4) -- (5) --(5) --
159,628 5.125 (6) 818,094(6) 247.91
- ---------------------------------------------------------------------------------------------------------------------
9%/7% Convertible Preferred Stock, 319,256 17.125(7) 5,467,259(7) 1,656.75
$.01 par value per share
- ---------------------------------------------------------------------------------------------------------------------
Warrants expiring March 14, 2001 1,277,030 -- (8) --(8) --
=====================================================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
under Rule 457.
(2) Maximum number of shares issuable under Warrants expiring March 14,
2001.
(3) Pursuant to Rule 457(g), based on the maximum exercise price of
Warrants.
(4) Maximum number of shares issuable upon conversion of 9%/7% Convertible
Preferred Stock.
(5) Pursuant to Rule 457(i), no fee payable due to registration of 9%/7%
Convertible Preferred Stock.
(6) Pursuant to Rule 457(c), based on the average of the bid and asked
price for Common Stock on January 24, 1997.
(7) Pursuant to Rule 457(c), based on the average of the bid and asked
price for 9%/7% Convertible Preferred Stock on January 24, 1997.
(8) Pursuant to Rule 457(g), no fee payable due to registration of
underlying Common Stock.

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
<PAGE> 2
SUBJECT TO COMPLETION, DATED JANUARY 28, 1997

SEARCH CAPITAL GROUP, INC.

1,277,024 SHARES OF COMMON STOCK
319,256 SHARES OF 9%/7% CONVERTIBLE PREFERRED STOCK
1,277,030 WARRANTS EXPIRING MARCH 14, 2001

This Prospectus relates to the offer and sale by certain selling
securityholders ("Selling Securityholders") named herein under "Selling
Securityholders" of up to (i) 159,628 shares of common stock, $.01 par value
per share ("Common Stock"), 319,256 shares of 9%/7% Convertible Preferred
Stock, $.01 par value per share ("Preferred Stock"), and 1,277,030 Warrants to
purchase shares of Common Stock expiring March 14, 2001 ("Warrants") of Search
Capital Group, Inc. ("Search"), and (ii) a maximum of 957,768 shares of Common
Stock that may be issued upon conversion of such shares of Preferred Stock and
159,628 shares of Common Stock that may be issued upon exercise of such
Warrants. Furthermore, this Prospectus relates to the continuing offer by
Search of up to 159,628 shares of Common Stock issuable upon exercise of the
Warrants. All Warrants and shares of Common Stock and Preferred Stock offered
by this Prospectus are referred to herein as the "Securities."

Search will receive no part of the proceeds of any sales by the
Selling Securityholders. All expenses of registration incurred in connection
with this offering are being borne by Search, but all selling and other
expenses incurred by Selling Securityholders will be borne by the Selling
Securityholders. None of the Securities have been registered prior to the
filing of the Registration Statement of which this Prospectus is a part. The
outstanding Securities were originally issued by Search in private
transactions. See "Selling Securityholders."

The Securities have not been registered for sale by the Selling
Securityholders under the securities laws of any state as of the date of this
Prospectus. Brokers or dealers effecting transactions in the Securities on
behalf of the Selling Securityholders should confirm the registration thereof
under the securities laws of the states in which such transactions occur or the
existence of an exemption from registration.

Search's Common Stock and Preferred Stock are traded in the
over-the-counter market under the symbols "SCGI" and "SCGIP," respectively.
Search has filed an application for listing of trades of the Common Stock,
Preferred Stock and Warrants through the Nasdaq National Market System
("NASDAQ"). The last reported bid and ask prices of the Common Stock and
Preferred Stock in the over-the-counter market on January 24, 1997 were
$5.00 and $5.25 per share of Common Stock and $16.50 and $17.75 per share
of Preferred Stock, respectively. There is no current established trading
market for the Warrants.

SEE "RISK FACTORS" ON PAGE 4 OF THIS PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE SECURITIES.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is ______________, 1997.
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
<PAGE> 4
AVAILABLE INFORMATION

Search is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Search with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549-1004, and at the following Regional Offices of the Commission:
Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and New York Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material may also
be obtained at prescribed rates from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549-1004. In addition, the Commission maintains a World
Wide Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission,
including Search (as of November 1995). The address of such Web site is
http://www.sec.gov.

Search has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus, which
constitutes a part of the Registration Statement, omits certain of the
information set forth in the Registration Statement. Reference is hereby made
to the Registration Statement and to the exhibits thereto for further
information with respect to Search and the Securities. Statements contained
herein concerning the provisions of any documents are necessarily summaries of
such documents, and each such statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
Copies of the Registration Statement and the exhibits thereto are on file at
the offices of the Commission and may be obtained upon payment of the fee
prescribed by the Commission, or may be examined without charge at the public
reference facilities of the Commission described above.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY STATE OR
OTHER JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by Search with the Commission are
incorporated by reference in this Prospectus: (i) Transition Report on Form
10-K for the period ended March 31, 1996, (ii) Quarterly Reports on Form 10-Q
for the quarters ended June 30, 1996 and September 30, 1996, (iii) Current
Reports on Form 8-K dated August 6, 1996, September 27, 1996, November 21, 1996
and November 25, 1996, and (iv) the description of the Common Stock, Preferred
Stock and Warrants contained in Search's registration statements on Form 8-A,
including any amendments or reports filed for the purpose of updating such
information.

All documents subsequently filed by Search pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of this offering will be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of the
filing of such documents. Any statement contained in a document incorporated
by reference will be deemed to be modified or superseded for the purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed incorporated document or in any accompanying prospectus
supplement modifies or supersedes such statement. Any such statement so
modified or superseded will not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.

Search will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the documents incorporated by reference in this
Prospectus, other than exhibits to such documents. Requests should be directed
to Search Capital Group, Inc., 700 North Pearl Street, Suite 400, Dallas, Texas
75201, Attention: Ellis A. Regenbogen, Secretary (telephone: (214) 965-6000).

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<PAGE> 5
THE COMPANY

Search Capital Group, Inc. (together with its subsidiaries, when
applicable, the "Company") is a financial services company specializing in the
purchase and management of used motor vehicle receivables, typically those owed
by consumer obligors who do not qualify for traditional financing. The Company
purchases its receivables either through the purchase of individual receivables
from franchise and independent automobile and light truck dealers ("Dealers")
who originate them in the sale of their vehicles or through bulk purchases of
receivables from Dealers and other finance companies. The Company has also
commenced consumer lending activities.

The automobile finance industry is the second largest consumer finance
market in the United States totaling $353 billion as of December 1995,
according to the Federal Reserve Board. Automobile financing is usually
provided by finance companies affiliated with manufacturers and banks, credit
unions and independent finance companies. The financings are generally
segmented according to the type of car sold (new or used) and the credit
characteristics of the consumer obligor (generally, prime or non-prime).
Non-prime obligors are individuals who, due to either incomplete or imperfect
credit histories, are unable to obtain traditional financing through a bank or
one of the finance companies affiliated with manufacturers. Through its
wholly-owned operating subsidiary, Automobile Credit Acceptance Corp., the
Company specializes in purchasing receivables secured by used cars and light
trucks and owed by non-prime obligors.

The Company commenced purchasing used motor vehicle receivables in
1991. Until 1994, it financed its purchases through (i) a series of public and
private offerings of asset-backed securities issued by its wholly-owned
subsidiaries (the "Fund Subsidiaries") and of the Company's stock and (ii) a
line of credit. In its receivables purchasing activities, the Company
originally placed particular emphasis on the characteristics of the receivables
and the underlying vehicle collateral. The Company's purchase discounts were
based on its assumptions regarding the average collection rates for the
receivables.

In 1994, the Company commenced to experience financial difficulties
primarily due to lower than expected collection rates on its receivables and
lower than expected recoveries on the sale of repossessed vehicles. The
Company caused its Fund Subsidiaries to reorganize their affairs under Chapter
11 bankruptcy proceedings commencing in August 1995. The Company's plan of
reorganization for the Fund Subsidiaries was confirmed in March 1996. Under
the plan of reorganization, approximately $69 million of indebtedness of the
Fund Subsidiaries was converted into approximately 1.5 million shares of Common
Stock, approximately 1.9 million shares of Preferred Stock and Warrants to
purchase 625,000 shares of Common Stock.

Since the beginning of 1996, the Company's management has implemented
a new receivables purchasing program for the Company. The program places more
emphasis on obligors with job and residence stability, higher income and
re-established positive credit histories. The Company expects that such
program will result in lower repossession rates, higher average collections and
less administrative expenses for its receivables. The Company's growth
strategy also includes acquiring portfolios of non-prime used motor vehicle
receivables and other non-prime used motor vehicle finance companies. The
Company is expanding into other consumer finance areas, including personal
property loans and home equity loans. The Company intends to expand its
operations geographically across the U.S. and Puerto Rico and to finance its
operations through lines of credit from banks and finance companies, public and
private offerings of equity and debt securities and securitization of its
receivables.

On November 22, 1996, the Company effected a one-for-eight reverse
stock split of its Common Stock and Preferred Stock. Retroactive adjustments
to numbers of shares of Common Stock and Preferred Stock and stock prices
throughout this Prospectus have been made to reflect the reverse stock split.

The Company's principal office is located at 700 North Pearl Street,
Suite 400, Dallas, Texas 75201. The Company's telephone number is (214)
965-6000.

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<PAGE> 6
RISK FACTORS

An investment in the Securities involves a high degree of risk. A
prospective investor should carefully consider all of the information contained
or incorporated by reference in this Prospectus in determining whether to
acquire any of the Securities and, in particular, the following elements of
risk:

Results of Operations. The Company does not have a history of
profitable operations. Although the Company had net income before dividends of
$1,124,000 for the six months ended September 30, 1996, it had a net loss of
$2,671,000 for the six month transition period ended March 31, 1996 and a net
loss of $1,822,000 after dividends for the six months ended September 30, 1996.
In addition, the Company had net losses of $19,894,000 and $25,950,000 for the
years ended September 30, 1995 and 1994, respectively. The Company's future
profitability will be dependent upon the results of operations from its
receivables purchasing and management business and other businesses. There can
be no assurance that the Company's businesses will be profitable in the future.

Availability of Funding. The purchase of receivables and the making
of consumer loans requires the Company to raise significant amounts of funds
from various sources, including banks, finance companies and other lenders.
There can be no assurance that lenders will provide sufficient credit on terms
the Company will find acceptable. One of the Company's planned financing
sources is securitization of its receivables. There can be no assurance that
the Company's future securitization activities will increase its profitability.
Further, there can be no assurance that funding will be available to the
Company through securitizations or, if available, that such funding will be on
terms acceptable to the Company.

Risks in Motor Vehicle Receivables Purchasing and Consumer Finance
Businesses. The Company faces all of the risks inherent in the motor vehicle
receivables purchasing business and in the consumer finance business. There
can be no assurance that the Company will properly evaluate the receivables
that it purchases or the borrowers to whom it makes consumer loans. There can
be no assurance that the Company will be able to purchase sufficient
receivables and make a sufficient number of consumer loans to profitably employ
its capital and borrowed funds. The Company purchases receivables whose
obligors, and makes loans to consumers who, do not qualify for traditional
financing as a result, among other things, of poor credit history, lack of
steady employment and/or low income. These individuals generally have higher
percentage default rates than individuals with better credit histories. In
addition, the vehicles securing the Company's receivables are subject to
deterioration in value due to the passage of time or usage by the obligor, and
the Company's loans to consumers may be unsecured. The Company has limited
historical information related to the quality of receivables it is purchasing
under its new receivables purchasing program. There can be no assurance that
the Company's efforts to purchase higher credit quality receivables will be
successful or profitable. In addition, the Company has little history in the
consumer loan business. Substantial unexpected delinquencies or charge-offs on
its receivables or loans could have a material adverse effect on the Company's
results of operations. A general economic downturn could adversely affect the
ability of obligors and borrowers to make payments to the Company on its
receivables and loans.

Acquisition Strategy. The Company intends to continue to pursue its
current growth strategy, which includes acquiring portfolios of non-prime used
motor vehicle receivables and other non-prime used motor vehicle finance
companies. There can be no assurance that the Company will be able to make
profitable acquisitions or successfully integrate any businesses that it
acquires into its operations without substantial costs, delays or other
problems. In addition, there can be no assurance that any acquired businesses
will be profitable at the time of their acquisition or will achieve
profitability that justifies the investment therein or that the Company will be
able to realize expected operating and economic efficiencies following such
acquisitions. Acquisitions may involve a number of special risks, including
adverse effects on the Company's reported operating results, devotion of
management's attention, increased burdens on the Company's management resources
and financial controls, dependence on retention and hiring of key personnel,
unanticipated problems or legal liabilities and amortization of acquired
intangible assets, some or all of which could have a material adverse effect on
the Company's results of operations.

Leverage. The Company intends to borrow substantial funds to finance
its operations. As the Company's debt leverage increases, its vulnerability to
adverse general economic conditions and to increased competitive pressures will
also increase.

Increases in Interest Rates. While the automobile receivables
purchased by the Company in most cases bear interest at a fixed rate, often
near the maximum rates permitted by law, the Company will finance its purchases
of a substantial portion of such receivables by incurring indebtedness with
floating interest rates. The Company's interest costs will increase during
periods of rising interest rates. Such increases may decrease the Company's
net interest margins and thereby adversely affect the Company's profitability.

Dealers. The Company plans to expand its receivables purchasing
activities by re-establishing relationships and establishing new relationships
with Dealers. Dealers often already have favorable secondary financing
sources, which may restrict the Company's ability to develop Dealer
relationships and delay the Company's growth. Competitive conditions in the
Company's markets may result in a reduction in the price discounts available
from or fees paid by Dealers and a lack of available receivables, which could
adversely affect the Company's profitability and its growth plans.

-4-
<PAGE> 7
Reliance on Information Processing Systems. The Company's business
depends upon its ability to store, retrieve, process and manage significant
amounts of information. Interruption, impairment of data integrity, loss of
stored data, breakdown or malfunction of the Company's information processing
systems caused by telecommunications failure, conversion difficulties,
undetected data input and transfer errors, unauthorized access, viruses,
natural disasters, electrical power outage or disruption or other events could
have a material adverse effect on the Company's business, financial condition
and results of operations.

Geographic Concentration. Currently, the Company is purchasing
receivables whose obligors are located primarily in Texas and certain
southeastern states. Although the Company expects to expand its operations to
other geographic areas, the Company's performance may be adversely affected by
regional or local economic conditions. The Company may from time to time make
acquisitions in regions outside of its current operating areas. There can be
no assurance that the Company's expansion into new geographic areas will
generate operating profits.

Qualified Personnel. The Company plans to expand its businesses. The
success of this strategy is dependent upon the Company's ability to hire and
retain qualified managers and other personnel.

Key Officer. The Company's future success depends in some measure
upon its Chief Executive Officer who has significant experience in the consumer
finance business. An unexpected loss of services of this officer could have a
material adverse effect upon the Company. The Company does not currently
maintain key person life insurance on the Chief Executive Officer but intends
to seek such coverage.

Competition. The Company has numerous competitors engaged in the
business of buying non-prime motor vehicle receivables and in making consumer
loans. Many of these competitors have significantly greater financial
resources and staff than the Company. Some of these competitors may generally
be able or willing to accept more risk in their activities than the Company.
Competition may reduce the number of suitable receivables offered for sale to
the Company and increase the bargaining power of Dealers with which the Company
seeks to do business. These competitive factors could have a material adverse
effect upon the operations of the Company.

Regulation. Numerous federal and state consumer protection laws
impose requirements upon the origination and collection of consumer
receivables. These federal laws and regulations include, among others, the
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade
Commission Act, the Fair Credit Reporting Act, the Fair Indebtedness Collection
Practices Act, the Magnuson-Moss Warranty Act and the Federal Reserve Board's
Regulation Z. The Company believes that it maintains all licenses and permits
required for its current operations and is in substantial compliance with all
applicable federal, state and local laws. There can be no assurance, however,
that the Company will be able to maintain all requisite licenses and permits.

State laws regulate, among other things, the interest rate chargeable
on, and terms and conditions of, motor vehicle retail installment loans. These
laws also impose restrictions on consumer transactions and require loan
disclosures in addition to those required under federal law. These
requirements impose specific statutory liabilities upon creditors who fail to
comply with their provisions. As a consumer finance company, the Company is
subject to various consumer claims and litigation seeking damages and statutory
penalties based upon, among other theories of liability, usury, wrongful
repossession, fraud and discriminatory treatment of credit applicants.

The Federal Trade Commission ("FTC") has adopted a
holder-in-due-course rule which has the effect of subjecting persons who
finance consumer credit transactions (and certain related lenders and their
assignees) to all claims and defenses which the purchaser could assert against
the seller of the goods and services. Another FTC rule requires that all
sellers of used vehicles prepare, complete and display a "Buyer's Guide" which
explains the warranty coverage (if any) for such vehicles. Failure of the
Dealers to comply with state and federal credit and trade practice laws and
regulations could result in consumers having rights of rescission and other
remedies that could have an adverse effect on the Company.

The failure to comply with legal requirements applicable to its
business could have a material adverse effect on the Company's results of
operations. Further, the adoption of additional, or the revision of existing,
laws and regulations could have a material adverse effect on the Company's
business.

Litigation. The Company and certain of its former officers and
directors are defendants in a case styled Janice and Warren Bowe, et. al. vs.
Search Capital Group, Inc., et. al., Cause No. 1:95CSV649BR, filed in the
Federal District Court for the Southern District of Mississippi. The
plaintiffs, who are former holders of notes issued by three of the Fund
Subsidiaries, allege violations of the securities laws by the defendants and
seek unspecified damages, rescission, punitive damages and other relief. The
plaintiffs also seek establishment of a class of plaintiffs consisting of all
persons who have purchased notes issued by the three Fund Subsidiaries.
While the Company believes the suit is without merit and intends to vigorously
defend itself, a substantial judgment in excess of the amount reserved to cover
the costs associated with the settlement of this matter could adversely affect
the Company.

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<PAGE> 8
Dividends on Preferred Stock. The terms of the Preferred Stock
specify that after March 15, 1997, the Company will continue to pay accrued
dividends entirely in cash unless it is prohibited from paying the dividends in
cash by Delaware law or the terms of any loan agreement of $5,000,000 or more.
If the Company is prevented from paying any dividend entirely in cash, the
terms of the Preferred Stock require the Company to pay the dividend in the
form of a mixture of cash and Common Stock to the extent possible under
Delaware law and any applicable loan agreement or, if necessary, entirely in
Common Stock, provided the average market price per share of the Common Stock
is $4.00 or greater for the 20 trading day period ending five days prior to the
date of payment of the dividend in Common Stock. The Company has entered into
a loan agreement with Hibernia National Bank that has a minimum net worth
covenant. This covenant, and covenants in other loan agreements into which the
Company may enter, may prohibit, directly or indirectly, the payment of cash
dividends on Preferred Stock. In addition, the minimum market price for the
issuance of shares of Common Stock in lieu of cash may not be satisfied. There
can be no assurance that the Company will be able to continue to pay dividends
on Preferred Stock in cash or that it will be able to satisfy the minimum price
condition for issuance of shares of Common Stock as a dividend on Preferred
Stock. Issuance of shares of Common Stock as a dividend on Preferred Stock
will adversely affect the relative voting power and ownership percentages of
the holders of Common Stock and Preferred Stock.

Absence of Developed Public Market for Securities. The Company's
Common Stock and Preferred Stock are currently traded in the over-the-counter
market. Trading volumes in these securities are volatile. No trading market
has developed for the Warrants. No assurance can be given that a trading
market will develop for the Warrants or that a more active and widespread
trading market will develop for the Common Stock and Preferred Stock. There
can be no assurance that purchasers will be able to resell their Securities at
or above the price at which they purchased them or without considerable delay,
if at all. If a more active and widespread market does develop, the prices may
be highly volatile. Although the Company has filed an application for listing
of trades of the Common Stock, Preferred Stock and Warrants through NASDAQ,
there can be no assurance that the listing will be achieved. Further, the
Commission's rules may apply to impose certain risk disclosure requirements and
suitability standards on broker-dealers who effect transactions in low price
stocks. These rules may have a negative impact on trading markets for low
price stocks. Consequently, if the Securities should be traded at low prices,
no assurances can be given that there will develop or continue to be any market
for the Securities. Factors such as those discussed herein may have a
significant effect on the market prices of the Securities.

Lack of Dividends on Common Stock. The Company has not paid dividends
on the Common Stock and does not expect to pay dividends on the Common Stock
for the foreseeable future. Furthermore, the Company may not pay dividends on
the Common Stock while any accrued dividends on the Preferred Stock and other
shares of preferred stock remain unpaid.

Senior Rights of Preferred Stock. Search's Restated Certificate of
Incorporation, as amended (the "Certificate"), authorizes the issuance of
preferred stock with such designations, rights and preferences as may be
determined from time to time by the Board of Directors. Accordingly, the Board
of Directors is empowered, without stockholder approval, to issue shares of
preferred stock that have preferences over the Common Stock with respect to the
payment of dividends, liquidation, conversion, voting or other rights which
could adversely affect the voting power and ownership interests of holders of
Common Stock. The issuance of shares of preferred stock or the issuance of
rights to purchase such shares could have the effect of discouraging, delaying
or preventing a change in control of the Company. There are currently issued
and outstanding 2,456,098 shares of Preferred Stock and 50,000 shares of
Search's 12% Senior Convertible Preferred Stock. These shares have rights that
are superior to the rights of holders of Common Stock with respect to
dividends, liquidation, conversion and voting which could adversely affect the
rights of holders of Common Stock.

SAFE HARBOR STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Prospectus contains certain forward-looking statements, as
defined in the Private Securities Litigation Reform Act of 1995, which may be
identified by the use of forward-looking terminology such as "may," "will,"
"expect," "anticipate," "estimate," "project," "goal," "continue," or
comparable terminology. Such statements involve risks or uncertainties and are
qualified in their entirety by the cautions and risk factors set forth above
under "Risk Factors" and contained in other Company documents filed with the
Securities and Exchange Commission and incorporated herein by reference.

USE OF PROCEEDS

The Company will not receive any of the proceeds from sales of any of
the Securities by the Selling Securityholders. Because of the unpredictable
timing of receipt, the Company has no current plans for use of any proceeds
that it may receive from the exercise of any of the Warrants. The Company,
however, presently expects that any such proceeds will be employed for working
capital purposes.

-6-
<PAGE> 9
DESCRIPTION OF SECURITIES

The following description of the Securities is a summary which does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Certificate.

GENERAL

The Certificate authorizes the issuance of two classes of capital
stock, consisting of 130,000,000 shares of Common Stock, and 60,000,000 shares
of preferred stock, par value $0.01 per share (the "Authorized Preferred
Stock"). The Certificate reserves to Search's Board of Directors the power to
establish the rights and preferences and to designate series of the Authorized
Preferred Stock. In accordance with this power, the Company's Board of
Directors has designated and established (i) a series consisting of 400,000
shares designated as the "12% Senior Convertible Preferred Stock" and (ii) a
series consisting of 30,000,000 shares designated as the "9%/7% Convertible
Preferred Stock."

As of January 20, 1997, there were outstanding 3,131,861 shares of
Common Stock, 2,456,098 shares of Preferred Stock and 50,000 shares of 12%
Senior Convertible Preferred Stock. As of the same date, there are outstanding
various warrants and options to purchase a total of 751,649 shares of Common
Stock. In addition, the Company is obligated to issue 146,381 shares of Common
Stock pursuant to the settlement of certain litigation in April 1996. The
Company has committed to issue warrants and options to purchase an additional
812,500 shares of Common Stock.

American Securities Transfer, Inc., Denver, Colorado, serves as the
transfer agent and registrar for the Common Stock, Preferred Stock and
Warrants.

COMMON STOCK

The shares of Common Stock are equal in all respects. There are no
preemptive rights, conversion rights, redemption privileges or sinking funds
with respect to Common Stock. Dividends on Common Stock may be paid if, as and
when declared by the Board of Directors out of funds legally available for
distributions and subject to the prior rights of holders of the outstanding
Authorized Preferred Stock.

Holders of Common Stock are entitled to one vote for each issued and
outstanding share held of record at each meeting of shareholders. There is no
cumulative voting for the election of directors.

In any liquidation or distribution of assets of the Company, whether
voluntary or involuntary, holders of Common Stock are entitled to receive pro
rata the assets remaining after creditors have been paid in full and holders of
the Company's outstanding Authorized Preferred Stock have received their full
liquidation preferences. All outstanding shares of Common Stock of the Company
are, and the shares of Common Stock into which Preferred Stock may be converted
and for which Warrants may be exercised will be, fully paid and nonassessable.

PREFERRED STOCK

Dividends. Holders of Preferred Stock are entitled to receive, out of
funds legally available therefor, non-cumulative dividends at a per annum rate
of (i) $2.52 per share until March 31, 1999 ("End Date"), and (ii) $1.96 per
share after the End Date. The Company is required to pay in cash the dividends
accruing prior to March 15, 1997 and thereafter to the extent Delaware law or
the terms and conditions of any loan agreement for a loan of $5,000,000 or more
do not limit or prevent the payment by the Company of cash dividends on
Preferred Stock. To the extent that the Company's right to pay cash dividends
is limited or prevented, the Company may pay the dividends in the form of
Common Stock so long as the average closing trading price for a share of
Common Stock is $4.00 or greater during the 20 trading day period ending five
days prior to the payment of such dividend. The dividends are payable on or
about the 15th day of the month following the end of each quarter to holders of
record as of the last day of the calendar quarter. The Company may not make
any dividend or distribution (other than a dividend payable in Common Stock or
other junior capital stock) on, or purchase or redeem, any of its Common Stock
or other capital stock that ranks junior to Preferred Stock unless all accrued
and unpaid dividends on Preferred Stock have been paid or declared and set
aside for payment.

The Company has entered into a loan agreement with Hibernia National
Bank that has a minimum net worth covenant. This covenant, and covenants in
other loan agreements into which the Company may enter, may prohibit, directly
or indirectly, the payment of cash dividends on Preferred Stock. In addition,
the minimum market price for the issuance of shares of Common Stock in lieu of
cash may not be satisfied. There can be no assurance that the Company will be
able to continue to pay dividends on Preferred Stock in cash or that it will be
able to satisfy the minimum price condition for issuance of shares of Common
Stock as a dividend on Preferred Stock.

Conversions. Holders of outstanding shares of Preferred Stock may
elect at any time to convert their shares into shares of Common Stock. The
conversion ratio is two shares of Common Stock for each share of Preferred
Stock. The conversion ratio will be proportionately adjusted upon any stock
dividend on Common Stock, any stock split, reverse stock

-7-
<PAGE> 10
split, stock combination or reclassification of Common Stock or any merger,
consolidation or combination of the Company with any other entity.

Up to 50% of the outstanding shares of Preferred Stock could be
mandatorily converted into shares of Common Stock at the option of the Company,
at a rate of two shares of Common Stock for one share of Preferred Stock, if
shares of Common Stock trade (i) at a price of $34.00 per share or higher on
any 20 trading days in a period of 30 consecutive trading days between March
16, 1998 and March 15, 1999 or (ii) at a price of $28.00 per share or higher on
any 20 trading days in a period of 30 consecutive trading days after March 15,
1999. Finally, on March 15, 2003, all of the outstanding shares of Preferred
Stock will be mandatorily converted into shares of Common Stock. For the
latter mandatory conversion, each share of Preferred Stock will be convertible
into a number of shares of Common Stock equal to the lesser of (y) three or (z)
the result of dividing the liquidation preference per share for Preferred Stock
by the market price of Common Stock as reported at the close of business on
March 15, 2003. For any mandatory conversion, holders of the converted
Preferred Stock would also be entitled to receive any accrued and unpaid
dividends on their converted shares.

Liquidation Rights. If the Company is liquidated, the holders of
Preferred Stock are entitled to be paid $28.00 per share plus all accrued and
unpaid dividends thereon before any distribution or payment is made to the
holders of Common Stock or any other capital stock of the Company ranking
junior to Preferred Stock. If, upon any liquidation of the Company, the
amounts payable with respect to Preferred Stock and any other stock of the
Company ranking on a parity with Preferred Stock cannot be paid in full, the
holders of such stock share ratably in any such distribution of assets in
proportion to the respective full preferential amounts to which they would
otherwise be entitled. After payment of the full preferential amount to which
the holders of Preferred Stock would be entitled upon any liquidation,
dissolution or winding up, they would have no right or claim to any of the
remaining assets of the Company.

Voting Rights. Each share of Preferred Stock has the same voting
attributes and characteristics as do the shares of Common Stock, which is one
vote per share. If the Company defaults in the payment of any four consecutive
quarterly dividends on outstanding Preferred Stock, the holders of outstanding
Preferred Stock would be automatically entitled to an additional vote per share
and given the right to elect immediately at an emergency meeting of
shareholders, which the Company must hold within thirty days after any such
failure, such additional directors as equals two-thirds of the Company's Board
of Directors determined after such election.

The affirmative vote or consent of the holders of at least 66-2/3% of
all outstanding shares of Preferred Stock, voting as a separate class, is
required (i) to amend, alter or repeal any provision of the Certificate of
Designations establishing the Preferred Stock to adversely affect the relative
rights, preferences, qualifications, limitations or restrictions of the
Preferred Stock or (ii) to effect any reclassification of the Preferred Stock.
The affirmative vote or consent of the holders of at least 50% of all
outstanding shares of Preferred Stock, voting as a separate class, is required
to approve (x) any merger of the Company with another company when the
Company's Board members do not constitute a majority of the board of directors
of the surviving company or (y) any sale of more than 50% of the Company's
assets. In addition, Delaware corporation law provides that the vote of the
holders of a majority of the outstanding shares of any series of Authorized
Preferred Stock, voting separately as a class, is required in order to (i)
increase or decrease the par value of such series of shares or (ii) change the
powers, preferences, or special rights of such series of shares so as to affect
them adversely.

Ranking. Preferred Stock ranks on a parity with the 12% Senior
Convertible Preferred Stock and senior to Common Stock as to rights to
dividends and liquidation preferences.

Subsequent Issuances of Preferred Stock. The Company is prohibited
from issuing Authorized Preferred Stock in the future that is pari passu with
Preferred Stock unless at the time of such issuance all dividends due on
Preferred Stock have been paid in full. The Company is also prohibited from
issuing convertible Authorized Preferred Stock which is senior in rights to
Preferred Stock except that such convertible Authorized Preferred Stock may
carry a then-current market interest rate, which may be higher or lower than
that of Preferred Stock. The Company is also prohibited from issuing preferred
or common stock or warrants or any other form of security to any of its
affiliates for consideration that does not equal or exceed the fair market
value of such security, as determined by an independent third party. The
Company may, nevertheless, issue options or warrants to new or existing
directors or management if such options or warrants are approved by the
Compensation Committee. The Company may also issue shares of Common Stock upon
the exercise of outstanding warrants or options but may not amend or modify
such warrants or options without the approval of the Compensation Committee.
If the Company issues any security for consideration less than its fair market
value, the number of shares of Preferred Stock will be immediately and
appropriately adjusted, and the conversion price of Preferred Stock will be
adjusted downward, to take into account the dilution in value of the security
holdings of former creditors of the Fund Subsidiaries caused by such below fair
market issuance of the Company's securities.

Other Rights. Preferred Stock is not subject to redemption by the
Company or at the election of the holders thereof. Preferred Stock does not
have any preemptive or sinking fund rights.

-8-
<PAGE> 11
WARRANTS

The Board of Directors of Search has authorized the issuance of
Warrants to purchase up to 10,000,000 shares of Common Stock. The Warrants are
governed by a Warrant Agreement dated as of March 22, 1996, as amended by First
Amendment dated July 18, 1996 and Second Amendment dated as of November 22,
1996 (collectively, the "Warrant Agreement"), between the Company and American
Securities Transfer, Inc., acting as the Warrant Agent (the "Warrant Agent").
As of January 20, 1997, there were outstanding 2,516,710 Warrants to purchase
an aggregate of 314,588 shares of Common Stock. In addition, Search is
obligated to issue an additional 5,000,000 Warrants to purchase 625,000 shares
of Common Stock pursuant to the reorganization plan of its Fund Subsidiaries.

The following is a summary of the provisions of the Warrants but does
not purport to be a complete description of such provisions. This summary is
qualified in its entirety by reference to the Warrant Agreement and form of
Warrant attached thereto.

Exercise. The holder of a Warrant must pay the exercise price per
Warrant in cash upon any exercise of the Warrant. The exercise price per
Warrant of the Warrants (the "Exercise Price") is initially $2.00 and increases
by $0.25 on March 15 of each successive year as follows: $2.00 from March 15,
1996 to March 14, 1997, $2.25 from March 15, 1997 to March 14, 1998, $2.50 from
March 15, 1998 to March 14, 1999, $2.75 from March 15, 1999 to March 14, 2000,
and $3.00 from March 15, 2000 to the Expiration Time (as herein defined). A
total of eight Warrants is required to purchase one share of Common Stock.
Accordingly, the exercise price per share of Common Stock purchasable under the
Warrants currently is $16.00 and increases by $2.00 on March 15 of each
successive year through 2000.

To exercise the Warrants, the Warrant certificate, properly completed
and accompanied by full payment (by check or money order) for all shares of
Common Stock to be purchased, must be surrendered to the Warrant Agent. At
that time (or upon later clearance of funds if an uncertified check is issued
for payment), the exercising holder will be deemed to be the record holder of
the shares of Common Stock issuable upon such exercise. Upon receipt of the
surrendered Warrant certificate and payment in full, the Warrant Agent will
mail or cause to be mailed, to or upon the written instructions of the
exercising holder, certificates representing the number of shares of Common
Stock so purchased. Fractional shares of Common Stock may not be purchased
under the terms of the Warrants.

Termination; Redemption. The Warrants will expire at 5:00 p.m. New
York time on March 14, 2001 (the "Expiration Time"). Within 90 days following
the Expiration Time, the Company must redeem all Warrants remaining unexercised
at the Expiration Time at a redemption price of $0.25 per Warrant (the
"Redemption Price"). Notice of the redemption must be mailed by the Company
not later than 10 days nor more than 60 days prior to the date of redemption to
each record holder of the Warrants. The notice must specify the place for
surrender of the Warrant certificates. Upon surrender of a Warrant
certificate, the holder will be paid the Redemption Price for the Warrant.
Except for the right to receive the Redemption Price, all rights under the
Warrants expire at the Expiration Time.

Anti-Dilution Provisions. In the event of any Common Stock dividend
on the Common Stock, any stock split or any stock combination, then the number
of shares of Common Stock subject to purchase under each Warrant will be
proportionately adjusted so that the holders of the Warrants after such event
shall be entitled to receive upon exercise the number and kind of shares which
they would have owned or been entitled to receive had such Warrants been
exercised immediately prior to such event. In the event of (i) a
recapitalization or reclassification of Common Stock (other than a change of
par value), (ii) any consolidation or merger of the Company with or into
another person or any merger of another person into the Company (other than a
merger that does not result in a reclassification, conversion, exchange or
cancellation of Common Stock), (iii) a sale or transfer of all or substantially
all of the assets of the Company, or (iv) a compulsory share exchange where the
holders of Common Stock receive other securities, cash or property, no
adjustment in the Exercise Price will be made but appropriate provision will be
made so that each holder of Warrants shall have the right to purchase upon
exercise of each Warrant the cash, securities or property to which such holder
would have been entitled had the Warrants been exercised prior to such
transaction. If the Company issues or sells any shares of Common Stock (other
than pursuant to employee stock options granted in good faith by the Board of
Directors or the exercise of any conversion or purchase rights under any
options, warrants, rights to purchase or convertible securities when the
conversion or exercise price at the time of issuance of the security is at
least equal to the fair market value of the Common Stock) for consideration
that is less than the then current market price of Common Stock, the number of
shares of Common Stock for which the Warrants are exercisable will be adjusted
to equal the product of the number of shares for which the Warrants are
exercisable immediately prior to the issuance or sale times the ratio of the
then current market price of the Common Stock to the per share consideration at
which such additional shares of Common Stock are issued or sold. The foregoing
adjustments will be made successively whenever any event listed above shall
occur. If the Company takes any action with respect to its Common Stock that
has an adverse effect on the rights of the Warrantholders, upon the request of
the holders of more than 50% of the Warrants, the Exercise Price and the number
of shares of Common Stock for which the Warrants are exercisable will be
adjusted in such manner as may be equitable in the circumstances.

Amendments. The Warrant Agent and the Company may amend the Warrant
Agreement to cure ambiguities or correct defects or mistakes or to make changes
that they deem necessary which do not adversely affect the interests of the

-9-
<PAGE> 12
Warrantholders. The written consent of holders of not less than 50% of the
outstanding Warrants are required for any other amendments.

Miscellaneous. The Warrants are not subject to conversion. A
registered owner of a Warrant will not have any rights of a stockholder of the
Company by virtue of holding the Warrants, including, without limitation, any
right to vote, give or withhold consent to any corporate action, receive notice
of meetings of stockholders or receive dividends or subscription rights, prior
to the issuance of Common Stock upon exercise thereof.

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

The following table sets forth the Company's ratio of earnings to
combined fixed charges and preferred stock dividends for the last five fiscal
years or transition periods.

<TABLE>
<CAPTION>
Six Months Fiscal Year Ended(3)
Ended --------------------------------------------------------------------------------------
Sept. 30, 1996(3) Mar. 31, 1996(1) Sept. 30, 1995 Sept. 30, 1994 Sept. 30, 1993(2) Dec. 31, 1992
----------------- ---------------- -------------- -------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to 0.44 (0.84) (0.76) (1.57) 0.91 0.60
Combined Fixed
Charges and Preferred
Stock Dividends
</TABLE>

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

(1) Six month transition period.
(2) Nine month transition period.
(3) In each period, the Company's earnings were inadequate to cover fixed
charges and preferred stock dividends. The dollar amounts of the
coverage deficiencies were $1,822,000, $2,998,000, $20,134,000,
$26,190,000, $391,000 and $846,000 in the periods ended September 30,
1996, March 31, 1996, September 30, 1995, September 30, 1994,
September 30, 1993 and December 31, 1992.

SELLING SECURITYHOLDERS

This Prospectus relates to the offer and sale from time to time (1) by
DACC Liquidation Corp., formerly known as Dealers Alliance Credit Corp.
("DACC"), of up to 159,628 shares of Common Stock, 95,777 shares of Preferred
Stock and 1,277,030 Warrants, as well as a maximum of 287,331 shares of Common
Stock that may be issued upon conversion of the shares of Preferred Stock owned
by DACC and 159,628 shares of Common Stock that may be issued upon the exercise
of the Warrants owned by DACC, (2) by R-H Capital Partners, L.P. ("R-H") of up
to 153,642 shares of Preferred Stock, as well as a maximum of 460,926 shares of
Common Stock that may be issued upon conversion of the shares of Preferred
Stock owned by R-H, and (3) by Kellett Investment Corporation ("Kellett") of up
to 69,837 shares of Preferred Stock, as well as a maximum of 209,511 shares of
Common Stock that may be issued upon conversion of the shares of Preferred
Stock owned by Kellett. Each of these Selling Securityholders acquired its
securities in transactions pursuant to which it obtained the right to have the
offer and sale of its Securities registered under the Securities Act.

The following table provides certain information with respect to the
Selling Securityholders, and the number of shares of Common Stock and Preferred
Stock, and the number of Warrants, owned, offered and to be owned after the
offering by each Selling Securityholder.

-10-
<PAGE> 13
<TABLE>
<CAPTION>
SELLING MAXIMUM NUMBER OF SECURITIES SECURITIES TO BE OWNED
SECURITYHOLDERS SECURITIES OWNED BEFORE OFFERING TO BE SOLD IN THE OFFERING AFTER OFFERING
- --------------- ---------------------------------- --------------------------------- ------------------------------
COMMON PREFERRED COMMON PREFERRED COMMON PREFERRED
STOCK STOCK WARRANTS STOCK STOCK WARRANTS STOCK STOCK WARRANTS
------ --------- -------- ------ --------- -------- ------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DACC Liquidation 606,587(1) 95,777 1,277,300 606,587(1) 95,777 1,277,030 0 0 0
Corp.

Kellett Investment 209,511(2) 69,837 -- 209,511(2) 69,837 -- 0 0 --
Corporation

R-H Capital 460,926(3) 153,642 -- 460,926(3) 153,642 -- 0 0 --
Partners, L.P.
</TABLE>

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

(1) Includes 159,628 shares that may be purchased under the Warrants owned
by DACC and 287,331 shares into which the shares of Preferred Stock
owned by DACC may be converted.

(2) Represents number of shares into which the shares of Preferred Stock
owned by R-H may be converted.

(3) Represents number of shares into which the shares of Preferred Stock
owned by Kellett may be converted.

TRANSACTIONS WITH DACC, R-H AND KELLETT

As of August 2, 1996, the Company acquired substantially all of the
assets of DACC. DACC's assets consisted primarily of used motor vehicle
receivables, repossessed motor vehicles, cash and certain furniture and
equipment.

The Company assumed all balance sheet liabilities of DACC, other than
approximately $4.1 million of subordinated debt held by R-H and Kellett and
certain other claims. These assumed liabilities consisted primarily of
indebtedness owing to senior lenders, accounts payable, accrued expenses, an
office lease expiring in 2002, service and equipment maintenance agreements and
an employment agreement for a DACC employee. As of June 30, 1996, DACC owed
approximately $18 million to its senior lenders and had accounts payable and
accrued expenses of approximately $0.7 million. In addition to assuming the
foregoing liabilities, the Company issued to DACC 159,628 shares of Common
Stock, 1,277,030 Warrants and 95,777 shares of a series of Authorized Preferred
Stock that were automatically converted into 95,777 shares of Preferred Stock
on November 22, 1996. One-half of the securities issued to DACC at closing
were escrowed until May 2, 1997, and the remainder were escrowed until August
3, 1997, to secure certain indemnification obligations of DACC in favor of the
Company.

The Company also purchased from R-H and Kellett the subordinated
indebtedness owing to them by DACC and certain related warrants to purchase
DACC stock. All of the debt and warrants were canceled by the Company as part
of the consideration for the transfer of DACC's assets. The Company issued to
R-H and Kellett 223,479 shares of a series of Authorized Preferred Stock that
were automatically converted into a total of 223,479 shares of Preferred Stock
on November 22,1996. One-fourth of these shares were escrowed until May 2,
1997, and an additional 25% of these shares were escrowed until August 3, 1997,
to secure certain indemnification obligations of the holders in favor of the
Company.

The foregoing transactions with DACC, R-H and Kellett were privately
negotiated, arms-length transactions. Pursuant to shareholders' agreements
entered into by the Company, DACC, R-H and Kellett, the Company is required to
file within six months after the closing, and to use best efforts to cause to
become effective within 90 days thereafter, a registration statement with the
Commission for the offer and sale of the securities issued to them in the DACC
acquisition.

-11-
<PAGE> 14
PLAN OF DISTRIBUTION

The Selling Securityholders may from time to time sell all or a
portion of their Securities in the over-the- counter market or on any national
securities exchange or automated interdealer quotation system on which the
Common Stock, Preferred Stock or Warrants may hereafter be listed or traded, in
negotiated transactions or otherwise, at prices then prevailing or related to
the then current market price or at negotiated prices. The Securities may be
sold directly or through brokers or dealers or in a distribution by one or more
underwriters on a firm commitment or best efforts basis. The methods by which
the Securities may be sold include (i) a block trade (which may involve
crosses) in which the broker or dealer engaged will attempt to sell the
Securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction, (ii) purchases by a broker or dealer
as principal and resales by such broker or dealer for its account pursuant to
this Prospectus, (iii) ordinary brokerage transactions and transactions in
which the broker solicits purchasers or to or through marketmakers, (iv)
transactions in put or call options or other rights (whether exchange-listed or
otherwise) established after the effectiveness of the Registration Statement of
which this Prospectus is a part and (v) privately negotiated transactions. In
addition, any of the Securities that qualify for sale pursuant to Rule 144 may
be sold in transactions complying with such Rule, rather than pursuant to this
Prospectus.

In the case of sales of the Securities effected to or through
broker-dealers, such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Securityholders or the
purchasers of the Securities sold by or through such broker-dealers, or both.
The Company has advised the Selling Securityholders that the anti-manipulative
Rules 10b-6 and 10b-7 under the Exchange Act may apply to their sales in the
market and has informed them of the need for delivery of copies of this
Prospectus. The Company is not aware as of the date of this Prospectus of any
agreements between any of the Selling Stockholders and any broker-dealers with
respect to the sale of the Securities. The Selling Securityholders and any
broker-dealers or agents participating in the distribution of the Securities
may be deemed to be "underwriters" within the meaning of the Securities Act and
any commissions received by any such broker-dealers or agents and profit on any
resale of Securities may be deemed to be underwriting commissions under the
Securities Act. The commissions received by a broker-dealer or agent may be in
excess of customary compensation. The Company will receive no part of the
proceeds from the sale of any of the Securities by the Selling Securityholders.

The Company will pay all costs and expenses incurred in connection
with the registration under the Securities Act of the Securities offered by the
Selling Securityholders, including without limitation all registration and
filing fees, listing fees, printing expenses, fees and disbursements of counsel
and accountants for the Company, up to $30,000 for the reasonable fees and
expenses of DACC and up to $10,000 for the reasonable fees and expenses of
counsel for R-H and Kellett. Each Selling Securityholder will pay all
brokerage fees and commissions, if any, incurred in connection with the sale of
the Securities owned by it. In addition, the Company has agreed to indemnify
the Selling Securityholders, other than the Trust, against certain liabilities,
including liabilities under the Securities Act.

There is no assurance that any of the Selling Securityholders will
sell any or all of the Securities offered by them.

LEGAL MATTERS

The validity of the issuance of the Securities offered hereby will be
passed upon for the Company by Bracewell & Patterson, L.L.P., 500 North Akard
Street, Suite 4000, Dallas, Texas 75201.

EXPERTS

The consolidated financial statements of the Company, as of and for
the six months ended March 31, 1996, and as of and for the fiscal years ended
September 30, 1995 and September 30, 1994, incorporated in this Prospectus by
reference from the Company's Transition Report on Form 10-K for the transition
period ended March 31, 1996 have been audited by BDO Seidman, LLP, independent
public accountants, as stated in their reports, which are incorporated herein
by reference, and have been so incorporated in reliance upon such reports given
upon the authority of that firm as experts in accounting and auditing.

The financial statements of DACC, as of and for the three months ended
March 31, 1996, and as of and for the fiscal years ended December 31, 1995,
December 31, 1994, and December 31, 1993, incorporated in this Prospectus by
reference from the Company's Form 8-K Current Report dated August 6, 1996 have
been audited by BDO Seidman, LLP, independent certified public accountants, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon such reports given upon the authority of
that firm as experts in accounting and auditing.

-12-
<PAGE> 15
================================================================================

No dealer, sales representative or other person has been authorized to
give any information or to make any representations in connection with this
offering other than those contained in or incorporated by reference in this
Prospectus, and if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any of
these securities in any jurisdiction to any person to whom it is unlawful to
make such offer or solicitation in such jurisdiction. Neither the delivery of
this Prospectus nor any sale made hereunder shall at any time imply that the
information contained or incorporated by reference herein is correct as of any
time subsequent to the date hereof.

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

TABLE OF CONTENTS

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

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . 2

Incorporation of Certain Documents by Reference 2

The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995 . . . . . . . . . . . . . 6

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Description of Securities . . . . . . . . . . . . . . . . . . . . . . . 7

Selling Securityholders . . . . . . . . . . . . . . . . . . . . . . . 10

Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 12

Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>

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SEARCH CAPITAL GROUP, INC.

COMMON STOCK
9%/7% CONVERTIBLE PREFERRED STOCK
WARRANTS EXPIRING MARCH 14, 2001

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P R O S P E C T U S

_____________, 1997

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<PAGE> 16
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The expenses to be paid by the registrant in connection with this
offering are estimated as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . . . $ 3,065.59
----------
Blue Sky fees and expenses . . . . . . . . . . . . . . . . (1)
----------
NASDAQ Listing Fees . . . . . . . . . . . . . . . . . . .
----------
Printing expenses . . . . . . . . . . . . . . . . . . . . (1)
----------
Accounting fees and expenses . . . . . . . . . . . . . . . (1)
----------
Legal fees and expenses . . . . . . . . . . . . . . . . . (1)
----------
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . (1)
----------
Total . . . . . . . . . . . . . . . . . . . . . . $ (1)(2)
----------
</TABLE>

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

(1) Estimated amounts
(2) None of the listed total costs and expenses to be paid in
connection with this offering are to be paid by the Selling
Securityholders. Each Selling Securityholder, however, will
pay all brokerage fees and commissions, if any, in connection
with the sale of the Securities offered by such Selling
Securityholder.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Delaware General Corporation Law. Section 102(b)(7) of the Delaware
General Corporation Law provides that a certificate of incorporation may
contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock) of
the Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit.

Section 145 of the Delaware General Corporation Law provides as
follows:

"(a) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.

(b) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.

(c) To the extent that a director, officer, employee or agent of
the corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

II 1
<PAGE> 17
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a) and
(b) of this section. Such determination shall be made (1) by a majority vote
of the directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) if there are no such directors, by
independent legal counsel in a written opinion, or (3) by the stockholders.

(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors deems appropriate.

(f) The indemnification and advancement of expenses provided by or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.

(g) A corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.

(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with respect to
the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.

(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this section.

(j) The indemnification and advancement of expenses provided by,
or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.

(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance expenses
(including attorneys' fees)."

Restated Certificate of Incorporation. Paragraph ELEVENTH of the
Restated Certificate of Incorporation states that the Company shall, to the
fullest extent permitted by Delaware General Corporation Law, indemnify any and
all persons who it would have the power to indemnify under such law from and
against any and all of the expenses, liabilities or other matters referred to
in or covered by such law and, to the extent permitted under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his director or officer capacity and as to action in another
capacity while holding such office. Such indemnification obligation will
continue as to a person who has ceased to be a director, officer, employee or
agent and inure to the benefit of his heirs, executors and administrators.

Paragraph TWELFTH of the Restated Certificate of Incorporation states
that, to the fullest extent permitted by the Delaware General Corporation Law,
a director of registrant will not be liable to registrant or its shareholders
for monetary damages for breach of fiduciary duty as a director.

Bylaws. Article IX of the Company's Bylaws requires the Company to
indemnify any person who was or is a party, or threatened to be made a party to
any suit or proceeding, by reason of the fact that he or she is or was an
authorized representative of the Company for specified liabilities and expenses
if he acted in good faith and in a manner he reasonably

II 2
<PAGE> 18
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, he or she had no reasonable cause
to believe his or her conduct was unlawful. The Board of Directors, by vote of
a majority of those present at any meeting, may elect to exclude such person
from such indemnification. The indemnified liabilities and expenses include,
but are not limited to, legal fees and disbursements and amounts of judgments,
fines or penalties against an amount paid in settlement by the indemnified
party. The Company may advance any reasonable expense incurred by the
indemnified party prior to the final disposition of any claim, action, suit or
proceeding if it receives an undertaking by or on behalf of the recipient to
repay such amount if it is ultimately determined that he is not entitled to
indemnification. These indemnification rights are in addition to any other
indemnification rights to which the person may be entitled under any agreement,
vote of stockholders, the Restated Certificate of Incorporation, or as a matter
of law or otherwise.

The directors and officers of the Company are insured (subject to
certain exceptions and deductions) against liabilities that they may incur in
their capacity as such, including liabilities under the Securities Act, under a
liability policy carried by the Company.

ITEM 16. EXHIBITS

The following documents are included as exhibits to this Registration
Statement and are filed herewith unless otherwise indicated. Exhibits
incorporated by reference are so indicated by parenthetical information.

Exhibit Description

4.1 -- Restated Certificate of Incorporation of Search Capital
Group, Inc. (incorporated by reference to Exhibit 3.1 to
Search Capital Group Inc.'s Transition Report on Form 10-K
for the transition period ended March 31, 1996)

4.2 -- Certificate of Amendment of Certificate of Designation of
9%/7% Convertible Preferred Stock (incorporated by reference
to Exhibit 3.1 to Search Capital Group, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended September 30,
1996 (the "9/30/96 Form 10-Q"))

4.3 -- Certificate of Designation Series B 9%/7% Convertible
Preferred Stock (incorporated by reference to Exhibit 3.2
to the 9/30/96 Form 10-Q)

4.4 -- Certificate of Correction to the Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.3 to
the 9/30/96 Form 10-Q)

4.5 -- Certificate of Amendment of Certificate of Designation of
9%/7% Convertible Preferred Stock (incorporated by reference
to Exhibit 3.4 to the 9/30/96 Form 10-Q)

4.6 -- Certificate of Amendment to Certificate of Designation of
Series B 9%/7% Convertible Preferred Stock (incorporated by
reference to Exhibit 3.5 to the 9/30/96 Form 10-Q)

4.7 -- Certificate of Amendment of Restated Certificate of
Incorporation

4.8 -- Certificate of Elimination of Series B 9%/7% Convertible
Preferred Stock

4.9 -- Warrant Agreement dated as of March 27, 1996 between Search
Capital Group, Inc. and American Securities Transfer, Inc.,
as Warrant Agent (incorporated by reference to Exhibit 4.2
to Search Capital Group, Inc.'s Current Report on Form 8-K
dated March 15, 1996)

4.10 -- First Amendment to Warrant Agreement dated as of July 18,
1996 between Search Capital Group, Inc., American Securities
Transfer, Inc. and Hall Phoenix/Inwood, Ltd.

4.11 -- Second Amendment to Warrant Agreement dated as of November
22, 1996 between Search Capital Group, Inc. and American
Securities Transfer, Inc.

5 -- Opinion of Bracewell & Patterson, L.L.P. as to the legality
of the securities being registered*

12 -- Statement Regarding Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends

II 3
<PAGE> 19
23.1 -- Consent of BDO Seidman, LLP

23.2 -- Consent of Bracewell & Patterson, L.L.P. (included in
Exhibit 5)*

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

* To be filed by amendment.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement.

(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;

Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registration pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

II 4
<PAGE> 20
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on the 28th day of
January, 1997.

SEARCH CAPITAL GROUP, INC.

By: /s/ George C. Evans
---------------------------------------
George C. Evans, Chairman of the Board,
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, George C. Evans,
Robert D. Idzi and Ellis A. Regenbogen, or any of them, with full power to act
alone, his true and lawful attorney-in-fact, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact full
power and authority to do and perform each and every act and thing requisite
and necessary to be done as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact or any of them may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George C. Evans Chairman of the Board, President, January 28, 1997
- ------------------------------------------- Chief Executive Officer and Director
George C. Evans

/s/ Richard F. Bonini Director January 28, 1997
- -------------------------------------------
Richard F. Bonini

/s/ William H. T. Bush Director January 28, 1997
- -------------------------------------------
William H. T. Bush

Director January 28, 1997
- -------------------------------------------
Luther H. Hodges

/s/ Frederick S. Hammer Director January 28, 1997
- -------------------------------------------
Frederick S. Hammer

/s/ James F. Leary Director January 28, 1997
- -------------------------------------------
James F. Leary

/s/ A. Brean Murray Director January 28, 1997
- -------------------------------------------
A. Brean Murray

/s/ Douglas W. Powell Director January 28, 1997
- -------------------------------------------
Douglas W. Powell

/s/ Barry W. Ridings Director January 28, 1997
- -------------------------------------------
Barry W. Ridings

/s/ Robert D. Idzi Senior Executive Vice President, January 28, 1997
- ------------------------------------------- Chief Financial Officer and Treasurer
Robert D. Idzi

/s/ Andrew D. Plagens Vice President, Controller and January 28, 1997
- ------------------------------------------- Chief Accounting Officer
Andrew D. Plagens
</TABLE>

II 5
<PAGE> 21
INDEX OF EXHIBITS

<TABLE>
<CAPTION>
Exhibit Page
- ------- ----
<S> <C> <C>
4.1 Restated Certificate of Incorporation of Search Capital Group, Inc. (incorporated by reference to
Exhibit 3.1 to Search Capital Group Inc.'s Transition Report on Form 10-K for the transition
period ended March 31, 1996)

4.2 Certificate of Amendment of Certificate of Designation of 9%/7% Convertible Preferred Stock
(incorporated by reference to Exhibit 3.1 to Search Capital Group, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996 (the "9/30/96 Form 10-Q"))

4.3 Certificate of Designation Series B 9%/7% Convertible Preferred Stock (incorporated by reference
to Exhibit 3.2 to the 9/30/96 Form 10-Q)

4.4 Certificate of Correction to the Restated Certificate of Incorporation (incorporated by reference
to Exhibit 3.3 to the 9/30/96 Form 10-Q)

4.5 Certificate of Amendment of Certificate of Designation of 9%/7% Convertible Preferred Stock
(incorporated by reference to Exhibit 3.4 to the 9/30/96 Form 10-Q)

4.6 Certificate of Amendment to Certificate of Designation of Series B 9%/7% Convertible Preferred
Stock (incorporated by reference to Exhibit 3.5 to the 9/30/96 Form 10-Q)

4.7 Certificate of Amendment of Restated Certificate of Incorporation

4.8 Certificate of Elimination of Series B 9%/7% Convertible Preferred Stock

4.9 Warrant Agreement dated as of March 27, 1996 between Search Capital Group, Inc. and American
Securities Transfer, Inc., as Warrant Agent (incorporated by reference to Exhibit 4.2 to Search
Capital Group, Inc.'s Current Report on Form 8-K dated March 15, 1996)

4.10 First Amendment to Warrant Agreement dated as of July 18, 1996 between Search Capital Group,
Inc., American Securities Transfer, Inc. and Hall Phoenix/Inwood, Ltd.

4.11 Second Amendment to Warrant Agreement dated as of November 22, 1996 between Search Capital Group,
Inc. and American Securities Transfer, Inc.

5 Opinion of Bracewell & Patterson, L.L.P. as to the legality of the securities being registered*

12 Statement Regarding Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends

23.1 Consent of BDO Seidman, LLP

23.2 Consent of Bracewell & Patterson, L.L.P. (included in Exhibit 5)*
</TABLE>

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

* To be filed by amendment.

<PAGE> 1
EXHIBIT 4.7

CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION

SEARCH CAPITAL GROUP, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY as follows:

1. At meetings of the Board of Directors of the Corporation held on
August 8, 1996 and September 26, 1996, resolutions were duly adopted
setting forth the following amendments to the Corporation's Restated
Certificate of Incorporation, declaring such amendments to be
advisable and calling a meeting of the stockholders of the Corporation
to consider the amendments:

a. The first paragraph of Paragraph FOURTH of the Restated
Certificate of Incorporation is amended to read in its
entirety as follows:

"FOURTH. The aggregate number of shares of all classes of
stock which the Corporation shall have the authority to issue
is One Hundred Ninety Million (190,000,000), of which One
Hundred Thirty Million (130,000,000) shares shall be Common
Stock, of the par value of $.01 per share, and Sixty Million
(60,000,000) shares shall be Preferred Stock, of the par value
of $.01 per share. At the effective time of this amendment to
the Restated Certificate of Incorporation of the Corporation,
each eight (8) issued and outstanding shares of Common Stock
of the Company ("Old Common Stock") shall be combined into one
(1) share of validly issued, fully paid and nonassessable
Common Stock of the Corporation ("New Common Stock"), and each
eight (8) issued and outstanding shares of Preferred Stock of
the Company ("Old Preferred Stock") shall be combined into one
(1) share of validly issued, fully paid and nonassessable
Preferred Stock of the Corporation ("New Preferred Stock"). No
scrip or fractional shares shall be issued by reason of this
amendment. Notwithstanding any contrary term of a Certificate
of Designation for the Preferred Stock, no adjustments in the
conversion rates of the Preferred Stock shall result by reason
of this amendment. Each certificate that represented shares of
Old Common Stock shall thereafter represent the number of
shares of New Common Stock into which the shares of Old Common
Stock represented by such certificate shall be combined and
reclassified; provided, however, that each person holding of
record a stock certificate or certificates that represented
shares of Old Common Stock shall receive, upon surrender of
such certificate or certificates, a new certificate or
certificates evidencing and representing the number of shares
of New Common Stock to which such person is entitled. Each
certificate that represented shares of Old Preferred Stock
shall thereafter represent the number of shares of New
Preferred Stock into which the shares of Old Preferred Stock
represented by such certificates shall be combined and
reclassified; provided, however, that each person holding of
record a stock certificate or certificates that represented
shares of Old Preferred Stock shall
<PAGE> 2
receive, upon surrender of such certificate or certificates, a
new certificate or certificates evidencing and representing
the number of shares of New Preferred Stock to which such
person is entitled."

b. Section 2 of the Certificate of Designations for 12% Senior
Convertible Preferred Stock is mended to read in its entirety
as follows:

"SECTION 2. Number of Shares. The number of shares of 12%
Preferred Stock is 400,000 of the par value of $0.01 per share
with a liquidation preference of $40.00 per share which number
of shares the Board of Directors may increase or decrease but
may not decrease below the number of shares of the series then
outstanding."

c. The first sentence of Section 3 of the Certificate of
Designations for 12% Senior Convertible Preferred Stock is
amended to read in its entirety as follows:

"The holders of 12% Preferred Stock shall be entitled to
receive out of any funds legally available, if, as and when
declared by the Board of Directors, cumulative dividends in
cash at the rate of $4.80 per share per annum payable
quarterly but no more."

d. Paragraph (a) of Section 5 of the Certificate of Designations
for 12% Senior Convertible Preferred Stock is mended to read
in its entirety as follows:

"The 12% Preferred Stock shall not be redeemable at the
option of the Corporation prior to September 30, 1994 (the
"Initial Redemption Date"). The Corporation may at any time
redeem all or any part of the 12% Preferred Stock at the
option of the Corporation if for any ninety (90) day period
commencing steer the Initial Redemption Date the average of
the following prices exceeds $48.00 per share: (i)the average
of the high bid and low asked prices of the Corporation's
Common Stock if the Common Stock is traded over-the-counter,
(ii)the closing trading price for the Common Stock if traded
on NASDAQ, or (iii) the reported closing price for the Common
Stock if traded on any national or regional stock exchange
(the "Triggering Event"). The redemption price will be $40.00
per share plus an amount equal to all accrued and unpaid
dividends on such shares."

e. The first paragraph of Section 6 of the Certificate of
Designations for 12% Senior Convertible Preferred Stock is
mended to read in its entirety as follows:

"SECTION 6. Liquidation Rights. The holders of 12%
Preferred Stock shall, in case of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs (a
"Liquidation") of the Corporation, be entitled to receive in
full out of the net assets of the Corporation before any
amount shall be paid or distributed among the holders of the
Common Stock or any other shares ranking junior to the 12%
Preferred Stock, an amount equal to $40.00 per share plus in
each case an

<PAGE> 3
amount equal to all accrued and unpaid dividends. If upon any
Liquidation of the Corporation, the assets available for
distribution to the holders of 12% Preferred Stock and any
other stock of the Corporation which shall then be outstanding
and which shall be on a parity with the 12% Preferred Stock
upon Liquidation (hereinafter in this paragraph called the
"Total Amount Available") shall be insufficient to pay the
holders of all outstanding shares of 12% Preferred Stock and
all other such parity stock the full amounts (including all
dividends accrued and unpaid) to which they shall be entitled
by reason of such Liquidation of the Corporation, then there
shall be paid to the holders of the 12% Preferred Stock in
connection with such Liquidation of the Corporation, an amount
equal to the product derived by multiplying the Total Amount
Available times a fraction, the numerator of which shall equal
the number of outstanding shares of 12% Preferred Stock
multiplied by $40.00 plus any accrued and unpaid dividends
thereon and a denominator of which shall be the total amount
which would have been distributed by reason of such
Liquidation of the Corporation with respect to the 12%
Preferred Stock and all other stock ranking on a parity with
the 12% Preferred Stock upon Liquidation then outstanding had
the Corporation possessed sufficient assets to pay the full
amount which the holders of all such stock would be entitled
to receive in connection with such Liquidation of the
Corporation."

f. Section 2 of the Certificate of Designation for 9%/7%
Convertible Preferred Stock is amended to read in its entirety
as follows:

"SECTION 2. Number of Shares. The number of shares of
Convertible Preferred Stock is 30,000,000 with the par value
of $0.01 per share and a liquidation preference of $28.00 per
share plus any declared but unpaid dividends, after payment of
all debts of the Company, which number of shares the Board of
Directors may increase or decrease but may not decrease below
the number of shares of the series then outstanding."

g. Section 3 of the Certificate of Designation for 9%/7%
Convertible Preferred Stock is amended to read in its entirety
as follows:

"SECTION 3. Dividends. The holders of the Convertible
Preferred Stock shall be entitled to receive, out of any funds
legally available, non-cumulative dividends at the annual rate
of $2.52 per share (i.e., 9% of $28.00 liquidation preference)
per annum until March 31, 1999 (the "End Date") and thereafter
at the rate of $1.96 per share (i.e., 7% of $28.00 liquidation
preference) per annum from the day following the End Date.

Dividends with respect to those shares of Convertible
Preferred Stock issued pursuant to the Third Amended Joint
Plan of Reorganization (the "Plan") of the Corporation and its
subsidiaries in the Chapter 11 bankruptcy proceedings styled
In re Automobile Credit Finance 1991-III, Inc., Automobile
Credit Finance, Inc., Automobile Credit Partners, Inc.,
Automobile Credit Finance 1992-H, Inc.,

-3-
<PAGE> 4
Automobile Credit Finance III, Inc., Automobile Credit Finance
IV, Inc., Automobile Credit Finance V, Inc., and Automobile
Credit Finance VI, Inc., Case Nos. 395-34981-RGM-11 through
395-34988-SAF-11, U.S. Bankruptcy Court, Northern District of
Texas, Dallas Division (the "Bankruptcy Proceedings"), will
begin to accrue from July 1, 1995. In connection with the
issuance by the Corporation of any shares of Convertible
Preferred Stock pursuant to the Plan, the Corporation will pay
in cash the dividends that accrued on such shares from July 1,
1995 through the effective date of the Plan, which is March
15, 1996 (the "Effective Date"). Thereafter, the initial
quarterly payment of dividends on the shares issued pursuant
to the Plan will be based on the accrual period from the
Effective Date to the end of the first full calendar quarter
following the Effective Date.

The Corporation may not pay dividends on the Convertible
Preferred Stock except in cash until all accrued dividends
have been paid by the Corporation in cash on the Convertible
Preferred Stock for the period beginning with the Effective
Date and ending with the first anniversary of the Effective
Date. After the accrued dividends have been paid in cash by
the Corporation for such period, dividends will continue to be
paid entirely in cash unless the Corporation is prohibited
from paying the dividends entirely in cash by Delaware law
(the state of its incorporation) or by the terms of any loan
agreement of $5,000,000 or more. If the Corporation is
prevented from paying a dividend entirely in cash, it will pay
a dividend in the form of a mixture of cash and common stock
of the Corporation ("Common Stock") to the extent possible
under Delaware law and any applicable loan agreement, or if
necessary, entirely in Common Stock, provided the average
market price per share of the Common Stock is $4.00 or greater
for the 20 trading day period ending five days prior to the
date of payment of the Common Stock dividend. The value of
any shares of Common Stock paid out as a dividend on the
Convertible Preferred Stock shall be based on the average
market price of the Common Stock for the 20 trading day period
ending five days prior to the date of payment of the Common
Stock dividend. For purposes of this Section, the market price
of the Corporation's Common Stock shall be determined by using
the closing sales price as reported by Nasdaq, if the Common
Stock is quoted by Nasdaq, or any national stock exchange on
which the Common Stock is listed for trading (or if such stock
is only traded over-the~counter, the average of the closing
bid and asked prices). If there is no established market for
the Common Stock, the market price shall be the fair market
value of the Common Stock as determined by the good-faith
judgment of the Board of Directors.

If a dividend upon any shares of the Convertible Preferred
Stock, or any other outstanding stock of the Corporation
ranking on a parity with the Convertible Preferred Stock, or
any other outstanding stock of the Corporation ranking on a
parity with the Convertible Preferred Stock as to dividends,
is in arrears, no stock of the Corporation standing on a
parity with the Convertible Preferred Stock as to dividends
may be purchased or otherwise acquired for any

-4-
<PAGE> 5
consideration by the Corporation except pursuant to an
acquisition made pursuant to the terms of one or more offers
to purchase all of the outstanding shares of the Convertible
Preferred Stock and all stock of the Corporation ranking on a
parity with the Convertible Preferred Stock as to dividends
(which offers shall describe such proposed acquisition of all
such parity stock). Unless otherwise declared by the Board of
Directors or required by this Certificate of Designation, no
dividends shall accrue or cumulate for any calendar quarter
(or portion thereof) during which a liquidation, dissolution
or winding up of the Corporation occurs."

h. Section 4 of the Certificate of Designation for 9%/7%
Convertible Preferred Stock is amended to read in its entirety
as follows:

"SECTION 4. Dividend Payment Dates; Accrual Periods.
Except to the extent otherwise provided by Section 3 above,
quarterly dividends on each share of Convertible Preferred
Stock (a)shall accrue from the date of issuance of such share
through the last day of the calendar quarter in which the
share was issued and thereafter from the first day of each
calendar quarter through the last day of such calendar
quarter, and (b) shall be paid on the 15th day of the month
following the end of each calendar quarter to the holder of
record of such share at the close of business on the last day
of the calendar quarter."

i. The first paragraph of Section 6 of the Certificate of
Designation for 9%/7% Convertible Preferred Stock is amended
to read in its entirety as follows:

"SECTION 6. Liquidation Rights. If the Company is
liquidated, the Convertible Preferred Stock will have a
preference as to liquidation proceeds (proceeds from the
disposition of assets less payment of all debts) in the amount
of $28.00 per share plus all accrued and unpaid dividends, if
any, after payment of all debts of the Company. If upon any
liquidation of the Corporation, the assets available for
distribution to the holders of the Convertible Preferred Stock
and any other stock of the Corporation which shall then be
outstanding and which shall be on a parity with the
Convertible Preferred Stock upon liquidation (hereinafter in
this paragraph called the "Total Amount Available") shall be
insufficient to pay the holders of all outstanding shares of
the Convertible Preferred Stock and all other such parity
stock the full amounts (including all dividends accrued and
unpaid) to which they shall be entitled by reason of such
liquidation of the Corporation, then there shall be paid to
the holders of the Convertible Preferred Stock in connection
with such liquidation of the Corporation, an amount equal to
the product derived by multiplying the Total Amount Available
times a fraction, the numerator of which shall equal the
number of outstanding shares of the Convertible Preferred
Stock multiplied by $28.00 plus any accrued and unpaid
dividends thereon and a denominator of which shall be the
total amount which would have been distributed by reason of
such liquidation of the Corporation with respect to the
Convertible Preferred Stock and all other stock ranking on a
parity with the Convertible Preferred Stock upon liquidation
then outstanding had the Corporation possessed

-5-
<PAGE> 6
sufficient assets to pay the full amount which the holders of
all such stock would be entitled to receive in connection with
such liquidation of the Corporation."

j. The third paragraph of Section 9 of the Certificate of
Designation for 9%/7% Convertible Preferred Stock is amended
to read in its entirety as follows:

"Upon the seventh anniversary of the Effective Date, the
number of persons constituting the Board of Directors shall be
reduced by the number of Directors then in office elected
pursuant to this Section 9, the term of office of said
Directors so elected shall end, and holders of the Convertible
Preferred Stock shall be divested of their special class
voting rights in respect of subsequent elections of
Directors."

k. The fifth paragraph of Section 9 of the Certificate of
Designation for 9%/7% Convertible Preferred Stock is amended
to read in its entirety as follows:

"Prior to the seventh anniversary of the Effective Date,
the Corporation will not, without the affirmative vote or
consent of holders of at least 50% of the outstanding shares
of Convertible Preferred Stock, voting as a single class (i)
merge with another company when the members of the Board of
Directors of the Corporation immediately prior to the merger
do not constitute a majority (x) of the members of the Board
of Directors of the Corporation if it survives the merger or
(y) of the board of directors of the surviving company if the
Corporation does not survive the merger, and (ii) sell more
than 50% of the Corporation's assets."

l. Subsection (g) of Section 10 of the Certificate of Designation
for 9%/7% Convertible Preferred Stock is amended to read in
its entirety as follows:

"(g) Mandatory Conversion. The Corporation may, at its
option, call for the mandatory conversion, in whole or in
part, of up to fifty percent (50%) of the issued and
outstanding shares of Convertible Preferred Stock under the
following conditions: (i) the Corporation's Common Stock
trades at a market price of $34.00 per share or higher on each
of any 20 trading days in a period of 30 consecutive trading
days, beginning with the first day following the second
anniversary of the Effective Date and ending on the third
anniversary of the Effective Date, or (ii) the Corporation's
Common Stock trades at a market price of $28.00 per share or
higher on each of any 20 trading days in a period of 30
consecutive trading days, beginning with the first day
following the third anniversary of the Effective Date and
ending on the day immediately preceding the Final Conversion
Date (as defined herein). The trigger prices per share of
$34.00 and $28.00 shall be subject to adjustment by the Board
of Directors if and when, and in appropriate proportion to,
any adjustment to the conversion rate of the Convertible
Preferred Stock is made pursuant to subsection 10(c) hereof.
In the event the Corporation elects to call for the conversion
of a portion of the Convertible Preferred Stock issued and
outstanding pursuant to clause (i) or (ii)

-6-
<PAGE> 7
above, then the Corporation shall select the shares to be
converted to the effect that to the extent practicable each
holder of shares of the Convertible Preferred Stock shall have
a pro rata portion of his or her shares converted.

The Corporation shall cause a notice of the mandatory
conversion pursuant to the immediately preceding paragraph to
be mailed, postage prepaid, to the holders of the Convertible
Preferred Stock at their respective addresses appearing on the
share transfer records of the Corporation. The Board of
Directors may elect to specify an effective date for such
conversion ("Effective Conversion Date"), which date may be no
later than sixty (60) days after the Board meeting or consent
at which the Corporation's election to convert was duly
adopted. If no Effective Conversion Date is specified by the
Board of Directors, the Effective Conversion Date shall be the
date of the initial mailing of the required notice. Such
notice shall set forth the number of shares of the Convertible
Preferred Stock that are mandatorily converted as of the
Effective Conversion Date with respect to each holder thereof,
and the address of the place where such shares of the
Convertible Preferred Stock shall be exchanged, upon
presentation and surrender of the certificates representing
such shares, and the certificates representing the shares of
Common Stock shall be delivered. The dividends on the shares
of Convertible Preferred Stock called for conversion shall
cease to accrue on the Effective Conversion Date. Any notice
which is mailed in the manner provided herein shall be
conclusively presumed to have been duly given, whether or not
the holder of the shares of the Convertible Preferred Stock
receives such notice, and failure to duly give such notice by
mail, or any defect in such notice, to any holder of shares of
the Convertible Preferred Stock shall not affect the validity
of the conversion thereof into Common Stock. Consequently, as
of the close of business on the Effective Conversion Date, all
shares of the Convertible Preferred Stock called for
conversion, regardless of whether notice of conversion is
actually received by the holder, shall automatically be deemed
to be the shares of Common Stock into which such shares could
have been voluntarily converted by the holders thereof. As of
the close of business on the Effective Conversion Date, the
Convertible Preferred Stock called for conversion shall be
deemed to cease to be outstanding or to accrue dividends, the
persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the registered
holders of such Common Stock and all rights of any holders of
the Convertible Preferred Stock called for conversion shall
thereupon be extinguished except the right to receive the
Common Stock in exchange therefor and any accrued and unpaid
dividends thereon. Holders of the Convertible Preferred Stock
called for conversion must surrender the certificates
representing such stock in order to receive the Common Stock
into which such Convertible Preferred Stock has been
converted.

The Corporation shall be obligated to pay, within 30 days
after the Effective Conversion Date, any accrued and unpaid
dividends on the shares of

-7-
<PAGE> 8
Convertible Preferred Stock called for conversion, to the
holders who, on the Effective Conversion Date, held such
shares of Convertible Preferred Stock.

Any previously unconverted Convertible Preferred Stock
shall be automatically and mandatorily converted on the
seventh anniversary of the Effective Date (the "Final
Conversion Date"). For the purpose of the conversion on the
Final Conversion Date, each share of Convertible Preferred
Stock shall be convertible into a number of shares of Common
Stock which shall equal the lesser of(i) three (which number
shall be subject to adjustment by the Board of Directors if
and when, and in the same proportion as, any adjustment in the
conversion rate of the Convertible Preferred Stock is made
pursuant to subsection 10(c) hereof), or (ii) the result of
dividing the $28.00 liquidation preference for the Convertible
Preferred Stock by the market price of the Common Stock as
reported at the close of business on the Final Conversion Date
(or if such date is not a trading day, on the first trading
day immediately preceding the Final Conversion Date).

The Corporation shall cause a notice of such mandatory
conversion on the Final Conversion Date to be mailed, postage
prepaid, to the holders of record of the Convertible Preferred
Stock at their respective addresses appearing on the share
transfer records of the Corporation. Such notice shall set
forth a statement that all outstanding shares of the
Convertible Preferred Stock shall be automatically and
mandatorily converted as of the Final Conversion Date and the
address of the place where such shares of Convertible
Preferred Stock shall be exchanged, upon presentation and
surrender of the certificates representing such shares, and
the certificates representing the shares of Common Stock shall
be delivered. The dividends on such shares shall cease to
accrue on the Final Conversion Date. Any notice which is
mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of
the shares of the Convertible Preferred Stock receives such
notice, and failure to duly give such notice by mail, or any
defect in such notice, to any holder of shares of the
Convertible Preferred Stock shall not affect the validity of
the conversion thereof into Common Stock. Consequently, all
issued shares of the Convertible Preferred Stock, as of close
of business on the Final Conversion Date, regardless of
whether notice of conversion is actually received by the
holder, shall automatically be deemed to be the shares of
Common Stock into which such shares are converted. As of the
close of business on the Final Conversion Date, the
Convertible Preferred Stock shall be deemed to cease to be
outstanding or to accrue dividends, the persons entitled to
receive the Common Stock issuable upon conversion shall be
treated for all purposes as the registered holders of such
Common Stock and all rights of any holders of the Convertible
Preferred Stock shall thereupon be extinguished except the
right to receive the Common Stock in exchange therefor and any
accrued and unpaid dividends thereon. Holders of the
Convertible Preferred Stock must surrender the certificates
representing such stock in order to receive the Common Stock
into which such Convertible Preferred Stock has been
converted. The Corporation shall be required to declare and
pay

-8-
<PAGE> 9
all cumulated unpaid dividends that accrue through the Final
Conversion Date as soon as practicable following the Final
Conversion Date.

After the conversion of all issued shares of the
Convertible Preferred Stock, all shares of the Convertible
Preferred Stock shall be canceled, the Convertible Preferred
Stock shall not be reissued and shall be deemed canceled and
shall revert to authorized but unissued Preferred Stock of the
Corporation, undesignated as to series, and the number of
shares of Preferred Stock which the Corporation shall have
authority to issue shall not be decreased by such conversion.

For purposes of this subsection (g), the market price of
the Corporation's Common Stock shall be determined by using
the closing sales price as reported by Nasdaq, if the Common
Stock is quoted by Nasdaq, or any national stock exchange on
which the Common Stock is listed for trading (or if such stock
is only traded over-the-counter, the average of the closing
bid and asked prices). If there is no established market for
the Common Stock, the market price shall be the fair market
value of the Common Stock as determined by the good-faith
judgment of the Board of Directors."

m. The third and fourth sentences of the second paragraph of
Section 3 of the Certificate of Designation for Series B 9%/7%
Convertible Preferred Stock are amended to read in their
entirety as follows:

"If the Corporation is prevented from paying a dividend
entirely in cash, it will pay a dividend in the form of a
mixture of cash and common stock of the Corporation ("Common
Stock") to the extent possible under Delaware law and any
applicable loan agreement, or if necessary, entirely in Common
Stock, provided the average market price per share of the
Common Stock is $4.00 or greater for the 20 trading day period
ending five days prior to the date of payment of the Common
Stock dividend. Such $4.00 minimum market price shall be
subject to adjustment by, the Board of Directors upon and in
appropriate proportion to, any adjustment to the conversion
rate of the Series B Preferred Stock pursuant to subsection
10(c) hereof."

n. The first paragraph of subsection 10(g) of the Certificate of
Designation for Series B 9%/7% Convertible Preferred Stock is
amended to read in its entirety as follows:

"(g) Mandatory Conversion into Common Stock. The
Corporation may, at its option, call for the mandatory
conversion, in whole or in part, of up to 50% of the issued
and outstanding shares of Series B Preferred Stock under the
following conditions: (i) the Corporation's Common Stock
trades at a market price of $34.00 per share or higher on each
of any 20 trading days in a period of 30 consecutive trading
days, beginning on March 16, 1998 and ending on March 15,

-9-
<PAGE> 10
1999, or (ii) the Corporation's Common Stock trades at a
market price of $28.00 per share or higher on each of any 20
trading days in a period of 30 consecutive trading days,
beginning on March 16, 1999 and ending on the day immediately
preceding the Final Conversion Date (as defined herein). The
trigger prices per share of $34.00 and $28.00 shall be subject
to adjustment by the Board of Directors upon, and in
appropriate proportion to, any adjustment to the conversion
rate of the Series B Preferred Stock pursuant to subsection
10(c) hereof. In the event the Corporation elects to call for
the conversion of a portion of the Series B Preferred Stock
issued and outstanding pursuant to clause (i) or (ii) above,
then the Corporation shall select the shares to be converted
to the effect that to the extent practicable each holder of
shares of the Series B Preferred Stock shall have a pro rata
portion of his or her shares converted."

2. Upon notice in accordance with Section 222 of the General Corporation
Law of the State of Delaware, a special meeting of stockholders of the
Corporation was duly called and held, at which the necessary number of
shares as required by statute were voted in favor of the amendments.

3. The foregoing amendments were duly adopted in accordance with Section
242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by George C. Evans, its President and Chief Executive Officer, and
attested by Ellis A. Regenbogen, its Secretary, this 15th day of November,
1996.

SEARCH CAPITAL GROUP, INC.

By: /s/ GEORGE C. EVANS
-----------------------------------
George C. Evans
President and Chief Executive Officer

ATTEST:

/s/ ELLIS A. REGENBOGEN
- --------------------------------
Ellis A. Regenbogen
Secretary

-10-

<PAGE> 1
EXHIBIT 4.8

CERTIFICATE OF ELIMINATION
OF
SERIES B 9%/7% CONVERTIBLE
PREFERRED STOCK

Search Capital Group, Inc., a Delaware corporation (the
"Corporation"), acting pursuant to Section 151 (g) of the Delaware General
Corporation Law (the "DGCL"), does hereby execute this Certificate of
Elimination amending the Restated Certificate of Incorporation of the
Corporation and does hereby certify that:

1. The name of the corporation is Search Capital Group, Inc.

2. The Board of Directors of the Corporation, by unanimous
written consent dated as of December 4, 1996, has duly adopted the following
resolutions:

RESOLVED, that, all outstanding shares of the Corporation's
Series B 9%/7% Convertible Preferred Stock (the "Series B Preferred")
having been automatically and mandatorily converted into shares of the
Corporation's 9%/7% Convertible Preferred Stock pursuant to subsection
10(h) of the Certificate of Designation for the Series B Preferred
(the "Certificate of Designation") so that none of the authorized
shares of the Series B Preferred are outstanding, (1) none of the
shares of the Series B Preferred will be issued subject to the
Certificate of Designation, (2) in accordance with subsection 10(h) of
the Certificate of Designation, all shares of the Series B Preferred
are canceled and shall revert to the status of authorized but unissued
shares of Preferred Stock of the Corporation without series
designation and (3) the number of shares of Preferred Stock which the
Corporation shall have authority to issue shall not be decreased by
the foregoing; and further

* * * * *

RESOLVED, that the officers of the Corporation are hereby
authorized, for and on behalf of the Corporation, to execute, deliver,
file, acknowledge and record any and all documents and instruments,
and to take or cause to be taken and do or cause to be done any and
all such other things, as they, or any of them, may deem necessary or
desirable to effectuate and carry out the foregoing resolutions.

3. Pursuant to Section 151 (g) of the DGCL, this Certificate of
Elimination shall be effective upon filing in the office of the Secretary of
State and shall have the effect of amending the Restated Certificate of
Incorporation of the Corporation to eliminate therefrom all reference to the
series of preferred stock of the Corporation designated as the Series B 9%/7%
Convertible Preferred Stock, par value $.01 per share, such shares reverting to
the status of authorized but unissued shares of preferred stock of the
Corporation undesignated as to series.
<PAGE> 2
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed and attested on its behalf this 24th day of December, 1996.

SEARCH CAPITAL GROUP, INC.

By: /s/ GEORGE C. EVANS
-------------------------------------
George C. Evans
President and Chief Executive Officer

ATTEST:

/s/ ELLIS A. REGENBOGEN
- --------------------------------
Ellis A. Regenbogen
Secretary

<PAGE> 1
EXHIBIT 4.10

FIRST AMENDMENT
TO WARRANT AGREEMENT

This First Amendment to Warrant Agreement is executed as of this 18th
day of July, 1996 by Search Capital Group, Inc., a Delaware corporation (the
"Company"), and American Securities Transfer, Inc., as Warrant Agent (the
"Warrant Agent").

R E C I T A L S:

WHEREAS, the Company and the Warrant Agent entered into that certain
Warrant Agreement dated as of March 27, 1996 (the "Warrant Agreement") relating
to the issuance of Warrant Certificates to purchase up to 5,676,178 shares of
Common Stock of the Company; and

WHEREAS, the Company and the Warrant Agent desire to amend the Warrant
Agreement as set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:

1. The second recital in the Warrant Agreement shall be revised
in its entirety to read as follows:

"WHEREAS, the Company proposes to issue and deliver additional
Warrant Certificates evidencing Warrants to purchase up to 5,000,000
additional shares, subject to adjustment, of its Common Stock;"

2. The third recital of the Warrant Agreement shall be amended in
its entirety to read as follows:

"WHEREAS, the aggregate number of shares, subject to
adjustment, to be purchased pursuant to this Warrant Agreement shall
be up to 10,000,000 shares of Common Stock."

3. The following sentence shall be added to the end of Section
9.2 of the Warrant Agreement:

"This Section 9.2 shall not apply to any shares of Common
Stock that may be issued upon the exercise of any conversion or
purchase rights under any options, warrants, rights to purchase or
convertible securities if, at the time of the issuance of such
options, warrants, rights to purchase or convertible securities, the
exercise or
<PAGE> 2
conversion price per share thereof was equal to or in excess of the
fair market value of a share of Common Stock."

4. The Warrant Agreement, as amended hereby, shall continue in
full force and effect.

EXECUTED as of the date first above written.

SEARCH CAPITAL GROUP, INC.

By: /s/ JOE B. DORMAN
-----------------------------------
Name: Joe B. Dorman
---------------------------------
Title: Secretary
--------------------------------

AMERICAN SECURITIES TRANSFER, INC., as
Warrant Agent

By: /s/ FRED BORRIOS, JR.
-----------------------------------
Name: Fred Borrios, Jr.
---------------------------------
Title: Vice President
--------------------------------

CONSENT TO FIRST AMENDMENT

The undersigned, being the sole holder of all of the outstanding
Warrants issued pursuant to the Warrant Agreement, does hereby consent to the
amendments effected by the foregoing First Amendment.

Dated 7/18/96

HALL PHOENIX/INWOOD, LTD.

By: /s/ LARRY LEVEY
-----------------------------------
Name: Larry Levey
---------------------------------
Title: Senior Vice President
--------------------------------

-2-

<PAGE> 1
EXHIBIT 4.11

SECOND AMENDMENT TO
WARRANT AGREEMENT

This Second Amendment to Warrant Agreement (this "Amendment") is
executed by and between Search Capital Group, Inc., a Delaware Corporation (the
"Company"), and American Securities Transfer, Inc., as Warrant Agent (the
"Warrant Agent").

RECITALS

WHEREAS, the Company and the Warrant Agent have entered into that
certain Warrant Agreement dated as of March 27, 1996, as amended by that
certain First Amendment to Warrant Agreement dated as of July 18, 1996 (as so
amended, the "Warrant Agreement"), which contemplates the issuance of certain
warrants expiring March 14, 2001 (the "Warrants") in the form of the
certificate attached to the Agreement as EXHIBIT A;

WHEREAS, effective November 22, 1996, the Company has effected a
1-for-8 reverse stock split of its Common Stock;

WHEREAS, as a result of the reverse stock split, the number of shares
purchasable pursuant to each Warrant has been reduced to one-eighth of the
previous number, in accordance with the provisions of the Warrant Agreement;

WHEREAS, the form of Warrant certificate attached to the Warrant
Agreement must be revised to reflect the reverse stock split and new
certificates must be prepared and exchanged with the holders of the outstanding
Warrants;

WHEREAS, Section 2(d) of the Warrant Agreement continues to
erroneously reflect that the Company may issue Warrants under the Warrant
Agreement to purchase up to 5,676,178 shares of the Company's Common Stock
rather than 10,000,000 shares as provided in the First Amendment to Warrant
Agreement;

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

1. Form of Warrant Certificate. The form of certificates for the
Warrants shall be revised in the manner set forth on EXHIBIT A attached hereto
and a new form of certificate shall be prepared that is identical to the prior
form of certificate except for the changes set forth on the attached EXHIBIT A.
When such new form of certificate is prepared, it shall be substituted in lieu
of the existing EXHIBIT A to the Warrant Agreement.
<PAGE> 2
2. Amendment to Warrant Agreement.

(a) Section 2(d) of the Warrant Agreement is hereby
amended to read in its entirety as follows:

"(d) From time to time, through the
Expiration Time, the Transfer Agent shall countersign
and deliver stock certificates in required whole
number denominations representing up to an aggregate
of 10,000,000 shares, subject to adjustment, of
Common Stock upon the exercise of Warrants in
accordance with the terms of this Agreement."

3. Definitions. Capitalized terms used without definition herein
shall have the meanings ascribed to such terms in the Warrant Agreement.

4. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, and all of which when taken together shall constitute one and the
same instrument as if the parties hereto had executed the same instrument.
Each counterpart may consist of a number of copies hereof each signed by less
than all, but together signed by all of the parties hereto. An electronically
transmitted copy of an executed counterpart of this Amendment shall be deemed
an original.

5. The Warrant Agreement as amended hereby shall continue in full
force and effect and is hereby ratified, confirmed and approved in all
respects.

Executed as of November 22, 1996.

SEARCH CAPITAL GROUP, INC.,
a Delaware corporation

By: /s/ ROBERT D. IDEI
-----------------------------------
Name: Robert D. Idei
---------------------------------
Title: Senior Executive Vice President
--------------------------------

-2-
<PAGE> 3
AMERICAN SECURITIES TRANSFER, INC.,
as Warrant Agent

By: /s/ KELLIE D. WATSON
------------------------------------
Name: Kellie D. Watson
----------------------------------
Title: Senior Vice President
---------------------------------

-3-
<PAGE> 4
EXHIBIT A

NUMBER WARRANT CERTIFICATE WARRANTS
OF
W 00105 SEARCH CAPITAL GROUP, INC. - 1,239,681 -

"EFFECTIVE NOVEMBER 22, 1996, THE NUMBER OF SHARES OF COMMON STOCK SUBJECT TO
PURCHASE UPON EXERCISE OF EACH WARRANT REPRESENTED HEREBY IS 1/8TH OF A SHARE."

CUSIP 812207 11 6

SEE REVERSE
FOR CERTAIN DEFINITIONS

THIS CERTIFIES that, for value received

DEVELOPMENT SPECIALISTS INC AS ESCROW AGENT PURSUANT
TO AN ESCROW AGREEMENT DTD NOV 25, 1996

or registered assigns thereof (the "Registered Holder") is the holder of the
number of Search Capital Group, Inc. (the "Company") warrants ("Warrants")
specified above. Each Warrant entitles the Registered Holder, but only subject
to the terms and conditions set forth herein and in the Warrant Agreement
referred to below, to purchase from the Company one share of Common Stock, par
value $0.01 per share (the "Common Stock") of the Company on or before the
Expiration Time (as defined herein), upon the presentation and surrender of
this Warrant Certificate with the Subscription Form on the reverse hereof duly
executed, at the Corporate office of American Securities Transfer, Inc, as
Warrant Agent, or in authorized successor (the "Warrant Agent"), at 938 Quail,
Lakewood, Colorado, 80215 or such other address as the Warrant Agent may
specify in writing to the Registered Holder of the Warrants evidenced hereby,
accompanied by payment of a price (the "Exercise Price") per Warrant in lawful
money of the United States of America in cash or by check or postal,
telegraphic or express money order drawn on commercial bank, trust company or
savings and loan having an office or correspondent in the United States and
made payable to the order of the "Search Capital Escrow Account." A Warrant
shall be exercisable at the Exercise Price indicated below if the Warrant is
exercised during the twelve-month period beginning on March 15th of the years
indicated below.

<TABLE>
<CAPTION>
Twelve Months Beginning Exercise Price
----------------------- --------------
<S> <C>
1996 $2.00
1997 $2.25
1998 $2.50
1999 $2.75
2000 $3.00
</TABLE>

After the Expiration Time, the Warrants shall no longer be exercisable.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated March 27, 1996,
by and between the Company and the Warrant Agent.
The term "Expiration Time" shall mean 5:00 pm., New York time, on
March 14, 2001, subject to extension as provided herein. If such date shall
fall on a day that is a Saturday or Sunday or a day on which banking
institutions are legally authorized to close in the City of New York, then such
expiration time shall mean the next following day which in the City of New York
is not a holiday or a day on which banking institutions are legally authorized
to close ("Business Day").
In the event of certain contingencies provided in the Warrant
Agreement, the number of shares of Common Stock subject to purchase upon the
exercise of each Warrant represented hereby is subject to modification or
adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all of the Warrants represented hereby,
this Warrant Certificate shall be cancelled and a new Warrant Certificate
or Warrant Certificate of like tenor, which the Warrant Agent shall
countersign, shall be delivered as directed by the Registered Holder for the
balance of such Warrants.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the Corporate Office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment, and payment of any
tax or other governmental charge imposed in connection therewith, for
registration of transfer of this Warrant Certificate at such office, a new
Warrant Certificate or Warrant Certificates representing an equal aggregate
number of Warrants will be issued to the transferee in exchange therefor,
subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.
Any Warrants not exercised prior to the Expiration Time will be
redeemed by the Company at a redemption price of $0.25 per Warrant, subject to
the Company's having funds legally available therefor.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
This warrant Certificate is not valid unless countersigned by the
Warrant Agent.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

11/25/1996

/s/ GEORGE C. EVANS /s/ JOE B. DORMAN
President Secretary

[SEAL]

COUNTERSIGNED:
American Securities Transfer, Inc.
P.O. Box 696
Denver, Colorado 80201

By /s/ ILLEGIBLE
--------------------------------------------
TRANSFER AGENT OR REGISTRAR AUTHORIZED SIGNATURE

<PAGE> 1
EXHIBIT 12

CALCULATION OF RATIO OF EARNINGS
TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS

<TABLE>
<CAPTION>
Fiscal Fiscal Fiscal Fiscal Fiscal
Year Ended Year Ended Year Ended Year Ended Year Ended Six Months Ended
Dec. 1992 Sept. 1993 Sept. 1994 Sept. 1995 March 1996 Sept. 1996
--------- ---------- ---------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Interest $1,909,000 $4,173,000 $9,968,000 $11,205,000 $1,306,000 $ 290,000

Preferred Dividends 206,000 263,000 240,000 240,000 327,000 2,946,000
---------- ---------- ---------- ----------- ---------- ----------

Total Fixed Charges and 2,115,000 4,436,000 10,208,000 11,445,000 1,633,000 3,236,000
Preferred Dividends (A)

Net Income (Loss) (846,000) (391,000) (26,190,000) (20,134,000) (2,998,000) (1,822,000)
---------- ---------- ---------- ----------- ---------- ----------

Total Available to Cover 1,269,000 4,045,000 (15,982,000) (8,689,000) (1,365,000) 1,414,000
---------- ---------- ---------- ----------- ---------- ----------
Fixed Charges (B)

Ratio (B/A) .60 .91 (1.57) (.76) (.84) .44
=== === ===== ==== ==== ===
</TABLE>

For each year shown: year ending 12/31/92, nine months ending 9/30/93, year
ending 9/30/94 and 9/30/95, and the six months ending 3/31/96 as well as the
six months ended 9/30/96, the registrant's ratio of earnings (loss) to fixed
charges is less than one-to-one coverage and, therefore, earnings (loss) are
inadequate to cover fixed charges. The following represents the dollar amount
of the coverage deficiency:

<TABLE>
<CAPTION>
Total Fixed Charges Total Available to
and Preferred Dividends (A) Cover Fixed Charges (B) Coverage Deficiency (A-B)
--------------------------- ----------------------- -------------------------
<S> <C> <C> <C>
Fiscal Year Ended 12/31/92 $2,115,000 $1,269,000 $846,000
Fiscal Year Ended 9/30/93 4,436,000 4,045,000 391,000
Fiscal Year Ended 9/30/94 10,208,000 (15,982,000) 26,190,000
Fiscal Year Ended 9/30/95 11,445,000 (8,689,000) 20,134,000
Fiscal Year Ended 3/31/96 1,633,000 (1,365,000) 2,998,000
Six Months Ended 9/30/96 3,236,000 1,414,000 1,822,000
</TABLE>

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

Search Capital Group, Inc.
Dallas, Texas

We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated May 21,
1996, except for Note 7 which is as of May 24, 1996, relating to the financial
statements of Dealers Alliance Credit Corp. which is as of May 24, 1996,
relating to the financial statements of Dealers Alliance Credit Corp. which is
contained in that Prospectus. Our report contains an explanatory paragraph
regarding a going concern uncertainty.

We also consent to the reference to us under the caption "Experts" in the
Prospectus.

/s/ BDO SEIDMAN, LLP

BOD SEIDMAN, LLP

Atlanta, Georgia
January 22, 1997
<PAGE> 2

CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

Search Capital Group, Inc.
Dallas, Texas

We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated May 10,
1996, relating to the consolidated financial statements and schedules of Search
Capital Group, Inc. appearing in the Company's Transition Report on Form 10-K
for the period ended March 31, 1996. Our report contains an explanatory
paragraph for a change in accounting principle.

We also consent to the reference to us under the caption "Experts" in the
Prospectus.

/s/ BDO SEIDMAN, LLP
-------------------------------------

BDO SEIDMAN, LLP

Dallas, Texas
January 22, 1997