<PAGE>
Filed Pursuant to Rule 424(b)(3)
File No. 333-40248
--------------------------------------------------------------------------------
American Business Financial Services, Inc. Investment Notes
Rate Supplement
Prospectus Supplement dated December 16, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
ANNUAL BONUS BONUS
TERM RATE YIELD* BONUS RATE YIELD*
---------------------------------------------------------------------------------------------
<S> <C> <C>
3-5 mos. 8.00% 8.32% -- -- --
6-11 mos. 9.00% 9.41% -- -- --
12-17 mos. 10.70% 11.29% 0.35% 11.05% 11.68%
15 mos. -- -- -- 11.35% 12.01%
18-23 mos. 10.75% 11.34% 0.35% 11.10% 11.73%
24-29 mos. -- -- -- 12.05% 12.80%
30-35 mos. 11.50% 12.18% 0.35% 11.85% 12.57%
36-47 mos. 11.50% 12.18% 0.35% 11.85% 12.57%
48-59 mos. 11.60% 12.29% 0.35% 11.95% 12.69%
60-119 mos. 12.00% 12.74% 0.35% 12.35% 13.14%
120 mos. 12.15% 12.91% 0.35% 12.50% 13.31%
Money Market Note 6.15% 6.34% -- -- --
---------------------------------------------------------------------------------------------
</TABLE>
Minimum for Investment Notes and Money Market Notes $1,000
For information, call
1.800.776.4001
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Bala Pointe Office Center 111 Presidential Boulevard, Suite 215 Bala Cynwyd, PA 19004
</TABLE>
www.ABFSonline.com
--------------------------------------------------------------------------------
AMERICAN BUSINESS FINANCIAL SERVICES, INC. IS A NASDAQ LISTED COMPANY (ABFI).
--------------------------------------------------------------------------------
An offer can only be made by the Prospectus dated October 30, 2000 delivered in
conjunction with this Rate Supplement dated December 16, 2000. See "Risk
Factors" for a discussion of certain factors which should be considered in
connection with an Investment in the Notes.
*The Effective Annual Yield assumes all interest reinvested daily at the stated
rate. The rates for the Investment Notes are available through January 19, 2001.
The interest rate paid on the Money Market Notes is subject to change from time
to time at the Company's sole discretion provided that such rate shall not be
reduced below 4% per year. Written notice of any decrease in rate will be
provided to holders of such notes at least 14 days prior to the effective date
of the change. No notice will be provided in connection with an increase in the
interest rate paid on such notes. You may obtain an additional copy of the
Prospectus dated October 30, 2000, free of charge from American Business
Financial Services, Inc. by calling (800) 776-4001.
Investment Notes and Money Market Notes represent obligations of ABFS and are
not certificates of deposit or insured or guaranteed by the FDIC or any other
governmental agency.
