Prospectus Supplement No. 3
The Prospectus dated November 14, 1996 (the "Prospectus") relating to the offer
for resale of up to $115,000,000 aggregate principal amount of 5 1/2%
Convertible Subordinated Debentures due 2006 of Aames Financial Corporation
(the "Company") and 4,107,142 shares of the common stock of the Company, par
value $0.001 per share, into which such Debentures are convertible is hereby
amended as follows:
(1) The fourth paragraph appearing on the cover page of the Prospectus is
deleted and replaced in its entirety as follows:
"The Debentures are general unsecured obligations of the Company,
subordinated to all existing and future Senior Indebtedness (as defined
herein), which at October 31, 1996 was approximately $256 million,
including $23.0 million of the Company's 10.5% Senior Notes due 2002, $150
million of the Company's 9.125% Senior Notes due 2003 and Company
guarantees of approximately $82.9 million of warehouse indebtedness
outstanding on such date incurred by a wholly owned subsidiary of the
Company. See 'Description of the Debentures.'"
(2) The following entities are hereby named as Selling Security Holders
as contemplated on page 33 of the Prospectus:
SELLING SECURITY HOLDER PRINCIPAL AMOUNT OF DEBENTURES
----------------------- ------------------------------
Argent Classic Convertible Arbitrage $1,350,000
Fund L.P.
591 West Putnam Avenue
Greenwich, CT 06830
The date of this Prospectus Supplement is December 2, 1996.
