1001258--12/28/2007--ASTA_FUNDING

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{capital, credit, financial}

{acquisition, growth, future}

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{regulation, change, law}

{financial, litigation, operation}

{control, financial, internal}

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We have incurred substantial debt from time to time in connection with our purchase of consumer receivable portfolios, particularly with respect to the Portfolio Purchase Agreement, and may incur further debt in the future which could affect our ability to obtain additional funds and may increase our vulnerability to economic or business downturns. We may not be able to purchase consumer receivable portfolios at favorable prices or on sufficiently favorable terms or at all. We may not be able to continually replace our defaulted consumer receivables. We have seen at certain times that the market for acquiring consumer receivable portfolios has become more competitive, thereby diminishing from time to time our ability to acquire such receivables at prices we are willing to pay. Our quarterly operating results may fluctuate and cause our stock price to decline. Our projections of future cash flows from our portfolio purchases may prove to be inaccurate, which could result in reduced revenues or the recording of an impairment charge if we do not achieve the collections forecasted by our model. We may not be able to recover sufficient amounts on our consumer receivable portfolios to recover the costs associated with the purchase of those portfolios and to fund our operations. We are subject to intense competition for the purchase of consumer receivable portfolios. We are dependent upon third parties to service a majority of our consumer receivable portfolios. We rely on our third party collectors to comply with all rules and regulations and maintain proper internal controls over their accounting and operations. Our collections may decrease if bankruptcy filings increase. If we are unable to access external sources of financing, we may not be able to fund and grow our operations. We use estimates for recognizing finance income on substantially all of our consumer receivable portfolio investments and our earnings would be reduced if actual results are less than estimated. We may rely on third parties to locate, identify and evaluate consumer receivable portfolios available for purchase. The loss of an asset type could impact our ability to acquire receivable portfolios. We may not be successful at acquiring receivables of new asset types or in implementing a new pricing structure. The loss of any of our executive officers may adversely affect our operations and our ability to successfully acquire receivable portfolios. The Stern family effectively controls Asta, substantially reducing the influence of our other stockholders. We have experienced rapid growth over the past several years, which has placed significant demands on our administrative, operational and financial resources and could result in an increase in our expenses. Government regulations may limit our ability to recover and enforce the collection of our receivables. Class action suits and other litigation in our industry could divert our management s attention from operating our business and increase our expenses. We may seek to make acquisitions that prove unsuccessful or strain or divert our resources. Our investments in other businesses and entry into new business ventures may adversely affect our operations. If our technology and phone systems are not operational, our operations could be disrupted and our ability to successfully acquire receivable portfolios could be adversely affected.

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1001258--12/28/2007--ASTA_FUNDING_INC