Sparta Commercial Services Completes $3 Million Private Placement; Provides Capital to Launch Sparta's Full Powersports Financing Platform

NEW YORK--July 21, 2005--Sparta Commercial Services, Inc. (OTC BB: SRCO), an Internet-based sales finance and leasing company dedicated exclusively to the powersports industry, announced today it has completed a $3 million private placement of units consisting of 6% Series A convertible, redeemable preferred stock, and three-year common stock warrants.

Anthony L. Havens, Sparta's CEO, commented, "We are pleased to complete this offering as it represents an important step in the launching of our powersports financing platform. Having strengthened our finances with this initial offering, we are now building lending relationships that will provide additional capital to fund our lease and retail installment sales contract originations. Leveraging our proprietary point of sale iPLUS(TM) (Internet Purchasing Leasing Underwriting Servicing) web-based origination platform, we launched our private label financing programs for scooters and can now launch our motorcycle finance products focused on vehicles 600 cc and above."

New York-based Maxim Group, LLC served as the placement agent for the offering. Sparta has agreed to file a registration statement for the resale of common stock underlying the units within 90 days of the final closing of the private placement.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy securities of Sparta Commercial Services, Inc. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

About Sparta Commercial Services:

Sparta Commercial Services, Inc. (www.spartacommercial.com) is an Internet-based acceptance (sales finance) and leasing company dedicated exclusively to the powersports industry, which includes motorcycles over 600cc, 4-stroke all-terrain vehicles, and select scooters through private label programs for manufacturers' distributors. Sparta provides a full line of financing solutions including indirect retail installment sales contracts and direct closed-end leases, as well as related services including GAP coverage and vehicle service contracts.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are valid only as of today, and we disclaim any obligation to update this information. Actual results may differ significantly from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to potential future losses, amount of, obtaining and satisfying terms of credit lines, competition, financing and commercial agreements and strategic alliances, seasonality, potential fluctuations in operating results and rate of growth, management of potential growth, system interruption, consumer and industry trends, limited operating history, and government regulation. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.