Contact:
                                                             Richard F. Latour
                                                             President and CEO
                                                             Tel: 781-994-4800


                           MICROFINANCIAL INCORPORATED
                          Secures New Funding Facility



Woburn,  MA--June 14, 2004  MicroFinancial  Incorporated  (NYSE-MFI),  announced
today that the  Company  has secured a $10  million  credit  facility  that will
enable it to immediately resume microticket contract  originations.  Previously,
MicroFinancial had suspended  contract  originations when the Company's previous
credit  facility  failed to renew in October 2002. The new facility is comprised
of a one-year  $8 million  line of credit  from Acorn  Capital  Group,  and a $2
million three-year subordinated note from AMPAC.

In  conjunction  with  raising new  capital,  the  Company  also  announced  the
inauguration of a new wholly owned operating subsidiary, TimePayment Corp. LLC.

Mr.  Richard F.  Latour,  President  and CEO,  said,  "We are very pleased to be
reentering the lease origination market and believe this agreement is a critical
next step in our  turnaround  process.  Although our current bank agreement made
securing  this  facility a  lengthier  and more  challenging  effort than we had
expected,  this new capital will enable us to begin originating new leases,  and
thereby, contribute to the long-term success of the Company. We continue to seek
a larger,  more permanent line of credit under more favorable  terms as the next
step in this process in order to provide better service to our customers."

Mr.  Richard F.  Latour,  concluded,  "I would like to express  gratitude to our
employees,  customers  and  shareholders  who  have  supported  us  during  this
difficult period."

About Microfinancial

MicroFinancial  Inc. (NYSE:  MFI),  headquartered in Woburn,  MA, is a financial
intermediary  specializing  in leasing and financing for products in the $500 to
$10,000 range. The company has been in operation since 1986.



Statements  in this release that are not  historical  facts are  forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation  Reform  Act  of  1995.  In  addition,   words  such  as  "believes,"
"anticipates,"  "expects,"  "views,  " and similar  expressions  are intended to
identify  forward-looking  statements.  The  Company  cautions  that a number of
important  factors could cause actual  results to differ  materially  from those
expressed in any forward-looking statements made by or on behalf of the Company.
Readers should not place undue  reliance on  forward-looking  statements,  which
reflect the management's view only as of the date hereof. The Company undertakes
no obligation  to publicly  revise these  forward-looking  statements to reflect
subsequent  events or  circumstances.  The Company cannot assure that it will be
able to anticipate or respond timely to changes which could adversely affect its
operating  results in one or more fiscal quarters.  Results of operations in any
past period  should not be  considered  indicative  of results to be expected in
future periods.  Fluctuations in operating results may result in fluctuations in
the price of the Company's common stock. For a more complete  description of the
prominent risks and uncertainties  inherent in the Company's  business,  see the
risk factors described in documents the Company files from time to time with the
Securities and Exchange Commission.