Company Profile

HPSC, Inc. ("HPSC" or the "Company") is a specialty finance company engaged primarily in financing licensed healthcare providers throughout the United States. A majority of the Company's revenues comes from its financing of healthcare equipment and healthcare practice acquisitions. Through its subsidiary, American Commercial Finance Corporation ("ACFC"), the Company also provides asset-based lending to commercial and industrial businesses, principally in the eastern United States.

HPSC provides financing to the dental, ophthalmic, general medical, chiropractic and veterinary professions. At December 31, 2000, on a consolidated basis, approximately 90% of the Company's net investment in leases and notes consisted of financing contracts with licensed healthcare professionals. Approximately 10% of the portfolio was asset-based lending to commercial and industrial businesses. HPSC principally competes in the portion of the healthcare finance market where the size of the transaction is $250,000 or less, sometimes referred to as the "small-ticket" market. The average size of the Company's financing transactions in 2000 was approximately $39,000. In connection with its equipment financing, the Company enters into noncancellable finance agreements and/or leases, which provide for a full payout at a fixed interest rate over a term of one to seven years. The Company markets its financing services to healthcare providers in a number of ways, including direct marketing through trade shows, conventions and advertising, through its sales staff with 22 offices in 12 states and through cooperative arrangements with equipment vendors.

ACFC, the Company's wholly-owned subsidiary, provides asset-based financing to companies which generally cannot readily obtain traditional bank financing. The ACFC loan portfolio generally provides the Company with a greater spread over its borrowing costs than the Company can achieve in its financing contracts with licensed professionals.