HPSC, Inc.

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

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

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

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