ACC CONSUMER FINANCE CORP, 424B1, 1996-11-19

ACC CONSUMER FINANCE CORP
424B1, 1996-11-19
SHORT-TERM BUSINESS CREDIT INSTITUTIONS

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<PAGE> 1
This filing is made pursuant
to Rule 424(b)(1) under
the Securities Act of
1933 in connection with
Registration No. 333-12605

PROSPECTUS

$20,000,000

LOGO

10.25% SUBORDINATED NOTES DUE 2003

The 10.25% Subordinated Notes due December 1, 2003 (the "Notes") offered
hereby are unsecured general obligations of ACC Consumer Finance Corporation
("ACC"). Interest on the Notes is payable monthly in arrears commencing January
1, 1997.

ACC will redeem, at any time, at par plus accrued interest, Notes tendered
for a deceased beneficial owner within 60 days of presentation of the necessary
documents, up to an annual maximum of $25,000 per beneficial owner and up to an
annual aggregate maximum of $300,000. The Notes are redeemable at the option of
ACC in whole or in part, at any time on or after December 1, 1999, at the
redemption prices set forth herein, plus accrued interest.

The Notes will be issued in integral multiples of $1,000 and will be in
fully registered form. No sinking fund will be established for the Notes. See
"Description of the Notes." The minimum principal amount of Notes which may be
purchased is $1,000. ACC has been advised by the Underwriters that each
Underwriter intends to make a market in the Notes; however, the Notes will not
be listed for trading on the Nasdaq National Market or any exchange, and no
assurance can be given that an active trading market for the Notes will develop.
------------------------

SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE NOTES OFFERED HEREBY.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) ACC(2)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note.......................... 100% 4% 96%
- -------------------------------------------------------------------------------------------------
Total(3).......................... $20,000,000 $800,000 $19,200,000
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.
(2) Before deducting expenses payable by ACC estimated at $237,000.

(3) ACC has granted the Underwriters an option exercisable within 30 days from
the date of this Prospectus to purchase up to $3,000,000 aggregate
principal amount of additional Notes on the same terms and conditions set
forth above to cover over-allotments, if any. If all such Notes are
purchased, the total Price to Public, Underwriting Discount and Proceeds to
ACC will be $23,000,000, $920,000 and $22,080,000, respectively. See
"Underwriting."

------------------------

The Notes are offered by the Underwriters, subject to receipt and
acceptance of such Notes by the Underwriters and subject to their rights to
reject any order in whole or in part and to withdraw, cancel or modify the offer
without notice. The Notes will bear interest from the date of delivery to the
Underwriters. It is expected that the Notes will be ready for delivery on or
about November 21, 1996.

MCDONALD & COMPANY J.C. BRADFORD & CO.
SECURITIES, INC.

THE DATE OF THIS PROSPECTUS IS NOVEMBER 18, 1996

<PAGE> 2

ACC CONSUMER FINANCE CORPORATION

REGIONAL CREDIT CENTERS(1) AND SIGNIFICANT STATES(2)
AS OF SEPTEMBER 30, 1996

[MAP]
- ---------------
(1) See "Business -- Purchase of Contracts" for a discussion of the Company's
regional credit centers.

(2) Significant States are any states wherein the Company purchased more than
$500,000 in Contracts in the three month period ending September 30, 1996.
------------------------

The Company intends to furnish its Noteholders with annual reports
containing audited financial statements each fiscal year.
------------------------

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------

2
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements, including the notes thereto,
appearing elsewhere in this Prospectus or incorporated herein by reference.
Unless otherwise indicated, all information set forth herein does not reflect
the exercise of the Underwriters' over-allotment option. This Prospectus
contains certain statements regarding the Company's plans and objectives for
future operations, the Company's future economic performance and assumptions
relating to future operations or future economic performance that constitute
"forward looking information" under the Securities Litigation Reform Act of
1995. Each of such statements is subject to risks, as set forth under "Risk
Factors" that could cause actual results to differ materially from the results
included in the forward looking information.

Unless the context otherwise requires, all references in this Prospectus to
the Company refer to ACC Consumer Finance Corporation, OFL-A Receivables Corp.,
a wholly-owned special purpose subsidiary of ACC that takes title to all
Contracts and is the record lienholder of all financed vehicles and the obligor
under the Company's secured financing facilities ("OFL-A"), and ACC Receivables
Corp. ("Receivables"), a wholly-owned special purpose subsidiary of ACC formed
in connection with the Company's issuance of asset-backed securities. All
references to ACC, unless the context otherwise requires, refer to ACC Consumer
Finance Corporation, which is the issuer of the Notes. ACC provides the Contract
acquisition and portfolio servicing functions and incurs virtually all of the
Company's operating expenses. However, OFL-A and Receivables own substantially
all of the earning assets of the Company.

THE COMPANY

The Company specializes in the indirect financing of automobile installment
contracts ("Contracts"), originated primarily by franchised automobile dealers,
for consumers who pose credit risks due to past credit problems, limited or no
credit histories and/or low incomes ("Non-Prime Borrowers"). These consumers are
unlikely to qualify for financing from traditional automobile financing sources
such as commercial banks, savings and loans, thrift and loans, credit unions and
the captive finance companies of automobile manufacturers. Through its financing
program, the Company provides automobile dealers ("Dealers") with a source of
financing for Non-Prime Borrowers.

ACC was founded by three senior executives with extensive experience in
non-prime credit evaluation, asset securitization and collections. ACC has
experienced significant growth since its formation in July 1993. From September
30, 1995, to September 30, 1996, the outstanding balance of Contracts serviced
by the Company increased from $100 million to $210 million, or 110%. The volume
of Contracts purchased by the Company increased from $72 million during the
nine-month period ended September 30, 1995, to $132 million during the
nine-month period ended September 30, 1996, or 83%. During the nine-month period
ended September 30, 1996, ACC reported net income of $3.4 million (with a 42%
effective tax rate), compared to net income of $2.8 million (with a 10.2%
effective tax rate) for the nine-month period ended September 30, 1995. In May
1996, the Company sold 2,000,000 shares of its common stock in an initial public
offering that generated net proceeds of approximately $12.5 million.

The automobile finance market is one of the largest consumer finance
markets in the United States, with $356 billion in outstanding credit as of
January 1996. Since its formation, ACC has targeted the highly fragmented
non-prime segment of this market which has an estimated $70 billion in
outstanding credit. The Company's business plan focuses on the following
strategies:

MARKET FOCUS. The Company targets major metropolitan areas and expands
into those markets in which it can recruit salespeople with non-prime lending
experience. The Company believes that major metropolitan areas provide
concentrations of high volume Dealers which can be effectively serviced by its
regional sales managers. The Company attempts to develop a broad Dealer base to
avoid dependence on a limited number of Dealers. As of September 30, 1996, the
Company directly marketed its program to Dealers in 25 states, and during the
nine-month period ended September 30, 1996, 62% of the Contracts were purchased
from Dealers in the states of California, Florida, Pennsylvania and Texas. As of
September 30,

3
<PAGE> 4

1996, the Company had 1,247 active Dealers, defined as Dealers from which the
Company had purchased at least one Contract in the last six months. As of
September 30, 1996, no Dealer accounted for more than 4% of the Company's
Contract portfolio and the ten Dealers from which the Company purchased the most
Contracts accounted for approximately 12% of the Company's Contract portfolio,
in aggregate.

LATE-MODEL USED VEHICLE CONTRACTS FROM FRANCHISED DEALERS. The Company's
financing program targets the purchase of Contracts for late-model used vehicles
that are originated by franchised Dealers. As of September 30, 1996, the median
model year in the Company's Contract portfolio was 1994. As of September 30,
1996, approximately 86% of Contracts serviced by the Company financed used
vehicles and 97% were acquired from franchised Dealers. The average discount and
the weighted average coupon on Contracts purchased during the nine-month period
ended September 30, 1996, were 4.8% and 20.7%, respectively. The Company
believes that late-model used vehicles represent the largest segment of the used
vehicle market, while posing less risk of default due to mechanical problems
than do older used vehicles. The Company targets franchised Dealers because the
financial requirements and customer service standards imposed on these dealers
by automobile manufacturers generally result in a high level of financial
stability and customer satisfaction. As a result, the Company believes, in
general, Contracts from these Dealers expose the Company to less risk of Dealer
misrepresentation and lower levels of borrower default.

CREDIT SCORING AND RISK MANAGEMENT SYSTEM. In order to manage the higher
risks associated with Non-Prime Borrowers, the Company maintains a database
which tracks key underwriting parameters for each Contract purchased. This
database is then used to statistically compare the characteristics of performing
Contracts to nonperforming Contracts. Using this analysis, the Company
periodically refines and enhances the proprietary credit scoring system used by
its credit officers. The Company believes that this approach to credit
evaluation allows the Company to offer to Dealers a series of different pricing
programs tied to the expected economic value of each program to the Company. In
addition, the Company has assigned designated lending limits for each credit
officer.

CREDIT PERFORMANCE AND ALLOWANCE FOR CONTRACT LOSSES. The Company monitors
its delinquencies and charge-offs and attempts to maintain an adequate allowance
for Contract losses. As of September 30, 1996, delinquencies of 31 days or more
were 4.4% of the servicing portfolio and delinquencies of 61 days or more were
1.4%. For the nine-month period ended September 30, 1996, net charge-offs as a
percentage of the average servicing portfolio were 4.1%. The combined allowance
for losses on Contracts held-for-investment and the allowance for losses
embedded in the excess servicing receivables was $15.9 million, representing
7.6% of the Contracts serviced as of September 30, 1996.

REGIONAL CREDIT CENTERS. The Company's regional credit centers in Atlanta,
Georgia; Dallas, Texas; Miami, Florida; Newark, Delaware; and San Diego,
California process and approve applications from the 25 states in which the
Company directly markets its program. The Company believes this regional
structure meets the Company's Dealer service objectives without sacrificing
economies of scale and operating controls.

CENTRALIZED FUNDING AND COLLECTION MANAGEMENT. The Company manages all
Contract funding and collection activities from its headquarters in San Diego.
Through this central operation, the Company conducts an extensive pre-funding
verification process on 100% of the Contracts, which generally includes a direct
telephone interview with the borrower. The Company typically returns Contract
packages that fail to meet its requirements. The Company also monitors the
performance of each of its Dealers and conducts a post-funding quality control
review of a random sample of 5% of all Contracts purchased by ACC. The Company
pursues a collection strategy of early and frequent contact with delinquent
borrowers using a high-penetration autodialer to begin contacting borrowers who
become six days delinquent. ACC believes that its centralized funding and
collection structure allows for maximum operating control and cost efficiency.

ASSET SECURITIZATIONS. As of September 30, 1996, the Company had issued
five asset-backed securities involving Contracts aggregating approximately $232
million. Each of the securities was rated AAA by Standard & Poor's Ratings Group
("S&P") and Aaa by Moody's Investors Service, Inc. ("Moody's"), based on a
guaranty by Financial Security Assurance Inc. ("FSA"). The Company issues
asset-backed securities to redeploy capital, reduce its interest rate risk and
recognize gains from the sale of the Contracts.

4
<PAGE> 5

Secured financing for Contract purchases is provided by Cargill Financial
Services Corporation ("Cargill") under a repurchase facility which expires in
July 1998 (the "Repurchase Facility").

------------------------

ACC was incorporated in California on June 3, 1993, under the name of
American Credit Corporation, changed its name to ACC Consumer Finance
Corporation in October 1995, was reincorporated in Delaware in November 1995 and
became a public company in May 1996. ACC's executive offices are located at
12750 High Bluff Drive, Suite 320, San Diego, California 92130, and its
telephone number is (619) 793-6300.

THE OFFERING

Securities Offered............ $20,000,000 principal amount of 10.25%
Subordinated Notes due 2003 assuming no
exercise of the Underwriters' over-allotment
option to purchase up to an additional
$3,000,000 principal amount of Notes. The Notes
are unsecured, general obligations of the
Company. See "Description of the Notes" for a
more detailed description of the Notes offered
hereby.

Maturity...................... December 1, 2003.

Interest Payment Dates........ Interest is payable monthly in arrears
commencing January 1, 1997.

Redemption Upon Death of
Noteholder.................. UPON THE DEATH OF A NOTEHOLDER: Notes tendered
by the personal representative or surviving
joint tenant or tenant in common of a deceased
beneficial owner shall be redeemed within 60
days of tender, at par plus accrued interest,
subject to the amount limitations set forth
below.

AMOUNT LIMITATIONS: Of the Notes tendered, the
Company is only required to redeem, for the
period from the date of issuance until November
30, 1997, and for each 12-month period ending
November 30, thereafter, an aggregate maximum
of $300,000 per year, subject to a maximum of
$25,000 per beneficial owner, per 12-month
period.

Redemption Upon Occurrence
of Certain Events........... In the event of a Fundamental Structural Change
or Fundamental Change of Business (as those
terms are defined herein), Noteholders will
have the right (through a date within 80 days
of occurrence of the event) to require the
Company to purchase the holder's Notes at a
price equal to par plus accrued interest;
provided that such right shall not be
exercisable if within 45 days after the
occurrence of such event the Notes have
received a specified rating from a nationally
recognized statistical rating organization. See
"Description of the Notes -- Noteholders' Right
to Prepayment After Fundamental Structural
Change or Fundamental Change of Business."

Redemption at Company's
Option........................ The Notes may be redeemed at the Company's
option on or after December 1, 1999, at the
redemption prices set forth herein.

Sinking Fund.................. None.

Subordination................. The Notes are unsecured and subordinated in
right of payment to all existing and future
Senior Indebtedness (as defined herein) of the
Company. See "Description of the
Notes -- Subordination."

5
<PAGE> 6

Certain Covenants of the
Company....................... In the Indenture, the Company agrees to certain
limitations on dividends and additional
indebtedness, to maintain certain levels of
cash or marketable investment securities, and,
unless certain conditions are met, to redeem
Notes tendered by Noteholders in the event of
certain transactions relating to the Company.

Use of Proceeds............... The net proceeds from the sale of the Notes
will be contributed to OFL-A for use, in part,
to repay temporarily a subordinated debt
facility (the "NIM Facility") and for the
Company's general working capital purposes.

Risk Factors.................. Certain risk factors beginning on page 10
should be considered in connection with the
purchase of the Notes.

Trustee....................... Norwest Bank Minnesota, National Association.

6
<PAGE> 7

SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
JULY 15,
SIX-MONTH 1993
TRANSITION (INCEPTION)
NINE MONTHS ENDED YEAR ENDED PERIOD ENDED THROUGH
SEPT. 30, DEC. 31, DEC. 31, JUNE 30,
-------------------------- 1995(1) 1994(1) 1994(1)
1995 ----------- ------------ ------------
-----------
1996 (UNAUDITED)
------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net Interest Income Before
Provision for Contract
Losses.................. $ 3,329,317 $ 2,940,849 $ 3,332,354 $ 2,187,843 $ 606,177
Gain on Sale of
Contracts............... 10,415,434 5,804,077 8,056,136 -- --
Servicing Income and
Ancillary Fees.......... 3,288,526 988,030 1,757,257 28,237 6,653
Litigation Settlement
Income.................. -- -- -- 325,000 --
------------ ----------- ----------- ------------ ------------
Total Revenues............. 17,033,277 9,732,956 13,145,747 2,541,080 612,830
Provision for Contract
Losses(2)............... (590,298) (300,190) (673,802) (902,361) (592,325)
Operating Expenses......... (10,525,546) (6,328,076) (8,796,590) (2,630,925) (2,608,467)
------------ ----------- ----------- ------------ ------------
Income (Loss) Before
Taxes................... 5,917,433 3,104,690 3,675,355 (992,206) (2,587,962)
Net Income (Loss).......... 3,432,433 2,787,310 3,466,355 (992,206) (2,587,962)
Preferred Stock
Dividends............... 116,818 151,641 215,419 82,621 152,673
------------ ----------- ----------- ------------ ------------
Net Income (Loss) Available
to Common
Shareholders............ $ 3,315,615 $ 2,635,669 $ 3,250,936 $ (1,074,827) $ (2,740,635)
============ =========== =========== ============ ============
Primary Income per Common
Share(3)................ $ 0.47 $ -- $ 0.62 $ -- $ --
Fully Diluted Income per
Common Share............ 0.47 -- 0.55 -- --
Weighted Average Shares
Outstanding (Primary)... 7,268,215 -- 5,624,305 -- --
Weighted Average Shares
Outstanding (Fully
Diluted)................ 7,303,038 -- 6,292,478 -- --
Pro Forma Ratio of Earnings
to Fixed Charges(4)..... 2.37 -- 1.61 -- --
STATEMENT OF CASH FLOWS DATA:
Net Cash Provided By (Used
In) Operating
Activities.............. $ (8,441,277) $ 2,095,875 $ 771,386 $ (1,588,352) $ (3,397,671)
Net Cash Provided By (Used
In) Investing
Activities.............. 2,196,822 1,071,881 (808,470) (24,505,335) (16,135,420)
Net Cash Provided By (Used
In) Financing
Activities.............. 6,230,277 (1,104,972) 13,923 26,199,046 19,571,565
(Decrease) Increase In Cash
and Cash Equivalents.... (14,178) 2,062,784 (23,161) 105,359 38,474
</TABLE>

7
<PAGE> 8

<TABLE>
<CAPTION>
AS OF AS OF
DEC. 31, 1995 DEC. 31, 1994
AS OF ------------- -------------
SEPT. 30, 1996
--------------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets.................................... $ 60,301,507 $ 46,908,938 $ 42,331,518
Net Installment Contracts
Held-for-Sale................................ 24,990,322 28,187,778 --
Held-for-Investment.......................... 330,120 509,388 38,613,239
Allowance for Contract Losses(5)................ 390,000 476,808 1,181,004
Asset-Backed Securities......................... 8,250,907 3,910,080 --
Excess Servicing Receivables.................... 11,862,618 5,590,878 --
Repurchase Facility, Net........................ 26,328,645 29,708,252 40,492,594
Other Borrowings................................ 3,884,986 7,439,597 --
Total Liabilities............................... 37,640,721 40,624,138 41,433,745
Redeemable Preferred Stock...................... -- 6,279,049 4,358,377
Shareholders' Equity............................ 22,660,786 5,751 (3,460,604)
Pro Forma Ratio of Indebtedness to Consolidated
Tangible Net Worth(6)........................ 2.04 7.91 --
Return (Loss) on Average Assets (Annualized)...... 8.67% 6.92% (6.65)%
Return (Loss) on Average Equity (Annualized)(7)... 31.43% 102.37% (160.91)%
</TABLE>

- ---------------
(1) Effective as of January 1, 1995, the Company changed its fiscal year end
from June 30 to December 31. Each of the periods ended June 30, 1994,
December 31, 1994, and December 31, 1995, is an audited period.

(2) The provision in the nine-month period ended September 30, 1995, included a
provision for Contract losses of $700,000 and a one-time recapture of
$400,000 from the allowance for Contract losses provided for in a prior
period on Contracts sold in conjunction with the 1995-A Transaction (as
defined herein).

(3) Due to the significant changes in the capital structure of the Company,
historical net income (loss) per common share prior to the year ended
December 31, 1995, is not presented.

(4) For purposes of calculating the pro forma ratio of earnings to fixed
charges, earnings consist of income before income taxes, plus fixed charges.
Fixed charges consist of the interest on all indebtedness and the
representative interest factor of rent expense.

(5) Allowance for Contract losses does not contain the estimated undiscounted
recourse loss allowance contained within the valuation of the ESRs (as
defined herein). As of September 30, 1996, December 31, 1995, and December
31, 1994, the estimated undiscounted recourse loss allowance embedded in the
ESRs was $15.5 million, $7.1 million and zero, respectively.

(6) For purposes of calculating the pro forma ratio of indebtedness to
consolidated tangible net worth, as adjusted for the issuance of the Notes,
indebtedness excludes secured indebtedness with respect to which the sole
recourse of the lender in the event of nonpayment or other default is to the
collateral and consolidated tangible net worth represents consolidated
shareholders' equity determined in accordance with generally accepted
accounting principles, less intangible assets.

(7) The calculation of return (loss) on average equity for December 31, 1995,
and 1994 includes the redeemable Preferred Stock.

8
<PAGE> 9

SUMMARY OPERATING DATA

<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------------------------
SEPT. 30, JUNE 30, MAR. 31, DEC. 31, SEPT. 30,
1996 1996 1996 1995 1995
--------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
CONTRACT PURCHASE DATA:
Amount of Contracts (000's)........... $ 53,431 $ 45,253 $ 33,715 $ 26,478 $ 28,642
Number of Contracts................... 4,283 3,682 2,746 2,184 2,366
Average Coupon on Contracts........... 20.74% 20.72% 20.65% 20.47% 20.33%
Average Discount of Contracts(1)...... 4.37% 5.16% 4.87% 5.14% 6.00%
Average Amount Financed under
Contracts.......................... $ 12,475 $ 12,290 $ 12,278 $ 12,124 $ 12,106
Average Original Term of Contracts
(months)........................... 57 57 57 58 57
Active Dealers(2)..................... 1,247 1,055 813 547 546
Number of Regional Sales Managers..... 42 35 32 25 19
Number of Significant States(3)....... 19 15 13 12 10
OPERATING DATA:
Principal Balance of Servicing
Portfolio at Period End
(000's)(4)......................... $ 209,761 $172,562 $139,969 $117,539 $ 100,028
Net Charge-offs as a Percentage of
Average Servicing Portfolio
(annualized)(5).................... 4.66% 3.40% 4.40% 4.53% 3.82%
Delinquencies 31 days or more as a
Percentage of Servicing Portfolio
at Period End(6)................... 4.36% 3.96% 2.73% 4.25% 4.11%
</TABLE>

- ---------------

(1) Includes acquisition fees.

(2) Active Dealers include any Dealers from which Contracts were purchased
within the six months prior to the period end.

(3) Significant States are any states wherein the Company purchased more than
$500,000 in Contracts during the period.

(4) All amounts are based on the full amount remaining to be repaid on each
Contract at period end. The information in the table represents the
principal amount of all Contracts owned and serviced by the Company,
including Contracts sold in asset-backed securities.

(5) Net charge-offs are net of recoveries and include the remaining Contract
balance at time of charge-off. In the case of repossession, net charge-offs
include the remaining Contract balance at the time of repossession less
liquidation proceeds (for disposed vehicles), NADA wholesale value (for
vehicles repossessed but not sold) or claims receivable under the Company's
vendor single interest insurance policy. For the periods reflected in the
table, the Company reduced its charge-offs by an aggregate of $986,000 and
paid total premiums of $650,000 in connection with VSI insurance. Net
charge-offs do not include repossessions that are less than 120 days
delinquent and are not yet charged-off.

(6) The Company considers a Contract delinquent when an obligor fails to make at
least 90% of the contractual payment by the stated due date. The period of
delinquency is based upon the number of days payments are contractually
past due. Contracts not yet 31 days late are not considered to be
delinquent. The delinquency rate excludes amounts in repossession.

9
<PAGE> 10

RISK FACTORS

CREDIT RISKS

The Company specializes in the indirect financing of Contracts for
consumers who typically have had past credit problems (including bankruptcy),
have limited or no credit histories and/or have low incomes. Consequently, a
high credit risk is inherent in the Contracts purchased by the Company. The
performance of Contracts serviced by the Company or purchased in the future may
be directly affected by unemployment trends and other economic factors beyond
the Company's control. These factors could impair the Company's ability to
predict or manage effectively the default rates of its Contracts and could cause
the Company to incur increased operating expenses associated with the servicing
of these Contracts. An increase in delinquencies, default rates or charge-offs
in its Contract portfolio could trigger defaults under the Company's secured
financing facilities and asset securitizations or constitute triggering events
in the asset securitizations. Any such default or triggering event would
increase the restrictions on the Company's access to cash from credit
enhancement cash reserves and adversely affect the Company's cash flow and its
ability to pay interest and principal on the Notes and the redemption price of
any Notes tendered to the Company. There is no assurance that the Company's
credit evaluation and collection processes will prevent excessive defaults or
that the Company will be able to purchase Contracts with yields commensurate
with the portfolio credit risk. See "Business -- Purchase of Contracts" and see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and see "Business -- Financing."

LIQUIDITY AND CAPITAL RESOURCES

Negative Operating Cash Flows. The Company's business requires substantial
cash to support the funding of credit enhancement cash reserves for its asset
securitizations, issuance costs of its asset securitizations, operating
expenses, tax payments due in recognition of gains on sales of Contracts (for
which no cash is received by the Company), debt service and other cash
requirements. These cash requirements increase as the volume of Contracts
purchased and serviced by the Company increases. Historically, the Company has
operated on a negative cash flow basis and, depending upon the Company's growth
of Contract purchase volumes and its Contract securitization program, its
negative cash flow may continue for the foreseeable future. The Company has
funded its negative operating cash flows principally through borrowings under
its secured financing facilities and sales of equity securities, and will use
the proceeds of the Notes to fund, in part, its negative operating cash flow. In
order to execute its business strategy, the Company is dependent upon its
Repurchase Facility (and the replacement of the Repurchase Facility in 1998),
its asset securitization program and its ongoing ability to access capital
markets to obtain long term debt and equity capital. There is no assurance that
the Company will have access to capital markets when needed or will be able to
obtain capital or financing facilities at costs and on terms satisfactory to the
Company. Factors that affect the Company's access to capital markets or the cost
of capital include, among others, interest rates, general economic conditions
and the Company's results of operations, financial condition, business prospects
(including competitive conditions), leverage and the performance of its asset
securitizations. In addition, covenants in the Indenture and in future debt
securities and financing facilities may significantly restrict the Company's
ability to incur additional indebtedness or issue new equity securities. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Financial Condition and Liquidity."

Corporate Structure and Limits on Availability of Cash to Obligor on the
Notes. Due to the structure of the Company's existing secured financing
facilities, substantially all of the earning assets of the Company are owned by
OFL-A and Receivables, which are wholly-owned, special purpose subsidiaries of
ACC, the obligor on the Notes. In effect, the Notes will be subordinated to the
secured financing facilities. ACC is dependent upon cash flow from OFL-A and
Receivables to fund its operations. As a result, ACC's ability to service its
obligations on the Notes or repurchase the Notes will depend upon cash flow from
its subsidiaries. Such cash flow could be adversely impaired by the occurrence
of triggering events on any of the asset securitizations or a default on a
secured facility. All of the assets of OFL-A are pledged as collateral to secure
the financing facilities and ACC's stock in OFL-A and Receivables are pledged as
collateral for the financing facilities and

10
<PAGE> 11

securitizations. OFL-A's activities are limited to the purchase of Contracts and
Receivables' activities are limited to the purchase and sale of Contracts in
connection with asset securitizations and activities incident thereto. Neither
OFL-A nor Receivables may incur any liabilities other than the existing secured
financing facilities. ACC provides the Company's Contract acquisition and
portfolio servicing functions and incurs virtually all of the Company's
operating expenses. However, ACC's direct cash flow is limited to servicing
fees, interest income and proceeds from the sale of securities, and these
sources are inadequate to fund the Company's operations. There is no assurance
that either subsidiary will have sufficient cash to cover ACC's operations and
fund obligations under the Notes even in the absence of a triggering event or
default. See "Risk Factors -- Disadvantageous Structure of the Repurchase
Facility in the Event of ACC's or Cargill's Bankruptcy" and see
"Business -- Financing."

Ability to Service Debt. Although the Company believes that its will have
adequate sources of liquidity to fund its interest and principal obligations,
redemption payments and other obligations on the Notes, there is no assurance
that the Company will not encounter liquidity problems that could adversely
affect its ability to meet such obligations and respond to economic, competitive
or other conditions affecting the Company's operations. Such liquidity problems
could adversely affect the Company's results of operations business prospects
and its ability to execute its business strategy. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Financial
Condition and Liquidity."

Leverage. The issuance of the Notes offered hereby will have the effect of
increasing the Company's leverage. At September 30, 1996, on an "as adjusted
basis" to give effect to the offering of the Notes and the repayment of the NIM
Facility, the aggregate outstanding consolidated liabilities of the Company
would have been approximately $54 million, of which $29 million would have been
liabilities of OFL-A to which the Notes are in effect subordinated. The degree
to which the Company is leveraged could have important consequences to the
Noteholders and to the Company (including the Company's ability to service its
debt and meet its redemption obligations under the Notes). The consequences of
increased leverage include: (i) the Company's increased vulnerability to changes
in economic conditions and competition; (ii) the potential limitations on the
Company's access to capital markets and ability to refinance its secured
financing facilities; and (iii) the dedication of a substantial portion of the
Company's available cash to debt service, thereby reducing cash available to
fund expanding business operations and future business opportunities. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Financial Condition and Liquidity" and see "Description of the
Notes."

Dependence Upon Financing Facilities and Upon Cargill. The Company has
depended upon the Repurchase Facility between ACC, OFL-A and Cargill, which
expires in July 1998, to finance its acquisition of Contracts. The Company also
has relied upon other Cargill financing facilities to fund its asset
securitizations, finance equipment acquisitions and provide working capital.
Cargill is a principal shareholder of the Company. The Company's ability to
continue to borrow under these financing facilities is dependent upon its
compliance with the covenants and other requirements of the agreements. If the
Repurchase Facility were to be terminated, the outstanding balance would become
immediately payable and there is no assurance the Company could find alternative
financing or financing on as favorable terms. See "Business -- Financing" and
see "Certain Transactions" and see "Risk Factors -- Dependence on Key
Personnel." The Company has depended upon Cargill as its principal financing
source and will continue following the offering to depend upon the Repurchase
Facility. See "Certain Transactions."

Disadvantageous Structure of the Repurchase Facility in the Event of the
Company's or Cargill's Bankruptcy. In the event that ACC or OFL-A became a
debtor under the United States Bankruptcy Code ("Bankruptcy Code"), the
structure of the Repurchase Facility could be disadvantageous to the Company and
make it very difficult to reorganize in bankruptcy without the cooperation of
Cargill. If Cargill did not cooperate in a bankruptcy, Cargill could attempt to
liquidate the Contracts without bankruptcy court approval and without giving the
Company an opportunity to formulate a plan of restructuring. An untimely
liquidation of the Contracts subject to the facility could result in the Company
receiving little or no proceeds from the liquidating sales, depending upon the
liquidation prices (net of costs) and the other cross-collateralized obligations
of the Company to Cargill. The loss of these Contracts also would adversely
affect the Company's

11
<PAGE> 12

balance sheet and financial condition, and could prevent the Company from
restructuring. Further, Cargill could elect to remove ACC as the servicer of the
Contracts subject to the facility, thereby terminating ACC's right to receive
the four percent servicing fee. In the event that Cargill becomes a debtor under
the Bankruptcy Code, there is a risk that Cargill could terminate the Company's
right to repurchase the Contracts as an executory contract, which could cause
the Company to lose the net interest income from the Contracts subject to the
Repurchase Facility and any future gain from the sale of the Contracts in an
asset-backed security. See "Business -- Financing."

Dependence Upon Asset Securitizations. The Company recently has relied and
expects to continue to rely on the issuance of asset-backed securities as a
means of providing long-term, fixed rate financing of Contracts and generating
servicing revenues. Gains from the issuance of these securities are expected to
generate a significant portion of the Company's revenues. The gain on sale,
however, does not generate any cash in the short term and is subject to
taxation. The timing of the issuance of any asset-backed security is affected by
a number of factors, some of which are beyond the Company's control, including,
among others, conditions in the asset-backed securities market, interest rates
and approvals from third parties. Some or all of these factors may cause delays
in closing a securitization or may even prevent such transactions entirely.
Further, the Company's asset securitization program could be adversely affected
by the performance of its existing securitizations, any significant changes in
its credit enhancement requirements and/or the loss of its guaranty relationship
with FSA. See "Business -- Securitization of Contracts."

INTEREST RATE RISK

Two primary components of the Company's earnings are: (i) net yield on
Contracts, which is the spread between the interest earned on the Contracts in
the Company's portfolio and the interest paid by the Company on the Repurchase
Facility and (ii) gain on sale, which is based upon the spread between the
interest earned on the Contracts included in asset-backed securities and the
pass-through rate paid to the investors in these securities. The Company's net
interest income and future gains on sale could be adversely affected by rising
interest rates, because while the interest rates on the Contracts in the
Company's portfolio are fixed, a portion of the Company's cost of funds is
variable. There is no assurance that the Company's cost of funds will not have
an adverse effect on the Company's ability to maintain profitability. See
"Business -- Financing" and see "Business -- Securitization of Contracts."

The Company has adopted a hedging program to mitigate the risk of reduced
income from changes in interest rates during the period after a Contract is
purchased and prior to the time it is sold in an asset-backed security. There is
no assurance that this hedging program will benefit the Company or offset
entirely corresponding losses with respect to Contracts affected by an interest
rate fluctuation; or that the hedging program itself will not cause the Company
to incur losses. See "Business -- Hedging Program."

COMPETITION AND CONSOLIDATION OF INDUSTRY

The automobile financing business, and the non-prime credit segment in
which the Company operates, are highly competitive. The Company competes with a
growing number of publicly and privately held national, regional and local
companies that specialize in non-prime automobile finance. In addition, the
Company competes, or may compete in the future, for business with more
traditional automobile financing sources, such as commercial banks and
automobile manufacturers' captive finance companies. Many of the Company's
competitors and potential competitors have substantially greater financial,
marketing and other resources than the Company, and may be more successful in
expanding into new geographic markets, building dealer networks and increasing
market share through internal growth or acquisition. The larger, more
established companies have access to capital markets for unsecured commercial
paper, investment-grade corporate debt instruments and to other funding sources
that may provide them with an advantageous cost of capital relative to the
Company's cost of capital. The non-prime finance segment of the automobile
financing industry, which is currently highly fragmented, may be subject to
significant future consolidation. See "Business -- Competition."

12
<PAGE> 13

GEOGRAPHIC CONCENTRATION

The Company's Contract purchases currently are concentrated in California,
Texas, Florida and Pennsylvania. As of September 30, 1996, 70% of the Contracts
serviced by ACC were purchased from Dealers in these states. An economic
slowdown or recession, or a change in the regulatory or legal environment, in
one or more of these states could have a material adverse effect on the
performance of the Company's existing Contract portfolio and on its Contract
purchases. See "Business -- Purchase of Contracts" and see
"Business -- Concentrations of Contract Purchases."

IMPACT OF GOVERNMENT REGULATION AND LITIGATION

The Company's business is subject to numerous federal and state consumer
protection laws and regulations which are subject to change. An adverse change
in or interpretation of existing laws or regulations, the promulgation of any
new laws or regulations, or the failure to comply with any of such laws and
regulations could have an adverse effect on the Company's business and its
financial condition. See "Business -- Government Regulation."

Given the consumer-oriented nature of the industry, industry participants
are from time to time named as defendants in litigation involving alleged
violations of federal and state consumer protection or other similar laws and
regulations. A judgment against the Company in connection with any litigation
could have a material adverse effect on the Company's financial condition and
its results of operations. In addition, if it were determined that a Dealer
failed to comply with applicable laws or a number of Contracts purchased by the
Company involved violations of applicable laws, the Company's financial
condition and results of operations could be materially adversely affected.
Further, an adverse judgment against a competitor relating to a standard
business practice in the industry could have a material adverse effect on the
non-prime automobile finance industry and on the Company. See
"Business -- Government Regulation."

DEPENDENCE ON KEY PERSONNEL

The Company is dependent upon its founding executive officers, Rocco J.
Fabiano, Gary S. Burdick and Rellen M. Stewart (the "Founders"). The loss of the
services of one or more of the Founders could have a material adverse effect on
the Company's business and there is no assurance that the Company would be able
to replace any of the Founders without incurring additional costs or without
disruptions to the Company. In addition, if any two of the three Founders are
not employed by the Company, Cargill will have the option of terminating the
Company's Repurchase Facility. The Company maintains key man life insurance in
the amount of $500,000 on each of the Founders. See "Risk Factors -- Dependence
Upon Financing Facilities and Upon Cargill" and see "Risk Factors -- Dependence
Upon Asset Securitizations" and see "Management -- Directors and Executive
Officers."

The Company's ability to implement its business strategy depends upon its
ability to attract and retain a sufficient number of qualified employees to
maintain its underwriting standards and collection procedures and to support its
expansion into new geographic markets. There is no assurance that the Company
will be able to recruit and retain such personnel. See "Risk
Factors -- Dependence on Dealer Relationships" and see "Business -- Purchase of
Contracts" and see "Business -- Servicing of Contracts."

DEPENDENCE ON DEALER RELATIONSHIPS

The Company's ability to expand into new geographic markets and to maintain
or increase its volume of Contract purchases is dependent upon maintaining and
expanding the network of Dealers from which it purchases Contracts. The
Company's loss of any of its regional sales managers could adversely affect the
Company's relationships with participating Dealers and future purchases of
Contracts. Increased competition, including without limitation, competition from
captive finance companies and other factors, could have an adverse effect on the
Company's ability to maintain or expand its Dealer network. See
"Business -- Purchase of Contracts" and see "Business -- Competition."

13
<PAGE> 14

CHANGES IN MARKET CONDITIONS

The Company's business of financing automobile sales is directly related to
the automobile industry's sales of new and used automobiles. Automobile sales
are cyclical in nature and are affected by general economic conditions,
including employment rates, interest rates, real wages and other economic
conditions. An increase in interest rates, economic slowdown or recession could
adversely affect automobile sales and, in turn, reduce the number of Contracts
available for purchase by automobile finance companies such as the Company. A
change in general economic conditions also could affect adversely the
performance of the portfolio of Contracts owned and serviced by the Company,
including Contracts sold in asset-backed securities. See "Business -- Non-Prime
Automobile Finance Industry."

RELIANCE ON SYSTEMS AND CONTROLS

The Company depends heavily upon its systems and controls, many of which
are designed specifically for its business. These systems and controls support
the evaluation, acquisition, monitoring, collecting and administering of the
Company's portfolio as well as support general accounting and other management
functions of the Company. There is no assurance that these systems and controls,
including those specially designed and built for the Company, are adequate or
will continue to be adequate to support the Company's growth. A failure of the
automated systems, including a failure of data integrity or accuracy, could have
a material adverse effect upon the Company's business and financial condition.
See "Business -- Management Information Systems."

CONTROL BY EXISTING SHAREHOLDER

As of October 1, 1996, investment funds managed by Strome Susskind
Investment Management, L.P. ("SSIM"), beneficially owned 38.7% of the
outstanding shares of Common Stock of the Company. As a result, SSIM has
significant influence over matters requiring approval of the Company's
stockholders, including the election or removal of directors. Currently, two of
the Company's five directors are limited partners of SSIM as well as
shareholders, directors and officers of the corporate general partner of SSIM.

SUBORDINATION OF NOTES

The Notes are subordinated in right of payment to all existing and future
senior indebtedness of ACC. Therefore, in the event of the liquidation,
dissolution, reorganization or any similar proceedings with respect to ACC, the
assets of ACC will be available to pay obligations on the Notes only after all
senior indebtedness and other secured indebtedness has been paid in full. As a
result, there may not be sufficient assets to pay all amounts due on the Notes.
Subject to restrictions on the amount of future indebtedness, ACC in the future
may enter into senior secured or unsecured financing facilities that would have
priority in payment to the Notes. Currently, virtually all of the Company's
earning assets are owned by OFL-A and Receivables, and are pledged as collateral
to secure the Repurchase Facility and NIM Facility. See, "Description of the
Notes."

LIMITED COVENANTS IN THE INDENTURE; ABSENCE OF SINKING FUND

The Indenture pursuant to which the Notes will be issued contains financial
and operating covenants including, among others, limitations on the Company's
ability to pay dividends, incur additional indebtedness and engage in certain
transactions. This includes limitations on certain consolidations, mergers or
transfers of all or substantially all of its assets. The covenants in the
Indenture are limited and are not designed to protect the Noteholders in the
event of a material adverse change in the Company's financial condition or
results of operations. Further, the Notes do not have the benefit of any sinking
fund payments by the Company. See "Description of the Notes."

RISK OF REDEMPTION

ACC at its option, is permitted at any time beginning December 1, 1999, to
redeem, in whole or in part, any or all of the outstanding Notes, at principal,
plus accrued interest, plus a premium (of four percent in 1999, two percent in
2000 and zero percent in 2001 and thereafter). There is no assurance that an
investor in

14
<PAGE> 15

the Notes will be able to reinvest the proceeds of the redemption and receive an
interest rate and rate of return comparable to the rate of return that would
have been achieved on the Notes through the remainder of the original term of
the Notes. See "Description of the Notes -- Optional Redemption by the Company."

LIMITED MARKET FOR NOTES

The Company has no present intention to have the Notes authorized for
quotation on the Nasdaq National Market or any other quotation system or listed
on any securities exchange. Although the Company has been advised by the
Underwriters that they currently intend to make a market in the Notes, the
Underwriters are not obligated to make a market or to continue to make a market
if one develops. There can be no assurance that an active trading market in the
Notes will develop or, if developed, will continue. See "Description of the
Notes."

15
<PAGE> 16

USE OF PROCEEDS

The net proceeds to ACC from the sale of Notes offered hereby, after
deducting the underwriting discount and estimated offering expenses payable by
ACC, will be $18,963,000, ($21,843,000 if the Underwriters' over-allotment
option is exercised in full). ACC intends to contribute net proceeds to OFL-A to
repay temporarily the amounts outstanding under the financing facility evidenced
by the "Subordinated Certificate and Net Interest Margin Certificate Financing
Facility Agreement" dated as of September 15, 1995, between ACC, OFL-A and
Cargill, as amended (the "NIM Facility"), which amount is expected to be $7.4
million at the closing of the offering. ACC used the funds borrowed under the
NIM Facility to pay credit enhancement and securitization expenses incurred in
connection with the sale of ACC's asset-backed securities and, to a lesser
extent, for working capital. The NIM Facility, which expires in May 1998, is a
floating rate facility priced at 7% above the one-month LIBOR, reset daily. The
Company intends to use the remaining proceeds for general working capital
purposes.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
September 30, 1996, and as adjusted to reflect the sale by the Company of
$20,000,000 of Notes offered hereby (assuming the Underwriters' over-allotment
option is not exercised) and the application of the estimated net proceeds
therefrom as described in "Use of Proceeds." The table should be read in
conjunction with the Company's Consolidated Financial Statements and the related
notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, 1996
---------------------------
AS
ACTUAL ADJUSTED
----------- -----------
(DOLLARS IN THOUSANDS)
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Repurchase Facility, Net............................................. $26,329 $26,329
Other Borrowings..................................................... 4,268 383
Notes................................................................ -- 20,000
------- -------
Total...................................................... 30,597 46,712
Shareholders' Equity:
Preferred Stock, $.001 par value, 1,817,718 shares authorized and
none issued and outstanding..................................... -- --
Common Stock, $.001 par value, 18,000,000 shares authorized,
8,292,478 shares issued and outstanding......................... 8 8
Additional Paid-in Capital......................................... 19,908 19,908
Retained Earnings(1)............................................... 2,745 2,745
------- -------
Total Shareholders' Equity................................. 22,661 22,661
Total Capitalization....................................... $53,258 $69,373
======= =======
</TABLE>

- ---------------

(1) Does not consider the impact of the rate differentials of the NIM Facility
and the Notes as the impact is not significant.

16
<PAGE> 17

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth certain summary consolidated financial
information for the Company. The following information as of December 31, 1995,
and 1994, and for the year ended December 31, 1995, the six-month transition
period ended December 31, 1994, and the period from July 15, 1993 (inception),
through June 30, 1994, has been derived from the Company's Consolidated
Financial Statements which have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report with respect thereto appears elsewhere in
this Prospectus. The information as of June 30, 1994, has been derived from
audited Consolidated Financial Statements of the Company which are not presented
herein. The information as of and for the nine-month periods ended September 30,
1996, and 1995, has been derived from the Company's unaudited Consolidated
Financial Statements. In the opinion of management, the unaudited Consolidated
Financial Statements have been prepared on the same basis as the audited
Consolidated Financial Statements and include all normal, recurring adjustments
which management considers necessary for the fair presentation of financial
position and results of operations for those periods. The consolidated financial
data should be read in conjunction with the Consolidated Financial Statements
and related notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this Prospectus. The
results for the nine-month period ended September 30, 1996, are not necessarily
indicative of results that may be expected for the year ending December 31,
1996.

<TABLE>
<CAPTION>
JULY 15,
SIX-MONTH 1993
TRANSITION (INCEPTION)
NINE MONTHS ENDED YEAR ENDED PERIOD ENDED THROUGH
SEPT. 30, DEC. 31, DEC. 31, JUNE 30,
-------------------------- 1995(1) 1994(1) 1994(1)
1995 ----------- ------------ ------------
-----------
1996 (UNAUDITED)
------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net Interest Income Before
Provision for Contract
Losses...................... $ 3,329,317 $ 2,940,849 $ 3,332,354 $ 2,187,843 $ 606,177
Gain on Sale of Contracts...... 10,415,434 5,804,077 8,056,136 -- --
Servicing Income and Ancillary
Fees........................ 3,288,526 988,030 1,757,257 28,237 6,653
Litigation Settlement Income.. -- -- -- 325,000 --
------------ ----------- ----------- ------------ ------------
Total Revenues................. 17,033,277 9,732,956 13,145,747 2,541,080 612,830
Provision for Contract
Losses(2)................... (590,298) (300,190) (673,802) (902,361) (592,325)
Operating Expenses............. (10,525,546) (6,328,076) (8,796,590) (2,630,925) (2,608,467)
------------ ----------- ----------- ------------ ------------
Income (Loss) Before
Taxes....................... 5,917,433 3,104,690 3,675,355 (992,206) (2,587,962)
Net Income (Loss).............. 3,432,433 2,787,310 3,466,355 (992,206) (2,587,962)
Preferred Stock Dividends...... 116,818 151,641 215,419 82,621 152,673
------------ ----------- ----------- ------------ ------------
Net Income (Loss) Available to
Common Shareholders......... $ 3,315,615 $ 2,635,669 $ 3,250,936 $ (1,074,827) $ (2,740,635)
============ =========== =========== ============ ============
Primary Income per Common
Share(3).................... $ 0.47 $ -- $ 0.62 $ -- $ --
Fully Diluted Income per Common
Share....................... 0.47 -- 0.55 -- --
Weighted Average Shares
Outstanding (Primary)....... 7,268,215 -- 5,624,305 -- --
Weighted Average Shares
Outstanding (Fully
Diluted).................... 7,303,038 -- 6,292,478 -- --
Pro Forma Ratio of Earnings to
Fixed Charges(4)............ 2.37 -- 1.61 -- --
</TABLE>

17
<PAGE> 18

<TABLE>
<CAPTION>
AS OF AS OF
DEC. 31, 1995 DEC. 31, 1994
AS OF ------------- -------------
SEPT. 30, 1996
--------------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets.............................................. $ 60,301,507 $ 46,908,938 $ 42,331,518
Net Installment Contracts
Held-for-Sale.......................................... 24,990,322 28,187,778 --
Held-for-Investment.................................... 330,120 509,388 38,613,239
Allowance for Contract Losses(5).......................... 390,000 476,808 1,181,004
Asset-Backed Securities................................... 8,250,907 3,910,080 --
Excess Servicing Receivables.............................. 11,862,618 5,590,878 --
Repurchase Facility, Net.................................. 26,328,645 29,708,252 40,492,594
Other Borrowings.......................................... 3,884,986 7,439,597 --
Total Liabilities......................................... 37,640,721 40,624,138 41,433,745
Redeemable Preferred Stock................................ -- 6,279,049 4,358,377
Shareholders' Equity...................................... 22,660,786 5,751 (3,460,604)
Pro Forma Ratio of Indebtedness to Consolidated
Tangible Net Worth(6).................................. 2.04 7.91 --
Return (Loss) on Average Assets (Annualized)................ 8.67% 6.92% (6.65)%
Return (Loss) on Average Equity (Annualized)(7)............. 31.43% 102.37% (160.91)%
</TABLE>

- ---------------

(1) Effective as of January 1, 1995, the Company changed its fiscal year end
from June 30 to December 31. Each of the periods ended June 30, 1994,
December 31, 1994, and December 31, 1995, is an audited period.

(3) Due to the significant changes in the capital structure of the Company,
historical net income (loss) per common share prior to the year ended
December 31, 1995, is not presented.

(4) For purposes of calculating the pro forma ratio of earnings to fixed
charges, earnings consist of income before income taxes, plus fixed
charges. Fixed charges consist of the interest on all indebtedness and the
representative interest factor of rent expense.

(5) Allowance for Contract losses does not contain the estimated undiscounted
resource loss allowance contained within the valuation of the ESRs. As of
September 30, 1996, December 31, 1995, and December 31, 1994, the estimated
undiscounted recourse loss allowance embedded in the ESRs was $15.5
million, $7.1 million and zero, respectively.

(6) For purposes of calculating the pro forma ratio of indebtedness to
consolidated tangible net worth, as adjusted for the issuance of the Notes,
indebtedness excludes secured indebtedness with respect to which the sole
recourse of the lender in the event of nonpayment or other default is to
the collateral and consolidated tangible net worth represents consolidated
shareholders' equity determined in accordance with generally accepted
accounting principles, less intangible assets.

(7) The calculation of return (loss) on average equity for December 31, 1995,
and 1994 includes the redeemable Preferred Stock.

18
<PAGE> 19

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

From the inception of the Company on July 15, 1993, through April 30, 1995,
the primary source of revenue for the Company was net interest income on the
Contracts owned by the Company. In May 1995, the Company initiated an
asset-backed securitization program by which the Company sells its Contracts and
retains subordinate asset-backed securities ("Subordinated Securities"), excess
servicing receivables ("ESRs") and credit enhancement cash reserves. The Company
completed its first securitization, ACC Auto Grantor Trust 1995-A (the "1995-A
Transaction"), effective May 1, 1995. Since that transaction, the Company has
completed four additional securitizations, the last one of which closed in
September 1996. As of September 30, 1996, the Company has sold $232 million of
Contracts through asset securitizations. Since initiation of the asset-backed
securitization program, the Company's earnings have been increasingly
attributable to the gains recognized on the sale of the Contracts. In addition,
servicing revenues are expected to comprise a greater percent of the Company's
revenues as a result of the growth of the servicing portfolio. In contrast,
interest income is expected to be a declining portion of total revenues.

In May 1996, the Company sold in an initial public offering 2,000,000
shares of its Common Stock which generated net proceeds of approximately $12.5
million. The proceeds were used to partially pay-down the NIM Facility,
temporarily reduce advances on the Repurchase Facility and for other general
corporate purposes. In addition, each share of the Company's redeemable
Preferred Stock automatically converted into 23 shares of Common Stock upon
consummation of the offering. Total cumulative dividends of $574,454 were paid
to the holders of the redeemable Preferred Stock subsequent to the conversion.

RESULTS OF OPERATIONS

The Nine-Month Period Ended September 30, 1996, Compared to the
Nine-Month Period Ended September 30, 1995

During the nine-month period ended September 30, 1996, income before taxes
increased to $5.9 million compared to $3.1 million for the same period in the
prior year. This increase is primarily due to increases in the gain on sale of
Contracts and servicing and ancillary fees totaling $6.9 million which resulted
from the sale of $131 million of Contracts and the servicing for others of an
average balance of $133 million of Contracts during the nine-month period ended
September 30, 1996, compared to $76 million sold and $30 million serviced during
the same period in 1995. Partially offsetting these increases was an increase in
operating expenses of $4.2 million as a result of the Company's expanded
purchasing and servicing operations. The Company reported net income of $3.4
million during the nine-month period ended September 30, 1996, compared to $2.8
million for the nine-month period ended September 30, 1995.

NET INTEREST INCOME. The Company generated approximately $3.3 million of
net interest income during the nine-month period ended September 30, 1996,
compared to $2.9 million in the nine-month period ended September 30, 1995. The
principal source of the Company's net interest income was the net yield on
Contracts (yield on Contracts less the cost of the Repurchase Facility) which
amounted to $2.7 million during the nine-month period ended September 30, 1996,
compared to $2.4 million during the nine-month period ended September 30, 1995.
This small increase resulted from a lower average balance of Contracts owned
offset by higher net yield in the nine-month period ended September 30, 1996,
compared to the same period in 1995. The yield on Contracts increased to 21.8%
and the average rate on the Repurchase Facility decreased to 8.7% in the
nine-month period ended September 30, 1996, compared to 19.5% and 9.4%,
respectively, in the nine-month period ended September 30, 1995. During the
nine-month period ended September 30, 1996, the Company earned interest income
of $1.3 million on asset-backed securities and cash balances held in restricted
accounts and as credit enhancement cash reserves, compared to $690,000 in the
nine-month period ended September 30, 1995. The Company recognized interest
expense on other borrowings and leases of $740,000 in the nine-month period
ended September 30, 1996, compared to $189,000 in the nine-month period a year
earlier.

CONTRACT LOSS PROVISION. The Company recorded a provision for Contract
losses of $590,000 for the nine-month period ended September 30, 1996, compared
to $300,000 for the nine-month period ended September 30, 1995. The 1995
provision included a provision for Contract losses of $700,000 and a one-time

19
<PAGE> 20

recapture of $400,000 from the allowance for Contract losses provided for in a
prior period on Contracts sold in conjunction with the 1995-A Transaction. The
allowance for Contract losses is maintained at a level deemed by management to
be adequate to provide for losses in the held-for-investment portfolio.

SERVICING REVENUES. The Company recorded $3.3 million of servicing and
ancillary fees for the nine-month period ended September 30, 1996, compared to
$988,000 for the nine-month period ended September 30, 1995. This substantial
increase in servicing revenues arose from an increase in the average size of the
portfolio of Contracts serviced for others to $133 million during the nine-month
period ended September 30, 1996, as compared to $30 million during the same
period in 1995. Until the completion of the 1995-A Transaction in May 1995, the
Company did not service Contracts for others and recognized no servicing
revenue. Future servicing revenues could be adversely affected if the level of
charge-offs and prepayments in any pool of Contracts sold exceeds the Company's
estimate of such levels at the time of the sale of such Contracts in
asset-backed securities.

GAIN ON THE SALE OF CONTRACTS. The Company recognized a gain of $10.4
million on the sale of $131 million of Contracts in connection with the 1996-A
Transaction, 1996-B Transaction and 1996-C Transaction during the nine-month
period ended September 30, 1996, compared to $5.8 million on the sale of $76
million of Contracts in connection with the 1995-A Transaction and 1995-B
Transaction in the nine-month period ended September 30, 1995. See Note 5 of the
Notes to Consolidated Financial Statements for the methodology used to calculate
the gain on sale.

OPERATING EXPENSES. The Company reported operating expenses of $10.5
million during the nine-month period ended September 30, 1996, compared to $6.3
million for the nine-month period ended September 30, 1995. The increase in
expenses reflected the growth in the amount of Contracts purchased and serviced
by the Company. The Operating Expense Ratio (annualized operating expenses as a
percentage of the average Contracts owned and serviced) improved to 8.8% for the
nine-month period ended September 30, 1996, from 12.1% during the nine-month
period ended September 30, 1995.

Personnel expenses for the nine-month period ended September 30, 1996, were
$5.9 million, compared to $3.9 million during the nine-month period ended
September 30, 1995. Personnel expenses consisted primarily of salaries and
wages, performance incentives, employee benefits and payroll taxes. The overall
increase in personnel expenses reflected the growth of the Company's full-time
employees from 121 as of September 30, 1995, to 198 as of September 30, 1996.
The Company expects that its number of full-time employees will continue to
increase commensurate with the growth of the Company's servicing portfolio.

The Company's general and administrative expenses increased to $2.7 million
for the nine-month period ended September 30, 1996, from $1.7 million for the
nine-month period ended September 30, 1995. These expenses consisted primarily
of telecommunications expenses, travel expenses, marketing expenses,
professional fees, insurance expenses, credit bureau expenses and management
information systems expenses. The increase in general and administrative
expenses reflected the substantial expansion of the Company's operations.

Servicing expenses increased to $1.2 million for the nine-month period
ended September 30, 1996, compared to $288,000 for the nine-month period ended
September 30, 1995, due to the substantial growth of the total servicing
portfolio. These expenses consisted primarily of out-of-pocket collection,
repossession and liquidation expenses.

Occupancy and equipment expenses increased to $352,000 for the nine-month
period ended September 30, 1996, from $268,000 for the nine-month period ended
September 30, 1995. The increase in occupancy and equipment expenses reflected
the expansion of its headquarters office space and its regional operations since
September 30, 1995. The Company expects its occupancy expenses to increase as
the Company expands its headquarters facility to accommodate the expansion of
the Company's operations.

INCOME TAXES. For the nine-month period ended September 30, 1996, the
effective tax rate was 42%, compared to 10.2% for the nine-month period ended
September 30, 1995.

20
<PAGE> 21

The Year Ended December 31, 1995, Compared to the Six-Month Transition Period
Ended December 31, 1994, Compared to the Year Ended June 30, 1994

At the inception of the Company on July 15, 1993, the Company adopted a
fiscal year end of June 30. The Company's initial fiscal year ended June 30,
1994 (the "initial fiscal year"). On January 23, 1996, the Company elected to
change its fiscal year end to December 31, with the change effective as of
January 1, 1995. The purpose of this change was to conform the Company's fiscal
year to the fiscal year adopted by its primary competitors. As a result of the
change in fiscal year end, the transition period from July 1, 1994, through
December 31, 1994 (the "transition period") constitutes an audited period.
Neither the actual results of the transition period nor the annualized results
of the transition period are indicative of the results that would have been
achieved in a 12-month fiscal year.

The Company reported net income of $3,466,000 during the year ended
December 31, 1995 ("fiscal year 1995"), compared to a net loss of $992,000 for
the transition period and a net loss of $2,588,000 for the initial fiscal year.
The Company's purchasing and servicing operations expanded significantly during
fiscal year 1995, compared to the transition period and the initial fiscal year.
During fiscal year 1995, the Company sold $101 million of Contracts in
asset-backed securities and recognized an $8.1 million gain on sale of such
Contracts. The Company did not sell contracts during the transition period or
the initial fiscal year.

NET INTEREST INCOME. The Company generated approximately $3.3 million of
net interest income during fiscal year 1995, compared to $2.2 million in the
transition period and $606,000 in the initial fiscal year. The principal source
of the Company's net interest income was the yield on Contracts, net of the cost
of the Repurchase Facility, which amounted to $2,895,000 during fiscal year 1995
compared to $2,184,000 during the transition period and $557,000 during the
initial fiscal year. In addition, during fiscal year 1995, the Company earned
interest of $927,000 on Subordinated Securities and cash balances held in
restricted accounts, and paid interest of $490,000 on other borrowings.

During fiscal year 1995, the Company recognized interest income of $114,000
from discount amortization, compared to $424,000 during the transition period
and $96,000 during the initial fiscal year. As of January 1, 1995, the Company
deemed all of its Contracts to be held-for-sale, except Contracts which were 31
days or more delinquent. Thereafter, the Company discontinued the amortization
of the purchase discounts, except in the case of Contract payoffs.

CONTRACT LOSS PROVISION. The Company recorded a provision for Contract
losses of $674,000 for fiscal year 1995, compared to $902,000 for the transition
period and $592,000 for the initial fiscal year. The allowance for Contract
losses is maintained at a level deemed by management to be adequate to provide
for losses in the held-for-investment portfolio.

SERVICING REVENUES. The Company recorded $1,757,000 of servicing and
ancillary fees during fiscal year 1995, compared to $28,000 for the transition
period and $7,000 for the initial fiscal year. For fiscal year 1995, the
substantial increase in servicing revenues arose from eight months of servicing
on the 1995-A Transaction and the four months of servicing on the 1995-B
Transaction. Since the Company had not yet sold any Contracts in asset-backed
securities in its initial fiscal year or the transition period, the Company's
servicing revenues were limited to ancillary fees.

GAIN ON THE SALE OF CONTRACTS. The Company recognized a gain on sale of
$8.1 million in fiscal year 1995, representing 7.7% of the principal amount of
$51 million in Contracts sold in the 1995-A Transaction and 8.6% of the
principal amount of $50 million in contracts in the 1995-B Transaction. There
were no such transactions in the transition period or in the initial fiscal
year. See Note 5 of Notes to Consolidated Financial Statements for the
methodology used to calculate the gain on sale.

LITIGATION SETTLEMENT INCOME. During the transition period, the Company
received a payment of $325,000 in connection with the settlement of litigation.
Management does not expect this source of income to be recurring.

OPERATING EXPENSES. The Company reported operating expenses of $8.8
million during fiscal year 1995, compared to $2.6 million for the transition
period and $2.6 million for the initial fiscal year. The increase in expenses
reflected the growth in the amount of Contracts purchased and serviced by the
Company. The

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<PAGE> 22

Operating Expense Ratio improved to 10.7% for fiscal year 1995, from 16.4% for
the transition period and 82.6% for the initial fiscal year.

Personnel expenses for fiscal year 1995 were $5.3 million, compared to $1.7
million for the transition period and $1.9 million for the initial fiscal year.
The increase in personnel expenses reflected the growth of the Company's
full-time employees from 64 as of June 30, 1994, to 82 as of December 31, 1994,
and 139 as of December 31, 1995.

The Company's general and administrative expenses increased to $2.4 million
for fiscal year 1995, from $701,000 for the transition period and $493,000 for
the initial fiscal year. The increase in general and administrative expenses
reflected the substantial growth of the Company.

Servicing expenses increased to $408,000 for fiscal year 1995, as compared
to $56,000 for the transition period. The increase in servicing expenses is due
to the substantial growth of the Company's total servicing portfolio from $43
million to $118 million as of December 31, 1994, and December 31, 1995,
respectively. During the initial fiscal year, the Company recognized no
servicing expenses.

Occupancy and equipment expenses increased to $372,000 for fiscal year
1995, from $101,000 for the transition period, and $101,000 for the initial
fiscal year. The increase in occupancy and equipment expenses generally
reflected growth in the activity of the Company. More specifically, the Company
significantly expanded its headquarters office space and its regional operations
since December 31, 1994.

INCOME TAXES. For the fiscal year 1995, representing the Company's first
year of earnings, the effective tax rate was 5.7% compared to zero for the
transition period and the initial fiscal year. This low effective tax rate for
fiscal year 1995 was due to the reversal of the valuation allowance on gross
deferred tax assets of $1,358,000 during fiscal year 1995.

CREDIT PERFORMANCE

The table below provides the Company's historic delinquency experience and
amounts in repossession with respect to its gross servicing portfolio, which
includes Contracts owned by the Company and Contracts sold in asset-backed
securities, at the dates indicated. All amounts and percentages are based on the
full amount remaining to be repaid on each Contract, net of any unearned finance
charges.

DELINQUENCY EXPERIENCE

<TABLE>
<CAPTION>
SEPT. 30, JUNE 30, MARCH 31, DEC. 31, SEPT. 30,
1996 1996 1996 1995 1995
--------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Gross Servicing Portfolio (000's)... $ 209,761 $172,562 $ 139,969 $117,539 $ 100,028
Period of Delinquencies (000's)(1):
31-60 Days........................ 6,234 4,827 2,256 3,217 2,620
61-90 Days........................ 1,832 1,347 1,010 1,171 838
91+ Days.......................... 1,088 662 561 608 652
-------- -------- -------- -------- --------
Total Delinquencies (000's)......... $ 9,154 $ 6,836 $ 3,827 $ 4,996 $ 4,110
======== ======== ======== ======== ========
Total Delinquencies as a Percentage
of Servicing Portfolio............ 4.36% 3.96% 2.73% 4.25% 4.11%
Amount in Repossession (000's)(2)... $ 1,685 $ 1,369 $ 1,130 $ 861 $ 755
Amount in Repossession as a
Percentage of Servicing
Portfolio......................... 0.80% 0.79% 0.81% 0.73% 0.75%
</TABLE>

- ---------------
(1) The Company considers a Contract delinquent when an obligor fails to make at
least 90% of the contractual payment by the stated due date. The period of
delinquency is based upon the number of days payments are contractually past
due. Contracts not yet 31 days past due are not considered to be delinquent.

22
<PAGE> 23

(2) Amount in repossession represents the outstanding principal on Contracts for
which vehicles have been repossessed, but not yet liquidated. Beginning with
the quarter ended March 31, 1996, the amounts are net of reinstated
repossessions.

Since January 1, 1995, the Company has maintained, at its own expense,
vendor single interest ("VSI") insurance that protects the Company's interest in
the collateral against uninsured physical damaged (including total loss) and
skips. From January 1, 1995, through September 30, 1996, the Company's
recoveries on its VSI insurance reduced its net charge-offs by $1.1 million and
the total premiums paid by the Company were $712,000. The Company has been
notified by its current carrier that it does not intend to offer a renewal of
the existing policy and the Company may elect to discontinue VSI insurance when
its current policy expires on December 31, 1996. This could result in certain
modifications to the requirements for the credit enhancement cash reserves for
the asset securitizations, which could delay the Company's receipt of cash from
such reserves.

The table below provides the Company's historic net charge-off experience
with respect to its average servicing portfolio, which includes Contracts owned
by the Company and Contracts sold in asset-backed securities, during the periods
indicated. All amounts and percentages are based on the full amount remaining to
be repaid on each Contract, net of any unearned finance charges.

NET CHARGE-OFF EXPERIENCE

<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------------------
SEPT. 30, JUNE 30, MARCH 31, DEC. 31, SEPT. 30,
1996 1996 1996 1995 1995
--------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Average Servicing Portfolio
Outstanding (000's)(1)............ $ 191,162 $156,266 $ 128,754 $108,784 $ 89,073
Net Charge-offs (000's)(2)(3)(4).... $ 2,227 $ 1,329 $ 1,417 $ 1,233 $ 851
Annualized Net Charge-offs as a
Percentage of Average Servicing
Portfolio......................... 4.66% 3.40% 4.40% 4.53% 3.82%
</TABLE>

- ---------------
(1) Average of receivables outstanding as of the beginning and the end of the
period.

(2) Charge-off amounts exclude the effect of accrued interest, discounts paid by
the dealers and potential recoveries from legal proceedings against
borrowers.

(3) Net charge-offs are net of recoveries and include the remaining Contract
balance at time of charge-off. In the case of repossession, net charge-offs
include the remaining Contract balance at the time of repossession less
liquidation proceeds (for disposed vehicles), NADA wholesale value (for
vehicles repossessed but not sold) or claims receivable under the Company's
VSI insurance. Net charge-offs do not include repossessions that are less
than 120 days delinquent and are not yet charged-off.

(4) For the periods reflected in the table, the Company reduced its charge-offs
by an aggregate of $986,000 and paid total premiums of $650,000 in
connection with VSI insurance.

The management of the Company believes that the payment practices of
Non-Prime Borrowers are partially a function of the time of year. Since
Non-Prime Borrowers typically have low disposable incomes, they tend with more
frequency to become late in payments on their Contracts during the fall and
early winter months, when the holiday season generates competing demands for
their limited disposable income and when these borrowers encounter
weather-related work slow-downs. As a result, if all other factors are equal,
management expects delinquencies to be highest in the fourth calendar quarter.

ALLOWANCE FOR LOSSES

The Company maintains an allowance for losses on Contracts that are
held-for-investment. The Company determines an allowance for Contract losses
based on an estimate of the losses inherent in the held-for-investment
portfolio, including estimates of the frequency of defaults for various
delinquency ranges and

23
<PAGE> 24

the expected average severity of losses on these defaults. The allowance for
Contract losses as of September 30, 1996, was $390,000, or 52% of the Contracts
held-for-investment. As of December 31, 1995, the allowance for Contract losses
was $477,000, or 46% of the Contracts held-for-investment.

In connection with the valuation of the ESRs, the Company projects loan
losses in the pool of Contracts which effectively represent the estimated
undiscounted recourse loss allowance contained within the valuation of the ESRs.
As of September 30, 1996, the estimated undiscounted recourse loss allowance
embedded in the ESRs (excluding accrued interest) was $15.5 million. The
combined allowance for losses on Contracts held-for-investment and the recourse
loss allowance embedded in the ESRs was 7.6% of the Contracts serviced as of
September 30, 1996, as compared to 6.4% at December 31, 1995.

FINANCIAL CONDITION AND LIQUIDITY

The Company's financing needs are primarily driven by two factors. First,
the Company requires working capital to fund its operating expenses because the
net interest income earned on the Contracts owned by the Company is restricted
and not available for general operating purposes. Second, the securitization
program is capital intensive as the Company must fund credit enhancement and
securitization expenses. The Company expects to have an ongoing need for cash to
support the securitization program. This need may exceed the amount of the net
proceeds of this offering. The Company may preserve its right to borrow under
the NIM Facility until May 1998, in the event its cash requirements exceed the
net proceeds of this offering and its other cash resources. Further, OFL-A and
Receivables generate substantially all of the cash income of the Company (from
the ESRs and Subordinated Securities), as well as all the secured financing
(from the Repurchase Facility and NIM Facility). ACC's only substantial source
of cash comes from fees generated from servicing Contracts pledged to Cargill in
conjunction with the Repurchase Facility and Contracts sold in conjunction with
asset-backed securitizations. Because ACC is responsible for virtually all
operating expenses, cash infusions from its subsidiaries are required regularly.
These cash infusions are recognized as intercompany loans and are eliminated
during consolidation of the financial statements of the Company.

The Company reported total assets of $60 million as of September 30, 1996,
compared to $47 million as of December 31, 1995, and $42 million as of December
31, 1994. As of September 30, 1996, and December 31, 1995, these assets
consisted primarily of Contracts held-for-sale, Subordinated Securities, ESRs
and credit enhancement cash reserves.

The Company had $106,000 of cash and cash equivalents as of September 30,
1996, compared to $121,000 as of December 31, 1995. The Company also had $8.6
million in cash balances held in restricted bank accounts and in credit
enhancement cash reserves as of September 30, 1996, compared to $5.1 million as
of December 31, 1995. See Note 2 of Notes to Consolidated Financial Statements.

The Company owned net Contracts of $25 million as of September 30, 1996,
compared to $29 million as of December 31, 1995. During the nine-month period
ended September 30, 1996, the Company acquired $132 million of Contracts and
sold $131 million of Contracts in the 1996-A Transaction, 1996-B Transaction and
1996-C Transaction. The average discount and the weighted average coupon on the
Contracts acquired during the nine-month period ended September 30, 1996, were
4.8% and 20.7%, respectively. During fiscal year 1995, the Company acquired $99
million of Contracts and sold $101 million of Contracts in the 1995-A
Transaction and 1995-B Transaction. During the transition period, the Company
acquired $29 million of Contracts and made no sales.

As of September 30, 1996, the Company owned $11.9 million of ESRs and $8.3
million of Subordinated Securities, compared to $5.6 million and $3.9 million,
respectively, as of December 31, 1995. There were no such investments as of
December 31, 1994. These assets represented 33.4% and 20.3% of the total assets
of the Company as of September 30, 1996, and December 31, 1995, respectively.
The value of these assets would be reduced in the event of a material increase
in the charge-off or prepayment experience relative to the Company's estimates
at the time of sale.

As of September 30, 1996, the principal amount owed under the Repurchase
Facility was $23 million and the Company had Contract shipments in process of
$2.7 million, compared to $29 million and $626,000,

24
<PAGE> 25

respectively, as of December 31, 1995. The Repurchase Facility balance was
collateralized by $27 million of Contracts and restricted cash reserves of $1.4
million as of September 30, 1996.

During the nine-month period ended September 30, 1996, the Company used net
cash from operations of $8.4 million, compared to net cash provided by
operations of $2.1 million during the nine-month period ended September 30,
1995. The decrease in cash provided by operations was primarily due to a net
decrease in cash from the acquisition and sale of Contracts held-for-sale of
$8.9 million and a net increase in accounts receivable of $1.2 million. The
Company sold $131 million of Contracts and acquired $132 million of Contracts in
the nine-month period ended September 30, 1996, compared to the sale of $76
million of Contracts and the acquisition of $72 million of Contracts in the
nine-month period ended September 30, 1995. Additionally, the Company deposited
$3.5 million into restricted cash accounts and in credit enhancement cash
reserves during the nine-month period ended September 30, 1996, as compared to
$1.3 million during the same period in 1995.

The net cash provided by operations in fiscal year 1995 was $771,000
compared to net cash used of $1.6 million for the transition period and $3.4
million in the initial fiscal year. The increase in net cash provided by
operations in fiscal year 1995, as compared to the transition period and the
initial fiscal year, was due to the income associated with the sale and
servicing of Contracts in the 1995-A Transaction and 1995-B Transaction.

During the nine-month period ended September 30, 1996, and fiscal year
1995, cash generated from payments received on Contracts financed under the
Repurchase Facility was used to reduce indebtedness under, or was deposited into
restricted accounts as additional collateral for, the Repurchase Facility.
Proceeds from the securitization of Contracts were also used by the Company to
reduce indebtedness under the Repurchase Facility. Following each of the asset
securitization transactions, excess servicing cash flows were deposited into
restricted accounts to build credit enhancements. Once the amounts in these
credit enhancement cash reserves reach required levels, any additional excess
servicing revenues are distributed to the Company. In January 1996, and May
1996, respectively, the reserves associated with the 1995-A Transaction and
1995-B Transaction met required levels and approximately $4.0 million has been
released, or approved for release, from these reserves during the nine-month
period ended September 30, 1996. These proceeds were used to reduce the amount
owed by the Company under the NIM Facility and for general working capital
purposes. To date, the required levels have not been met by the reserves
associated with the 1996-A Transaction, 1996-B Transaction or 1996-C
Transaction. Under normal circumstances, the Company expects to meet required
levels eight to 12 months following the effective date of a securitization,
however, there is no assurance that this expectation will be met and the
occurrence of any triggering event would delay release of excess cash.

The net cash provided by investing activities was $2.2 million during the
nine-month period ended September 30, 1996, compared to net cash provided of
$1.1 million in the nine-month period ended September 30, 1995. This increase in
cash provided was primarily due to collections associated with a larger balance
of Subordinated Securities, net of an increased balance of Contracts
held-for-investment. The cash used in investing activities was $808,000 for
fiscal year 1995, compared to $24.5 million used for investing activities during
the transition period and $16.1 million used in investing activities during the
initial fiscal year. The decrease in cash used by investing activities during
the fiscal year 1995, compared to the transition period, was the result of the
classification of the Contracts to a held-for-sale status during the quarter
ended March 31, 1995. The increase in cash used during the transition period
compared to the initial fiscal year was the result of a higher volume of
Contract purchases.

The net cash provided by financing activities was $6.2 million for the
nine-month period ended September 30, 1996, compared to net cash used of $1.1
million for the nine-month period ended September 30, 1995. The increase in cash
provided by financing activities was primarily due to net cash of $12.5 million
raised in the Company's initial public offering and $1.0 million from the
issuance of redeemable Preferred Stock, net of $7.0 million used to partially
pay-down the outstanding balance of the NIM Facility. Additionally, the Company
reduced the balance of the Repurchase Facility by $3.5 million in the nine-month
period ended September 30, 1996, compared to $10.7 million in the same period a
year earlier. The net cash

25
<PAGE> 26

provided by financing activities for fiscal year 1995 was $14,000, compared to
$26.2 million for the transition period.

The Company has financed its acquisition of Contracts primarily through the
Repurchase Facility. Cargill finances 100% of the purchase price of the
Contracts under the Repurchase Facility. The Company has also used the proceeds
of the retired bridge facility and, subsequently, the NIM Facility to finance
credit enhancement and securitization expenses arising from the issuance of
asset-backed securities and for working capital. A breach under either the
Repurchase Facility or the NIM Facility could prohibit the Company from
obtaining financing under both of the facilities and would require ACC to obtain
an alternative source of financing or limit its purchase of Contracts. The
Company intends to use the proceeds of this offering to repay temporarily the
NIM Facility and for general working capital purposes.

The Company's business requires substantial cash to support the funding of
credit enhancement cash reserves for its asset securitizations, issuance costs
of its asset securitizations, operating expenses, tax payments due in
recognition of gains on sales of Contracts (for which no cash is received by the
Company), debt service and other cash requirements. These cash requirements
increase as the volume of Contracts purchased and serviced by the Company
increases. Historically, the Company has operated on a negative cash flow basis
and, depending upon the Company's growth of Contract purchase volumes and its
Contract securitization program, its negative cash flow may continue for the
foreseeable future. The Company has funded its negative operating cash flows
principally through borrowings under the NIM Facility (and the bridge facility
retired by the NIM Facility) and proceeds from the sale of equity securities,
and will use the proceeds of the Notes to fund, in part, its negative operating
cash flow. In order to execute its business strategy, the Company is dependent
upon the Repurchase Facility (and the replacement of the Repurchase Facility in
1998), its asset securitization program and its ongoing ability to access
capital markets to obtain long term debt and equity capital. There is no
assurance that the Company will have access to capital markets when needed or
will be able to obtain capital or financing facilities at costs and on terms
satisfactory to the Company. Factors that affect the Company's access to capital
markets or the cost of capital include, among others, interest rates, general
economic conditions and the Company's results of operations, financial
condition, business prospects (including competitive conditions), leverage and
the performance of its asset securitizations. In addition, covenants in the
Indenture and in future debt securities and financing facilities may
significantly restrict the Company's ability to incur additional indebtedness or
issue new equity securities.

INTEREST RATE RISK MANAGEMENT

The Company's hedging plan includes the sale of futures contracts on
two-year Treasury securities. These sales are made by the Company in amounts
which generally correspond to the principal amount of expected sales of
asset-backed securities. The market value of these futures contracts responds
inversely to changes in the value of the Contracts. Gains and losses relative to
these hedging transactions are deferred and recognized at the time of
securitization as an adjustment to the gain or loss on sale. The Company
recognized net gains on the hedging program of $90,000 during the nine-month
period ended September 30, 1996, as compared to net losses of $927,000 during
the year ended December 31, 1995. As of September 30, 1996, and December 31,
1995, the Company had unrealized losses under the hedging program of $39,000 and
$225,000, respectively.

At any point in time, the portfolio may be partially or fully hedged. As of
September 30, 1996, the Company owned $27 million of Contracts and maintained a
$25 million hedge position.

IMPACT OF NEW ACCOUNTING STANDARDS

In October 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123"). SFAS No. 123 applies to all
transactions in which an entity acquires goods or services by issuing equity
instruments or by incurring liabilities where the payment amounts are based on
the entity's common stock price, except for employee stock ownership plans. A
new method of accounting for stock-based compensation arrangements with
employees is established by SFAS No. 123. The new method is a fair value-

26
<PAGE> 27

based method rather than the intrinsic value-based method that is contained in
APB Opinion No. 25 ("APB 25").

The SFAS No. 123 fair value-based method will result in higher compensation
costs than the APB 25 intrinsic value-based method for fixed stock option
compensation plans and will result in different compensation costs for variable
stock option compensation plans. Also, many employee stock purchase plans that
are considered noncompensatory under APB 25 will be compensatory and result in
the recognition of compensation costs under the fair value-based method.

SFAS No. 123 does not require an entity to adopt the new fair value-based
method for purposes of preparing its basic financial statements. Entities are
allowed either to continue to use the APB 25 method or to adopt the SFAS No. 123
fair value-based method. However, disclosure of the pro forma net earnings and
earnings per share, as if the fair value method of accounting for stock-based
compensation had been elected, is required for fiscal years beginning after
December 15, 1995. The Company has elected to continue to measure compensation
cost related to employee stock purchase options using APB 25, and will provide
pro forma disclosures as required in the 1996 consolidated financial statements.

In June 1996, the FASB issued SFAS No. 125 which establishes accounting for
transfers and servicing of financial assets and extinguishment of liabilities.
This statement specifies when financial assets and liabilities are to be removed
from an entity's financial statements, the accounting for servicing assets and
liabilities and the accounting for assets that can be contractually prepaid in
such a way that the holder would not recover substantially all of its recorded
investment.

Under SFAS No. 125, an entity recognizes only assets it controls and
liabilities it has incurred, discontinues recognition of assets only when
control has been surrendered, and discontinues recognition of liabilities only
when they have been extinguished. SFAS No. 125 requires that the selling entity
continue to carry retained interests, including servicing assets, relating to
assets it no longer recognizes. Such retained interests are based on the
relative fair values of the retained interests of the subject assets at the date
of transfer. Transfers not meeting the criteria for sale recognition are
accounted for as a secured borrowing with a pledge of collateral. Under SFAS No.
125, certain collateralized borrowings may result in assets no longer being
recognized if the assets are provided as collateral and the secured party takes
control of the collateral. This determination is based upon whether: (1) the
secured party is permitted to repledge or sell the collateral and (2) the debtor
does not have the right to redeem the collateral on short notice.
Extinguishments of liabilities are recognized only when the debtor pays the
creditor and is relieved of its obligation for the liability, or when the debtor
is legally released from being the primary obligor under the liability, either
judicially or by the creditor.

SFAS No. 125 requires an entity to recognize its obligation to service
financial assets that are retained in a transfer of assets in the form of a
servicing asset or liability. The servicing asset or liability is to be
amortized in proportion to, and over the period of, net servicing income or
loss. Servicing assets and liabilities are to be assessed for impairment based
on their fair value.

SFAS No. 125 modifies the accounting for interest-only strips or retained
interests in securitizations, such as capitalized servicing fees receivable,
that can be contractually prepaid or otherwise settled in such a way that the
holder would not recover substantially all of its recorded investment. In this
case, it requires that they be classified as available for sale or as trading
securities. Interest-only strips and retained interests are to be recorded at
market value. Changes in market value are included in operations, if classified
as trading securities, or in shareholders' equity as unrealized holding gains or
losses, net of the related tax effect, if classified as available for sale.
Management of the Company is currently in the process of evaluating the
financial impact of this statement on the Company.

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<PAGE> 28

BUSINESS

GENERAL

The Company specializes in the indirect financing of Contracts originated
primarily by franchised Dealers for Non-Prime Borrowers. By purchasing Contracts
financing primarily late-model used vehicles as well as some new vehicles, the
Company provides an alternative source of financing for Non-Prime Borrowers who
might not be able to qualify for traditional automobile loans or leases. The
Company's business strategy currently calls for the sale of all Contracts
through asset securitizations, rather than holding Contracts to maturity. To
this end, the Company periodically securitizes pools of its Contracts in order
to redeploy its capital, reduce interest rate risk and realize a gain on the
sale of these Contracts. The Company believes that its competitive advantages
include its national presence, risk-based pricing, financial resources,
nationwide consistency of credit decisions and quality Dealer service.

The Company commenced business operations in July 1993. The Company was
initially capitalized primarily through equity investments by its Founders and
two funds managed by SSIM, Strome Partners, L.P. and Strome Offshore Limited
(the "SSIM Funds"); and through subsequent equity investments by the SSIM Funds,
Cargill and the Founders. In July 1993, the Company entered into the Repurchase
Facility with Cargill through which it has financed its purchases of Contracts.
Cargill's operations consist of global proprietary trading activities as well as
other specialized financial services. Cargill was founded in 1984 and currently
manages more than $6 billion in assets. Cargill is headquartered in Minneapolis,
Minnesota, and has more than 650 employees worldwide.

NON-PRIME AUTOMOBILE FINANCE INDUSTRY

Automobile financing is one of the largest consumer finance markets in the
United States, with $356 billion in automobile-related credit outstanding as of
January 1996. In general, the automobile finance industry can be divided into
two principal segments: a prime credit market and a non-prime credit market.
Traditional automobile finance companies, such as commercial banks, savings and
loans, thrift and loans, credit unions and captive finance companies of
automobile manufacturers, generally provide credit to the most creditworthy
borrowers, or so-called "prime borrowers."

The so-called "non-prime" credit market, in which the Company operates,
provides financing to Non-Prime Borrowers, who are those borrowers who have had
past credit problems (including bankruptcy), have limited or no credit histories
and/or have low incomes. Historically, traditional automobile financing sources
have not serviced the non-prime market or have done so only through programs
that were not consistently available. An industry group of independent finance
companies specializing in non-prime automobile financing is now emerging, but
the industry remains highly fragmented, with no company having a significant
share of this non-prime market.

The Company estimates that the size of the non-prime automobile market may
be as large as $70 billion in outstanding installment debt. The Company believes
that the number of Non-Prime Borrowers is increasing due to, among other
factors, declining real wages, the greater willingness on the part of consumers
to seek bankruptcy protection, the high cost of new automobiles relative to
consumer incomes and the greater availability of late-model used vehicles coming
off short-term lease programs. The Company's program is designed to provide
financing to this market segment.

BUSINESS STRATEGY

The Company's primary objective is to increase its net income by expanding
market share. The Company believes it has the operational and administrative
capacity to expand its business and attain this objective. The Company's
strategies for achieving this objective, which focus on credit quality,
efficiency of operations and expansion, are as follows:

- Enforcing nationwide consistency of underwriting standards and controls,
including verification and document review;

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<PAGE> 29

- Increasing the volume of Contract purchases from existing Dealers;

- Increasing the number of active Dealers in the Company's existing
geographic markets;

- Entering selected new markets in metropolitan areas where the Company can
recruit experienced regional sales managers or correspondents;

- Using the Company's Contract database to refine underwriting standards,
program pricing and overall credit risk evaluation capabilities;

- Attracting and retaining qualified employees;

- Maintaining reliable funding sources;

- Approving applications and funding Contract purchases in a timely manner;
and

- Maintaining and improving the Company's delinquency monitoring and
collection processes.

Overall, the Company's strategy is to purchase Contracts with yields, after
discounts, that compensate the Company for the credit risk inherent in the
non-prime market, and to manage this credit risk through the Company's internal
credit evaluation and its proactive collection processes.

PURCHASE OF CONTRACTS

Sales and Marketing

The Company markets its financing program primarily to franchised Dealers
and to a limited number of independent used automobile Dealers. Before
purchasing Contracts from a Dealer, ACC and the Dealer enter into an agreement
("Dealer Agreement") that provides the Company with recourse to the Dealer in
cases of Dealer fraud or a breach of the Dealer's representations and
warranties. As of September 30, 1996, the Company had 1,247 active Dealers,
defined as Dealers from which the Company had purchased at least one Contract in
the last six months, compared to 546 active Dealers as of September 30, 1995.

The Company typically solicits business from Dealers through its regional
sales managers ("RSMs"), each of whom is assigned an exclusive territory. The
Company typically hires RSMs who have experience with the purchase of non-prime
Contracts and who have pre-existing, established relationships with Dealers in a
particular major metropolitan area. As of September 30, 1996, the Company had 42
RSMs.

RSMs meet regularly with Dealers and provide information about the
Company's program, train Dealer personnel as to the Company's program
requirements and assist Dealers in identifying consumers who qualify for ACC's
program. As of September 30, 1996, the Company marketed its program to Dealers
in 25 states: Arizona, California, Colorado, Delaware, Florida, Georgia,
Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada,
New Jersey, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina,
Tennessee, Texas, Virginia, Washington and West Virginia. The Company targets
major metropolitan areas because it believes they provide concentrations of high
volume Dealers, which can be effectively serviced by its RSMs. The Company
purchased $500,000 or more of Contracts from 19 states during the quarter ended
September 30, 1996, compared to ten states during the quarter ended September
30, 1995.

RSMs typically target the late-model used vehicle business of franchised
Dealers. The Company believes that late-model used vehicles represent the
largest segment of the used vehicle market, while posing less risk of default
due to mechanical problems than do older used vehicles. The Company targets
franchised Dealers because the financial requirements and customer service
standards imposed on these dealers by automobile manufacturers generally result
in a high level of financial stability and customer satisfaction. As a result,
the Company believes that, in general, Contracts from these Dealers expose the
Company to less risk of Dealer misrepresentation and lower levels of borrower
default.

Dealer Reviews

Each month, senior management reviews Dealer performance reports that
track, by Dealer, the number of applications submitted, the number of
applications approved, the number of applications funded, the ratio

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<PAGE> 30

of applications funded to applications received ("efficiency ratio"),
delinquency ratios and default rates. Senior management maintains a Dealer
"watch list" to track the performance of Dealers with low efficiency ratios,
high delinquency ratios or high loss levels relative to the overall portfolio.
Based upon senior management's subjective assessment of these factors, during
the nine-month period ended September 30, 1996, the Company discontinued the
purchase of Contracts from approximately 35 Dealers due to unsatisfactory
results.

Regional Credit Centers

The Company serves its Dealers on a regional basis through its regional
credit centers. The Company believes that these regional centers provide a
sufficient local market presence to meet the needs of its Dealers, without
incurring the reduction in operating controls and economies of scale that can
result from operating a large number of small branches. The Company currently
has regional credit centers in Atlanta, Georgia; Dallas, Texas; Miami, Florida;
Newark, Delaware; and San Diego, California.

Application Processing and Purchase Criteria

Dealers submit credit applications to one of the Company's regional credit
centers, typically by facsimile. Upon the Company's receipt of a credit
application, a credit processor uses an automated system to obtain credit
histories, determine the wholesale value of the vehicle and calculate the credit
score of the application. The Company's credit officers use the credit score as
a guide to evaluate applications, but the approval/ declination decision is not
based solely on the credit score. Individual credit officers have limited
approval authority and the approval of a more senior credit manager is required
when the credit score or the amount financed exceeds the individual credit
officer's approval limits. The Company's regional credit centers then notify
Dealers by facsimile of a credit decision, usually within three hours of receipt
of the application.

During the nine-month period ended September 30, 1996, the Company approved
approximately 16% of the applications it received and funded approximately 61%
of the applications that were approved. The Company believes Dealers select
among finance companies based upon price, term, advance, down payment
requirements, stipulations, timeliness of the finance company's approval and the
historic reliability of the finance company's funding of purchases. The Company
strives to maintain its competitiveness by meeting Dealer needs without
compromising its credit standards.

The Non-Prime Borrowers under Contracts of the type typically purchased by
the Company generally have credit histories which include past bankruptcies,
significant charged-off accounts and/or multiple collection accounts. Further,
other Contracts may be purchased by the Company for borrowers with limited or no
credit histories. In light of the deficiencies in the borrowers' credit
histories, the Company's credit officers evaluate other potential offsetting
factors such as the borrowers' residence stability, employment stability, income
level relative to expenses and past performance on other automobile-related
debt. If, in the credit officers' judgment, there are enough offsetting positive
factors, such Contracts may be approved for purchase by the Company.

To be eligible for purchase, a Contract must be fully amortizing and
provide for level payments over the term of the Contract, must grant a first
priority security interest in the financed vehicle to OFL-A, must prohibit the
sale or transfer of the financed vehicle without the Company's consent and must
allow for acceleration of the maturity of the Contract if the vehicle is sold or
transferred without this consent. The portions of payments on Contracts
allocable to principal and interest are, for payoff and deficiency purposes,
determined in accordance with the law of the state in which the Contract was
originated.

Each Contract includes a requirement that the borrower maintain fire, theft
and collision insurance on the financed vehicle and name the Company as a loss
payee. As part of the funding process, the Company verifies by telephone that
insurance is in place on the financed vehicle; however, as of September 30,
1996, approximately 12% of borrowers had canceled their insurance or allowed
their insurance policies to lapse. Although the Contracts permit the Company to
force-place insurance, the Company, as a matter of policy, generally does not
force-place insurance due to the added collection and litigation risk.

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<PAGE> 31

Funding Package Completion, Verification and Funding

After receiving an approval from one of the Company's regional credit
centers and compiling a set of documents the Dealers believe to be consistent
with the Company's documentation requirements, the Dealers send these funding
packages to the Company's central funding group in San Diego. The Company
generally requires that funding packages include proof of the borrower's
residency, income, insurance and title.

The Company's funding department reviews each Contract and verifies the
application data and Contract documentation. The funding department also
confirms or reconfirms the borrower's employment and the insurance on the
vehicle. The Company believes one of the most important verifications is a
direct telephone interview of the borrower to confirm the terms of the Contract,
the source of the down payment and the equipment on the vehicle. The Company
typically will not fund a Contract without a prior telephone interview of the
borrower. The Company believes this process reduces the risk of
misrepresentation by Dealers and/or borrowers and provides a basis for future
borrower contact.

A funding package may be returned if it does not comply with the terms of
the initial approval or if the Company discovers facts that were not disclosed
during the approval process. The Company returns unfunded approximately 10% of
all completed funding packages for these reasons, a portion of which are
resubmitted in approvable form. As an additional quality control check, the
Company's data processing systems perform an automated review of the Contracts
and identify any characteristics not in compliance with the Company's minimum
underwriting standards.

Post-Funding Quality Reviews

The Company uses its automated systems to continue to monitor Contracts
after funding. In addition, the Company's quality control manager, who reports
directly to the Chief Executive Officer, completes a full quality control review
of a random sample of 5% of the newly-originated Contracts. This review focuses
on compliance with underwriting standards, the quality of the credit decision
and the completeness of Contract documentation. On a periodic basis, the
Company's quality control manager issues a report to the Company's senior
management summarizing (by credit processor and credit officer) policy
exceptions, processing errors, documentation deficiencies and credit decisions
which the quality control manager considered overly aggressive. The bonuses of
the Company's credit officers are, in part, dependent upon results of these
quality control reviews.

Risk-Based Pricing

The Company uses statistical information and its automated Contract
purchasing systems to establish different pricing programs by geographic region,
by borrower credit characteristics or, in some cases, by Dealer; all tied to the
expected economic value of each program to the Company.

The Company maintains a database which tracks key underwriting parameters
for each Contract purchased since the formation of the Company. This database is
updated periodically to reflect the payment performance of each Contract. The
Company uses this information to identify and aggregate a pool of Contracts that
have failed to perform as anticipated. Each Contract in this pool is then
matched against a performing Contract with the same date of purchase. By
statistically comparing the characteristics of these two pools over time, the
Company is able to refine periodically its credit evaluation processes and
believes it is better able to price each of its programs based upon the expected
risk of each program.

Correspondents

The Company has established relationships with a limited number of
third-party marketing organizations which generate Contracts for the Company.
The Contracts generated by these correspondents meet the same standards and
undergo the same pre-funding review as Contracts arising from ACC's regional
credit centers. As of September 30, 1996, the Company had five active
correspondent relationships and less than 2% of the Company's Contract portfolio
was generated through these correspondents. The Company believes that, either as
a result of geographic coverage or established industry contacts, certain
correspondents can generate

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<PAGE> 32

Contracts for the Company on a more cost-effective basis than the Company's
RSMs. Thus, the Company may purchase a greater portion of its Contracts through
these correspondents in the future.

Bulk Purchases

To date, the Company has reviewed a small number of portfolios for purchase
in bulk and has, on occasion, made unsuccessful bids on portfolios. These
portfolios have been as large as $40 million in Contracts and the Company may
bid on portfolios of comparable size or larger in the future. As of September
30, 1996, the Company had not consummated a bulk portfolio purchase, either
because the portfolios offered for sale did not satisfy the Company's due
diligence requirements or because the asking price exceeded the Company's
valuation of the portfolio. The Company believes bulk purchases represent
opportunities to exploit the Company's servicing expertise and the flexibility
of the Repurchase Facility. Thus, the Company intends to continue to explore
such purchase opportunities and may purchase Contracts in bulk from other
originators if the price and quality of the portfolio are satisfactory to the
Company. Purchases in bulk involve a greater risk of misrepresentation than
Contracts purchased directly by the Company. The Company believes the risk can
be mitigated by the Company's review of the seller's underwriting standards, the
Company's due diligence concerning the seller and by representations and
warranties made by the seller.

CONTRACT PORTFOLIO

The following table sets forth certain data for the Contracts purchased by
the Company for the periods indicated.

<TABLE>
<CAPTION>
CONTRACTS PURCHASED DURING
THE THREE MONTHS ENDED
---------------------------------------------------------------
SEPT. 30, JUNE 30, MARCH 31, DEC. 31, SEPT. 30,
1996 1996 1996 1995 1995
--------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Amount of Contracts (000's).............. $ 53,431 $ 45,253 $33,715 $ 26,478 $ 28,642
Average Amount Financed Under
Contracts.............................. $ 12,475 $ 12,290 $12,278 $ 12,124 $ 12,106
Average Coupon on Contracts.............. 20.74% 20.72% 20.65% 20.47% 20.33%
Average Original Term of Contracts
(months)............................... 57 57 57 58 57
Average Discount of Contracts, including
Acquisition Fees....................... 4.37% 5.16% 4.87% 5.14% 6.00%
</TABLE>

The Company expects from time to time to make changes to its underwriting
guidelines and program requirements to respond to competitive conditions in the
non-prime automobile financing market. These changes are likely to affect the
characteristics of the portfolio, may increase portfolio risk and/or reduce the
Company's discounts and interest margins. See "Risk Factors -- Credit Risks" and
see "Risk Factors -- Competition and Consolidation of Industry." In the quarter
ended September 30, 1996, the Company instituted several programs that provided
its Dealers with greater pricing options than were previously available,
introduced certain new programs and provided more attractive pricing on certain
existing programs. As expected, this had the effect of lowering the average
discount and acquisition fees on Contracts purchased in this period.

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<PAGE> 33

CONCENTRATIONS OF CONTRACT PURCHASES

The following table sets forth information by state concerning Contract
purchases and servicing portfolio amounts outstanding for the period and at the
date indicated.

<TABLE>
<CAPTION>
CONTRACTS
PURCHASED DURING SERVICING
THE PORTFOLIO
NINE MONTHS OUTSTANDING
ENDED BALANCES AS OF
SEPTEMBER 30, SEPTEMBER 30,
1996 1996
---------------- ----------------
$000'S % $000'S %
-------- --- -------- ---
<S> <C> <C> <C> <C>
California..................................... $ 33,593 25% $ 57,438 27%
Texas.......................................... 23,997 18 45,677 22
Florida........................................ 16,844 13 27,147 13
Pennsylvania................................... 8,236 6 17,043 8
All Other...................................... 49,729 38 62,456 30
-------- --- -------- ---
$132,399 100% $209,761 100%
======== === ======== ===
</TABLE>

The Company attempts to develop a broad Dealer base to avoid dependence on
a limited number of Dealers. As of September 30, 1996, no Dealer accounted for
more than 4% of the Company's Contract portfolio and the ten Dealers from which
the Company purchased the most Contracts accounted for approximately 12% of the
Contract portfolio, in aggregate. The Company's financing program also
concentrates on purchases of Contracts for late-model used vehicles that are
originated by franchised Dealers. As of September 30, 1996, 86% of Contracts
serviced by the Company financed used vehicles and 97% were acquired from
franchised Dealers.

SERVICING OF CONTRACTS

General

ACC services all of the Contracts the Company originates, whether owned by
the Company or sold in an asset-backed security. ACC's servicing generally
consists of payment and pay-off processing, collecting, insurance tracking,
title tracking, responding to borrower inquiries, investigating delinquencies,
repossessing and reselling collateral, collection reporting and credit
performance monitoring.

Billing and Collection Process

The Company sends each borrower a monthly bill, rather than using payment
coupon books. All payments are directed to the Company's lock-box account at a
regional commercial bank. On a daily basis, the lock-box bank retrieves and
processes payments received, and then deposits the entire amount into the lock-
box account. A simultaneous electronic data transfer of borrower payment data is
made to the Company for posting to the Company's computerized records.

The Company's collection process is based on a strategy of closely
monitoring Contracts and maintaining frequent contact with borrowers. As part of
this process, the Company makes early, frequent contact with delinquent
borrowers and attempts to educate borrowers on how to manage monthly budgets.
The Company attempts to identify the underlying causes of a borrower's
delinquency and to make an early collection risk assessment. The Company
believes that its proactive collection process, including the early
identification of payment problems, reduces its repossession rates and loss
levels.

In support of its collection efforts, the Company maintains a collection
software package with customized features designed for high-intensity collection
operations, which includes a high-penetration autodialer. With the aid of the
autodialer, the Company initially attempts to contact any borrower whose account
becomes six days past due. See "Business -- Management Information Systems."

Although the Company emphasizes telephonic contact, the Company also
typically sends past due notices to borrowers when an account becomes ten days
past due. In some cases, the Company uses the Western Union Quick Collection
Service to collect borrowers' payments and to reduce the incidence of bad

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<PAGE> 34

checks. When necessary, the Company uses a network of independent agencies to
make field visits to borrowers.

Extensions and Modifications

If a borrower has current financial difficulties, but has previously
demonstrated a positive history of payment on the Contract, the Company will
permit a payment extension of not more than two months during the term of a
Contract. Senior management of the Company must approve each extension and less
than 2% of the Contracts in the Company's servicing portfolio had been extended
as of September 30, 1996. Further, the Company typically permits only one
extension over the term of a Contract and the Company neither restructures
Contracts nor forbears any payments on Contracts.

Repossession

The Company repossesses a vehicle when resolution of a delinquency is not
likely or when the Company believes that its collateral is at risk. The Company
makes these judgments based upon its collectors' discussions with borrowers, the
ability or inability to locate the borrowers and/or the vehicles, the receipt of
notices of liens and other information. The Company uses independent, licensed
and bonded repossession agencies to repossess vehicles as well as the services
of an agency that traces skips (where neither the borrower nor the vehicle can
be located) to supplement its own efforts in locating vehicles. When a vehicle
is repossessed, it generally is sold through a public auction within 60 days of
the repossession. The Company generally uses its own staff to pursue recoveries
of deficiency balances, but may also use outside collection agencies which share
in any recoveries. If the Company has reason to believe that a Dealer violated
any representations or warranties made to the Company on a defaulted Contract,
the Company may pursue its remedies against the Dealer under the Dealer
Agreement.

The Company employs the same policies for charging-off Contracts on both
Contracts it owns and on Contracts sold in asset-backed securities. The Company
expects to incur a loss whenever it repossesses a vehicle. When the Company
sells a repossessed vehicle, it records a net loss equal to the outstanding
principal balance of the Contract, less the proceeds from the sale of the
vehicle.

If an account becomes 120 days delinquent (other than accounts in
bankruptcy) and the Company has repossessed the vehicle, but not yet received
the sale proceeds, then the Company records a loss equal to the outstanding
principal balance of the Contract, less the estimated auction value of the
vehicle (which is based upon wholesale used car values published by nationally
recognized firms) and any expected recoveries under its VSI insurance. This VSI
insurance protects the Company's interest in the collateral against uninsured
physical damage (including total loss) and skips. If an account becomes 120 days
delinquent and the Company has not repossessed the vehicle, then the Company
records a loss equal to the outstanding principal balance of the Contract. In
the event a borrower is a skip, the Company reduces its loss by the expected
recoveries under its VSI insurance. Any recoveries received subsequent to the
Contract being charged-off, including amounts (i) from the borrower's insurance
policies or service contracts, (ii) from Dealers under a breach of the Dealer
Agreements or (iii) from deficiency balances recovered from borrowers, are
treated as loss adjustments in the period when these recoveries are received.
See "Management's Discussion and Analysis of Financial Conditions and Results of
Operations" for a discussion of VSI insurance.

MANAGEMENT INFORMATION SYSTEM

The Company relies on automated information management and data processing
systems to maximize productivity, minimize credit losses and maintain data
integrity. The Company operates its information management, accounting and data
processing systems on a Model 300, IBM AS400 ("AS400").

The Company uses its own proprietary Application Processing System and
Contract Management System, both of which operate on the AS400. The Application
Processing System tracks applications through the approval process and provides
status reports to sales and credit administration personnel on approved and
declined Contracts. This system is also used for credit scoring and credit
review. The Application Processing System electronically transmits all data to
the Contract Management System. The Contract Management

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<PAGE> 35

System analyzes Contracts for compliance with the Company's underwriting
standards, tracks key underwriting characteristics for all funded Contracts,
tracks approval trends, analyzes charge-offs, monitors delinquencies and
measures pool performance.

The Company uses the Universal Loan Accounting package resident on the
AS400 for all aspects of its loan accounting and payment processing. The
Company's general ledger is maintained on the MAS-90 General Ledger package. The
Company uses collection software that operates on the AS400. The Company also
has installed IBM's ImagePlus(TM) imaging system on the AS400 to make Contract
documents available on-screen, decrease data entry costs and aid disaster
recovery. Further, the Company has installed video teleconference and document
sharing systems, which facilitate interaction between the Company's headquarters
and its regional credit centers. In its collection efforts, the Company uses a
Telerelations, Inc. high-penetration autodialer, which is a PC-LAN-based system
interfaced to the AS400.

The Company backs up its systems on a daily basis and stores the backup
tapes offsite. The Company also has implemented a disaster recovery plan that is
intended to restore critical business operations within 48 hours of a disaster.
In an emergency, IBM will deliver replacement parts for the AS400 within 24
hours. Additionally, the Company has the contractual right to access SunGard's
nationwide recovery facilities, which are fully equipped and permit access to
hardware, software and telephones. The Company has made a significant investment
in its hardware and software systems and intends to continue to upgrade these
systems as its needs dictate.

FINANCING

Repurchase Facility

On July 15, 1993, ACC and OFL-A entered into the Repurchase Facility with
Cargill to finance the Company's purchase of Contracts and enable the Company to
accumulate Contracts in sufficient volume to issue asset-backed securities. The
interest rate on the Repurchase Facility is the one-month LIBOR, plus 3.25%, and
the facility reprices on a daily basis. As of September 30, 1996, the rate on
the Repurchase Facility was 8.69%. The Repurchase Facility commitment period
runs until July 1998. During the commitment period, both Cargill and the Company
have the obligation (with limited exceptions) to finance under the facility all
of the Contracts that the Company purchases in conformance with the Company's
underwriting guidelines which have been approved by Cargill. As of September 30,
1996, the outstanding principal amount financed under the Repurchase Facility
was $23 million. See "Risk Factors -- Dependence Upon Warehouse Financing
Facility and Upon Cargill" and see "Certain Transactions."

Under the Repurchase Facility, OFL-A retains the essential risks of
ownership, including credit and interest rate risk, and, therefore, accounts for
each transaction as a financing of Contracts. Since OFL-A is obligated to
repurchase from Cargill any Contracts that are charged-off under the Company's
charge-off policy, OFL-A bears the credit risk of owning the Contracts. Since
the interest rate of the facility floats with LIBOR and the interest rate on
each financed Contract is fixed at the time of its origination, OFL-A retains
interest rate risk on the Contracts. Although accounted for as a financing, for
legal reasons, the Repurchase Facility is structured as a sale of Contracts to
Cargill with a right to repurchase the Contracts. OFL-A purchases each Contract
from the Dealer. OFL-A then transfers each conforming Contract to Cargill,
typically for 100% of the Company's basis in such Contract, plus a portion of
the operating expenses associated with the Company's acquisition of the
Contract. OFL-A has the right to repurchase the Contracts (generally for sale
through an asset-backed security) for a specified amount for each Contract,
which includes outstanding principal, accrued interest and a repurchase fee. See
"Certain Transactions -- Transaction with Cargill."

While Cargill holds title to the Contracts, all principal payments on the
Contracts are applied to reduce the principal balance of the Repurchase
Facility. All interest received on Contracts under the Repurchase Facility is
used as follows: first to pay custodian fees; second to pay OFL-A amounts
sufficient to make any payments it owes pursuant to a tax sharing agreement with
ACC; third to pay ACC a servicing fee equal to 4% per annum of the monthly
pay-off balance of the Contracts; fourth to pay Cargill interest on the facility
balance; and fifth to pay Cargill the aggregate balance (net of recoveries) of
charged-off Contracts. All

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<PAGE> 36

remaining interest is distributed to a cash reserve account held by the
custodian as additional collateral for the facility. The cash reserve builds,
without any cap on its amount, until the Company disposes of the Contracts
through an asset-backed securitization, a whole-loan sale or other disposition.
Upon a disposition, OFL-A is entitled to receive the balance of the cash reserve
account. As of September 30, 1996, less than $5,000 was held in such cash
reserve account.

Cargill has the right, at its election, to terminate the Repurchase
Facility upon the occurrence of any "Termination Event" as defined therein. The
following events, among others, would constitute Termination Events under the
Repurchase Facility: (i) a change in control or ownership of ACC, (ii) aggregate
Contract purchases of less than $75 million in any 12-month period, (iii) an
average delinquency rate during any three-month period, computed using the
current pay-off balance of Contracts collateralizing the Repurchase Facility
("Collateral"), equal to or greater than 15%, (iv) an annualized six-month net
charge-off rate, computed using the current pay-off balance of the Collateral,
equal to or greater than 10% or (v) if any two of the Founders are no longer
employed by ACC. In addition, the Repurchase Facility is subject to early
amortization in the event that the aggregate balance of the facility exceeds
$100 million or in the event that the Company fails to sell Contracts through an
asset securitization or whole loan sale within 18 months of the last asset
securitization or whole loan sale ("Early Amortization Event"). As of the date
of this Prospectus, the Company is in compliance with all its covenants under
the Repurchase Agreement and no Termination Event or Early Amortization Event
has occurred.

In the event that ACC or OFL-A became a debtor under the United States
Bankruptcy Code ("Bankruptcy Code"), the structure of the Repurchase Facility
could provide Cargill with greater rights than Cargill would have had if the
facility were structured as a secured loan transaction. There is no assurance
that the Company could be reorganized in a bankruptcy without the cooperation of
Cargill. The Repurchase Facility characterizes each purchase of a Contract by
Cargill as a "securities contract" as defined in Section 741 of the Bankruptcy
Code. If this characterization were upheld, Cargill would not be subject to the
automatic stay (that normally precludes a secured party from liquidating
collateral without prior bankruptcy court approval) and Cargill could liquidate
the Contracts during an early stage of an ACC or OFL-A bankruptcy. Under the
servicing agreement with ACC, Cargill also would have the right to remove ACC as
the servicer of the Contacts subject to the facility, thereby terminating ACC's
right to receive the 4% servicing fee (which might then be its primary source of
operating funds). Further, the structure of the facility would make it difficult
for ACC to gain access to any of the cash generated by the Contracts subject to
the facility, even though the liquidation value of the Contracts and the cash
reserves held by Cargill exceeded OFL-A's obligations to Cargill.

In the event that Cargill became a debtor under the Bankruptcy Code,
Cargill, as debtor in possession, or a bankruptcy trustee could attempt to
terminate the Repurchase Facility and cutoff the Company's right to repurchase
the Contracts. The Company would contend that Cargill was not the owner of the
Contracts, but only a secured party holding the Contracts as collateral for the
facility, and that Cargill could not terminate the repurchase right. If Cargill
were successful in terminating the facility, then the Company would have only
pre-bankruptcy, unsecured claims against Cargill for breach of contract damages.
Those damages would approximate the value of the net interest income that would
have been earned on Contracts while owned by the Company or the gain on sale
that would have been realized through the sale of such Contracts. Such claims
would likely be paid on a pro rata basis with all other unsecured creditors of
Cargill, and there is no assurance that Cargill would have adequate funds, if
any, to pay the Company what the Company would have realized through the
repurchase of the Contracts.

NIM Facility

In order to obtain financing to fund credit enhancement and securitization
expenses for its asset-backed securities and, to a lesser extent, for working
capital, the Company and Cargill entered into the NIM Facility on September 15,
1995. The NIM Facility enables the Company to obtain additional debt financing
through a pledge of OFL-A's interest in the Subordinated Securities and ESRs.
OFL-A is obligated to pay Cargill an annual commitment fee of $150,000, payable
in quarterly installments of $37,500. The NIM Facility can be prepaid at any
time upon 30 days' notice. Until the NIM Facility is retired, borrowings under
this facility can

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be redrawn at the time of an asset-backed securities issuance by Receivables.
The facility had an outstanding balance of $3.9 million as of September 30, 1996
(and $7.4 million as of October 1, 1996), and is subject to a maximum
outstanding balance of $15 million, with the borrowing base subject to the
current valuation of the Subordinated Securities and ESRs pledged as collateral.
ACC intends to provide a portion of the proceeds of approximately $7.4 million
to OFL-A to repay the expected outstanding balance of the NIM Facility at the
close of the offering and to reborrow under the facility, as necessary. The NIM
Facility expires in May 1998. As of the date of this Prospectus, the Company is
in compliance with all of its covenants under the NIM Facility and no event of
default has occurred.

The Repurchase Facility and the NIM Facility are cross-collateralized and
contain cross-default provisions so that a default under either facility will
constitute a default under both facilities and could result in the acceleration
of the payment obligations under both facilities and a foreclosure on the
collateral of both facilities. ACC has guaranteed up to $5 million on both
facilities and has pledged all of its OFL-A stock as collateral for the
facilities. See "Certain Transactions -- Transactions With Cargill."

HEDGING PROGRAM

The Company maintains an ongoing hedging program for the purpose of
mitigating the potential impact of changing interest rates on the gain on the
sale of Contracts. The hedging strategy is implemented through the forward sale
of two-year Treasury notes or futures Contracts on two-year Treasury
instruments, with Cargill acting as the counterparty to these hedging
transactions. Gains and losses on the hedging program are recorded as an
adjustment to the accounting basis of the Contracts until such time that the
Contracts are sold. At the time of sale, the previously unrealized gains or
losses are recognized as an adjustment to the gain on the sale of the Contracts.
See "Certain Transactions."

The Company began actively using the hedging program in January 1995 and
the extent to which the Contracts held by the Company are hedged has varied and
will continue to vary from time to time, depending upon prevailing interest
rates and other economic factors. The Repurchase Facility requires the Company
to maintain its hedging program whenever the two-year Treasury rate is greater
than 7.5%. The Company generally has maintained the hedging program even when it
was not required to do so, but may choose not to maintain the hedging program
based on management's assessment of interest rate risk and the costs associated
with the hedging program.

SECURITIZATION OF CONTRACTS

In June 1995, the Company began selling its portfolio of Contracts to
investors through the issuance of asset-backed securities. The periodic
securitization of Contracts is an integral part of the Company's business plan.
The issuance of these securities enables the Company to redeploy capital, reduce
its interest rate risk and recognize gains from the sale of the Contracts. As of
the date of this Prospectus, the Company has completed five securitizations, the
1995-A Transaction, 1995-B Transaction, 1996-A Transaction, 1996-B Transaction
and 1996-C Transaction, involving Contracts aggregating approximately $232
million.

These asset-backed securities are treated as sales of the Contracts and
Contracts sold in a security are removed from the consolidated balance sheet of
the Company. The asset-backed securities are generally structured as follows:
ACC repurchases a pool of Contracts from Cargill under the Repurchase Facility
and simultaneously sells the pool to Receivables, which then sells the pool to a
trust in exchange for interest-bearing certificates of an amount equal to the
aggregate principal balance of the Contracts. The certificates are then sold to
one or more institutional investors.

The certificates sold to investors have been rated "AAA" by S&P and "Aaa"
by Moody's based on the FSA guarantee. Cargill serves as sponsor for the
certificates and guarantees certain representations and warranties made by the
Company. The certificates sold to investors have fixed pass-through interest
rates which have ranged from 5.95% to 6.90%.

The Company retains the right to service the Contracts sold to the trust
and receives monthly base servicing fees of approximately 3% per annum on the
outstanding balance of Contracts sold in asset-backed

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<PAGE> 38

securities. In addition, Receivables (or OFL-A if Receivables' rights are
assigned to OFL-A for pledge under the NIM Facility) is entitled to receive
excess interest arising from collections, to the extent that these collections
exceed payments to investors, contributions to the credit enhancement cash
reserves, base servicing fees and certain other fees. Generally, certificates
are sold to investors without recourse, except that the representations and
warranties provided by Dealers to the Company are similarly provided by the
Company to the investors and to FSA, along with certain indemnities. These
indemnities are secured by a pledge of all of the stock of Receivables.
Receivables is obligated to repurchase a Contract from the trust if the Contract
fails to conform to normal representations and warranties relating to the
collateral. Receivables bears the risk of loss on Contracts it repurchases.

Each issuance of securities results in the recognition of a "net gain on
sale of contracts" on the Company's consolidated statement of operations for the
period in which the sale was made. The discounted present value of the excess
cash flow expected from the security is recognized as an increase in the ESRs on
the Company's consolidated balance sheet. Because the interest rate on the
Contracts is relatively high in comparison to the pass-through interest rate
paid to investors, the net gain on sale can be significant. In calculating this
net gain on sale, the Company must estimate the future rates of prepayments,
delinquencies, defaults and loss severity as they impact the amount and timing
of the cash flows used in the gain on sale calculation. The cash flows expected
to be received by Receivables, before expected losses, are then discounted at a
market interest rate that the Company believes an unaffiliated third-party
purchaser would require as a rate of return on such a financial instrument.
Expected losses are discounted using a risk-free rate which is equivalent to the
rate earned on securities rated AAA or better, with a duration similar to the
estimated duration for the underlying Contracts. See Note 1(g) of Notes to
Consolidated Financial Statements.

In future periods, the Company will recognize additional revenue if the
actual performance of the Contracts is better than that originally estimated. If
the actual performance of the Contracts is worse than originally estimated, then
the Company will be required to recognize a write-down against the ESRs, which
would result in a reduction in net income during the period in which the
write-down occurred.

Under the servicing agreement for each security, the Company is obligated
to service all Contracts sold to the trusts in accordance with the Company's
standard procedures. The servicing agreements generally provide that the Company
will bear all costs and expenses incurred in connection with the management,
administration and collection of the Contracts serviced. The servicing
agreements can be terminated by the investor in the event of certain defaults by
the Company and under certain other circumstances.

COMPETITION

The automobile financing business is highly competitive. The Company
competes with a growing number of publicly and privately held national, regional
and local automobile finance companies that specialize in non-prime automobile
finance, many of which compete directly with the Company for Contracts. These
competitors include AmeriCredit Corp., AutoFinance Group (now a subsidiary of
KeyCorp), Consumer Portfolio Services, Inc., First Merchants Acceptance Corp.
and TransSouth (a subsidiary of Ford Motor Credit Corporation). The Company does
not believe that any of the finance companies specializing in Non-Prime
Borrowers currently has more than a 2% market share.

In addition, the Company competes, or may compete in the future, for
business with more traditional automobile financing sources, such as commercial
banks, savings and loans, thrift and loans, credit unions and captive finance
companies of automobile manufacturers such as General Motors Acceptance
Corporation, Ford Motor Credit Corporation, Chrysler Financial Corporation,
Toyota Motor Credit Corporation, Nissan Motors Acceptance Corporation and
American Honda Finance. These traditional automobile finance companies may lower
credit standards or introduce programs for Non-Prime Borrowers to attract more
financing business or, in the case of the captive finance companies, to
stimulate new vehicle sales.

Many of the Company's competitors and potential competitors have
substantially greater financial, marketing and other resources than the Company
and may be more successful in expanding into new geographic markets, building
Dealer networks and increasing market share through internal growth or

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<PAGE> 39

acquisition. The larger, more established companies have access to unsecured
commercial paper, investment-grade corporate debt and to other funding sources
that may provide them with an advantageous cost of capital relative to the
Company's cost of capital.

The captive finance companies and many of the other traditional automobile
finance companies have long-standing relationships with Dealers that may give
them a competitive advantage in establishing dealer networks for the purchase of
Contracts. Many of these companies provide other types of financing, including
inventory financing, which is not offered by the Company.

The Company believes that the industry competes for Dealers on the basis of
the price charged to the Dealer for the purchase of Contracts (which is a
function of the discount to the face value of a Contract and any applicable
fees), advance limitations, down payment requirements, stipulations, the
timeliness of the finance company's response to an application, the approved
Contract terms, documentation requirements for purchase of the Contract and the
historic reliability of the finance company's funding of purchases. The Company
believes that its competitive advantages include geographic diversification,
risk-based pricing, financial resources, nationwide consistency of credit
decisions and quality Dealer service.

GOVERNMENT REGULATION

The Company has obtained and maintains licenses and registrations required
by certain states' sales finance company laws and/or laws regulating purchases
of installment or conditional sales contracts. The Company intends to obtain and
maintain any and all additional qualifications, registrations and licenses
necessary for the lawful conduct of its business and operations.

Numerous federal and state consumer protection laws, including the Federal
Truth-In-Lending Act, the Federal Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Federal Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Federal Reserve Board's Regulations B and Z, and state motor
vehicle retail installment sales acts, retail installment sales acts and other
similar laws regulate the origination and collection of consumer receivables and
impact the Company's business. The relevant laws, among other things, (A)
require the Company to (i) obtain and maintain certain licenses and
qualifications, (ii) limit the finance charges, fees and other charges on the
Contracts purchased and (iii) provide specified disclosures to consumers; (B)
limit the terms of the Contracts; (C) regulate the credit application and
evaluation process; (D) regulate certain servicing and collection practices; and
(E) regulate the repossession and sale of collateral. These laws impose specific
statutory liabilities upon creditors who fail to comply with their provisions
and may give rise to defense to payment of the consumer's obligation. In
addition, certain of the laws make the assignee of a consumer installment
contract liable for the violations of the assignor.

The Dealer Agreement contains representations and warranties by the Dealer
that, as of the date of assignment, the Dealer has complied with all applicable
laws and regulations with respect to each Contract. The Dealer is obligated to
indemnify the Company for any breach of any of the representations and
warranties and to repurchase any non-conforming Contracts. The Company generally
verifies Dealer compliance with usury laws, but does not audit a Dealer's full
compliance with applicable laws. There is no assurance the Company will detect
all Dealer violations or that individual Dealers will have the financial ability
and resources either to repurchase Contracts or indemnify the Company against
losses. Accordingly, failure by Dealers to comply with applicable laws, or with
their representations and warranties, could have a material adverse effect on
the Company.

The Company believes it is currently in compliance in all material respects
with applicable laws, but there can be no assurance that the Company will be
able to maintain such compliance. The failure to comply with such laws, or a
determination by a court that the Company's interpretation of law was erroneous,
could have a material adverse effect upon the Company. Furthermore, the adoption
of additional laws, changes in the interpretation and enforcement of current
laws or the expansion of the Company's business into jurisdictions that have
adopted more stringent regulatory requirements than those in which the Company
currently conducts business, could have a material adverse effect upon the
Company.

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<PAGE> 40

If a borrower defaults on a Contract, the Company as the servicer of the
Contract is entitled to exercise the remedies of a secured party under the
Uniform Commercial Code ("UCC"), which typically includes the right to
repossession by self-help means unless such means would constitute a breach of
peace. The UCC and other state laws regulate repossession and sales of
collateral (A) by requiring reasonable notice to the borrower of (i) the date,
time and place of any public sale of the collateral, (ii) the date after which
any private sale of the collateral may be held and (iii) the borrower's right to
redeem the financed vehicle prior to any such sale; and (B) by providing that
any such sale must be conducted in a commercially reasonable manner. Financed
vehicles repossessed generally are resold by the Company through unaffiliated
wholesale automobile networks or auctions which are attended principally by used
automobile Dealers.

Under the UCC and other laws applicable in most states, a creditor is
entitled, subject to possible prohibitions or limitations, to obtain a
deficiency judgment from a borrower for any deficiency on repossession and
resale of the vehicle securing the unpaid balance of the borrower's installment
contract. Since a deficiency judgment against a borrower would be a personal
judgment for the shortfall, and the defaulting borrower may have very little
capital or few sources of income, in many cases it is not prudent to seek a
deficiency judgment against a borrower or, if one is obtained, it may be settled
at a significant discount.

PROPERTY

The Company's headquarters are located in San Diego, California, where it
leases approximately 25,000 rentable square feet of general office space from
unaffiliated lessors. The headquarters leases expire at various times between
January 1998 and November 2002. The base monthly rent for all San Diego
properties leased by the Company is $34,000. The Company has an option to extend
most of the headquarters lease for an additional three years upon terms
substantially similar to those of the existing lease.

The Company also leases from unaffiliated lessors four offices that it uses
as regional credit centers, located in Dallas, Texas; Atlanta, Georgia; Miami,
Florida; and Newark, Delaware. The office in Dallas consists of approximately
1,836 rentable square feet for which the lease expires March 1, 1998. The base
monthly rent is $2,334. The Company has an option to renew the lease for an
additional three years, on substantially similar terms. The office in Atlanta
consists of approximately 2,100 rentable square feet for which the lease expires
January 31, 1998. The monthly rent is $2,363. The office in Miami consists of
approximately 1,662 rentable square feet for which the lease expires June 10,
2001. The base monthly rent is $2,250. The office in Newark consists of
approximately 3,414 rentable square feet for which the lease expires April 15,
1999. The base monthly rent is $5,050.

EMPLOYEES

As of September 30, 1996, the Company had 198 full-time employees. The
Company believes that its relations with its employees are good. The Company is
not a party to any collective bargaining agreement.

LEGAL PROCEEDINGS

As of the date of this Prospectus, the Company is involved as a defendant
in certain litigation and threatened litigation arising in the normal course of
business. While the outcome of the pending and threatened litigation cannot be
predicted with certainty, the Company's management believes that all pending and
threatened claims will be resolved on terms and for amounts that will not have a
material effect on the Company's business or consolidated financial condition.

The Company regularly initiates and intends to continue initiating legal
proceedings as a plaintiff in connection with its routine collection activities.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The information set forth below describes the directors and executive
officers of the Company as of October 5, 1996.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- ---- --------------------------------------------------
<S> <C> <C>
Rocco J. Fabiano................... 40 Chairman of the Board, Chief Executive Officer
Gary S. Burdick.................... 40 President
Rellen M. Stewart.................. 43 Chief Operating Officer, Chief Financial Officer,
Treasurer
John J. Cruz....................... 48 Senior Vice President of Collections
R. Frank Mercer.................... 50 Senior Vice President, Chief Credit Officer
Brett L. Beckerman................. 31 Vice President of Information Technology
Jack R. Cohen...................... 44 Vice President and General Counsel, Secretary
Anthony N. Fiduk................... 40 Vice President of Sales and Marketing
Ernest M. Garcia................... 48 Vice President of Correspondent Purchases
Shaemus A. Garland................. 31 Vice President and Controller
Michael D. LoPresti................ 44 Vice President of National Sales Manager
Tammy S. Ramos..................... 35 Vice President of Funding
Ethan J. Falk...................... 42 Director
Jack P. Fitzpatrick................ 42 Director
Jeffrey S. Lambert................. 33 Director
Jeffrey E. Susskind................ 43 Director
</TABLE>

ROCCO J. FABIANO, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER. Mr.
Fabiano is a Founder of ACC and is the Chairman of the Board and Chief Executive
Officer, pursuant to an Employment Agreement described below. In August 1995,
Mr. Fabiano was acquitted of criminal charges relating to a signing bonus
received in 1989 from an unrelated, regulated financial institution. Pending
resolution of this matter, from July 1993 to September 1995, Mr. Fabiano was a
full-time consultant to ACC. In 1991, Mr. Fabiano co-founded Consumer Portfolio
Services, Inc., and acted as a consultant to that company until December 1992,
at which time he began work on the formation of ACC. Mr. Fabiano was Chairman of
the Board of Far Western Bank from May 1989 to December 1990, at which time Far
Western Bank was placed under the control of the Federal Deposit Insurance
Corporation. He also has been an Executive Vice President of Imperial
Corporation of America, Chief Operating Officer of Ameristar Mortgage
Corporation and Senior Consultant for KPMG Peat Marwick. Mr. Fabiano holds a
B.S. in Genetics and an M.S. in Protein Chemistry from Colorado State University
and an M.B.A. in Finance from Cornell University.

GARY S. BURDICK, PRESIDENT. Mr. Burdick is a Founder of ACC and has been
the President since September 1995, pursuant to an Employment Agreement,
described below. Mr. Burdick was Chairman of the Board and Chief Executive
Officer of ACC from July 1993 to September 1995. Mr. Burdick worked from January
through June of 1993 as an advisor to the Ministry of Privatization for the
Czech Republic in Prague as part of a United States State Department Aid to
Developing Nations program. From May 1991 to December 1992, Mr. Burdick was an
independent consultant and contributed time to Rebuild L.A. Mr. Burdick was a
Director of Prudential Securities from 1989 to April 1991. He also has
specialized in mortgage finance and asset securitizations as a Vice President of
Goldman Sachs and a Vice President of Lehman Brothers. Mr. Burdick holds a B.A.
in Economics and a B.S. in Environmental Studies from the University of
California at Santa Barbara.

RELLEN M. STEWART, CHIEF OPERATING OFFICER, CHIEF FINANCIAL OFFICER AND
TREASURER. Mr. Stewart is a Founder of ACC and has been the Chief Operating
Officer and Chief Financial Officer of ACC since July 1993, pursuant to an
Employment Agreement, described below. Mr. Stewart was also President of ACC
from July 1993 to September 1995. From 1988 to July 1993, Mr. Stewart was an
Executive Vice President of EurekaBank. From 1977 to 1988, Mr. Stewart was
employed by KPMG Peat Marwick becoming a Partner in

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<PAGE> 42

1984 and later becoming the firm's National Practice Director for consulting to
the mortgage industry. He also has been a Financial Analyst for Wells Fargo
Bank. Mr. Stewart holds a B.S. in Business Administration and an M.B.A. in
Finance from the University of California at Berkeley.

JOHN J. CRUZ, SENIOR VICE PRESIDENT OF COLLECTIONS. Mr. Cruz joined ACC in
July 1993 as Vice President of Collections. In October 1996, Mr. Cruz became a
Senior Vice President. From July 1991 to July 1993, Mr. Cruz was Collections
Manager for Consumer Portfolio Services, Inc. Mr. Cruz was Vice President and
Collections Manager of Far Western Bank from 1987 to April 1991. He also has
held the position of General Manager of Pacific Coast Collections.

R. FRANK MERCER, SENIOR VICE PRESIDENT, CHIEF CREDIT OFFICER. Mr. Mercer
joined ACC in July 1993 as Vice President of Credit Administration. He was
promoted to Senior Vice President in May 1994 and was made Chief Credit Officer
in September 1995. Mr. Mercer worked as an independent banking consultant and
mortgage broker from December 1992 to July 1993. From 1990 to November 1992, Mr.
Mercer was a Vice President of Financial Services of Olympian Bancorp. He also
has held positions as Vice President of Consumer Loan Operations of Imperial
Savings Association, Vice President of Landmark Thrift and Loan, Principal of
RFM Financial Services and District Manager for Mellon Financial Services.

BRETT L. BECKERMAN, VICE PRESIDENT OF INFORMATION TECHNOLOGY. Mr.
Beckerman has been Vice President of Information Technology since August 1993.
From 1989 to August 1993, Mr. Beckerman was Data Processing Supervisor for LSI
Financial Group. He also has been an Operations Manager of Vision, Inc., and a
Senior Computer Operator for Quintec Insulectro. Mr. Beckerman holds a B.S. in
Management Information Systems from California State University at Long Beach.

JACK R. COHEN, VICE PRESIDENT AND GENERAL COUNSEL AND SECRETARY. Mr. Cohen
joined ACC as Vice President and Corporate Counsel in August 1995. He became
Secretary of the Company in September 1995 and General Counsel in August 1996.
Mr. Cohen was in private practice from November 1994 to July 1995. Mr. Cohen was
Executive Vice President and General Counsel of Coast to Coast Marketing, Inc.,
from February 1992 to October 1994. From May 1991 to January 1992, Mr. Cohen was
Vice President and Attorney for Republic Factors Corp. He also has been Vice
President and Senior Counsel of Imperial Savings Association, Associate Attorney
for Jennings, Engstrand and Henrikson and Law Clerk for the U.S. Bankruptcy
Court. Mr. Cohen holds a B.A. in Psychology from Clark University and a J.D.
from University of San Diego School of Law.

ANTHONY N. FIDUK, VICE PRESIDENT OF SALES AND MARKETING. Mr. Fiduk has
been ACC's Vice President of Sales and Marketing since December 1993. From
November 1992 to November 1993, Mr. Fiduk was Finance Manager for Huntington
Beach Dodge, Inc. and from July 1992 to October 1992 was Regional Marketing
Director for Bedford Financial Corp. Mr. Fiduk was a Loan Officer with
Interstate Diversified Financial from September 1990 to June 1992. He also has
held positions as Assistant Vice President of Loan Originations for Far Western
Bank, Credit Underwriter for Lloyd Anderson Companies and Branch Manager for
Transamerica Financial Services, Inc. Mr. Fiduk holds a B.A. in Economics from
University of California at San Diego.

ERNEST M. GARCIA, VICE PRESIDENT OF CORRESPONDENT PURCHASES. Mr. Garcia
has been with ACC since November 1993 and became Vice President of Correspondent
Purchases in February 1996. From May 1994 to February 1996, he had been the
Company's Vice President of Credit Administration. Mr. Garcia was an Assistant
Vice President for First Fidelity Thrift and Loan from 1989 to September 1993.
He also has held positions as Assistant Vice President for American Thrift and
Loan, Branch Manager for California Thrift and Loan and Branch Manager for
Household Finance.

SHAEMUS A. GARLAND, VICE PRESIDENT AND CONTROLLER. Mr. Garland has been
the Controller of ACC since September 1995. In October 1996, Mr. Garland became
a Vice President. From November 1993 to September 1995, Mr. Garland was the
Company's Accounting Manager. Previously, Mr. Garland spent four years with the
United States Marine Corps. He holds a B.S. in Accounting from San Diego State
University.

MICHAEL D. LOPRESTI, VICE PRESIDENT OF NATIONAL SALES MANAGER. Mr.
LoPresti has been Vice President and National Sales Manager of ACC since August
1993. From January 1992 to July 1993,

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<PAGE> 43

Mr. LoPresti was Regional Vice President for Consumer Portfolio Services, Inc.
Mr. LoPresti was New Car Manager for Long Beach Toyota from 1990 to January
1992. He also has held positions as Vice President of Loan Originations of Far
Western Bank, General Sales Manager for Auto Circus, Inc. and Finance Manager
for Maurice J. Sopp and Son Chevrolet.

TAMMY S. RAMOS, VICE PRESIDENT OF FUNDING. Ms. Ramos has been with ACC
since February 1994 and became Vice President of Funding in March 1996. From
February 1994 to March 1996, she had been the Company's Manager of Funding. From
1987 until joining the Company in February 1994, Ms. Ramos had been an
Operations Manager for First Fidelity Thrift and Loan. She also held the
position of Operations Manager for the City of Margatte, Florida.

ETHAN J. FALK, DIRECTOR. Mr. Falk has been a Director since February 1995.
Mr. Falk has been a shareholder in the law firm of Falk & Sharp, Professional
Corporation, since 1990. Prior to founding Falk & Sharp, Mr. Falk was a partner
in the law firm of Lillick & McHose. Mr. Falk holds a B.A. in Mathematics from
the State University of New York at Binghamton and a J.D. from the University of
Michigan Law School.

JACK P. FITZPATRICK, DIRECTOR. Mr. Fitzpatrick has been a Director since
February 1995. Mr. Fitzpatrick is the Chief Financial Officer of Multichannel
Communications Sciences, Inc. and has held this position since July 1995. From
July 1993 to May 1995, Mr. Fitzpatrick was the Chief Financial Officer of
Diatek/Arkive Information Systems. From 1989 to July 1993, Mr. Fitzpatrick was
the Chief Financial Officer and, later, Vice President of Sales for Pacific Data
Products. He also has held positions as Chief Financial Officer of Syntro,
Manager of Strategic Planning for Xerox and Senior Consultant for KPMG Peat
Marwick. Mr. Fitzpatrick holds a B.A. in Applied Mathematics, an M.S. in
Computer Science and an M.B.A. from Harvard University.

JEFFREY S. LAMBERT, DIRECTOR. Mr. Lambert has been a Director since July
1993. Mr. Lambert is the Chief Financial Officer and a Director of the general
partner of Strome Susskind Investment Management, L.P., and Strome Susskind
Securities, L.P., a member firm of the National Association of Securities
Dealers, and has held both positions since November 1993. Mr. Lambert is also
the Chief Financial Officer and a Director of Strome Susskind & Co. and has held
this position since July 1992. From 1987 to July 1992, Mr. Lambert was the Chief
Financial Officer of Kayne Anderson & Co. He also has held the position of
Senior Accountant for Oppenheim, Appell & Dixon. Mr. Lambert holds a B.S. in
Accounting from California State University Northridge.

JEFFREY E. SUSSKIND, DIRECTOR. Mr. Susskind has been a Director since July
1993. Mr. Susskind is a Vice President and Director of the general partner of
Strome Susskind Investment Management, L.P., and Strome Susskind Securities,
L.P., and has held both positions since November 1993. Mr. Susskind is also a
Vice President and Director of Strome Susskind & Co. and has held this position
since February 1992. From 1987 to July 1992, Mr. Susskind was an Analyst with
Kayne Anderson & Co. He also has held the position of Analyst with Goldman Sachs
and with Donaldson, Lufkin & Jenrette. Mr. Susskind holds a B.S. in Economics
from the University of Pennsylvania and a J.D. from the University of Michigan
Law School.

ELECTION OF DIRECTORS

All directors hold office until their respective terms expire and the
election and qualification of their successors (except in cases of death,
removal or resignation). Officers are elected at each annual meeting of the
Board of Directors and serve at its discretion.

COMMITTEES OF THE BOARD OF DIRECTORS

In September 1995, the Board of Directors of the Company established a
Compensation Committee and Audit Committee. The Compensation Committee is
responsible for determining executive compensation policies and administering
the Company's compensation plans, stock options and other stock option plans.
The current members of the Compensation Committee are Messrs. Fitzpatrick,
Lambert and Susskind. The Audit Committee is responsible for recommending
independent auditors, reviewing the audit plan, the adequacy of internal
controls, the audit report and management letter and undertaking such other
related functions as the

43
<PAGE> 44

Board of Directors may authorize. The current members of the Audit Committee are
Messrs. Falk, Fitzpatrick and Lambert.

EXECUTIVE COMPENSATION

The following table shows, for the most recent fiscal year, the cash
compensation paid by the Company as well as all other compensation paid or
accrued for those years to its Chief Executive Officer and the four most highly
compensated executive officers (other than the Chief Executive Officer) (the
"Named Executives") as of December 31, 1995.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION(1) COMPENSATION
YEAR ENDED --------------------- STOCK
DECEMBER 31 SALARY BONUS OPTION SHARES
------------ -------- -------- -------------
<S> <C> <C> <C> <C>
Rocco J. Fabiano............................ 1995 $217,233 $180,000 30,000
Chairman of the Board and Chief Executive
Officer(2)
Gary S. Burdick............................. 1995 183,900 180,000 30,000
President(2)
Rellen M. Stewart........................... 1995 183,900 180,000 30,000
Chief Operating Officer, Chief Financial
Officer and Treasurer(2)
R. Frank Mercer............................. 1995 101,500 18,000 35,000
Senior Vice President and Chief Credit
Officer
Michael D. LoPresti......................... 1995 85,800 20,000 28,000
National Sales Manager
</TABLE>

- ---------------
(1) The compensation described in this table does not include medical insurance,
retirement benefits and other benefits received by the foregoing executive
officers that are available generally to all employees of the Company; and
it does not include certain perquisites and other personal benefits received
by the foregoing executive officers of the Company, the value of which did
not exceed the lesser of $50,000 or 10% of the executive officer's cash
compensation in the table.

(2) See "Management -- Directors and Executive Officers" for the positions held,
and the periods for which they were held, by Mr. Fabiano, Mr. Burdick and
Mr. Stewart during the fiscal year ended December 31, 1995.

STOCK OPTION GRANTS TABLE

The following table shows certain information concerning stock options
granted during fiscal year 1995 to the Company's Named Executives.

FISCAL YEAR 1995 STOCK OPTION GRANTS

<TABLE>
<CAPTION>
% OF TOTAL POTENTIAL REALIZABLE
OPTIONS VALUE(2)
OPTIONS GRANTED TO EXERCISE EXPIRATION ---------------------
NAME GRANTED EMPLOYEES PRICE(1) DATE @5% @10%
- ----------------------------- ------- ---------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Rocco J. Fabiano............. 30,000 8.28% $ 7.25 2005 $120,000 $295,500
Gary S. Burdick.............. 30,000 8.28% $ 7.25 2005 $120,000 $295,500
Rellen M. Stewart............ 30,000 8.28% $ 7.25 2005 $120,000 $295,500
R. Frank Mercer.............. 35,000 9.66% $ 7.25 2005 $140,000 $344,750
Michael D. LoPresti.......... 28,000 7.73% $ 7.25 2005 $112,000 $275,800
</TABLE>

- ---------------
(1) The exercise price may be paid in cash or, at the discretion of the
Compensation Committee, by tendering shares of ACC Common Stock, or the
delivery of an irrevocable direction to a securities broker

44
<PAGE> 45

to sell shares and deliver the sales proceeds to the Company in payment of all
or part of the exercise price, instead of cash.

(2) The potential realizable value is calculated pursuant to SEC regulations by
assuming the indicated annual rates of stock price appreciation for the
option term from May 1996 when the exercise price of the option was
determined. Actual realized value will depend on the actual annual rate of
stock price appreciation for the option term.

AGGREGATED STOCK OPTION EXERCISES AND FISCAL YEAR-END STOCK OPTION VALUE TABLE

The following table sets forth certain information regarding the number and
value of specified unexercised options held by the Company's Named Executives as
of December 31, 1995:

<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED
IN-THE-MONEY OPTIONS
----------------------------- -----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(1)
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Rocco J. Fabiano................... -- 30,000 -- $48,750
Gary S. Burdick.................... -- 30,000 -- 48,750
Rellen M. Stewart.................. -- 30,000 -- 48,750
R. Frank Mercer.................... -- 35,000 -- 56,875
Michael D. LoPresti................ -- 28,000 -- 45,500
</TABLE>

- ---------------
(1) The value of the Unexercisable In-The-Money Options is based upon the
closing price of ACC's Common Stock on the Nasdaq National Market on October
18, 1996. Each of the Options has an exercise price of $7.25 per share.

FABIANO, BURDICK AND STEWART EMPLOYMENT AGREEMENTS

Messrs. Fabiano, Burdick and Stewart are employed under separate employment
agreements, each of which expires on December 31, 1998. If the Company
terminates any employment agreement without cause or if Mr. Fabiano, Mr. Burdick
or Mr. Stewart terminates his employment for "good reason" (defined in the
agreement as termination following either an uncured breach by the Company, a
reduction in duties, a reduction in compensation or an involuntary relocation),
then the terminated employee is entitled to severance pay in an amount equal to
the greater of the remaining base salary that would have been payable through
the end of the term of the employment agreement or one-year's base salary, plus
a prorated portion of the bonus he would have otherwise received for the year in
which such termination occurred. Each of them is paid a base annual salary of
$195,000, and each of them is entitled to an annual bonus of 50% to 100% of his
base salary, based on a straight line sliding scale, if the Company achieves
Return on Average Equity ("ROAE") between 15% and 35%. ROAE is calculated at the
end of each calendar year as the sum of the ending book value of the Company for
each of preceding five quarters divided by five. Each of them is also entitled
to insurance benefits, an automobile allowance of $9,000 per year and
participation in employee benefit plans adopted by the Company for senior
executives.

FOUNDERS' STOCK

In connection with the founding of the Company, Messrs. Fabiano, Burdick
and Stewart purchased for the then current aggregate fair market value of
$22,000, $22,000 and $16,000, respectively, 506,000, 506,000 and 368,000 shares,
respectively, of the Common Stock of the Company.

1995 STOCK OPTION PLAN

The Company's 1995 stock option plan ("Employee Plan") covers 450,000
shares of Common Stock. The Employee Plan permits the grant of incentive stock
options or non-qualified options to any employees of the Company. Incentive
stock options may not have an exercise price of less than the fair market value
of the Common Stock on the date of grant, except options granted to holders of
more than 10% of the Company's Common Stock may not have an exercise price of
less than 110% of the fair market value of the Common

45
<PAGE> 46

Stock on the date of the grant. The Compensation Committee of the Board of
Directors administers the Employee Plan and determines the employees who may
participate, the amount and timing of each option grant and the vesting schedule
for options. Under the Employee Plan, all options must vest at a rate of at
least 25% per year and may not have a term in excess of 10 years. At September
30, 1996, an aggregate 434,338 shares of Common Stock were subject to
outstanding options. The options will vest over four years at a rate of 25% per
year and expire 10 years from the date of grant.

401(K) PLAN

Effective February 1, 1994, the Company established a tax-deferred savings
plan (the "401(k) Plan") that is intended to qualify under Section 401(a) of the
Internal Revenue Code of 1986, as amended. All full-time employees of the
Company who have attained age 21 and have completed three months of service to
the Company are eligible to participate in the 401(k) Plan. A participant may
elect to contribute a percentage of his or her compensation to the 401(k) Plan
on a pretax basis, subject to statutory limitations. The Company may, in its
sole discretion, make matching contributions. Each participant's individual
account is invested in selected investment alternatives as directed by the
trustees of the 401(k) Plan. The current trustees of the 401(k) Plan are Messrs.
Fabiano, Burdick and Stewart. A participant's 401(k) contributions are fully
vested and non-forfeitable at all times. Matching contributions made by the
Company are subject to divestment provisions until a participant has been
employed by the Company for three years. With certain exceptions, participants
in the 401(k) Plan shall receive benefits in the form of an immediate annuity
for the life of the participant, with a survivor annuity for the life of the
participant's spouse. Under the same matching program available to all
employees, the Company has contributed $1,000 per year to the individual
accounts of each of the Founders.

DIRECTOR COMPENSATION

At present, each director who is not employed by ACC or its affiliates is
paid an annual retainer of $7,000 plus $1,500 for each Board of Directors
meeting attended by the director and $500 for each committee meeting held on a
day and at a location other than the day and location of a regularly scheduled
Board meeting. ACC reimburses reasonable out-of-pocket expenses for all
directors to attend meetings.

DIRECTOR STOCK OPTION PLAN

The Company's separate stock option plan for its non-employee Directors
(the "Director Plan") covers 100,000 shares of Common Stock. The Director Plan
provides for the award of non-qualified options, which expire five years from
the date of grant, covering 20,000 shares of Common Stock to each non-employee
director on the date of the plan's adoption and to any future elected or
appointed non-employee director. Each of the options granted to the four current
nonemployee directors is at an exercise price of $7.25 per share. One-fourth of
the option shares are exercisable and the balance vest over three years from the
date of grant at a rate of one-third per year. Any future option grant will be
at an exercise price equal to the fair market value of the Common Stock on the
date of the grant. At September 30, 1996, 80,000 shares of Common Stock were
subject to outstanding options.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The current members of the Compensation Committee are Messrs. Fitzpatrick,
Lambert and Susskind. Mr. Susskind is a Vice President and a Director of the
corporate general partner of SSIM and Mr. Lambert is the Chief Financial Officer
and a Director of the corporate general partner of SSIM. SSIM is the general
partner of Strome Partners, L.P. and the investment advisor of Strome Offshore
Limited.

The Company has entered into certain transactions with Strome Partners,
L.P. and Strome Offshore Limited, its two major shareholders, and other
shareholders of the Company. The Company believes that each such transaction has
been on terms no less favorable to the Company than could have been obtained in
a transaction with an independent third party. Each of the transactions was
reviewed and approved by the Board of Directors of the Company.

46
<PAGE> 47

BRIDGE FINANCING FACILITY. Pursuant to a Credit Facility Agreement dated
as of June 24, 1994, between the Company and Strome Partners, L.P., the Company
borrowed $2.5 million to fund securitization expenses, at annual rates of 12%
for the first six months and 25% thereafter. The debt was repaid and the
facility was retired on September 15, 1995, using proceeds of the NIM Facility.

CONSULTING ARRANGEMENT. SSIM provided the Company with consulting services
in connection with its initial public offering and its retention of managing
underwriters and was paid $150,000 for its services.

STOCK SALE. In January 1996, the Company established and designated Series
C Preferred Stock and sold 3,057 shares, 3,058 shares and 1,798 shares of Series
C Preferred Stock to Strome Offshore Limited, Strome Partners, L.P., and
Cargill, respectively. The purchase price for such shares was their then current
aggregate fair market value of $1,000,995. The proceeds were used to fund the
Company's operations during the first quarter of fiscal year 1996.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Company's Certificate of Incorporation (the "Certificate") eliminates
the personal liability of directors for monetary damages for breach of fiduciary
duties to the fullest extent permitted by the Delaware General Corporation Law.
The Company's Certificate and Bylaws also provide that the Company shall
indemnify its directors and officers to the fullest extent permitted by the
Delaware General Corporation Law. The Company has entered into indemnification
agreements with each of its directors and certain of its officers providing for
such indemnification and advancement of expenses. The Company also maintains
directors' and officers' liability insurance providing total coverage of $10
million.

CERTAIN TRANSACTIONS

TRANSACTIONS WITH CARGILL

The Company has entered into financing and related transactions with
Cargill, one of the principal stockholders of the Company. Cargill has the
right, upon request, to receive board materials and have access to the same
books and records to which a director has access under Delaware law. The Company
believes that each transaction with Cargill has been on terms no less favorable
to the Company than could have been obtained in a transaction with an
independent third party. Each of the transactions was reviewed and approved by
the Board of Directors of the Company.

REPURCHASE FACILITY. On July 15, 1993, Cargill and the Company entered
into the Repurchase Facility, which expires on July 15, 1998. In consideration
of the Repurchase Facility, ACC granted Cargill a warrant to acquire 35,294
shares of Series A Preferred Stock at an exercise price between $33.17 and
$63.17 based upon the consolidated book value per share of ACC's Common Stock.
ACC valued the warrant at $128,000 on the date of grant. Cargill exercised the
warrant on September 29, 1995, at an exercise price of $33.17 per share and a
total exercise price of $1,170,702. On June 24, 1994, Cargill purchased 39,008
shares of Common Stock of the Company for an aggregate of $5,936, its then
current fair market value. See "Business -- Financing" and see "Principal
Stockholders."

Under the Repurchase Facility, the Company is obligated to maintain certain
servicing standards and may not alter the underwriting standards for Contracts
financed under the Repurchase Facility without prior approval from Cargill. The
Company is obligated to pay Cargill a repurchase fee in connection with each
asset securitization or bulk sale of Contracts financed under the Repurchase
Facility. The repurchase fee is calculated as a percentage of the Contracts sold
through a securitization, with the percentage based upon the cumulative amount
of Contract sales. Until cumulative sales equal or exceed $250 million, the
Company will pay a 2% repurchase fee. The repurchase fee is 1.5% for cumulative
sales between $250 million and $400 million, 1% for cumulative sales between
$400 million and $500 million, and 0.5% for cumulative sales in excess of $500
million. As of September 30, 1996, the Company's total sales through
asset-backed securities equal $232 million. See "Business -- Financing."

47
<PAGE> 48

EQUIPMENT LEASING FACILITY. On September 23, 1994, the Company entered
into a master equipment finance lease ("Equipment Lease") with Cargill Leasing
Corporation ("Cargill Leasing"). Cargill Leasing is a wholly-owned subsidiary of
Cargill, Incorporated, and an affiliate of Cargill. Under the Equipment Lease,
Cargill Leasing finances from time to time the Company's acquisition of MIS
equipment, including the AS400, and office equipment, subject to the parties'
prior agreement and execution of a schedule relating to the transaction. The
Equipment Lease is collateralized by the financed equipment. As of the date of
this Prospectus, the Company has entered into seven transactions financing
equipment with an aggregate original cost of $731,000. The Company currently
pays approximately $23,000 per month to Cargill Leasing. Each transaction has a
three-year term and the last transaction currently expires in November 1998.

NIM FACILITY. As of September 1, 1995, Cargill, OFL-A and Norwest Bank
Minnesota, N.A., as paying agent, entered into the NIM Facility Agreement as
described in "Business -- Financing." Cargill has the option to terminate the
NIM Facility if an event of default occurs under the NIM Facility or a
termination event occurs under the Repurchase Facility. Under the NIM Facility
Agreement, the following events, among others, constitute events of default: (i)
a material adverse change in the financial condition of OFL-A, ACC or
Receivables, (ii) failure of ACC, OFL-A or Receivables to maintain a
consolidated stockholders' equity of at least $2,000,000, $50,000, and $50,000,
respectively, if the condition is not remedied within ten days; (iii) a change
in control of ACC, OFL-A or Receivables; (iv) either (A) any two of Rocco
Fabiano, Gary Burdick or Rellen Stewart are no longer employed by ACC, unless
the successors are acceptable to Cargill, or (B) Rocco Fabiano, Gary Burdick and
Rellen Stewart collectively own less than ten percent of ACC's Common Stock, on
a fully diluted basis; (v) except in certain circumstances, Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's Ratings Group ("S&P") shall have
downgraded any asset-backed security of the Company other than as result of the
downgrading of FSA or other related surety company; (vi) in connection with any
structured finance transaction (including any subsequent asset-backed security),
the initial credit enhancement levels required to achieve an overall "BBB"
rating from either Moody's or S&P is equal to or greater than nine percent of
the aggregate unpaid principal balance of the Contracts so financed; (vii)
Cargill, as sponsor, shall be obligated to make any payments in respect of any
asset securitization or any other eligible transaction due to a default by the
Company; (viii) the occurrence of more than three collateral events with respect
to Contracts financed under the Repurchase Facility or in pool of Contracts
securing any Subordinated Certificates or excess servicing revenues pledged as
collateral to Cargill under the NIM Facility; (ix) except in certain
circumstances, the occurrence of valuation adjustments of an aggregate,
cumulative, amount of 20% or more of the Subordinated Certificates and ESRs
securing the NIM Facility; or (x) an interest rate (equal to LIBOR plus seven
percent) that is equal to or greater than 18% for 30 or more consecutive days. A
collateral event means with respect to the Contracts securing the Repurchase
Facility or with respect to any pool of Contracts in an asset-backed security,
the occurrence of any of the following events during any monthly period: (i) a
trailing three-month annualized net charge-off rate equal to or greater than ten
percent; (ii) a trailing six-month annualized net charge-off rate equal to or
greater than nine percent, (iii) a trailing three-month delinquency rate equal
to or greater than nine percent; (iv) a trailing six-month delinquency rate
equal to or greater than eight percent; (v) a trailing three-month annualized
repossession rate equal to or greater than 15%; or (vi) a trailing six-month
annualized repossession rate equal to or greater than 14%. See
"Business -- Financing."

SPONSORSHIP OF ASSET-BACKED SECURITIES. Cargill serves as a sponsor of
each of the asset securitization transactions that the Company has completed to
date. As sponsor, Cargill is obligated, pursuant to the Pooling and Servicing
Agreement for the transaction, to repurchase Contracts from the trust under
certain circumstances if (i) any of the representations and warranties made by
Receivables with respect to the Contracts or (ii) so long as ACC is the servicer
of the pools, if certain covenants made therein by ACC; are breached in a manner
that materially and adversely affects the interests of the trust, the
certificate holders and FSA, and if Receivables or ACC has not cured the breach
or repurchased the Contracts. ACC is obligated to indemnify Cargill against any
third party claim arising out of the events or facts giving rise to a breach of
the representations, warranties or covenants of Receivables or ACC. Cargill
serves as sponsor in consideration of the repurchase fee payable under the
Repurchase Facility.

48
<PAGE> 49

HEDGING PROGRAM. Under the Repurchase Facility, the Company is obligated
to maintain a hedging program under certain circumstances. Cargill acts as the
counterparty for the Company's hedging positions. In exchange for this service,
the Company pays Cargill nominal administrative fees and reimburses Cargill for
its direct costs of executing the hedging transaction. These administrative fees
and direct cost reimbursements have totaled approximately $9,093 since the
inception of the hedging program. The Company believes that it could directly
acquire hedging positions through U.S. government securities dealers, although
such dealers might require more collateral from ACC than does Cargill.

STOCK SALE. Cargill purchased 1,798 shares of Series C Preferred Stock in
January 1996 at its fair market value. See "Compensation Committee Interlocks
and Insider Participation."

AGREEMENTS WITH STROME PARTNERS, STROME OFFSHORE LIMITED AND OTHERS

The Company has entered into certain transactions with Strome Partners,
L.P. and Strome Offshore Limited, its two major shareholders, and other
shareholders of the Company. See "Compensation Committee Interlocks and Insider
Participation."

49
<PAGE> 50

PRINCIPAL STOCKHOLDERS

COMMON STOCK

The following table sets forth the number and percentage of shares of
Common Stock owned beneficially as of September 1, 1996: (i) by each person
known to the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) each of the Company's directors and (iii) all
directors and executive officers of the Company as a group. Except as noted
below, and subject to applicable community property and similar laws, each
shareholder has sole voting and investment power with respect to the shares
shown.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS(2)
- -------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
Strome Offshore Limited(3).......................................... 1,637,255 19.5%
Strome Partners, L.P.(3)............................................ 1,613,933 19.2%
Cargill Financial Services Corporation(4)........................... 957,950 11.4%
Rocco J. Fabiano(5)................................................. 663,504 7.9%
Gary S. Burdick(6).................................................. 631,220 7.5%
Rellen M. Stewart(6)................................................ 465,116 5.5%
Ethan J. Falk(7).................................................... 10,000 *
Jack P. Fitzpatrick(8).............................................. 67,615 *
Jeffrey S. Lambert(9)............................................... 10,000 *
Jeffrey E. Susskind(9).............................................. 10,000 *
Directors/Officers as a group....................................... 1,882,278 22.4%
</TABLE>

- ---------------
* Less than 1%.

(1) Includes the ownership of the named individual or member of a group of
shares of Common Stock obtainable within 60 days upon the exercise of
options.

(2) Each beneficial owner's percentage ownership is determined assuming that
shares that may be acquired by such person or group within 60 days following
September 1, 1996, have been acquired but that shares acquirable by other
beneficial owners within the same 60 days have not been acquired.

(3) The address of Strome Partners, L.P., is 100 Wilshire Boulevard, 15th Floor,
Santa Monica, California 90401. The address of Strome Offshore Limited is
c/o Meespierson (Cayman) Ltd., British Amer Centre, POB 2003, Dr. Roy's
Drive Georgetown, Grand Cayman, Cayman Islands. SSIM is the beneficial owner
of such shares. The address of SSIM is 100 Wilshire Boulevard, 15th Floor,
Santa Monica, California 90401.

(4) The stockholder's address is 6000 Clearwater Drive, Minnetonka, Minnesota
55343-9497.

(5) The stockholder's address is the same address as the Company's address. The
shares in the table include 57,615 shares held in the name of the Fabiano
Irrevocable Trust. Mr. Fabiano disclaims beneficial ownership of such
shares. The balance of the shares in the table are held in the name of the
Fabiano Revocable Trust of March 28, 1991, of which Mr. Fabiano and his
wife, Joan Fabiano, are trustees.

(6) The stockholder's address is the same address as the Company's address.

(7) The director holds vested options to purchase 10,000 shares of Common Stock.
The director's address is 660 South Figueroa Street, Suite 1600, Los
Angeles, California 90017-3474.

(8) The number of shares in the table includes 57,615 shares held in the name of
the Fabiano Irrevocable Trust for which Mr. Fitzpatrick serves as trustee.
Also, the director holds vested options to purchase 10,000 shares of Common
Stock. The director's address is 9775 Town Center Drive, Suite 110, San
Diego, California, 92121.

(9) The director holds vested options to purchase 10,000 shares of Common Stock.
The director's address is 100 Wilshire Boulevard, 15th Floor, Santa Monica,
California 90401.

50
<PAGE> 51

DESCRIPTION OF THE NOTES

GENERAL

The Notes are to be issued under the Indenture, a copy of which is filed as
an exhibit to the Registration Statement of which this Prospectus is a part. The
following statements, unless the context otherwise requires, are summaries of
the substance or general effect of certain provisions of the Indenture and are
qualified in their entirety by reference to the Indenture. Unless otherwise
defined herein, capitalized terms used in this Prospectus have the same meaning
as defined in the Indenture.

The Notes will be limited in aggregate principal amount to $23,000,000
(including Notes issuable upon exercise of the over-allotment option) and will
be issued as fully-registered Notes only in integral multiples of $1,000. The
Notes will bear interest at the rate of 10.25% per annum from and after the date
of delivery, and payments of interest will be made monthly in arrears beginning
January 1, 1997, to Noteholders of record as of the close of business on the
15th day of the preceding month. At the option of the Company, interest may be
paid by Company checks mailed to registered Noteholders.

The Notes will mature on December 1, 2003, and payments of the principal on
the Notes will be made at the Main Office of the Trustee in Minneapolis,
Minnesota. The Notes are also exchangeable and transferable at such office,
without charge therefor, except for any tax or other governmental charge
connected therewith. The Notes are subordinated unsecured general obligations of
ACC.

NOTEHOLDERS' RIGHTS TO REDEMPTION UPON DEATH OF A HOLDER

In the event of the death of a Noteholder (including tenants by the
entirety, joint tenants and tenants in common) or beneficial owner, upon the
request of the personal representative or surviving tenant of any such deceased
Noteholder or beneficial owner, the Company shall redeem the Notes subject to
certain limitations. Any such redemption shall be at a price of 100% of the
principal amount plus accrued interest to the date of redemption. Any redemption
will take place within 60 days of the Trustee's receipt of a redemption request,
unless the redemption exceeds the annual aggregate and per Noteholder
limitations.

The Company is not obligated to redeem more than $25,000 of the Notes
tendered by the personal representative or surviving joint tenant or tenant in
common of a deceased Noteholder or beneficial owner in any Redemption Period (as
defined below) ("Per Holder Redemption Limitation"), except that in the case of
Notes registered in the name of banks, trust companies or broker-dealers who are
members of a national securities exchange of the National Association of
Securities Dealers, Inc. ("Qualified Institutions"), the Per Holder Redemption
Limitation applies to each beneficial owner of Notes held by any Qualified
Institution. Further, the Company is not obligated to redeem more than an
aggregate of $300,000 of the Notes ("Aggregate Redemption Limitation") tendered
for all deceased Noteholders within the period commencing on the original
issuance date of the Notes and ending November 30, 1997, and thereafter in any
subsequent 12-month period commencing December 1 and ending November 30 each
year ("Redemption Period").

A Note held in tenancy by the entirety, joint tenancy or tenancy in common
will be deemed to be held by a single holder, and the death of a tenant by the
entirety, joint tenant or tenant in common will be deemed the death of the
Noteholder. The death of a person who, during his lifetime, was entitled to
substantially all of the beneficial ownership interest of a Note, will be deemed
the death of a holder, regardless of the registered Noteholder, if such
beneficial interest can be established to the satisfaction of the Trustee. Such
beneficial interest will be deemed to exist in typical cases of street name or
nominee ownership, ownership by a custodian for the benefit of a minor under the
Uniform Gifts to Minors Act, community property or other joint ownership
arrangements between a husband and wife (including individual retirement
accounts of Keogh plans maintained solely by or for the decedent, or by or for
the decedent and spouse) and trusts and certain other arrangements whereby a
person has substantially all of the beneficial ownership interests in the Notes
during his/her lifetime. Beneficial interests shall include the power to sell,
transfer or other dispose of a Note and the right to receive the proceeds
therefrom, as well as interest and principal payable with respect thereto.

51
<PAGE> 52

Except in the case of Qualified Institutions and the personal
representative or surviving tenant of a deceased Noteholder, no particular form
of request for redemption or authority to request payment is necessary. However,
in order for Notes to be validly tendered for redemption, the Trustee must have
received: (1) a written request for redemption, (2) the Notes to be redeemed and
(3) in the case of a surviving tenant or personal representative of a deceased
Noteholder or beneficial owner, appropriate evidence of death and such other
additional documents as the Trustee shall require, including, but not limited
to, inheritance or estate tax waivers and evidence of authority of the personal
representative. Any Notes tendered or any request for redemption may be
withdrawn by written request received by the Trustee prior to the issuance of a
check in payment thereof. Requests for redemption covering Notes not paid will
remain in effect unless withdrawn. A Noteholder who has tendered a Note for
redemption shall continue to receive all monthly interest payments prior to the
date of redemption.

Notes tendered by the personal representative or surviving tenant of a
deceased Noteholder or beneficial owner shall be redeemed first in order of the
Trustee's receipt of a written request for redemption. Notes tendered following
a deceased Noteholder's death that are not redeemed during a Redemption Period
due to the limitations, will be held for redemption in order of receipt, subject
to the Per Holder Redemption Limitation and the Aggregate Redemption Limitation,
within 60 days following the commencement of the next succeeding Redemption
Period until paid, unless sooner withdrawn.

The Company's obligation to redeem Notes properly tendered for redemption
is not cumulative. Although the Company is obligated to redeem in any Redemption
Period up to $300,000 of the Notes issued under the Indenture, it is not
required to establish a sinking fund or otherwise set aside funds for that
purpose, and the Company has no present intention of setting aside funds for
redemption of Notes prior to maturity. The Company intends to redeem Notes
tendered out of its internally-generated funds or, if necessary, short-term or
other long-term borrowing. The obligation to redeem the Notes, however, is an
unsecured obligation of the Company.

Nothing in the Indenture prohibits the Company from purchasing any Notes on
the open market. However, the Company may not use any Notes purchased on the
open market as a credit against amounts the Company is otherwise obligated under
the Indenture to purchase.

NOTEHOLDER'S RIGHTS TO REDEMPTION AFTER FUNDAMENTAL STRUCTURAL CHANGE OR
FUNDAMENTAL CHANGE OF BUSINESS

In the event of any Fundamental Structural Change or Fundamental Change of
Business (as those terms are defined herein below), each Noteholder will have
the right, at the Noteholder's option and subject to the terms and conditions of
the Indenture, to require the Company to purchase for cash all or any part
(provided the principal amount of such part is $1,000 or an integral multiple
thereof) of the holder's Notes on the date that is 80 days after the occurrence
of the a Fundamental Structural Change (the "Repurchase Date") at a price equal
to 100% of the principal amount thereof plus accrued interest to the Repurchase
Date, unless on or before the date that is 45 days after the occurrence of a
Fundamental Structural Change, the Notes have received a rating of Baa3 or
better by Moody's Investors Service, Inc., or BBB or better by either Standard &
Poor's Corporation or Duff & Phelps Credit Rating Co. Neither the Board of
Directors of the Company nor the Trustee has the ability to waive the Company's
obligation to redeem a holder's Notes upon request in the event of a Fundamental
Structural Change or Fundamental Change of Business. Exercise of this redemption
option by a Noteholder is irrevocable.

If within 45 days after a Fundamental Structural Change or Fundamental
Change of Business the Notes have not received a rating as described in the
immediately preceding paragraph, the Company is obligated to provide promptly,
but in any event within three business days after expiration of such 45-day
period, notice to the Trustee, who shall promptly (and in all events within five
days after receipt of notice from the Company) notify all Noteholders, of a
Fundamental Structural Change, which notice shall state, among other things (i)
the availability of the redemption option, (ii) the date before which a
Noteholder must notify the Trustee of such Noteholder's intention to exercise
the redemption option (which date shall be no more than three business days
prior to the Repurchase Date) and (iii) the procedure such Noteholder must
follow to exercise

52
<PAGE> 53

such right. To exercise this right, the Noteholder must deliver to the Trustee
on or before the close of business on the Repurchase Date, written notice of
such Noteholder's redemption election and the Notes to be redeemed free of liens
or encumbrances. If a Noteholder fails to tender Notes for repurchase by the
Repurchase Date, the redemption option shall lapse.

Under the Indenture, a "Fundamental Structural Change" in ACC is deemed to
have occurred at such time as (i) ACC shall convey, transfer or lease all or
substantially all of its assets to any person other than a direct or indirect
subsidiary of ACC and other than as part of a Contract securitization or sale
entered into in the ordinary course of business, (ii) ACC is party to any merger
or consolidation whereby, following the transaction, the stockholders of ACC
immediately prior to the transaction do not control a majority of the Common
Stock of ACC or the surviving entity following the transaction, (iii) any person
or group of persons acting in concert shall purchase or otherwise acquire in one
or more transactions beneficial ownership of 50% or more of the Common Stock of
ACC outstanding on the date immediately prior to the last purchase or other
acquisition, (iv) ACC or any subsidiary shall purchase or otherwise acquire in
one or more transactions during the 12-month period preceding the date of the
last such purchase or other acquisition an aggregate of 25% or more of the
Common Stock of ACC outstanding on the date immediately prior to the last such
purchase or acquisition or (v) ACC shall make a distribution of cash, property
or securities to holders of Common Stock in their capacity as such (including by
means of dividends, reclassification or recapitalization) which, together with
all other distributions during such 12-month period preceding the date of such
distribution, has an aggregate fair market value in excess of an amount equal to
25% of the fair market value of Common Stock of ACC outstanding on the date
immediately prior to such distribution.

Although there is a developing body of case law interpreting the phrase
"substantially all," there is no precise established definition of the phrase
under applicable law. Accordingly, the ability of a Noteholder to require ACC to
repurchase such Notes as a result of conveyance, transfer or lease of less than
all of the assets of ACC to another person may be uncertain.

Under the Indenture, a "Fundamental Change of Business" is deemed to have
occurred if, as of the last day of any quarter, excluding any extraordinary or
non-recurring revenues, ACC shall have derived less than an average of 65% of
its Consolidated Net Revenues (as defined in the Indenture) from the consumer
finance business, including consumer mortgage finance, during the preceding four
quarters.

Except as described above with respect to a Fundamental Structural Change
or a Fundamental Change of Business, the Indenture does not contain any other
provisions that permit the Noteholders to require that the Company repurchase
the Notes in the event of a takeover or similar transaction. Moreover, a
recapitalization of the Company or a transaction entered into by the Company
with management or their affiliates would not necessarily be included within the
definition of a "Fundamental Structural Change." Accordingly, while such
definitions cover a wide variety of arrangements which have traditionally been
used to effect highly-leveraged transactions, the Indenture does not afford the
Noteholders protection in all circumstances from highly leveraged transactions,
reorganizations, restructurings, mergers or similar transactions involving the
Company and its subsidiaries that may adversely affect Noteholders.

The Fundamental Structural Change and the Fundamental Change of Business
feature of the Notes may, in certain circumstances, make more difficult or
discourage a takeover of the Company and thus removal of incumbent management.
The Fundamental Structural Change and the Fundamental Change of Business
feature, however, is not the result of management's knowledge of any specific
effort to obtain control of the Company or part of a plan by management to adopt
a series of anti-takeover provisions. Rather, the terms of the Fundamental
Structural Change and the Fundamental Change of Business feature is a result of
negotiations between the Company and the Underwriters.

To the extent that the right of redemption by a Noteholder in the event of
a Fundamental Structural Change or a Fundamental Change of Business constitutes
a tender offer under Section 14(e) of the Exchange Act and the rule thereunder,
the Company will comply with all applicable tender offer rules.

53
<PAGE> 54

OPTIONAL REDEMPTION BY THE COMPANY

Beginning December 1, 1999, the Company shall have the option to redeem,
upon not less than 30 and not more than 60 days' notice, all or any portion of
the Notes.

If the Company redeems the Notes prior to maturity, it will pay in cash a
redemption price equal to the following percentages of the principal amount of
the Notes redeemed, plus interest to the date fixed for redemption:

<TABLE>
<CAPTION>
IF REDEEMED DURING REDEMPTION
THE 12 MONTHS BEGINNING PRICE
-------------------------------------------------------------------------- ----------
<S> <C>
December 1, 1999.......................................................... 104%
December 1, 2000.......................................................... 102%
December 1, 2001 and thereafter........................................... 100%
</TABLE>

If less than all the Notes are redeemed, the particular Notes to be
redeemed will be selected by lot by the Trustee. Notice of redemption will be
mailed to each holder of Notes to be redeemed at the address appearing in the
registry books for the Notes maintained by the Company.

SUBORDINATION

Payment of the principal of and interest on the Notes is subordinated in
right of payment to payments due under Senior Indebtedness. Senior Indebtedness
is defined to include the principal of (and premium, if any) and interest on all
indebtedness of ACC incurred in connection with the borrowing of money from
banks, trust companies, insurance companies, investment companies, real estate
investment trusts, pension and profit sharing trusts or other financial
institutions or institutional investors, whether outstanding at the date of
execution of the Indenture or thereafter incurred or created, and such
indebtedness of others that ACC has assumed, guaranteed or otherwise assured
payment of, directly or indirectly, and renewals, extensions and refunding of
any of the foregoing. Senior Indebtedness does not include indebtedness
incurred, created or assumed after the date of execution of the Indenture that
provides by its terms that such indebtedness is not prior in right of payment to
the Notes or secured indebtedness with respect to which the sole recourse of the
lender in the event of nonpayment or other default is to the collateral. At
September 30, 1996, Senior Indebtedness aggregated $5 million. The amount of
Senior Indebtedness may change in the future.

The Notes are senior to the Company's authorized Common Stock and Preferred
Stock and will be senior to any other class of capital stock that may be
authorized.

EVENTS OF DEFAULT; NOTICE AND WAIVER

The following will be Events of Default: (a) default in the payment of
principal, or premium, if any, when due; (b) default in the payment of any
interest when due, continued for five days; (c) default in the making of any
redemption payment when due, continued for five days; (d) acceleration of all or
any portion of Senior Indebtedness or the foreclosure upon any collateral
securing Senior Indebtedness; (e) default by the Company under any Senior
Indebtedness if the default shall remain uncured for a period of 180 consecutive
days; (f) default in the performance of any other covenant or warranty of the
Company, continued for 30 days (or, in certain circumstances, 60 days) after
written notice to the Company by the Trustee or to the Company and the Trustee
by the holders of 10% in principal amount of the outstanding Notes; or (g)
certain events of bankruptcy, insolvency or reorganization. If any Event of
Default shall occur and be continuing, the Trustee or the holders of not less
than 25% in principal amount of outstanding Notes may declare the Notes
immediately due and payable.

The Company is required to deliver annually to the Trustee an officers'
certificate as to the absence or existence of any default in the performance of
any covenant contained in the Indenture during the preceding year.

54
<PAGE> 55

The Indenture provides that the Trustee will, within 60 days after
obtaining notice of the occurrence of a default, give the Noteholders (and to
certain other persons and former Noteholders) notice of all uncured defaults
known to it; but, except in the case of a default in the payment of principal,
or premium, if any, or interest on any of the Notes, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of such Noteholders.

The holders of a majority of the aggregate principal amount of outstanding
Notes may on behalf of all Noteholders waive certain past defaults, not
including a default in payment of principal, or premium, if any, or interest on
any Note.

RESTRICTIONS ON ADDITIONAL INDEBTEDNESS

The Company is prohibited by the Indenture from permitting its total
Indebtedness (as defined in the Indenture), which excludes secured indebtedness
with respect to which the sole recourse of the lender in the event of nonpayment
or other default is to the collateral and includes the Notes, to exceed six (6)
times the Company's Consolidated Tangible Net Worth (as defined in the
Indenture) at any time. At September 30, 1996, assuming that the Notes were then
outstanding and such proceeds of the offering were used as described in "Use of
Proceeds," such Indebtedness was approximately 2.04 times the Company's
Consolidated Tangible Net Worth.

LIQUIDITY MAINTENANCE REQUIREMENT

The Company is not required to establish a sinking fund for the purpose of
redeeming the Notes. ACC has covenanted, however, to maintain on or before ten
days prior to and until the next Interest Payment Date (as defined in the
Indenture), Permitted Investments (as defined in the Indenture) the fair market
values of which are equal to six times the aggregate amount of interest payable
with respect to the Notes for the next succeeding Interest Payment Date. The
Company is required to deliver to the Trustee, within 30 days after the end of
each fiscal quarter, an officer's certificate as to compliance with this
covenant.

LIMITATIONS ON DIVIDENDS AND OTHER PAYMENTS

ACC has agreed pursuant to the Indenture that it will not make, pay or
declare any of the following (each a "Restricted Payment"): (i) any dividend or
other distribution of property or assets other than dividends paid solely in the
Company's stock, (ii) a repayment or defeasance of any indebtedness which is
subordinate to the Notes (except, so long as the Notes are not in default,
scheduled payments of principal and interest thereon), (iii) an exchange of
equity for debt issued subsequent to September 30, 1996, or (iv) any stock
repurchase, unless such Restricted Payment is less than the sum of (A)
$1,000,000 plus (B) 45% of the Company's cumulative consolidated net income
earned during the period commencing October 1, 1996, and ending on the date of
such Restricted Payment, plus (C) the cumulative cash proceeds to the Company of
all public or private equity offerings during such time. In addition, the
Company is prohibited by the Indenture from making any Restricted Payment if, by
so doing, the Company will be in violation of any other provisions of the
Indenture or any other loan agreement or indenture to which the Company is a
party.

MERGER, CONSOLIDATION OR SALE OF ASSETS; SUCCESSOR CORPORATION

The Company has covenanted that it will not merge or consolidate with, or
sell all or substantially all of its assets to, any person, firm or corporation
unless the Company is the continuing corporation in such transaction and,
immediately thereafter, is not in default under the Indenture or, if it is not
the continuing corporation, the successor corporation expressly assumes the
Company's obligations under the Indenture and, immediately after such
transaction, the successor corporation is not in default under the Indenture.
Any successor corporation shall succeed to and be substituted for the Company as
if such successor corporation has been named as the Company in the Indenture.

55
<PAGE> 56

MODIFICATION OF THE INDENTURE

Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the holders of 66 2/3% of the aggregate
principal amount of outstanding Notes, provided that no such modification or
amendment may (i) reduce the principal amount of or interest on any Note or
change the stated maturity of the principal or the interest payment dates or
change the currency in which the Notes are to be paid, without the consent of
each holder of any Note affected thereby, or (ii) reduce the percentage of
holders of Notes necessary to modify or alter the Indenture, without the consent
of the holders of all Notes then outstanding.

THE TRUSTEE

Norwest Bank Minnesota, National Association, is the Trustee under the
Indenture. Its mailing address is Norwest Center, Sixth Street and Marquette
Avenue, Minneapolis, Minnesota 55479-0069.

The Indenture contains a provision pursuant to which the Company will
indemnify the Trustee against any and all losses or liabilities incurred by the
Trustee in connection with its execution and performance of the Indenture;
provided, however, that such indemnification will not extend to losses resulting
from a breach of the Trustee's duties under the Indenture. The Indenture
provides that the holders of a majority in principal amount of the outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred upon
the Trustee, subject to certain limitations set forth in the Indenture. The
Trustee is not required to take any action at the direction of the Noteholders
unless such Noteholders have provided the Trustee with a reasonable indemnity.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

Set forth below is a discussion of certain federal income tax consequences
to persons purchasing the Notes. The discussion relates only to the material
federal income tax consequences regarding the initial purchase, ownership and
disposition of the Notes and is not necessarily inclusive of all matters which
may be of interest to an individual investor. The discussion below likewise does
not address the tax treatment to certain Noteholders subject to special
treatment under the federal income tax laws (for example, dealers in securities,
banks, life insurance companies, tax-exempt organizations and foreign
taxpayers), nor does it discuss any aspect of state, local or foreign taxation.
EACH PROSPECTIVE INVESTOR SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR
CONCERNING THE PARTICULAR TAX CONSEQUENCES TO THE INVESTOR OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE APPLICABILITY OF ANY
STATE, LOCAL OR FOREIGN TAX LAWS TO WHICH THE INVESTOR MAY BE SUBJECT.

PAYMENTS OF INTEREST

Interest on the Notes generally will be taxable to the Noteholder as
ordinary income at the time it is paid or accrued in accordance with the
Noteholder's method of accounting for tax purposes.

SALE OR REDEMPTION

Generally, any sale or redemption of Notes will result in taxable gain or
loss equal to the difference between the amount of cash or the property received
and the Noteholder's adjusted tax basis in the Note. Generally, a Noteholder's
adjusted tax basis in a Note will equal the cost of the Note to such holder. Any
gain or loss upon a sale or other disposition of a Note (including the
redemption of a Note or the payment of its principal amount at maturity), will
be recognized as capital gain or loss, which will be long term if the Note has
been held by the Noteholder for more than one year.

BACKUP WITHHOLDING

The Company is required to comply with information reporting requirements
imposed by the Internal Revenue Service and will be required to withhold 31% of
the interest paid to Noteholders who are subject to the backup withholding rules
and who (i) fail to provide to the Company their correct taxpayer identification

56
<PAGE> 57

number under penalty of perjury, (ii) furnish an incorrect taxpayer
identification number, (iii) fail to report properly interest or dividends or
(iv) under certain circumstances, fail to provide the Company with a certified
statement, under penalty of perjury, that the Noteholder is not subject to
backup withholding. Any amounts so withheld from payments on the Notes will be
paid over to the Internal Revenue Service and will be allowed as a credit
against the Noteholder's federal income tax. Certain Noteholders (including,
among others, corporations and foreign individuals who comply with certain
certification requirements) are not subject to backup withholding. Noteholders
should consult their tax advisors as to their qualification for exemption from
backup withholding and the procedure for obtaining such exemption.

57
<PAGE> 58

UNDERWRITING

Pursuant to the Underwriting Agreement, and subject to the terms and
conditions thereof, the Underwriters named below, have agreed, severally, to
purchase from ACC the principal amount of Notes set forth below opposite their
respective names.

<TABLE>
<CAPTION>
NAME OF UNDERWRITER AMOUNT OF NOTES
---------------------------------------------------------------------- ---------------
<S> <C>
McDonald & Company Securities, Inc.................................... $10,000,000
J.C. Bradford & Co.................................................... 10,000,000
-----------
Total....................................................... $20,000,000
===========
</TABLE>

In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions therein set forth, to purchase all the principal amount of
Notes offered hereby if any of such Notes are purchased.

ACC has granted to the Underwriters and option, exercisable during the 30
days after the date of the Prospectus, to purchase up to $3,000,000 in aggregate
principal amount of the Notes at the Price to Public set forth on the cover page
hereof less an underwriting discount. The Underwriters may exercise such option
to purchase solely for the purpose of covering over-allotments, if any, incurred
in the sale of Notes offered hereby.

The Underwriters have advised ACC that they propose initially to offer the
Notes to the public at the public offering price set forth on the cover page of
this Prospectus and to certain dealers at such a price less a concession not in
excess of 2.0% of the principal amount. The Underwriters may allow and such
dealers may reallow a concession not in excess of 0.5% of the principal amount
to certain other dealers. After the initial public offering of the Notes, the
public offering price and such concessions may be changed.

The offering of the Notes is made for delivery when, as and if accepted by
the Underwriters and subject to prior sale and to withdrawal, cancellation or
modification of the offer without notice. The Underwriters reserve the right to
reject any order for the purchase of Notes.

There is no public market for the Notes and ACC does not intend to apply
for listing of the Notes on the Nasdaq National Market or any securities
exchange. ACC has been advised by the Underwriters that, following the public
offering of the Notes, the Underwriters presently intend to make a market in the
Notes; however, the Underwriters are not obligated to do so, and any
market-making activity with respect to the Notes may be discontinued at any time
without notice. There can be no assurances as to the liquidity of the public
market for the Notes or that an active public market for the Notes will develop.
If an active market does not develop, the market price and liquidity of the
Notes may be adversely affected.

The Underwriting Agreement provides that ACC will indemnify the
Underwriters, and controlling persons, if any, against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments which the Underwriters or any such controlling persons
may be required to make in respect thereof.

LEGAL MATTERS

The legality of the Notes offered hereby is being passed upon for ACC by
Sheppard, Mullin, Richter & Hampton LLP, whose address is 501 West Broadway,
Suite 1900, San Diego, California 92101. Certain legal matters in connection
with the sale of the Notes offered hereby will be passed upon for the
Underwriters by Manatt, Phelps & Phillips LLP whose address is 11355 West
Olympic Boulevard, Los Angeles, California 90064.

EXPERTS

The Consolidated Financial Statements of the Company as of December 31,
1995, and December 31, 1994, and for the year ended December 31, 1995, and for
the six-month transition period ended December 31,

58
<PAGE> 59

1994, and for the period from July 15, 1993 (the inception of the Company)
through June 30, 1994, have been included herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
auditors, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement (as amended, the "Registration Statement") under
the Securities Act with respect to the securities offered by this Prospectus.
This Prospectus, which constitutes a part of the Registration Statement, does
not contain all the information set forth in the Registration Statement. For
further information with respect to the Company and the securities offered
hereby, reference is made to the Registration Statement and to the exhibits and
schedules filed therewith. Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the SEC. A copy of the Registration Statement, including
exhibits and schedules thereto, filed by the Company with the SEC, as well as
reports and other information filed by the Company with the SEC may be inspected
without charge (and copies of the material contained therein may be obtained
from the SEC upon payment of applicable copying charges) at the public reference
facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549 and at the following regional addresses: Los Angeles Regional Office, 3600
Wilshire Boulevard, Suite 100-J, Los Angeles, California 90010; Chicago Regional
Office, 500 West Madison, Suite 1400, Chicago, Illinois 60661; and New York
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048. The
SEC maintains a Web site on the Internet that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC at http://www.sec.gov.

59
<PAGE> 60

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
ACC Consumer Finance Corporation:

We have audited the accompanying consolidated balance sheets of ACC
Consumer Finance Corporation and subsidiaries (the Company) as of December 31,
1995 and 1994, and the related consolidated statements of operations,
shareholders' equity and cash flows for the year ended December 31, 1995, the
six-month transition period ended December 31, 1994 and the period from July 15,
1993 (inception) through June 30, 1994. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted accounting
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of ACC Consumer
Finance Corporation and subsidiaries as of December 31, 1995 and 1994, and the
results of their operations and their cash flows for the year ended December 31,
1995, the six-month transition period ended December 31, 1994 and the period
from July 15, 1993 (inception) through June 30, 1994, in conformity with
generally accepted accounting principles.

KPMG PEAT MARWICK LLP

San Diego, California
April 15, 1996

F-1
<PAGE> 61

ACC CONSUMER FINANCE CORPORATION

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DEC. 31, DEC. 31,
1995 1994
SEPT. 30, ----------- -----------
1996
-----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Cash and Cash Equivalents.................................... $ 106,494 $ 120,672 $ 143,833
Restricted Cash (2).......................................... 1,426,361 1,032,683 1,918,915
Credit Enhancement Cash Reserve (2).......................... 7,194,382 4,052,524 --
Installment Contracts Held-for-Sale, Net(3).................. 24,990,322 28,187,778 --
Installment Contracts Held-for-Investment, Net(4)............ 330,120 509,388 38,613,239
Interest Receivable.......................................... 320,694 386,673 579,569
Asset-Backed Securities(5)................................... 8,250,907 3,910,080 --
Excess Servicing Receivables(6).............................. 11,862,618 5,590,878 --
Accounts Receivable(7)....................................... 4,014,471 1,423,112 115,769
Fixed Assets, Net(8)......................................... 965,067 842,016 490,220
Repossessed Vehicles......................................... 227,675 211,619 196,225
Prepaid Expenses............................................. 322,458 427,456 73,404
Other Assets................................................. 289,938 214,059 200,344
----------- ----------- -----------
Total Assets....................................... $60,301,507 $46,908,938 $42,331,518
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Repurchase Facility, Net(9).................................. $26,328,645 $29,708,252 $40,492,594
Amount Due to Bank........................................... 2,105,633 1,537,290 289,932
Other Borrowings(10)......................................... 3,884,986 7,439,597 --
Tax Liability(14)............................................ 2,189,290 123,909 --
Lease Liability(13).......................................... 383,165 519,486 205,919
Accounts Payable and Accrued Liabilities..................... 2,749,002 1,295,604 445,300
----------- ----------- -----------
Total Liabilities.................................. 37,640,721 40,624,138 41,433,745
----------- ----------- -----------
Redeemable Preferred Stock, $.001 Par Value,
Authorized 182,282 Shares(11)
Series A -- 0, 162,831 and 127,537 Shares Issued and
Outstanding at September 30, 1996, (unaudited), December
31, 1995, and December 31, 1994, Respectively, and
Series B -- 0, 11,538 and 0 Shares Issued and Outstanding
at September 30, 1996 (unaudited), December 31, 1995,
and December 31, 1994, Respectively, and
Series C -- 0, 0 and 0 Shares Issued and Outstanding at
September 30, 1996 (unaudited), December 31, 1995, and
December 31, 1994, Respectively......................... -- 6,279,049 4,358,377
Shareholders' Equity
Preferred Stock, $.001 Par Value, 1,817,718 Shares
Authorized and None Issued and Outstanding(11)
Common Stock, $.001 Par Value, Authorized 18,000,000,
8,292,478 and 2,099,992 Shares Issued and Outstanding as
of September 30, 1996 (unaudited) and December 31, 1995
and December 31, 1994, Respectively..................... 8,292 2,100 2,100
Additional Paid-in Capital................................... 19,908,328 117,464 117,464
Retained Earnings (Accumulated Deficit)...................... 2,744,166 (113,813) (3,580,168)
----------- ----------- -----------
Total Shareholders' Equity......................... 22,660,786 5,751 (3,460,604)
Commitments and Contingencies(13)
Total Liabilities and Shareholders' Equity......... $60,301,507 $46,908,938 $42,331,518
=========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-2
<PAGE> 62

ACC CONSUMER FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPT. JULY 15,
SIX-MONTH 1993
TRANSITION (INCEPTION)
30, YEAR ENDED PERIOD THROUGH
------------------------- DEC. 31, ENDED DEC. JUNE 30,
1995 1995 31, 1994 1994
----------- ----------- ----------- -----------
1996 (UNAUDITED)
-----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Interest Income
Interest Income........................ $ 6,576,043 $ 6,373,575 $ 7,531,690 $ 3,496,763 $ 811,516
Interest Expense....................... (3,246,726) (3,432,726) (4,199,336) (1,308,920) (205,339)
----------- ----------- ----------- ----------- -----------
Net Interest Income................. 3,329,317 2,940,849 3,332,354 2,187,843 606,177
Contract Losses
Provision for Contract Losses(4)....... (590,298) (300,190) (673,802) (902,361) (592,325)
----------- ----------- ----------- ----------- -----------
Net Interest Income after Provision
for Contract Losses............... 2,739,019 2,640,659 2,658,552 1,285,482 13,852
Other Income
Servicing and Ancillary Fees (3 and
6).................................. 3,288,526 988,030 1,757,257 28,237 6,653
Litigation Settlement Income........... -- -- -- 325,000 --
Gain on Sale of Contracts(3 and 6)..... 10,415,434 5,804,077 8,056,136 -- --
----------- ----------- ----------- ----------- -----------
Total Other Income.................. 13,703,960 6,792,107 9,813,393 353,237 6,653
Total Income........................ 16,442,979 9,432,766 12,471,945 1,638,719 20,505
Expenses
Personnel.............................. 5,907,831 3,904,851 5,280,161 1,691,212 1,924,588
General and Administrative............. 2,742,914 1,668,097 2,449,217 701,366 493,056
Servicing.............................. 1,197,081 287,533 408,231 56,299 --
Occupancy and Equipment................ 351,745 268,008 372,254 101,333 100,779
Depreciation and Amortization.......... 325,975 199,587 286,727 80,715 90,044
----------- ----------- ----------- ----------- -----------
Total Expenses...................... 10,525,546 6,328,076 8,796,590 2,630,925 2,608,467
Income (Loss) Before Taxes.......... 5,917,433 3,104,690 3,675,355 (992,206) (2,587,962)
Income Tax Expense(14).............. 2,485,000 317,380 209,000 -- --
----------- ----------- ----------- ----------- -----------
Net Income (Loss)................... 3,432,433 2,787,310 3,466,355 (992,206) (2,587,962)
----------- ----------- ----------- ----------- -----------
Preferred Stock Dividends(11)............ 116,818 151,641 215,419 82,621 152,673
----------- ----------- ----------- ----------- -----------
Net Income (Loss) Available to Common
Shareholders........................... $ 3,315,615 $ 2,635,669 $ 3,250,936 $(1,074,827) $(2,740,635)
=========== =========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPT. 30, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Net Income per Common Share and Common Share Equivalent(1)
Primary............................................................. $0.47 $0.62
Fully Diluted....................................................... $0.47 $0.55
Shares Used in Computing Net Income Per Common Share and Common Share
Equivalent(1)
Primary............................................................. 7,268,215 5,624,305
Fully Diluted....................................................... 7,303,038 6,292,478
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 63

ACC CONSUMER FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
RETAINED NOTES
COMMON STOCK ADDITIONAL EARNINGS RECEIVABLE
------------------ PAID-IN (ACCUMULATED FROM
SHARES AMOUNT CAPITAL DEFICIT) SHAREHOLDERS TOTAL
--------- ------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at July 15, 1993
(Inception)........................ -- $ -- $ -- $ -- $ -- $ --
Issuance of Common Stock........... 2,099,992 2,100 117,464 -- -- 119,564
Net Loss........................... -- -- -- (2,587,962) -- (2,587,962)
Issuance of Notes Receivable from
Shareholders.................... -- -- -- -- (33,628) (33,628)
--------- ------ ----------- ---------- ----------- -----------
Balance at June 30, 1994............. 2,099,992 2,100 117,464 (2,587,962) (33,628) (2,502,026)
Payment on Notes Receivable from
Shareholders.................... -- -- -- -- 33,628 33,628
Net Loss........................... -- -- -- (992,206) -- (992,206)
--------- ------ ----------- ---------- ----------- -----------
Balance at December 31, 1994......... 2,099,992 2,100 117,464 (3,580,168) -- (3,460,604)
Net Income......................... -- -- -- 3,466,355 -- 3,466,355
--------- ------ ----------- ---------- ----------- -----------
Balance at December 31, 1995......... 2,099,992 2,100 117,464 (113,813) -- 5,751
Net Income (unaudited)............. -- -- -- 3,432,433 -- 3,432,433
Issuance of Common Stock, Net
(unaudited)..................... 2,000,000 2,000 12,515,012 -- -- 12,517,012
Payment of Preferred Stock
Dividends (unaudited)........... -- -- -- (574,454) -- (574,454)
Noncash Conversion of Preferred
Stock to Common Stock
(unaudited)..................... 4,192,486 4,192 7,275,852 -- 7,280,044
--------- ------ ----------- ---------- ----------- -----------
Balance at September 30, 1996
(unaudited)........................ 8,292,478 $8,292 $19,908,328 $ 2,744,166 $ -- $22,660,786
========= ====== =========== ========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 64

ACC CONSUMER FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPT. SIX-MONTH
TRANSITION JULY 15, 1993
30, YEAR ENDED PERIOD ENDED (INCEPTION)
-------------------------- DEC. 31, DEC. 31, THROUGH
1995 1995 1994 JUNE 30, 1994
------------ ------------ ------------ -------------
1996 (UNAUDITED)
-----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income......................... $ 3,432,433 $ 2,787,310 $ 3,466,355 $ (992,206) $ (2,587,962)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Used In
Operating Activities:
Gain on Sale of Contracts..... (10,415,434) (5,804,077) (8,056,136) -- --
Amortization and 3,848,411 1,204,369 2,382,908 (289,041) 26,548
Depreciation...............
Provision for Contract 590,298 300,190 673,802 902,361 592,325
Losses.....................
Provision for Deferred Income -- -- 174,000 -- --
Taxes, Net.................
Net Cash Deposited into (3,535,536) (1,337,308) (3,166,292) (1,245,225) (673,689)
Restricted Accounts........
Net Deferred Fees............. -- -- 572,709 (88,685) (77,363)
Changes in Operating Assets:
Net (Increase) Decrease in (3,361,640) 5,519,641 5,435,470 -- --
Contracts Held-for-Sale....
Interest Receivable........... 65,979 202,773 192,896 (402,845) (176,723)
Accounts Receivable........... (2,591,359) (1,433,488) (1,307,343) 357,338 (473,107)
Other Assets.................. (98,206) (186,507) (43,144) (52,468) (177,177)
Prepaid Expenses.............. 104,998 (334,587) (354,052) (60,234) (13,170)
Changes in Operating Liabilities:
Accounts Payable and Accrued 3,518,779 1,177,559 800,213 282,653 162,647
Liabilities................
----------- ------------ ------------ ------------ ------------
Net Cash (Used In) Provided By (8,441,277) 2,095,875 771,386 (1,588,352) (3,397,671)
Operating Activities.......
Cash Flows from Investing Activities:
Net Increase in Contracts Held-for- (677,106) (73,883) (2,617,056) (24,524,573) (15,375,670)
Investment......................
Principal Paydowns of Asset-Backed 1,790,081 345,153 710,880 -- --
Securities......................
Fees for Arranging Repurchase -- -- -- -- (360,000)
Facility........................
----------- ------------ ------------ ------------ ------------
Proceeds from Liquidation of 1,469,550 1,311,786 1,706,800 244,000 --
Repossessed Vehicles............
Purchases of Fixed Assets.......... (385,703) (511,175) (609,094) (224,762) (399,750)
----------- ------------ ------------ ------------ ------------
Net Cash Provided By (Used In) $ 2,196,822 $ 1,071,881 $ (808,470) $(24,505,335) $ (16,135,420)
Investing Activities.......
</TABLE>

F-5
<PAGE> 65

ACC CONSUMER FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPT. SIX-MONTH
TRANSITION JULY 15, 1993
30, YEAR ENDED PERIOD ENDED (INCEPTION)
-------------------------- DEC. 31, DEC. 31, THROUGH
1995 1995 1994 JUNE 30, 1994
------------ ------------ ------------ -------------
1996 (UNAUDITED)
-----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flows from Financing Activities:
Net (Decrease) Increase in $(3,472,562) $(10,705,491) $(10,907,271) $ 25,476,742 15,448,076
Repurchase Facility.............
Increase in Other Borrowings....... 3,327,264 8,936,556 9,939,597 -- --
Repayment of Other Borrowings...... (7,000,000) (2,500,000) (2,500,000) -- --
Net (Decrease) Increase in Capital (136,321) 265,610 313,567 205,919 --
Leases..........................
Increase in Amount Due to Bank..... 568,343 977,681 1,247,358 232,780 57,153
Payment on Notes Receivable from -- -- -- 33,628 --
Shareholders....................
Net Proceeds from Issuance of 12,517,012 -- -- -- 85,936
Common Stock....................
Net Proceeds from Issuance of 1,000,995 1,920,672 1,920,672 249,977 3,980,400
Preferred Stock.................
Payment of Preferred Stock (574,454) -- -- -- --
Dividends.......................
----------- ------------ ------------ ------------ ------------
Net Cash Provided By (Used In) 6,230,277 (1,104,972) 13,923 26,199,046 19,571,565
Financing Activities.......
(Decrease) Increase in Cash and (14,178) 2,062,784 (23,161) 105,359 38,474
Cash Equivalents................
Cash and Cash Equivalents at 120,672 143,833 143,833 38,474 --
Beginning of Period.............
----------- ------------ ------------ ------------ ------------
Cash and Cash Equivalents at End of $ 106,494 $ 2,206,617 $ 120,672 $ 143,833 $ 38,474
Period..........................
=========== ============ ============ ============ ============
Supplemental Disclosure:
Interest Paid...................... $ 2,990,814 $ 3,336,911 $ 4,073,177 $ 1,038,586 $ 97,839
Taxes Paid......................... $ 419,619 $ 42,091 $ -- $ -- $ --
Non-Cash Conversion of Preferred $ 7,280,044 $ -- $ -- $ -- $ --
Stock...........................
Non-Cash Issuance of Common Stock $ -- $ -- $ -- $ -- $ 33,628
in Exchange for Notes
Receivable......................
Non-Cash Issuance of Warrants in $ -- $ -- $ -- $ -- $ 128,000
Conjunction with Repurchase
Facility........................
Transfers of Contracts $ 5,803,000 $ 3,385,284 $ 4,484,392 $ -- $ --
Held-for-Sale to Asset-Backed
Securities......................
Transfers of Contracts Held-for- $ 1,485,606 $ 1,449,288 $ 1,722,194 $ 440,225 $ --
Investment to Repossessed
Vehicles........................
Transfers of Contracts Held-for- $ 986,196 $ 38,862,581 $ 40,907,980 $ -- $ --
Investment to Contracts
Held-for-Sale...................
Transfers of Contracts $ 2,205,726 $ 2,972,453 $ 2,762,889 $ -- $ --
Held-for-Sale to Contracts
Held-for-Investment.............
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 66

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED), AND
THE YEAR ENDED DECEMBER 31, 1995,
AND THE SIX-MONTH TRANSITION PERIOD ENDED DECEMBER 31, 1994
AND THE PERIOD FROM JULY 15, 1993 (INCEPTION) TO JUNE 30, 1994

(1) NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Nature of Business

ACC Consumer Finance Corporation (ACC) initiated business in California on
July 15, 1993, under the name American Credit Corporation. The Company changed
its name in October 1995 and was reincorporated in Delaware in November 1995.
ACC and its wholly-owned subsidiaries, OFL-A Receivables Corp. (OFL-A) and ACC
Receivables Corp. (Receivables) (collectively, the Company), engage primarily in
the business of purchasing, selling and servicing automobile installment sale
contracts (the Contracts). The Company specializes in Contracts with borrowers
who generally would not qualify for traditional financing, such as that provided
by commercial banks or captive finance companies of automobile manufacturers.
The Company purchases Contracts directly from automobile dealers, with the
intent to resell them to institutional investors in the form of securities
backed by the Contracts.

The Company conducts its activities through three legal entities. The
Company's operations (underwriting and Contract servicing) are conducted by ACC.
The Contracts are purchased and held until sale by OFL-A, which is a special
purpose financing corporation. Upon sale, the Contracts are concurrently
transferred from OFL-A to ACC, from ACC to Receivables, and then from
Receivables to a trust. Receivables retains subordinated asset-backed securities
(Subordinated Securities) and excess servicing receivables (ESRs) in the
securitization transactions.

(b) Principles of Consolidation

The consolidated financial statements include the accounts of ACC, OFL-A
and Receivables. All significant intercompany accounts and transactions have
been eliminated in consolidation.

On January 23, 1996, the Board of Directors approved a change in year end
for federal and state taxes and for financial statement reporting from June 30
to December 31. The change for financial reporting purposes was effective as of
January 1, 1995.

(d) Initial Public Offering

In May 1996, the Company sold in an initial public offering 2,000,000
shares of its Common Stock which generated net proceeds of approximately $12.5
million. The proceeds were used to partially pay-down the NIM Facility (included
in Other Borrowings), temporarily reduce advances on the Company's warehouse
facility (Repurchase Facility), and for other general corporate purposes. In
addition, each share of the Company's redeemable Preferred Stock automatically
converted into 23 shares of Common Stock upon consummation of the offering.
Total cumulative dividends of $574,454 were paid to the holders of the
redeemable Preferred Stock subsequent to the conversion.

(e) Installment Contracts Held-For-Sale

The Contracts are acquired from automobile dealers. The Contracts provide
for interest of approximately 20%. Each Contract provides for full amortization,
equal monthly payments and can be fully prepaid by the borrower at any time.

F-7
<PAGE> 67

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Contracts are purchased at a discount and are recorded net of the
discount. The Company also recognizes the interest accrued on Contracts through
the date of purchase as an addition to the discount. Nonrefundable fees and
related direct costs are deferred and netted against the Contract balances.

The Company has purchased the Contracts with the intent to resell them in
the future. Contracts held-for-sale are stated at the lower of aggregate cost or
market value.

The Contracts are financed under the terms of a repurchase agreement
(Repurchase Agreement) and are accounted for as a financing of the Contracts.
Under the terms of the agreement, the Company maintains the essential elements
of ownership of the Contracts, particularly credit risk and interest rate risk.

(f) Installment Contracts Held-for-Investment

Since January 1, 1995, all Contracts have been purchased with the intent to
be sold in asset-backed securities. Contracts that are identified as ineligible
during the securitization process (primarily due to their payment history) are
transferred to Contracts held-for-investment until such time that the deficiency
has been resolved. These Contracts are transferred to held-for-investment at the
lower of cost or market value and are accounted for net of an allowance for
losses, as determined by historical loss experience and current delinquency
levels. Effective January 1, 1995, concurrent with management's intent to sell
the Contracts, amortization of the purchase discount and net deferred fees was
discontinued.

(g) Allowance for Contract Losses

The allowance for Contract losses is maintained at a level deemed by
management to be adequate to provide for the inherent risks in the Contracts
held-for-investment. Management considers past loss experience and delinquency
levels in determining the adequacy of the allowance for credit losses.

The Company's policy is to charge-off the principal balance of all
Contracts which are 120 or more days delinquent, except Contracts which are
involved in bankruptcies which are charged-off at 210 or more days delinquent.
In addition, the Company charges off Contracts prior to becoming 120 or 210 days
delinquent if management has knowledge of specific circumstances that impair the
collectibility of the outstanding balances. The Company maintains general loss
allowances for the Contracts held-for-investment.

(h) Excess Servicing Receivables

The Company has created ESRs as a result of the sale of Contracts in the
ACC Auto Grantor Trust 1995-A (the 1995-A Transaction), the ACC Auto Grantor
Trust 1995-B (the 1995-B Transaction), the ACC Auto Grantor Trust 1996-A (the
1996-A Transaction) (unaudited), the ACC Auto Grantor Trust 1996-B Transaction
(the 1996-B Transaction) (unaudited) and the ACC Auto Grantor Trust 1996-C (the
1996-C Transaction) (unaudited). ESRs are determined by computing the present
value of the excess of the weighted average coupon on the Contracts sold
(ranging from 19.77% to 20.62%) over the sum of: (i) the coupon on the senior
bonds (ranging from 5.95% to 6.90%), (ii) a base servicing fee paid to the
Company (ranging from 3.00% to 3.15%) and (iii) the charge-offs expected to be
incurred on the portfolio of Contracts sold. For purposes of the projection of
the excess servicing cash flows, the Company assumes that annual charge-offs
(including accrued interest) will cumulatively approximate 11% of the original
principal of the Contracts sold, over the life of the portfolio. Further, the
Company uses an estimated average Contract life of 1.5 to 1.8 years. The cash
flows expected to be received by the Company, before expected losses, are then
discounted at a market interest rate that the Company believes an unaffiliated
third-party purchaser would require as a rate of return on such a financial
instrument. Expected losses are discounted using a rate equivalent to the
risk-free rate which is equivalent to the rate earned on securities rated AAA or
better with a duration similar to the duration estimated for the underlying
Contracts. This results in an effective overall discount rate of approximately
15%. The excess servicing cash flows are only available to the Company to the
extent that there

F-8
<PAGE> 68

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

is no impairment of the credit enhancements established at the time the
Contracts are sold. ESRs are amortized using the interest method and are offset
against servicing and ancillary fees. To the extent that the actual future
performance results are different from the excess cash flows the Company
estimated, the Company's ESRs will be adjusted quarterly with corresponding
adjustments made to income in that period. In connection with the valuation of
ESRs, the Company projects losses in the pool of Contracts which effectively
represents the estimated undiscounted recourse loss allowance offset with the
ESRs. As of September 30, 1996 (unaudited), and December 31, 1995, the estimated
undiscounted recourse loss allowance embedded in the ESRs, excluding accrued
interest, was $15.5 million and $7.1 million, respectively. This recourse loss
allowance represents 8.5% and 8.1% of the Contracts serviced for others as of
September 30, 1996, and December 31, 1995, respectively.

The carrying value of the ESRs is subject to the provisions of the Emerging
Issues Task Force (EITF) 88-11 pronouncement which states that an enterprise
that sells the right to receive the interest payments, the principal payments,
or a portion of either or both, relating to a loan should allocate the recorded
investment in that loan between the portion of the loan sold and the portion
retained based on the relative fair values of those portions.

(i) Asset-Backed Securities

In accordance with SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" (Statement 115), management determines the
appropriate classification of securities at the time of purchase. If management
has the intent and the Company has the ability at the time of purchase to hold
securities until maturity, they are classified as held-to-maturity. Asset-backed
securities held-to-maturity are stated at estimated fair value at the time of
securitization adjusted for the amortization of premiums and accretion of
discounts over the maturity of the related security. These asset-backed
securities have contractual terms to maturity, but require periodic payments to
reduce principal. In addition, expected maturities will differ from contractual
maturities because borrowers have the right to prepay the underlying installment
contracts. Effective July 1, 1994, the Company adopted Statement 115. The
carrying value of the asset-backed securities is subject to the provisions of
the EITF 88-11 and are recorded net of a discount, which is amortized using the
interest method.

(j) Net Gain on Sale

Each issuance of an asset-backed security results in the recognition of a
"net gain on sale of contracts" on the Company's consolidated statement of
operations for the period in which the sale was made. These gains are recognized
to the extent that the net proceeds from the sale are greater than the relative
fair value of the Contracts sold. This gain is subject to the provisions of the
EITF 88-11 that states that any gain recognized when a portion of a loan is sold
should not exceed the gain that would be recognized if the entire loan were
sold.

(k) Repossessed Vehicles

Vehicles acquired from non-payment of indebtedness are recorded at the
lower of the estimated fair market value or the outstanding Contract balance.
Such assets are generally sold within 60 days and any difference between the
sales price, net of expenses, and the carrying amount is treated as a charge-off
or recovery. In addition, the Company recognizes claims submitted pursuant to a
vendor single interest policy as accounts receivables.

(l) Fixed Assets

Furniture, fixtures and equipment are initially recorded at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets (six months to five years).

F-9
<PAGE> 69

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(m) Organizational Expenses

The Company incurred expenses in connection with the organization of the
business. These expenses were capitalized and are amortized on a straight-line
basis over a five-year period.

(n) Repurchase Facility Fees

The Company incurred fees of $488,000 in connection with the Repurchase
Facility. These fees reflected cash payments made and the estimated value of
Preferred Stock warrants issued in conjunction with the Repurchase Facility. The
Repurchase Facility costs have been deferred and are amortized over the
five-year term of the Repurchase Facility as an adjustment to interest expense.

(o) Servicing and Ancillary Fees

Servicing fees are reported as income when earned, net of related
amortization of excess servicing.

The Company has the right to collect late payment fees and non-sufficient
funds fees from borrowers. In addition, the Company from time to time incurs
collection costs in connection with delinquent accounts. Ancillary fees are
accounted for on a cash basis. Collection expenditures are recorded as expenses
in the period incurred. Any reimbursements of collection costs are recognized as
an expense recovery in the period that the proceeds are received.

(p) Reclassification

Certain amounts for the prior period have been reclassified to conform to
the 1995 presentation.

(q) Income Taxes

The Company filed consolidated federal income and combined state franchise
tax returns on a fiscal year basis through June 30, 1995, and has filed on a
calendar basis thereafter. The Company accounts for income taxes in accordance
with SFAS No. 109 (Statement 109). Under the asset and liability method of
Statement 109, deferred income taxes are recognized based on future tax
consequences due to differences between (i) the financial statement carrying
amounts of existing assets and liabilities and (ii) their respective tax bases.
Deferred tax assets and liabilities are measured using tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the effect on deferred
taxes of a change in tax rates is recognized in income in the period that
includes the enactment date.

(r) Cash and Cash Equivalents

For purposes of the consolidated financial statements, cash and cash
equivalents include highly liquid debt and investment instruments with an
original maturity of three months or less.

(s) Hedging

The Company enters into forward contracts as hedges relating to the
Contract portfolio. These financial instruments are designed to minimize
exposure and reduce risk from interest rate fluctuations. Gains and losses on
forward contracts are deferred and recognized as adjustments to the basis of the
Contracts until such time that the Contracts are sold. Such amounts are realized
upon the sale of Contracts that are hedged.

(t) Net Income (Loss) Per Share

Due to the significant changes in the capital structure of the Company upon
the closing of the initial public offering as discussed at Note 1(d) above,
historical net income (loss) per share prior to the year ended

F-10
<PAGE> 70

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

December 31, 1995, is not presented. Net income per share is computed using the
weighted average number of shares of Common Stock outstanding and common
equivalent shares, unless the effect of common stock equivalents are
anti-dilutive. However, pursuant to Securities and Exchange Commission Staff
Accounting Bulletins, Common Stock and common equivalent shares issued during
the 12-month period prior to the offering have been included in the calculation
as if they were outstanding for all periods presented, even if anti-dilutive. In
addition, net income per share reflects the 23 for 1 stock split which occurred
in connection with the Company's initial public offering.

(u) Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities to prepare these
consolidated financial statements in conformity with generally accepted
accounting principals. Actual results could differ from those estimates.

(2) RESTRICTED CASH AND CREDIT ENHANCEMENT CASH RESERVE

With regard to Contracts owned, the Company is required to deposit all
borrower payments, Contract liquidation proceeds and certain other receipts into
restricted bank accounts under the control of a custodian. These accounts are
owned by the Company, but funds may only be released by the custodian under the
terms of the Repurchase Facility. Generally, the funds will be released only
upon the repurchase and sale of the Contracts. As of September 30, 1996
(unaudited), December 31, 1995, and December 31, 1994, $1.4 million, $1.0
million and $1.9 million was held in the restricted bank accounts, respectively.

The Company is a party to an agreement in connection with the sale of
Contracts in asset-backed securities. The terms of the agreement provide that
simultaneous with each sale of certificates to investors, the Company makes a
cash contribution, as a credit enhancement, to a credit enhancement cash reserve
under the control of a trustee. Subsequent to the sale, cash received from the
ESRs and Subordinated Securities is deposited into the credit enhancement cash
reserve. The credit enhancement cash reserve is owned by the Company, but funds
will only be released by the trustee when certain credit enhancement
requirements are met. The agreement provides that the amount of cash to be
maintained in the credit enhancement cash reserve shall be at a specified
percentage of the principal balance of the senior bonds. As principal payments
are made to the bondholders, and if the pledged cash is in excess of the
specified percentage of the principal balance of the bonds, the trustee will
release the excess amount to the Company. As of September 30, 1996 (unaudited),
and December 31, 1995, $7.2 million and $4.1 million, respectively, of cash were
invested in short-term instruments and are included in the credit enhancement
cash reserve on the consolidated balance sheets. There were no ESRs as of
December 31, 1994.

(3) INSTALLMENT CONTRACTS HELD-FOR-SALE

Installment Contracts held-for-sale are summarized as follows:

<TABLE>
<CAPTION>
DEC. 31, 1995
SEPT. 30, 1996 -------------
--------------
(UNAUDITED)
<S> <C> <C>
Principal Balance......................................... $ 25,996,221 $ 29,517,717
Purchase Discount......................................... (1,321,512) (1,161,892)
Net Deferred Expenses (Fees).............................. 276,512 (392,889)
Unrealized Hedge Losses................................... 39,101 224,842
----------- -----------
$ 24,990,322 $ 28,187,778
=========== ===========
</TABLE>

As of September 30, 1996 (unaudited), December 31, 1995, and December 31,
1994, approximately $27 million, $31 million and $43 million, respectively, of
the Contracts, including some Contracts held-for-

F-11
<PAGE> 71

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

investment, have been sold to Cargill Financial Services Corporation (Cargill)
subject to the terms of the Repurchase Facility. These Contracts are held by a
custodian until such time that they are repurchased. (See Notes 4 and 9.) There
were no Contracts held-for-sale as of December 31, 1994.

The Company maintains an ongoing hedging program to minimize the impact of
changing interest rates on the value of the Contracts. The hedging strategy is
implemented through the forward sale of two-year Treasury notes, futures
Contracts or two-year Treasury instruments with remaining terms of approximately
1.5 years to 2 years, with Cargill acting as the counterparty to these hedging
transactions. As of September 30, 1996 (unaudited), the Company had two-year
Treasury futures Contracts with a notional amount of $25 million for sale in
December 1996. As of December 31, 1995, the Company had sold forward $25 million
of Treasury notes for delivery in January 1996. As of December 31, 1994, the
Company had no forward sales outstanding.

The Company recognizes unrealized gains and losses on the hedging
transactions as an adjustment to the basis of the Contracts. Gains and losses
are recognized upon sale of the Contracts. The Company recognized $90,000 of net
gains on the hedging program during the nine-month period ended September 30,
1996 (unaudited). The Company recognized $927,000 of losses on the hedging
program during the year ended December 31, 1995. During the six-month transition
period ended December 31, 1994, there were no gains or losses from hedging
transactions.

In addition to the Contracts owned by the Company, the Company serviced
$148 million and $87 million of Contracts as of September 30, 1996 (unaudited),
and December 31, 1995, respectively. As of December 31, 1994, the Company did
not service Contracts outside of those owned by the Company. The Company
services Contracts for borrowers residing in approximately 40 states, with the
largest concentrations of Contracts in California, Texas, Florida and
Pennsylvania. An economic slowdown or recession or a change in the regulatory or
legal environment in one or more of these states could have a material adverse
effect on the performance of the Company's existing servicing portfolio and on
its Contract purchases.

During the nine-month period ended September 30, 1996 (unaudited), and the
fiscal year ended December 31, 1995, the Company sold $131 million and $101
million, respectively, of Contracts in connection with the securitization
transactions. For the same periods, the Company recognized gains associated with
these securitizations of $10.4 million (unaudited) and $8.1 million,
respectively. No Contracts were sold in the six-month transition period ended
December 31, 1994.

Contract packages are submitted to the Company for funding by automobile
dealers. The Company evaluates each customer's creditworthiness on a
case-by-case basis. As of September 30, 1996 (unaudited), and December 31, 1995,
Contract packages representing $5.5 million and $2.1 million, respectively, were
submitted to the Company for funding.

(4) INSTALLMENT CONTRACTS HELD-FOR-INVESTMENT

Contracts held-for-investment represent Contracts that are ineligible for
sale primarily due to their delinquent status or represent Contracts which
management had no present intention to sell. The held-for-

F-12
<PAGE> 72

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

investment Contracts are also subject to the terms of the Repurchase Facility
and are held by a custodian until they are repurchased. The Contracts
held-for-investment are comprised of the following:

<TABLE>
<CAPTION>
SEPT. 30, DEC. 31, DEC. 31,
1996 1995 1994
--------- ----------- ------------
<S> <C> <C> <C>
(UNAUDITED)
Principal Balance............................. $ 750,000 $ 1,040,695 $ 42,649,366
Purchase Discount............................. (37,857) (40,727) (3,021,171)
Net Deferred Expenses (Fees).................. 7,977 (13,772) 166,048
Allowance for Contract Losses................. (390,000) (476,808) (1,181,004)
--------- ----------- ------------
$330,120.. $ 509,388 $ 38,613,239
========= =========== ============
</TABLE>

The Company maintains an allowance for Contract losses based on the
outstanding principal balance of Contracts held-for-investment. A summary of the
activity in the allowance for Contract losses is as follows:

<TABLE>
<CAPTION>
SIX-MONTH PERIOD FROM
TRANSITION JULY 15, 1993
YEAR ENDED PERIOD ENDED THROUGH
DEC. 31, DEC. 31, JUNE 30,
1995 1994 1994
NINE MONTHS ----------- ------------ -------------
ENDED SEPT. 30,
-------------------------
1996 1995
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Beginning Balance................. $ 476,808 $ 1,181,004 $ 1,181,004 $ 580,462 $ --
Provision....................... 590,298 300,190 673,802 902,361 592,325
Charge-offs..................... (823,079) (1,018,820) (1,435,224) (302,735) (11,863)
Recoveries...................... 145,973 13,275 57,226 916 --
--------- ----------- ----------- ----------- --------
Ending Balance.................... $ 390,000 $ 475,649 $ 476,808 $ 1,181,004 $ 580,462
========= =========== =========== =========== ========
</TABLE>

(5) ASSET-BACKED SECURITIES

In connection with the securitizations, the Company retained Subordinated
Securities representing 5% of the principal balance of the Contracts sold. The
Subordinated Securities from the 1995-A Transaction, 1995-B Transaction, 1996-A
Transaction (unaudited), 1996-B Transaction (unaudited) and 1996-C Transaction
(unaudited) have pass-through rates of 6.70%, 6.40%, 5.95%, 6.90% and 6.90%,
respectively. These

F-13
<PAGE> 73

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

securities have been valued at a discount to yield approximately 13% to 14%.
There were no Subordinated Securities at December 31, 1994. The Subordinated
Securities are as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 DECEMBER 31, 1995
------------------------ ------------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Total.............................. $8,250,907 $8,713,000 $3,910,080 $4,251,000
========== ========== ========== ==========
</TABLE>

(6) EXCESS SERVICING RECEIVABLES

A summary of the activity in ESRs is as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DEC. 31, 1995
NINE MONTHS -------------
ENDED
SEPT. 30, 1996
--------------
(UNAUDITED)
<S> <C> <C>
Beginning Balance......................................... $ 5,590,878 $ --
Additions from Securitizations............................ 9,952,000 7,700,699
Amortization.............................................. (3,680,260) (2,109,821)
----------- -----------
Ending Balance.................................. $ 11,862,618 $ 5,590,878
=========== ===========
</TABLE>

There were no ESRs at December 31, 1994.

(7) ACCOUNTS RECEIVABLE

As of September 30, 1996 (unaudited), December 31, 1995, and December 31,
1994, the Company had approximately $2.7 million, $626,000 and $116,000,
respectively, due from Cargill for net Contracts funded by the Company which
were delivered to a custodian, but not yet funded through the Repurchase
Facility.

F-14
<PAGE> 74

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) FIXED ASSETS, NET

Furniture, fixtures and equipment consisted of the following:

<TABLE>
<CAPTION>
DEC. 31, DEC. 31,
1995 1994
SEPT. 30, ---------- ---------
1996
-----------
(UNAUDITED)
<S> <C> <C> <C>
Furniture, Fixtures & Equipment................ $ 917,660 $ 679,826 $ 330,281
Leasehold Improvements......................... 103,312 70,889 19,969
Computer Equipment............................. 598,337 482,891 274,262
---------- ---------- ---------
1,619,309 1,233,606 624,512
Less Accumulated Depreciation.................. (654,242) (391,590) (134,292)
---------- ---------- ---------
Fixed Assets, Net.............................. $ 965,067 $ 842,016 $ 490,220
========== ========== =========
</TABLE>

The Company has entered into lease arrangements with Cargill Leasing
Corporation, an affiliate of Cargill, for the sale and leaseback of certain of
its furniture and equipment. These leases are accounted for as capital leases.
The original cost of the equipment subject to the capital leases is $731,000.
(See Note 13.)

(9) REPURCHASE FACILITY, NET

The Company has entered into a financing arrangement, the object of which
is to provide interim financing for the Contracts purchased. When the Contracts
are repurchased from Cargill, the Company is obligated to pay Cargill a
repurchase fee that is calculated as a percentage of the Contracts ranging from
2% to .5%, depending upon the cumulative amount of Contract sales.

The Repurchase Facility expires in July 1998. Under the terms of the
Repurchase Facility, the Company will sell Contracts to Cargill with an
agreement to repurchase the Contracts. The repurchase is intended to occur
concurrent with the sale of the Contracts. The Repurchase Facility requires
Contracts to be held by a custodian and requires the Company to deposit borrower
payments into restricted bank accounts. The Company is obligated to repurchase
Contracts in the event that: (i) the Contracts do not conform to the terms of
the Repurchase Facility, (ii) a breach of a representation or warranty has
occurred or (iii) the Company has defaulted under the terms of the Repurchase
Facility. In addition, the Repurchase Facility contains certain restrictive
covenants that include, without limitation, achieving specific Contract purchase
volumes. If these covenants are not met, a termination of the facility could
occur. As of September 30, 1996 (unaudited), December 31, 1995, and December 31,
1994, management believes the Company was in compliance with such covenants.

The Repurchase Facility balance is net of deferred costs of $217,000,
$310,000 and $432,000 as of September 30, 1996 (unaudited), December 31, 1995,
and December 31, 1994, respectively. Interest on the Repurchase Facility accrues
at a fixed margin (3.25% over the one-month LIBOR as of September 30, 1996
(unaudited), and December 31, 1995 and 3.00% over the three-month LIBOR as of
December 31, 1994). The relevant LIBOR was 5.4% as of September 30, 1996
(unaudited), 5.7% as of December 31, 1995, and 6.8% as of December 31, 1994. In
addition to funds in the restricted cash accounts, advances on the Repurchase
Facility were secured by Contracts aggregating approximately $27 million, $31
million and $43 million as of September 30, 1996 (unaudited), December 31, 1995,
and December 31, 1994, respectively. These amounts include $2.8 million,
$642,000 and $122,000 of gross Contracts which were delivered, but not yet
funded by Cargill, as of September 30, 1996 (unaudited), December 31, 1995, and
December 31, 1994, respectively.

F-15
<PAGE> 75

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(10) OTHER BORROWINGS

In September 1995, the Company entered into a Subordinated Certificate and
Net Interest Margin Certificate Financing Facility Agreement (NIM Facility) with
Cargill, as amended, that permits up to $15 million in borrowings collateralized
by the Subordinated Securities and the ESRs. The facility was increased to $15
million on May 22, 1996. The NIM Facility and the Repurchase Facility have
cross-default and cross-collateralization clauses which state that the Company
must be in compliance with all covenants relating to both agreements at all
times. As of September 30, 1996 (unaudited), the Company has drawn approximately
$3.9 million under this facility. As of December 31, 1995, the Company has drawn
$7.4 million under this facility. The interest rate on the NIM Facility is the
one-month LIBOR, plus 7%. The Company also pays an annual commitment fee of
$150,000, which is payable in four quarterly installments. The NIM Facility has
a contractual maturity date of May 22, 1998. Under the NIM Facility Agreement,
the following events, among others, constitute events of default: (i) a material
adverse change in the financial condition of OFL-A, the Company or Receivables,
(ii) a change in control of ACC, OFL-A or Receivables; (iii) Moody's Investors
Service, Inc. (Moody's) or Standard & Poor's Ratings Group (S&P) shall have
downgraded any asset-backed security of ACC other than as result of the
downgrading of FSA or other related surety company; (iv) in connection with any
structured finance transaction (including any subsequent asset-backed security),
the initial credit enhancement levels required to achieve an overall "BBB"
rating from either Moody's or S&P is equal to or greater than nine percent of
the aggregate unpaid principal balance of the Contracts so financed; (v)
Cargill, as sponsor, shall be obligated to make any payments in respect of any
asset securitization transaction or any other eligible transaction due to a
default by the Company; (vi) the occurrence of more than three collateral events
with respect to Contracts financed under the Repurchase Facility or in pool of
Contracts securing any Subordinated Certificates or excess servicing revenues
pledged as collateral to Cargill under the NIM Facility; (vii) the occurrence of
valuation adjustments of an aggregate, cumulative, amount of 20% or more of the
Subordinated Certificates and ESRs securing the NIM Facility; or (viii) an
interest rate (equal to LIBOR plus seven percent) that is equal to or greater
than 18% for 30 or more consecutive days. A collateral event means with respect
to the Contracts securing the Repurchase Facility or with respect to any pool of
Contracts in an asset-backed security, the occurrence of any three of the
following events during any monthly period: (i) a trailing three-month
annualized net charge-off rate equal to or greater than ten percent; (ii) a
trailing six-month annualized net charge-off rate equal to or greater than nine
percent, (iii) a trailing three-month delinquency rate equal to or greater than
nine percent; (iv) a trailing six-month delinquency rate equal to or greater
than eight percent; (v) a trailing three-month annualized repossession rate
equal to or greater than 15%; or (vi) a trailing six-month annualized
repossession rate equal to or greater than 14%. As of September 30, 1996, and
December 31, 1995, management believes the Company was in compliance with its
covenants and no event of default had occurred.

The Company retired a bridge financing facility of $2.5 million (Bridge
Financing Facility) with proceeds of the NIM Facility. The Bridge Financing
Facility had an interest rate of 12% through December 5, 1995, and 25%
thereafter.

(11) PREFERRED STOCK

(a) Redeemable Preferred Stock

Each share of all series of outstanding redeemable Preferred Stock was
converted into 23 shares of Common Stock in May 1996 when the Company completed
its initial offering of its Common Stock. (See Note 1(d).) In June 1996,
$574,454 of dividends were paid to the holders of the redeemable Preferred
Stock.

The holders of the Series A Preferred Stock were entitled to receive
cumulative dividends equal to 4% of the stated value of the shares ($33.17) when
and as declared by the Board of Directors. No dividends were declared or paid
prior to the earlier of: (i) July 15, 1998, (ii) 30 days following the Company's
initial public offering or (iii) a liquidation of the Company. As of December
31, 1995, and December 31, 1994, $416,000

F-16
<PAGE> 76

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and $235,000, respectively, of dividends on Series A Preferred Stock had
accumulated. Upon liquidation, holders of the Series A Preferred Stock were
entitled to receive, in preference to any payment on the Common Stock, an amount
equal to the stated value of the shares, plus any accrued and unpaid dividends.
The Series A Preferred Stock was redeemable, at the option of the holder, five
years from the date of issue at the stated value, plus accumulated dividends.
Each share of Series A Preferred Stock automatically converted into a share of
Common Stock upon the closing of the Company's firm commitment underwritten
public offering of its Common Stock.

In March 1995, the Company issued Series B Preferred Stock. The holders of
the Series B Preferred Stock were entitled to receive cumulative dividends equal
to 6% of the stated value of the shares ($65.00) when and as declared by the
Board of Directors. No dividends were declared or paid until the earlier of: (i)
July 15, 1998, (ii) 30 days following the Company's initial public offering,
(iii) a liquidation of the Company or (iv) redemption of the Preferred Stock. As
of December 31, 1995, $34,000 of dividends on Series B Preferred Stock had
accumulated. Upon liquidation, holders of the Series B Preferred Stock were
entitled to receive, in preference to any payments on the Common Stock, an
amount equal to the stated value, plus accrued and unpaid dividends. The Series
B Preferred Stock was redeemable, at the option of the holder, two years from
the issue at the stated value, plus accumulated dividends. Each share of Series
B Preferred Stock automatically converted into a share of Common Stock upon the
closing of the Company's firm commitment underwritten public offering of its
Common Stock.

In January 1996 (unaudited), the Company issued Series C Preferred Stock.
The holders of the Series C Preferred Stock were entitled to receive cumulative
dividends equal to 4% of the stated value of the shares ($126.50) when and as
declared by the Board of Directors. No dividends were declared or paid prior to
the earlier of: (i) July 15, 1998, (ii) 30 days following the Company's initial
public offering or (iii) a liquidation of the Company. Upon liquidation, holders
of the Series C Preferred Stock were entitled to receive, in preference to any
payment on the Common Stock, an amount equal to the stated value of the shares,
plus any accrued and unpaid dividends. The Series C Preferred Stock was
redeemable, at the option of the holder, five years from the date of issue at
the stated value, plus accumulated dividends. Each share of Series C Preferred
Stock automatically converted into a share of Common Stock upon the closing of
the Company's firm commitment underwritten public offering of its Common Stock.

The changes in redeemable Preferred Stock are as follows:

<TABLE>
<CAPTION>
SERIES A SERIES B SERIES C
PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK TOTAL
---------------------- ------------------- -------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT AMOUNT
-------- ----------- ------- --------- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1994...... 120,000 $ 4,108,400 -- $ -- -- $ -- $ 4,108,400
Issuance of Series A Preferred
Stock....................... 7,537 249,977 -- -- -- -- 249,977
-------- ----------- ------- --------- ------ ----------- -----------
Balance at December 31,
1994........................ 127,537 4,358,377 -- -- -- -- 4,358,377
Issuance of Series B Preferred
Stock....................... -- -- 11,538 749,970 -- -- 749,970
Exercise of Warrants.......... 35,294 1,170,702 -- -- -- -- 1,170,702
-------- ----------- ------- --------- ------ ----------- -----------
Balance at December 31,
1995........................ 162,831 5,529,079 11,538 749,970 -- -- 6,279,049
Issuance of Series C Preferred
Stock (unaudited)........... -- -- -- -- 7,913 1,000,995 1,000,995
-------- ----------- ------- --------- ------ ----------- -----------
Conversion to Common Stock
(unaudited)................. (162,831) (5,529,079) (11,538) (749,970) (7,913) (1,000,995) (7,280,044)
-------- ----------- ------- --------- ------ ----------- -----------
Balance at September 30, 1996
(unaudited)................. -- $ -- -- $ -- -- $ -- $ --
======== =========== ======= ========= ====== =========== ===========
</TABLE>

F-17
<PAGE> 77

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(b) Blank Check Preferred Stock

The Company's Certificate of Incorporation authorizes the issuance of
1,817,718 shares of Preferred Stock that have not been designated or issued
("blank check preferred") and may be subject, without stockholder approval, to
being issued in one or more series with such preferences, limitations and
relative rights as are determined by the Board of Directors of the Company at
the time of the issuance.

In July 1993, the Company issued to Cargill a warrant in connection with
the Repurchase Facility for 35,294 shares of the Company's Series A Preferred
Stock. The warrant entitled Cargill to acquire a like number of shares of Series
A Preferred Stock for an exercise price in the range of $33.17 per share and
$66.17 per share based upon the net book value per share of the Common Stock.
The warrants were to expire on the earlier of: (i) July 15, 1999, (ii) the
closing of an initial public offering or (iii) the termination of the Repurchase
Facility by Cargill due to a material breach by Cargill. The warrant was fully
exercised by Cargill on September 29, 1995, at an exercise price of $33.17 per
share.

(12) FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting No. 107, "Disclosures About Fair Value of
Financial Instruments," requires that the Company disclose estimated fair values
for its financial instruments, as well as the methods and significant
assumptions used to estimate fair values. The following information does not
purport to represent the aggregate net fair value of the Company.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 DECEMBER 31, 1995
--------------------------- ---------------------------
CARRYING FAIR CARRYING FAIR
FINANCIAL INSTRUMENT VALUE VALUE VALUE VALUE
- -------------------------------------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Installment Contracts Held-for-Sale... $24,990,322 $25,996,221 $28,187,778 $29,517,717
Installment Contracts
Held-for-Investment................. 330,120 330,120 509,388 509,388
Asset-Backed Securities............... 8,250,907 8,713,000 3,910,080 4,251,000
Excess Servicing Receivables.......... 11,862,618 12,917,000 5,590,878 5,753,000
Repurchase Facility................... 26,328,645 26,328,645 29,708,252 29,708,252
Other Borrowings...................... 3,884,986 3,884,986 7,439,597 7,439,597
Lease Liabilities..................... 383,165 411,409 519,486 568,815
Hedge Position........................ 39,101 39,101 224,842 224,842
</TABLE>

Installment Contracts Held-for-Sale

The carrying value of Contracts held-for-sale represents the Company's cost
basis in the Contracts. Also, since the Company intends to hold the Contracts
for a relatively short period of time and sell them through a securitization,
typically at par, fair values of Contracts held-for-sale is estimated to be par
value.

Installment Contracts Held-for-Investment

Estimates have been made, based on historical experience, of the value of
the non-performing Contracts within the held-for-investment portfolio. The
carrying value is reported net of an allowance for the probable losses on these
Contracts and is a reasonable estimate of what management believes to be the
fair value of the Contracts in this portfolio.

F-18
<PAGE> 78

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Asset-Backed Securities and Excess Servicing Receivables

The fair value of the asset-backed securities (elsewhere referred to as
Subordinated Securities) and the ESRs is estimated by discounting future cash
flows using credit and discount rates that the Company believes reflect the
estimated credit, interest rate and prepayment risks associated with similar
types of instruments.

Repurchase Facility and Other Borrowings

The carrying value approximates fair value as these facilities reprice
frequently at market rates.

Lease Liabilities

The fair value of the lease liabilities is estimated by discounting the
future cash payout with obligations using a rate that the Company believes
reflects the market rate for similar types of instruments.

Hedge Liability

The carrying value approximates fair values as this position refixes
frequently at market rates. The fair value of the hedge position is based upon
quoted market prices.

(13) COMMITMENTS AND CONTINGENCIES

(a) Leases

The Company leases office space, computers and other equipment under
various operating leases. Future minimum rental payments on these operating
leases are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------------------------------------------
<S> <C>
1996........................................................... $ 529,075
1997........................................................... 496,021
1998........................................................... 403,340
1999........................................................... 270,866
2000........................................................... 277,733
Thereafter..................................................... 349,837
----------
Total Payments................................................. $2,326,872
==========
</TABLE>

Total lease expenses for the nine-month periods ended September 30, 1996,
and 1995 (unaudited), were $466,775 and $314,056, respectively. Total lease
expense for the year ended December 31, 1995, the six-month transition period
ended December 31, 1994, and the period from July 15, 1993 to June 30, 1994, was
$445,342, $133,755 and $102,885, respectively.

F-19
<PAGE> 79

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company also leases furniture and equipment under various capital
leases with a related party. The future minimum lease payments on these capital
leases are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------------------------------------------
<S> <C>
1996........................................................... $ 280,250
1997........................................................... 279,812
1998........................................................... 106,766
---------
Total Payments................................................. 666,828
Less Amount Representing Interest.............................. (147,342)
---------
Total Lease Liability.......................................... $ 519,486
=========
</TABLE>

(b) Litigation

The Company is subject to lawsuits which arise in the ordinary course of
business. Management is of the opinion, based in part upon consultation with its
counsel, that the liability to the Company, if any, arising from existing and
threatened lawsuits would have no material adverse effect on the Company's
financial position and results of operations.

(14) INCOME TAXES

The components of income tax expense for the year ended December 31, 1995,
for the six-month transition period ended December 31, 1994, and for the period
from July 15, 1993 to June 30, 1994, are as follows:

<TABLE>
<CAPTION>
SIX-MONTH PERIOD FROM
TRANSITION JULY 15,
PERIOD 1993,
YEAR ENDED ENDED THROUGH
DEC. 31, 1995 DEC. 31, 1994 JUNE 30, 1994
------------- ------------- -------------
<S> <C> <C> <C>
Current Income Taxes
Federal.................................... $ 12,000 $ -- $ --
State...................................... 23,000 -- --
------------- ------------- -------------
Total.............................. 35,000 -- --
------------- ------------- -------------
Deferred Income Taxes
Federal.................................... 1,171,000 (329,000) (818,000)
State...................................... 361,000 (24,000) (187,000)
------------- ------------- -------------
Total.............................. 1,532,000 (353,000) (1,005,000)
------------- ------------- -------------
Change in Valuation Allowance................ (1,358,000) 353,000 1,005,000
------------- ------------- -------------
Total.............................. $ 209,000 $ -- $ --
========== ========== ==========
</TABLE>

F-20
<PAGE> 80

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A reconciliation of expected income taxes computed using the federal income
tax rate of 34% to taxes actually provided is set forth as follows:

<TABLE>
<CAPTION>
SIX-MONTH PERIOD FROM
TRANSITION JULY 15,
PERIOD 1993,
YEAR ENDED ENDED THROUGH
DEC. 31, 1995 DEC. 31, 1994 JUNE 30, 1994
------------- ------------- -------------
<S> <C> <C> <C>
Computed Expected Income Taxes............... $ 1,250,000 $(337,000) $(880,000)
Change in Valuation Allowance, Net of (1,358,000) 353,000 880,000
(Utilization) Non-recognition of Net
Operating Loss Carryforward................
State Taxes, Net of Federal Benefit.......... 339,000 -- --
Alternative Minimum Tax...................... 12,000 -- --
Other........................................ (34,000) (16,000) --
------------- ------------- -------------
$ 209,000 $ -- $ --
========== ========== ==========
</TABLE>

Deferred income taxes result from the temporary differences between the tax
basis of an asset or a liability and its reported amount in the consolidated
balance sheets. The components that comprise deferred tax assets and liabilities
at December 31, 1995, and December 31, 1994, are as follows:

<TABLE>
<CAPTION>
DEC. 31, 1995 DEC. 31, 1994
------------- -------------
<S> <C> <C>
Deferred Tax Assets:
Allowance for Contract Losses....................... $ 216,000 $ 409,000
Net Operating Loss Carryforwards.................... 452,000 965,000
Amortization........................................ 245,000 --
Other............................................... 190,000 65,000
----------- -----------
Total Gross Deferred Tax Assets............. 1,103,000 1,439,000
Less Valuation Allowance............................ -- (1,358,000)
----------- -----------
Net Deferred Tax Assets............................... 1,103,000 81,000
----------- -----------
Deferred Tax Liabilities:
Gain on Securitization.............................. (1,020,000) --
Amortization........................................ -- (9,000)
Deferred Fees....................................... (161,000) --
Other............................................... (96,000) (72,000)
----------- -----------
Total Gross Deferred Tax Liabilities........ (1,277,000) (81,000)
----------- -----------
Net Deferred Taxes.................................... $ (174,000) $ --
=========== ===========
</TABLE>

Based upon the level of historical taxable income and projections for
future taxable income over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not that the Company will
realize the benefits of these deductible differences, net of the existing
valuation allowance, at December 31, 1995, and 1994, respectively.

At December 31, 1995, the Company had net operating loss carryforwards for
federal and state income tax purposes of approximately $1.2 million and
$166,000, respectively, which are available to offset future taxable income, if
any, through the year 2010 and 2000, respectively.

An effective tax rate of 42% and 10.2% was used in determining the income
tax expense for the nine months ended September 30, 1996, and 1995 (unaudited),
respectively.

F-21
<PAGE> 81

ACC CONSUMER FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(15) 401(K) PLAN

The Company adopted a defined contribution plan, pursuant to Internal
Revenue Code Section 401(k), effective February 1, 1994. Eligible employees,
generally those who have completed more than 90 days of service, may elect to
contribute from 2% to 20% of their pre-tax compensation. Voluntary Company
contributions to the plan are allocated based on 50% of the employee
contributions up to $1,000 per calendar year. The plan may be terminated by the
Company at any time. Employer contributions to the plan were approximately
$37,000, $25,000 and $14,000 for the year ended December 31, 1995, the six-month
transition period ended December 31, 1994, and the period from July 15, 1993, to
June 30, 1994, respectively.

(16) STOCK OPTION PLANS

The Company's 1995 stock option plan (Employee Plan) covers 450,000 shares
of common stock. The Employee Plan permits the grant of incentive stock options
or non-qualified options to any employees of the Company. Incentive stock
options may not have an exercise price of less than the fair market value of the
Common Stock on the date of grant, except options granted to holders of more
than 10% of the Company's Common Stock may not have an exercise price of less
than 110% of the fair market value of the Common Stock on the date of the grant.
The Compensation Committee of the Board of Directors administers the Employee
Plan and determines the employee who may participate, the amount of timing of
each option grant and the vesting schedule for options. As of September 30, 1995
(unaudited), stock options representing 434,338 shares of common stock were
outstanding.

The Company's separate stock option plan for its non-employee Directors
(Director Plan) covers 100,000 shares of Common Stock. The Director Plan
provides for the award of non-qualified options, which expire five years from
the date of grant, covering 20,000 shares of Common Stock to each non-employee
director on the date of the plan's adoption and to any future elected or
appointed non-employee director. Each of the options granted to the four current
non-employee directors is at an exercise price of $7.25 per share. One-fourth of
the option shares are exercisable immediately as of the offering, and the
balance will vest over the subsequent three years at a rate of one-third per
year. Any future option grant will be at an exercise price equal to the fair
market value of the Common Stock on the date of the grant. At September 30, 1996
(unaudited), stock options representing 80,000 shares of Common Stock were
outstanding.

(17) RELATED PARTY TRANSACTIONS

At inception, the Company entered into a consulting contract with Rocco J.
Fabiano to assist in the management of the Company. Terms of the contract
required the Company to pay the consultant $220,000 annually, plus additional
bonus compensation, through July 15, 1997. Additionally, the Company had
employment contracts with Gary S. Burdick and Rellen M. Stewart, which extended
through July 15, 1997. During the year ended December 31, 1995, the Company
entered into Employment Agreements with all three of the Founders, which
supersede previous agreements and extend through December 31, 1998.
Additionally, the Company has other borrowings with shareholders as discussed in
Notes 9 and 10 and capital lease arrangements with a related party as discussed
in Notes 8 and 13.

F-22
<PAGE> 82

- ------------------------------------------------------
- ------------------------------------------------------

NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AND OFFER TO BUY ANY SECURITIES
OTHER THAN THE NOTES TO WHICH IT RELATES OR AN OFFER TO, OR A SOLICITATION OF,
ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
The Company........................... 3
The Offering.......................... 5
Summary Financial and Operating
Data................................ 7
Risk Factors.......................... 10
Use of Proceeds....................... 16
Capitalization........................ 16
Selected Consolidated Financial
Data................................ 17
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 19
Business.............................. 28
Management............................ 41
Certain Transactions.................. 47
Principal Stockholders................ 50
Description of the Notes.............. 51
Certain Federal Income Tax
Considerations...................... 56
Underwriting.......................... 58
Legal Matters......................... 58
Experts............................... 58
Available Information................. 59
Financial Statements.................. F-1
</TABLE>

UNTIL DECEMBER 13, 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

- ------------------------------------------------------
- ------------------------------------------------------

$20,000,000

10.25% SUBORDINATED NOTES

DUE 2003

LOGO
------------------

PROSPECTUS
------------------
MCDONALD & COMPANY

SECURITIES, INC.
J.C. BRADFORD & CO.

NOVEMBER 18, 1996

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