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                                                                EXHIBIT 10.111


                              [FINOVA LETTERHEAD]


                               February 28, 1997



Preferred Equities Corporation
4310 Paradise Road
Las Vegas, Nevada 89109
Attention:  Herbert Hirsch

    VIA AIRBORNE EXPRESS

    Re: Increase in Revolving Receivables Loan to $75 Million

Dear Mr. Hirsch:

       We are pleased to advise you that FINOVA Capital Corporation ("Lender")
has agreed to increase the Revolving Receivables Line of Credit to Preferred
Equities Corporation, a Nevada corporation ("Borrower"), to $75 million (the
"Loan"), subject to the terms and conditions set forth in this letter.

        1.      BORROWER. Preferred Equities Corporation, a Nevada Corporation.

        2.      GUARANTOR.  Mego Financial Corp., a New York Corporation.

        3.      AMOUNT AND PURPOSE.  The Loan shall be in the total aggregate
amount of $75 million.  The Loan shall be constituted of the following loan
facilities: 

                (a)  $75 million aggregate revolving Receivables line of credit
        (the "Receivables Line"), which represents a $25 million increase in the
        existing $50 million Receivables line;

                
                (b)  $15 million aggregate revolving mortgage loan facility
        (the "Mortgage Loan Facility") for the purpose of providing funds to
        Borrower on a revolving basis in order to finance Borrower's acquisition
        and refurbishment of time-share projects;

                (c)  $5 million nonrevolving mortgage loan previously made with
        respect to the Aloha Bay time-share project located in Pinellas County,
        Florida (the "Aloha Bay Loan"); and

                
                (d)  $7 million nonrevolving mortgage loan made with respect to
        two (2) office buildings owned by Borrower and located in Las Vegas,
        Nevada (the "Office Loan").

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                                                                [FINOVA LOGO]

Preferred Equities Corporation
February 28, 1997
Page 2


        The maximum aggregate balance of the Loan at any time shall not exceed
$75 million (the "Maximum Loan Amount").  The maximum amount of the Loan
available to Borrower under the Receivables Line shall be reduced by the then
aggregate outstanding principal balances of the Mortgage Loan Facility, the
Aloha Bay Loan and the Office Loan.  In addition, the total principal amount of
any and all indebtedness of Borrower to Lender under the Loan which is secured
by Receivables Collateral encumbering Lots shall not exceed $35 million at any
time. 

        4.      TERMS AND CONDITIONS OF LOAN.  The terms and conditions
applicable to the Loan shall be as currently set forth in that Amended and
Restated Loan and Security Agreement dated as of May 10, 1989, executed by
Borrower and Lender's predecessor-in-interest, Greyhound Real Estate Finance
Company, an Arizona corporation ("GREFCO"), as subsequently amended pursuant to
fifteen (15) amendments thereafter executed by Borrower and Lender
(collectively, the "PEC Loan Agreement"), and by that Loan and Security
Agreement dated as of March 30, 1989, executed by Borrower's
predecessor-in-interest, Vacation Spa Resorts, Inc., a Tennessee corporation,
and GREFCO, as subsequently amended pursuant to six (6) amendments executed by
Borrower and Lender (collectively, the "VSR Loan Agreement"), with the material
modifications and amendments hereinafter set forth (for the purpose of this
Commitment Letter, all references to the "Loan Agreement" shall be deemed to
refer to the applicable provision(s) of the PEC Loan Agreement and/or the VSR
Loan Agreement, and all initial capitalized terms used herein which are not
otherwise defined herein shall have the meaning ascribed thereto in the Loan
Agreement):  

                4.1   Interest.  As of the Closing Date (hereinafter described),
        the Receivables Line and the Mortgage Loan Facility shall bear interest
        at a rate per annum (the "Interest Rate") equal to the "Prime Rate" of
        interest publicly announced from time to time by Citibank, N.A. as its
        base rate plus 2%, adjusted monthly.  The initial Prime Rate shall be
        Citibank's base rate in effect on the first day of the month of the
        initial advance of the Loan proceeds.  Thereafter, the Prime Rate will
        change based upon Citibank's base rate in effect on the first day of
        each subsequent month.  Interest shall be calculated on the basis of a
        360-day year and charged for the actual days elapsed.

                The Interest Rate payable on the Aloha Bay Loan and the Office
        Loan shall remain unchanged.

                4.2  Borrowing Term.  Borrower shall have the right to request
        and receive Advances under the Receivables Line for a period of
        thirty-six (36) months following the first Advance made under the
        Receivables Line after the Closing Date, or thirty-nine (39) months
        after date of this Commitment Letter, whichever comes first.


                Borrower shall have the right to request and receive Advances
under the Mortgage Loan Facility for a period of twelve (12) months after the
Closing Date.



        

                  


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                                                                [FINOVA LOGO]

Preferred Equities Corporation
February 28, 1997
Page 3

                The Borrowing Terms with respect to the Aloha Bay Loan and the
        Office Loan shall remain unchanged.

                4.3  Borrowing Base Formula Under Receivables Line.  The
        Advances of the Loan which shall be available to Borrower under the
        Receivables Line shall be equal to lesser of (a) eighty-five percent
        (85%) of the unpaid principal balance payable under the Eligible
        Receivables, or (b) ninety percent (90%) of the then present value
        assigned to the unmatured installments of principal and interest payable
        under the Eligible Receivables, discounted at Lender's prevailing
        discount rate as described in the Loan Agreement (except that the
        Lender's prevailing discount rate as described in paragraph 7.6.1(c) of
        the Loan Agreement shall be amended to provide a floor of twelve percent
        (12%) per annum); provided, however, that the maximum Borrowing Base
        allocable to Eligible Receivables arising from the sale of Units in
        Project (Reno) shall not in any event exceed $4 million.  There shall no
        longer be a limitation on the maximum Borrowing Base allocable to
        Eligible Receivables arising from sales of Lots in projects located in
        Colorado; provided, however, that in calculating the Borrowing Base, the
        indebtedness secured by Eligible Receivables arising from the sale of
        Lots shall be limited to $35 million.  In addition, Advances of the Loan
        with respect to Eligible Receivables arising from "Unsolidified Lot
        Sales" shall be limited to 65% of the unpaid principal balance payable
        under any Eligible Receivables arising from "Unsolidified Lot Sales";
        provided that the indebtedness secured by Eligible Receivables arising
        from "Unsolidified Lot Sales"; shall not exceed at any time $2.5
        million.  For the purpose of the Loan, "Unsolidified Lot Sales" shall be
        deemed to mean an Instrument or Contract which arises out of the sale of
        a Lot by Borrower to a Purchaser where such Purchaser has not personally
        inspected the Lot with a representative of Borrower and the Instrument
        or Contract provides a specific period after the date of purchase within
        which such Purchaser may cancel the Instrument or Contract as a result
        of the fact that the Purchaser had not inspected the Lot prior to the
        purchase.  At such time as the Purchaser makes any such required
        inspection or the period for rescission of the Instrument or Contract
        has expired, the 65% Advance limitation with respect to such Eligible
        Receivables shall no longer apply.

         
                4.4     Maturity Date.  The principal balance of the Loan
        consisting of Advances under the Receivables Line shall be payable on a
        monthly basis in an amount equal to one hundred percent (100%) of all
        proceeds of the Receivables Collateral collected during each month
        during the Loan term.  All amounts of unpaid principal representing
        Advances made under the Receivables Line with respect to Receivables
        Collateral secured by Units shall be paid in full not later than the
        seventh (7th) anniversary of the date of the last Advance made by Lender
        under the Receivables Line.  All Advances of the Loan made under the
        Receivables Line with respect to Lots shall be paid in full not later
        than the tenth (10th) anniversary of the date of the last Advance made
        under the Receivables Line.

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                                                                [FINOVA LOGO]

Preferred Equities Corporation
February 28, 1997
Page 4

        Payments of the outstanding principal balance under the Mortgage Loan
Facility shall be made on a monthly basis commencing with the first full
calendar month following the final Advance made with respect to the Project
being financed by such Advance with payments of principal and interest in an
amount necessary to amortize the entirety of the Advance over a twenty-four (24)
month amortization period.

        The payment provisions with respect to the Aloha Bay Loan and the
Office Loan shall continue as set forth in the promissory notes executed by
Borrower in connection with such loans.

        4.5     Partial Prepayment.  Advances under the Receivables Line may be
partially prepaid in increments of not less than $2 million per prepayment;
provided that Borrower gives Lender thirty (30) days prior written notice of
its intent to partially prepay the Receivables Line, which notice shall be
irrevocable; and provided, further, that any such prepayment is accompanied by
accrued interest on the amount to be prepaid, any and all other sums then due
to Lender, and a prepayment premium in an amount equal to one percent (1%) of
the amount to be prepaid; and provided, further, that in no event shall any
partial prepayment reduce the total outstanding principal balance of the Loan
below $35 million.

        Advances which are represented by Borrower's promissory notes executed
in connection with the Aloha Bay Loan and the Office Loan and any Advances under
the Mortgage Loan Facility may be prepaid in accordance with the terms and
conditions of the promissory notes executed by Borrower in connection therewith.

        4.6     Full Prepayment.  The Loan may be prepaid in whole; provided
that Borrower gives Lender at least thirty (30) days prior written notice of
its intent to prepay the total outstanding principal balance of the Loan, which
notice shall be irrevocable; and provided, further, that any such prepayment is
accompanied by accrued interest on the Loan and any and all other sums then due
to Lender, together with a prepayment premium determined in accordance with the
following schedule:

<TABLE>
<CAPTION>

Month of Prepayment        Prepayment Premium
-------------------        ------------------
<S>                        <C>
Months  1-18               3% of the principal balance outstanding

Months 19-36               2% of the principal balance outstanding

Months 37-54               1% of the principal balance outstanding

Month 55 and thereafter    0% of the principal balance outstanding
</TABLE>


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                                                                [FINOVA LOGO]

Preferred Equities Corporation
February 28, 1997
Page 5



                4.7     Security.  All obligations of Borrower to Lender shall
continue to be secured by (a) the Receivables Collateral as described in the
Loan Agreement, (b) the First Mortgage Liens recorded with respect to the
following Projects as described in the Loan Agreement: Aloha Bay Phase I,
Headquarters, FCFC Building, Ida Building Addition, Ida Building I, Ida Building
II and Winnick Building Addition, (c) the Mego Guarantee, and (d) all other
security for the performance of Borrower's obligations under the Loan as
described in the Loan Agreement.

                4.8     Loan Fees.  Borrower shall pay to Lender the following
Loan Fees in connection with the Loan described herein:

                        (a)     One percent (1%) of the increase in the
        Receivables Line ($250,000.00), which shall be paid by Borrower to
        Lender in an amount equal to $180,000.00 simultaneously with the first
        Advance made under the Receivables Line after the Closing Date, and the
        balance thereof ($70,000.00) shall be paid at such time as the
        outstanding principal balance of the Loan under the Receivables Line
        equals or exceeds $68 million.

                        (b)     For each Project funded by an Advance under the
        Mortgage Loan Facility, Borrower shall pay a fee equal to one-half
        percent (.5%) of each Advance at the time of such Advance, together with
        an incentive fee equal to $20.00 per Time-Share Interval (the "Incentive
        Fee"), which Incentive Fee shall be payable at such time as such
        interval is sold to a Purchaser and released from the mortgage or deed
        of trust recorded with respect to such Project.

                4.9     Eligible Receivables.  The existing requirements for
Eligible Receivables as defined under the Loan Agreement shall continue to
apply with the following modifications:

                        (a)     With respect to Instruments or Contracts in the
        case of Receivables Collateral encumbering Units, consecutive monthly
        installments of principal and interest shall have a remaining term not
        exceeding ninety-six (96) months; provided, however, that Instruments or
        Contracts consisting of Receivables Collateral encumbering Units with
        consecutive monthly installments of principal and interest having a
        remaining term exceeding 96 months, but not exceeding 120 months, shall
        be includable as Eligible Receivables to the extent that such
        Instruments or Contracts have an aggregate unpaid principal balance not
        exceeding twenty percent (20%) of the aggregate unpaid principal
        balance of the total Receivables Collateral encumbering Units then 
        pledged by Borrower to Lender under the Loan Agreement.

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Preferred Equities Corporation
February 28, 1997
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                        (b)     Receivables Collateral arising out of the sale
        of Lots which are not within a Project included within the definition of
        "Project" under the Loan Agreement, shall not be deemed to constitute
        Eligible Receivables unless such Project is first approved by Lender.

                4.10    Requirements for Funding Under Mortgage Loan Facility.
In addition to all other conditions and requirements under the Loan Agreement
with respect to Advances under the Mortgage Loan Facility, each Project to be
funded under the Mortgage Loan Facility shall satisfy the following conditions
and requirements:

                        (a)     The Borrower shall have a total equity
        investment in such Project of not less than ten percent (10%) of the
        total Project cost;

                        (b)     Each Project to be funded under the Mortgage
        Loan Facility shall be located in relatively close proximity to existing
        Projects or in time-share markets whose historical sales are deemed
        satisfactory to Lender.

                        (c)     No Projects funded under the Mortgage Loan
        Facility shall consist of Lots;

                        (d)     Each Project to be funded under the Mortgage
        Loan Facility must be approved by Lender.

                4.11    Marketing Expenses.  Borrower's covenant with respect to
Marketing Costs shall be modified to provide that Borrower's Marketing Costs (as
defined in the Loan Agreement) shall not exceed fifty-five percent (55%) of Net
Sales (as defined in the Loan Agreement) for any of Borrower's trailing four (4)
quarters. Any fees payable by Borrower to Hospitality Franchise Systems, Inc.
(Ramada) shall be excluded from the calculation of Marketing Costs. The covenant
with respect to Marketing Costs shall be tested on a semiannual basis at the end
of Borrower's second (2nd) fiscal quarter and again at the end of Borrower's
fourth (4th) fiscal quarter for each of Borrower's fiscal years.

                4.12    Tangible Net Worth.  The Tangible Net Worth
requirement under the Loan Agreement shall be modified to read as follows:

                        "Until full and complete performance of all of
        Borrower's Obligations under the Loan, the Consolidated Tangible Net
        Worth of Borrower and its Subsidiaries shall be, at all times, not less
        than $20 million (the "Tangible Net Worth Base"); provided, however,
        that the Tangible Net Worth Base shall be increased each fiscal quarter
        by an amount equal to fifty percent (50%) of the consolidated Net Income
        of Borrower and its Subsidiaries (if any), commencing with Borrower's
        fiscal

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Preferred Equities Corporation
February 28, 1997
Page 7



        quarter ending November 30, 1997; and provided, further, that the
        Tangible Net Worth base shall not be increased to more than $25 million.
        In the event that Borrower and its Subsidiaries do not realize any Net
        Income for any fiscal quarter, or if there is a Net Loss for such
        quarter, the Tangible Net Worth Base applicable to the next successive
        quarter shall remain unchanged and shall not in any event be reduced or
        decreased. For purposes of testing the Tangible Net Worth requirement,
        the definition of "Consolidated Tangible Net Worth" shall mean, on any
        date of determination thereof, the Consolidated Net Worth of Borrower
        and its Subsidiaries, as determined in accordance with GAAP, after
        deducting the value of patents, trademarks, goodwill and other
        intangible assets, the value of assets treated as "questionable" by the
        accounting firm shall have prepared Borrower's most recent financial
        statement, and after deducting all amounts due Borrower from its
        Affiliates or from Mego Financial Corp. (provided that the deduction for
        any amounts owed to Borrower from Mego Mortgage shall include only
        amounts which are owed in excess of $1 million). It is agreed that
        deferred selling expenses determined in accordance with GAAP shall not
        be classified as intangible assets. For the purposes of determining the
        quarterly increases in the Tangible Net Worth Base, the Net Income of
        Borrower and its Subsidiaries shall be determined in accordance with
        GAAP."

        5.      CONDITIONS PRECEDENT TO CLOSING.  The following shall be
delivered to lender or occur prior to the Closing Date, all in form, manner and
substance satisfactory to Lender, in Lender's sole discretion:

                5.1     Loan Documents.  Such duly executed loan documents as
        lender shall require to evidence and secure the Loan (the "Loan
        Documents"), which shall include a Second Amended and Restated Loan and
        Security Agreement which shall operate to restate and consolidate all of
        the current and applicable terms and conditions of the Loan Agreement as
        modified by this Commitment Letter.

                5.2     Continued Perfection of Liens.  Evidence that all liens
        and security interests granted to Lender have been duly perfected and
        continue to be perfected as first and prior liens and security
        interests, and that there are no other financing statements or liens
        filed against either Borrower or the property of either Borrower, except
        those which are approved by Lender.

                5.3     Power and Authority.  Such documents as Lender shall
        require to establish the proper organization and good standing of
        Borrower and Guarantor, the authority of the Borrower and Guarantor to
        execute the Loan Documents, and evidence that Borrower and Guarantor
        have obtained all approvals and consents which are necessary to enable
        Borrower to execute the Loan Documents and consummate the Loan.

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Preferred Equities Corporation
February 28, 1997
Page 8


                5.4   Insurance.  Evidence that there is in effect such casualty
        and hazard insurance, flood, business interruption, title, public
        liability and other insurance required by Lender and written by
        insurers, and in amounts and form satisfactory to Lender.
        
                5.5   Legal Opinion.  Favorable legal opinions of counsel for
        Borrower, dated as of the day of Closing, covering the due
        authorization, execution, delivery, validity, binding effect and
        enforceability of the Loan Documents and the validity of all liens and
        security interests granted thereby, compliance with usury laws, and such
        other matters as Lender may require.

                5.6   Material Adverse Change.  Evidence that as of the date of
        Closing there has been no material adverse change in the financial
        condition of Borrower or Guarantor from the financial statements and
        other documents most recently submitted to Lender.

                5.7   Loan Costs.  Payment of the applicable portion of the Loan
        Fees to Lender.  Any other known third-party expenses (including,
        without limitation, appraisal fees, Lender's outside attorneys' fees and
        costs, Lender's out-of-pocket costs, brokerage commissions,
        environmental assessment fees, costs and premiums related to the
        examination and insurance of title, survey fees and travel expenses)
        shall also have been paid.

                5.8   Other Institutional Financing.  Such documents or evidence
        as Lender shall require to establish that any and all indebtedness owed
        by Borrower to Heller Financial and Textron Financial is currently paid
        and Borrower is in good standing and in compliance with all of its
        obligations to Heller Financial and Textron Financial.

                5.9   Searches.  Current lien, tax lien, litigation and judgment
        searches on each of Borrower and Guarantor.

                5.10  Title Insurance.  Borrower shall have obtained and
        delivered to Lender, at Borrower's expense, current date-down
        endorsements to all existing ALTA extended coverage mortgagee's title
        insurance policies issued in favor of Lender with respect to Aloha Bay
        Phase I, Headquarters, FCFC Building, Ida Building Addition, Ida
        Building I, Ida Building II and the Winnick Building Addition, which
        date-down endorsements shall insure that the deeds of trust or mortgages
        recorded with respect to such properties continue to be a first and
        prior lien on such property, subject only to such additional exceptions
        as may be approved by Lender.
               
                5.11  Management Letters.  Lender shall have received, reviewed
        and approved to its satisfaction Management Letters written by Deloitte
        & Touche to Guarantor and Borrower with respect to their 1996 fiscal
        year, together with any responses to such Management Letters by Borrower
        or Guarantor.
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Preferred Equities Corporation
February 28, 1997
Page 9


                5.12  Financial Statements.  Lender shall have received,
        reviewed and approved to its satisfaction financial statements for
        Guarantor and Borrower for the fiscal quarter ending November 30, 1996.
        In addition, and as a post-closing condition, not later than May 15,
        1997, Lender shall have received, reviewed and approved to its
        satisfaction financial statements for Guarantor and Borrower for the
        fiscal quarter ending February 28, 1997.

                5.13  Litigation Update.  Borrower shall have delivered to
        Lender, and Lender shall have reviewed and approved to its satisfaction,
        an updated report and analysis with respect to all litigation matters
        involving Borrower and Guarantor.

        6.  FEES AND EXPENSES:  Whether or not the Loan closes, Borrower shall
pay to Lender on demand all outside attorneys' fees and costs, appraisal fees,
title and recording charges, and all costs and expenses incurred by Lender in
making the Loan.

        7.  CHOICE OF LAW:  This Commitment and the Loan Documents shall be
governed by the laws of the State of Arizona.  Proper and exclusive (unless
Lender requires otherwise) jurisdiction and venue for any dispute arising out
of this Commitment or the Loan Documents shall be in Federal and State courts
sitting in Phoenix, Arizona.

        8.  JURY TRIAL:  Given the fact that any controversy which may arise
under any of the Loan Documents or with respect to the transaction contemplated
thereby would be based upon difficult and complex issues, the parties agree
that any lawsuit arising out of such controversy will be tried in a court of
competent jurisdiction by a judge sitting without a jury.

        9.  ACCEPTANCE AND EXPIRATION AND TERM:  This Commitment shall not
become effective unless a copy of the Commitment executed by Borrower, is
delivered to Lender on or before March 5, 1997 at its offices at 7272 East
Indian School Road, Suite 410, Scottsdale, Arizona 85251, to the attention of
Jeffrey A. Owings.  If the closing (the "Closing") does not occur on or before
April 15, 1997, or the date to which the term is extended by the written
agreement of Borrower and Lender, except for Borrower's obligations pursuant to
Section 6, this Commitment shall automatically terminate.

                                        Cordially,

                                        FINOVA CAPITAL CORPORATION



                                        By:  /s/  RANDALL HELLER
                                           ------------------------------------
                                        Name:  Randall Heller
                                        Title: Vice President

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Preferred Equities Corporation
February 28, 1997
Page 10




ACCEPTED AND AGREED TO THIS
3rd day of March, 1997:

PREFERRED EQUITIES
CORPORATION, a Nevada corporation




By:  /s/  RICHARD L. RODRIGUEZ
   -------------------------------------
Name:  Richard L. Rodriguez
Title: Vice President
                              "BORROWER"


MEGO FINANCIAL CORP., a Nevada
corporation


By:  /s/  RICHARD L. RODRIGUEZ
   -------------------------------------
Name:  Richard L. Rodriguez
Title: Asst. Secretary & Asst. Treasurer
                             "GUARANTOR"