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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

| |       |                                                                                  
| | ----- | ---------------------------------------------------------------------------------
| | [ X ] | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended       March 31, 2003

OR

| |        |                                                                                   
| | ------ | ----------------------------------------------------------------------------------
| | [   
] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period
from   
to

Commission file number: 333-9371

CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

38-3304096
(IRS Employer Identification Number)

24 Frank Lloyd Wright Drive, Lobby L, 4th FloorP.O. Box 544, Ann Arbor, Michigan 48106-0544
(Address of principal executive offices, including zip code)

(734) 994-5505
(Issuers telephone number)

Not Applicable
(Former name, former address and former fiscal year, if changed since last year)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to filing
requirements for the past 90 days.       Yes X   No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court: Not applicable

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date: Not applicable





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TABLE OF CONTENTS



|                                                                                              |                                                                                     |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                                                               
|Item 1. Financial Statements:                                                                
|                                                                                              | Balance Sheets, March 31, 2003 and December 31, 2002                               
|                                                                                              | Statement of Operations for the three months ended March 31, 2003 and 2002         
|                                                                                              | Statement of Changes in Partners Capital for the three months ended March 31, 2003
|                                                                                              | Statement of Cash Flows for the three months ended March 31, 2003 and 2002         
|                                                                                              | Notes to Financial Statements                                                      
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|Item 4. Controls and Procedures                                                              
|PART II  OTHER INFORMATION                                                                  
|                                                                                              | Other Information                                                                  
|SIGNATURES                                                                                   
|CERTIFICATION Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002                   
|906 Certification CEO/CFO                                                                    



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CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV

Index to Form 10-Q

|              |  |                                                                                       |       |  |  | 
|------------- |  | ------------------------------------------------------------------------------------- | ----- |  |  | 
|Item No.      |  |                                                                                       | Page  |  |  | 
|              |  |                                                                                       |       |  |  | 
|PART I        |  | FINANCIAL INFORMATION                                                                 |       |  |  | 
|              |  |                                                                                       |       |  |  | 
|Item 1.       |  | Financial Statements:                                                                 |       |  |  | 
|              |  |                                                                                       |       |  |  | 
|              |  | Balance Sheets, March 31, 2003 and December 31, 2002                                  | 3     |  |  | 
|              |  |                                                                                       |       |  |  | 
|              |  | Statement of Operations for the three months ended March 31, 2003 and 2002            | 4     |  |  | 
|              |  |                                                                                       |       |  |  | 
|              |  | Statement of Changes in Partners Capital for the three months ended March 31, 2003   | 5     |  |  | 
|              |  |                                                                                       |       |  |  | 
|              |  | Statement of Cash Flows for the three months ended March 31, 2003 and 2002            | 6     |  |  | 
|              |  |                                                                                       |       |  |  | 
|              |  | Notes to Financial Statements                                                         | 7-8   |  |  | 
|              |  |                                                                                       |       |  |  | 
|Item 2.       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations | 9-10  |  |  | 
|              |  |                                                                                       |       |  |  | 
|Item 3.       |  | Quantitative and Qualitative Disclosures about Market Risk                            | 11    |  |  | 
|              |  |                                                                                       |       |  |  | 
|Item 4.       |  | Controls and Procedures                                                               | 11    |  |  | 
|              |  |                                                                                       |       |  |  | 
|PART II       |  | OTHER INFORMATION                                                                     |       |  |  | 
|              |  | Other Information                                                                     | 11-12 |  |  | 
|              |  |                                                                                       |       |  |  | 
|SIGNATURES    |  |                                                                                       | 13    |  |  | 
|              |  |                                                                                       |       |  |  | 
|CERTIFICATION |  | Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002                          | 14    |  |  | 

2



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CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV

PART I  FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




Captec Franchise Capital Partners L.P. IV
Balance Sheets

|                                   |                                         |             |            |            |            |   |              |            |            |  | 
|---------------------------------- | --------------------------------------- | ----------- | ---------- | ---------- | ---------- | - | ------------ | ---------- | ---------- |  | 
|                                   |                                         |             |            |            | March 31,  |   | December 31, |           
|                                   |                                         |             |            |            | 2003       |   |              | 2002      
|                                   |                                         |             |            |            |            |  
|Assets                             |                                         | (Unaudited) |            |            |            |  
|Cash and cash equivalents          |                                         | $           | 965,952    |            |            | $ | 1,132,891    |           
|Restricted cash                    |                                         |             | 250,542    |            |            |   | 234,178      |           
|Investment in leases:              |                                         |             |            |            |            |   |              |           
|                                   | Operating leases, net                   |             |            | 28,788,150 |            |   |              | 28,910,393 |           
|                                   | Financing leases, net                   |             |            | 2,314,856  |            |   |              | 2,591,336  |           
|                                   | Impaired financing leases, net          |             |            | 15,000     |            |   |              | 15,000     |           
|Accounts receivable                |                                         |             | 153,169    |            |            |   | 90,785       |           
|Unbilled rent, net                 |                                         |             | 1,297,759  |            |            |   | 1,261,886    |           
|Due from related parties           |                                         |             | 14,031     |            |            |   |             |           
|Deferred financing costs, net      |                                         |             | 355,760    |            |            |   | 375,711      |           
|                                   |                                         |             |            |            |            |  
|                                   | Total assets                            |             |            | $          | 34,155,219 |   |              | $          | 34,612,180 | 
|                                   |                                         |             |            |            |            |  
|Liabilities and Partners Capital  |                                         |             |            |            |            |   |              |           
|Liabilities:                       |                                         |             |            |            |            |   |              |           
|                                   | Notes payable                           |             | $          | 14,295,185 |            |   | $            | 14,374,899 |           
|                                   | Accounts payable and accrued expenses   |             |            | 115,515    |            |   |              | 157,241    |           
|                                   | Due to related parties                  |             |            | 2,936      |            |   |              | 19,938     |           
|                                   |                                         |             |            |            |            |  
|                                   | Total liabilities                       |             |            |            | 14,413,636 |   |              |            | 14,552,078 | 
|                                   |                                         |             |            |            |            |  
|Partners capital:                 |                                         |             |            |            |            |   |              |           
|Limited partners capital accounts |                                         |             | 19,769,011 |            |            |   | 20,091,845   |           
|General partners capital account  |                                         |             | (27,428    | )          |            |   | (31,743      | )         
|                                   |                                         |             |            |            |            |  
|                                   | Total partners capital                 |             |            |            | 19,741,583 |   |              |            | 20,060,102 | 
|                                   |                                         |             |            |            |            |  
|                                   | Total liabilities and partners capital |             |            | $          | 34,155,219 |   |              | $          | 34,612,180 | 
|                                   |                                         |             |            |            |            |  

The accompanying notes are an integral part of the financial statements.

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Captec Franchise Capital Partners L.P. IV
Statement of Operations
for the three months ended March 31, 2003 and 2002
(Unaudited)

|                                                                 |                            |                                    |         |    |         |         |         |      |         |         | 
|---------------------------------------------------------------- | -------------------------- | ---------------------------------- | ------- | -- | ------- | ------- | ------- | ---- | ------- | ------- | 
|                                                                 |                            |                                    |         |    | 2003    |         |         | 2002 |        
|                                                                 |                            |                                    |         |    |         |         |         |      |        
|Operating revenue:                                               |                            |                                    |         |    |         |         |         |     
|                                                                 | Rental income              |                                    |         | $  | 840,954 |         |         | $    | 840,954 |        
|                                                                 | Finance income             |                                    |         |    | 58,283  |         |         |      | 93,937  |        
|                                                                 |                            |                                    |         |    |         |         |         |     
|                                                                 |                            | Total operating revenue            |         |    |         | 899,237 |         |      |         | 934,891 | 
|Operating costs and expenses:                                    |                            |                                    |         |    |         |         |         |     
|                                                                 | Interest expense           |                                    |         |    | 311,762 |         |         |      | 322,229 |        
|                                                                 | Depreciation               |                                    |         |    | 122,243 |         |         |      | 123,247 |        
|                                                                 | General and administrative |                                    |         |    | 33,811  |         |         |      | 27,631  |        
|                                                                 |                            |                                    |         |    |         |         |         |     
|                                                                 |                            | Total operating costs and expenses |         |    |         | 467,816 |         |      |         | 473,107 | 
|                                                                 |                            |                                    |         |    |         |         |         |     
|                                                                 |                            | Income from operations             |         |    |         | 431,421 |         |      |         | 461,784 | 
|Other income:                                                    |                            |                                    |         |    |         |         |         |     
|                                                                 | Interest and other income  |                                    |         |    | 27      |         |         |      |        |        
|                                                                 | Gain on sale of equipment  |                                    |         | 33 |         |         |         |     |        
|                                                                 |                            |                                    |         |    |         |         |         |     
|                                                                 |                            | Total other income                 |         |    |         | 60      |         |      |         |        | 
|                                                                 |                            |                                    |         |    |         |         |         |     
|Net income                                                       |                            |                                    | 431,481 |    |         |         | 461,784 |     
|Net income allocable to general partner                          |                            |                                    | 4,315   |    |         |         | 4,618   |     
|                                                                 |                            |                                    |         |    |         |         |         |     
|Net income allocable to limited partners                         |                            | $                                  | 427,166 |    |         | $       | 457,166 |     
|                                                                 |                            |                                    |         |    |         |         |         |     
|Net income per limited partnership unit                          |                            | $                                  | 14.56   |    |         | $       | 15.55   |     
|                                                                 |                            |                                    |         |    |         |         |         |     
|Weighted average number of limited partnership units outstanding |                            |                                    | 29,341  |    |         |         | 29,391  |     

The accompanying notes are an integral part of the financial statements.

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Captec Franchise Capital Partners L.P. IV
Statements of Changes in Partners Capital
for the three months ended March 31, 2003
(Unaudited)

|                                                      |  |           |        |  |           |   |            |           |  |   |           |   |  |   |            |  
|----------------------------------------------------- |  | --------- | ------ |  | --------- | - | ---------- | --------- |  | - | --------- | - |  | - | ---------- | -
|                                                      |  | Limited   |        |  | Limited   |   |            | General   |  |   | Total     |  
|                                                      |  | Partners |        |  | Partners |   |            | Partners |  |   | Partners |  
|                                                      |  | Units     |        |  | Accounts  |   |            | Account   |  |   | Capital   |  
|                                                      |  |           |        |  |           |   |            |           |  |   |           |  
|Balance, December 31, 2002                            |  |           | 29,341 |  |           | $ | 20,091,845 |           |  | $ | (31,743   | ) |  | $ | 20,060,102 |  
|                                                      |  |           |        |  |           |   |            |           |  |   |           |  
|Distributions  ($25.56 per limited partnership unit) |  |           |       |  |           |   | (750,000   | )         |  |   |          |   |  |   | (750,000   | )
|Net income                                            |  |           |       |  |           |   | 427,166    |           |  |   | 4,315     |   |  |   | 431,481    |  
|                                                      |  |           |        |  |           |   |            |           |  |   |           |  
|Balance, March 31, 2003                               |  |           | 29,341 |  |           | $ | 19,769,011 |           |  | $ | (27,428   | ) |  | $ | 19,741,583 |  
|                                                      |  |           |        |  |           |   |            |           |  |   |           |  

The accompanying notes are an integral part of the financial statements.

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Captec Franchise Capital Partners L.P. IV
Statement of Cash Flows
for the three months ended March 31, 2003 and 2002
(Unaudited)

|                                               |                                                                     |                                                   |           |          |         |   |           |          |         |  
|---------------------------------------------- | ------------------------------------------------------------------- | ------------------------------------------------- | --------- | -------- | ------- | - | --------- | -------- | ------- | -
|                                               |                                                                     |                                                   |           | 2003     |         |   | 2002      |         
|                                               |                                                                     |                                                   |           |          |         |   |           |         
|Cash flows from operating activities:          |                                                                     |                                                   |           |          |         |   |           |         
|                                               | Net Income                                                          |                                                   | $         | 431,481  |         |   | $         | 461,784  |        
|                                               | Adjustments to net income:                                          |                                                   |           |          |         |   |           |          |        
|                                               |                                                                     | Depreciation                                      |           |          | 122,243 |   |           |          | 123,247 |  
|                                               |                                                                     | Amortization of debt issuance costs               |           |          | 19,951  |   |           |          | 19,951  |  
|                                               |                                                                     | Gain on sale of equipment                         |           |          | (33     | ) |           |          |        |  
|                                               |                                                                     | Increase in unbilled rent                         |           |          | (35,873 | ) |           |          | (86,296 | )
|                                               |                                                                     | Decrease in accounts receivable                   |           |          | (62,384 | ) |           |          | (42,287 | )
|                                               |                                                                     | Decrease in accounts payable and accrued expenses |           |          | (41,726 | ) |           |          | (14,863 | )
|                                               |                                                                     | Increase in restricted cash                       |           |          | (16,364 | ) |           |          | (25,831 | )
|                                               |                                                                     | Increase in due from related parties              |           |          | (14,031 | ) |           |          | (5,187  | )
|                                               |                                                                     | Decrease in due to related parties                |           |          | (17,002 | ) |           |          | (66,019 | )
|                                               |                                                                     |                                                   |           |          |         |   |          
|Net cash provided by operating activities      |                                                                     |                                                   | 386,262   |          |         |   | 364,499   |         
|                                               |                                                                     |                                                   |           |          |         |   |          
|Cash flows from investing activities:          |                                                                     |                                                   |           |          |         |   |           |         
|                                               | Proceeds from disposition of properties subject to operating leases |                                                   |           |         |         |   |           |         |        
|                                               | Proceeds from sale of equipment                                     |                                                   |           |         |         |   |           |         |        
|                                               | Principal payments on financing leases                              |                                                   |           | 276,513  |         |   |           | 322,395  |        
|                                               |                                                                     |                                                   |           |          |         |   |          
|Net cash provided by investing activities      |                                                                     |                                                   | 276,513   |          |         |   | 322,395   |         
|                                               |                                                                     |                                                   |           |          |         |   |          
|Cash flows from financing activities:          |                                                                     |                                                   |           |          |         |   |           |         
|                                               | Repayments of notes payable                                         |                                                   |           | (79,714  | )       |   |           | (76,831  | )      
|                                               | Distributions to limited partners                                   |                                                   |           | (750,000 | )       |   |           | (775,002 | )      
|                                               | Distributions to general partner                                    |                                                   |           |         |         |   |           |         |        
|                                               |                                                                     |                                                   |           |          |         |   |          
|Net cash used in financing activities          |                                                                     |                                                   | (829,714  | )        |         |   | (851,833  | )       
|                                               |                                                                     |                                                   |           |          |         |   |          
|Net decrease in cash and cash equivalents      |                                                                     |                                                   | (166,939  | )        |         |   | (164,939  | )       
|Cash and cash equivalents, beginning of period |                                                                     |                                                   | 1,132,891 |          |         |   | 1,257,402 |         
|                                               |                                                                     |                                                   |           |          |         |   |          
|Cash and cash equivalents, end of period       |                                                                     | $                                                 | 965,952   |          |         | $ | 1,092,463 |         
|                                               |                                                                     |                                                   |           |          |         |   |          

The accompanying notes are an integral part of the financial statements.

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CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV
NOTES TO FINANCIAL STATEMENTS



|1. |  | THE PARTNERSHIP AND ITS SIGNIFICANT ACCOUNTING PRINCIPLES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Captec Franchise Capital Partners L.P. IV (the Partnership), a Delaware
limited partnership, was organized on July 23, 1996 for the purpose of
acquiring income-producing commercial real properties and equipment
leased on a triple net or double net basis, primarily to operators of
national and regional chain franchised fast food and family style
restaurants, as well as other national and regional retail chains.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |  | The initial general partners of the Partnership were Captec Franchise
Capital Corporation IV (the Corporation), a wholly-owned subsidiary of
Captec Financial Group, Inc. (Captec), an affiliate, and Patrick L.
Beach, the Chairman of the Board of Directors, President and Chief
Executive Officer of the Corporation and Captec. In August 1998, Captec
Net Lease Realty, Inc. (Captec Net Lease), an affiliate, acquired the
General Partnership interest of the Partnership. In December 2001, Captec
Net Lease merged with and into Commercial Net Lease Realty, Inc.
(Commercial Net Lease). In connection with the merger, Commercial Net
Lease agreed to sell and assign its General Partnership interest in the
Partnership to GP4 Asset Acquisition, LLC (GP4 Asset Acquisition),
which is wholly-owned by Mr. Beach and is an affiliate of Captec. The
limited partners have consented to the transfer of the General
Partnership interest. In accordance with the terms of an agreement with
Commercial Net Lease, immediately upon the closing of the merger and
until such time as the consent of the Partnerships secured lender is
obtained, GP4 Asset Acquisition has assumed all of the General Partners
obligations and liabilities under the terms of the Partnership Agreement.
|  
|   |  | The Partnership commenced a public offering (the Offering) of up to
30,000 limited partnership units (the Units), priced at $1,000 per
Unit, registered under the Securities Act of 1933, as amended, by means
of a Registration Statement filed on Form S-11 which was declared
effective by the Securities and Exchange Commission on December 23, 1996.
The Partnership accepted subscriptions for the minimum number of Units on
March 5, 1997 and immediately commenced operations. The Offering reached
final funding in December 1998 having received subscriptions for the
entire 30,000 Units. Since 1999, 659 Units have been repurchased by the
Partnership pursuant to the terms of the Repurchase Plan set forth in the
Partnerships December 23, 1996 prospectus with respect to the Offering.
At March 31, 2003, the Partnership had 29,341 Units issued and
outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |  | The principal investment objectives of the Partnership are: (i)
preservation and protection of capital; (ii) distribution of cash flow
generated by the Partnerships leases; (iii) capital appreciation of
Partnership properties; (iv) generation of increased income and
protection against inflation through escalation of base rents or
participation in gross revenues of tenants of Partnership properties; and
(v) deferred taxation of cash distributions to the limited partners.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |  | Allocation of profits, losses and cash distributions from operations and
cash distributions from sale or refinancing are made pursuant to the
terms of the Partnership Agreement. Profits and losses from operations
are allocated among the limited partners based upon the number of Units
owned.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |  | Net income per limited
partnership interest is calculated using the weighted average number
of limited partnership Units outstanding during the period and the
limited partners allocable share of the net income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |  | Distributions per limited
partnership Unit is calculated using the actual distributions
disbursed during the period to the weighted average number of limited
partnership Units during the period. Actual individual limited
partner distributions realized may vary from this calculation as a
result of a variety of factors including: (1) actual distributions
are computed based on quarterly operating results and outstanding
limited partnership units, which are disbursed in the subsequent
quarter; (ii) certain limited partners have elected to receive
monthly distributions versus quarterly distributions which creates
timing differences between comparative calculations, and (iii) the
calculation ignores the timing of repurchases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | The balance sheet of the Partnership as of March 31, 2003, the statements
of operations and cash flows for the periods ending March 31, 2003 and
March 31, 2002 and the statements of changes in partners capital for the
period ending March 31, 2003 have not been audited. In the opinion of
Management, these unaudited financial statements contain all adjustments
necessary to present fairly the financial position and results of
operations and cash flows of the Partnership for the periods then ended.
Results of operations for the interim periods are not necessarily
indicative of results for the full year. These unaudited financial
statements should be read in conjunction with the financial statements
and notes thereto included in the Partnerships annual report on Form 10-K for the year ended December 31, 2002 filed with the United States
Securities and Exchange Commission on March 31, 2003.                                                                                                                                                                                                                                                                                                                                                                               

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|2. |  | LAND AND BUILDING SUBJECT TO OPERATING LEASES:                                                                  
|-- |  | ----------------------------------------------------------------------------------------------------------------
|  
|   |  | The net investment in
operating leases as of March 31, 2003 and December 31, 2002 is comprised
of the following:

|                              |  |            |            |   |               |   |            |  
|----------------------------- |  | ---------- | ---------- | - | ------------- | - | ---------- | -
|                              |  | March 2003 |            |   | December 2002 |  
|                              |  |            |            |   |               |  
|Land                          |  | $          | 11,197,200 |   |               | $ | 11,197,200 |  
|Building and improvements     |  |            | 19,549,580 |   |               |   | 19,549,580 |  
|                              |  |            |            |   |               |  
|                              |  |            | 30,746,780 |   |               |   | 30,746,780 |  
|Less accumulated depreciation |  |            | (1,958,630 | ) |               |   | (1,836,387 | )
|                              |  |            |            |   |               |  
|Total                         |  | $          | 28,788,150 |   |               | $ | 28,910,393 |  
|                              |  |            |            |   |               |  



|3. |  | NET INVESTMENT IN FINANCING LEASES:                                                                             
|-- |  | ----------------------------------------------------------------------------------------------------------------
|  
|   |  | The net investment in
financing leases as of March 31, 2003 and December 31, 2002 is comprised
of the following:

|                                      |  |            |            |   |               |   |            |  
|------------------------------------- |  | ---------- | ---------- | - | ------------- | - | ---------- | -
|                                      |  | March 2003 |            |   | December
2002 |  
|                                      |  |            |            |   |               |  
|Minimum
lease payments to be received |  | $          | 3,232,273  |   |               | $ | 3,567,069  |  
|Estimated residual value              |  |            | 183,485    |   |               |   | 183,485    |  
|                                      |  |            |            |   |               |  
|Gross investment in financing leases  |  |            | 3,415,758  |   |               |   | 3,750,554  |  
|Less unearned income                  |  |            | (1,089,116 | ) |               |   | (1,147,432 | )
|Less direct origination costs         |  |            | (11,786    | ) |               |   | (11,786    | )
|                                      |  |            |            |   |               |  
|Net investment in financing leases    |  | $          | 2,314,856  |   |               | $ | 2,591,336  |  
|                                      |  |            |            |   |               |  



|4. |  | NOTES PAYABLE:                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | In December 1998, the Partnership entered into a $6.4 million term note.
The note has a ten-year term, is collateralized by certain properties
subject to operating leases, and bears interest at a rate of 8.13% per
annum.                    
|  
|   |  | In March 1999, the Partnership entered into an additional $3.3 million
term note. The note has a ten-year term, is collateralized by certain
properties subject to operating leases, and bears interest at a rate of
8.5% per annum.            
|  
|   |  | In October 2000, the Partnership assumed a $3.7 million term note in
connection with the acquisition of a property. The note has a ten-year
term and bears interest at a rate of 8.35% per annum.                                               
|  
|   |  | In November 2001, the Partnership entered into an additional $1.5 million
term note. The note has a two-year term, is collateralized by certain
properties subject to operating leases, and bears interest at a rate of
prime plus 2% per annum.
|  
|   |  | Debt issuance costs of $622,434 in aggregate were incurred in connection
with the issuance of the notes, and are being amortized to interest
expense using the straight-line method over the term of the notes.                                 

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

When used in this discussion, words such as intends, anticipates,
expects, will, could, estimate, and similar expressions are intended to
identify forward-looking statements. Such statements are subject to certain
risks and uncertainties, which could cause actual results to differ materially
from those described herein. Such risks and uncertainties, some of which are
beyond the Partnerships control, include, but are not limited to, the
following: (i) the possibility that tenants and lessees may default in making
rent payments, (ii) the risk of fire or other casualty interrupting cash flow
from a property, (iii) the inability to enter into leases at the assumed rental
rates, (iv) unexpected expenses, and (v) the inability to sell properties at
anticipated prices and/or times.

As a result of these and other factors, the Partnership may experience material
fluctuations in future operating results on a quarterly or annual basis, which
could materially and adversely affect its business, financial condition and
operating results. Any statements contained in this report or any document
incorporated herein by reference that are not statements of historical fact may
be deemed to be forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, some of which are beyond the
Partnerships control, and actual results may differ materially depending on a
variety of important factors, many of which are also beyond the Partnerships
control. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this report. The Partnership
disclaims, except as may be required by law, any obligations to update or
release revisions to these forward-looking statements to reflect events or
circumstances after the date of this report or to reflect the occurrence of
unanticipated events.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2003.During the three months ended March 31,
2003 total operating revenue decreased 3.8% to approximately $899,000 as
compared to approximately $935,000 for the three months ended March 31, 2002.
Rental revenue from operating leases for the three months ended March 31, 2003
remained unchanged at approximately $841,000. Earned income from financing
leases for the three months ended March 31, 2003 decreased 38.0% to
approximately $58,000 as compared to approximately $94,000 for the three months
ended March 31, 2002 due to the amortization of principal balances and the
termination of an equipment lease in January 2003.

Operating expenses totaled approximately $468,000 for the three months ended
March 31, 2003, nearly unchanged as compared to approximately $473,000 for the
three months ended March 31, 2002. Total operating expenses for the three
months ended March 31, 2003 are comprised of approximately $122,000 of
depreciation expense, approximately $34,000 of general and administrative
expense, and approximately $312,000 of interest expense.

As a result of the foregoing, the Partnerships net income decreased 6.6% to
$431,000 for the three months ended March 31, 2003, as compared to $462,000 for
the three months ended March 31, 2002.

The Partnership announced first quarter distributions of $750,000, of which
$652,110 was distributed to its limited partners on April 15, 2003 and the
remaining $97,890 will be distributed to limited partners who elected to
receive distributions on a monthly basis.

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CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV
PART I  FINANCIAL INFORMATION

LIQUIDITY AND CAPITAL COMMITMENTS

In December 1996, the Partnership commenced its Offering of up to 30,000 Units.
The offering reached final funding in December 1998 with subscriptions for the
entire 30,000 Units. Net proceeds after offering expenses were approximately
$26.1 million.

In December 1998, the Partnership entered into a $6.4 million term note. The
Partnership entered into an additional $3.3 million term note in March 1999.
Proceeds from the notes were used to acquire additional properties. The notes
have a ten-year term, are collateralized by certain properties subject to
operating leases, and bear interest at a rate of 8.13% and 8.5% per annum,
respectively.

The Partnership purchased one net leased real estate property in October 2000
and assumed a $3.75 million term note in connection with the acquisition. The
note has a ten-year term and bears interest at a rate of 8.35% per annum.

In November 2001, the Partnership entered into an additional $1.5 million term
note. The note has a two-year term, is collateralized by certain properties
subject to operating leases and bears interest at a rate of prime plus 2% per
annum. Proceeds from this note were used to repay approximately $700,000 of
short-term borrowings and to provide working capital intended to be used to
fund Unit repurchases and potential property acquisitions.

Debt issuance costs of approximately $622,000 incurred in connection with the
issuance of the notes are being amortized into interest expense over the life
of the notes using the straight-line method.

As of March 31, 2003, the Partnership had a portfolio of 21 properties located
in 11 states, with a cost basis of $31.9 million, 17 performing equipment
leases with an original investment of $5.9 million and one repossessed
equipment package related to a defaulted equipment contract. The remaining net
investment in the Partnerships leased equipment is $1.1 million, net of $4.8
million of aggregate principal collections on financing leases during the life
of those investments. Inclusive of the above amount, the Partnership has
received approximately $6.3 million of aggregate principal collections on its
financing leases during the life of those investments. As of March 31, 2003,
the Partnership has two properties for which rental payments have been
delinquent for approximately 150 days. The tenant experienced financial
difficulties that resulted in the stores recent closure. The Partnership is
actively seeking to re-tenant the property as well as pursuing rights and
remedies under the leases to collect all the amounts owed. The General Partner
does not have sufficient evidence at this time, to believe an impairment
exists. As of March 31, 2003, the Partnership had agreed, subject to various
contingencies, to acquire a real property leased to a Taco Bell franchisee for
a purchase price of $1,150,000. Subsequent to March 31, 2003, the Partnership
completed the purchase of this property utilizing cash and proceeds from a bank
loan.

The Partnership semi-annually considers written requests to repurchase Units
pursuant to the terms of the repurchase plan set forth in the Partnerships
prospectus with respect to the Offering. Since 1999, 659 Units have been
repurchased by the Partnership pursuant to the terms of the Repurchase Plan set
forth in the Partnerships December 23, 1996 prospectus with respect to the
Offering. At March 31, 2003, the Partnership had 29,341 Units issued and
outstanding. The Partnership expects to fund any future Unit repurchases out of
working capital reserves and Net Sale or Refinancing Proceeds, but may also
fund such repurchases out of Cash Flow. The Partnership is not obligated to
accept Unit repurchase requests if the Partnership does not have the liquidity
to fund such requests and/or if the Partnership does not have sufficient Cash
Flow to distribute the 10% Current Preferred Return.

The Partnership expects that only limited amounts of liquid assets will be
required for existing properties since its property and equipment leases
require tenants and lessees to pay all taxes and assessments, maintenance and
repairs and insurance premiums, including casualty insurance, thereby
minimizing the Partnerships operating expenses and capital requirements. The
General Partner expects that the cash flow

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to be generated by the Partnerships properties and equipment will provide
adequate liquidity and capital resources to pay operating expenses and provide
distributions to Limited Partners.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Credit risk relates to investment in leases and accounts receivable balances
and results from the possibility that a lessee defaults on its contractual
obligation to the Partnership. Both the ability of the lessees to pay rent on
a timely basis and the amount of the rent (which is the Partnerships principal
source of income) are affected by general economic conditions. A default by a
lessee or other premature termination of a lease agreement will interrupt
rental payments and Partnership cash flows would be temporarily impacted. In
such an instance, the General Partner expects that it would find a substitute
lessee, however there can be no assurances that the property or equipment could
be leased on comparable or acceptable terms. The Partnership monitors this
risk by performing ongoing credit evaluations of lessees and maintains
allowances for potential credit losses.




ITEM 4. CONTROLS AND PROCEDURES

Mr. Beach, acting in his capacity as the principal executive officer of GP4
Asset Acquisition, is ultimately responsible for the disclosure controls and
procedures of the Partnership. Disclosure controls and procedures are
established and maintained by the Partnership to ensure the information
required to be disclosed by the Partnership in the reports that it files or
submits pursuant to the Securities Exchange Act of 1934, as amended (the
Act), is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the United States Securities and Exchange
Commission. Mr. Beach has evaluated the effectiveness of the Partnerships
disclosure controls and procedures as of a date within 45 days prior to the
filing date of this report, and has determined that the Partnerships
disclosure controls and procedures effectively communicate the information
required to be disclosed by the Partnership in the report it files or submits
under the Act in a manner that allows timely decisions regarding such
disclosure.

There have been no significant changes in the Partnerships internal controls
or in other factors that could significantly affect these controls subsequent
to the evaluation date, including, but not limited to, any corrective actions
with regard to significant deficiencies and material weaknesses.







PART II  OTHER INFORMATION



|ITEM 1. |  | LEGAL PROCEEDINGS.On November 19, 2002, the Partnership was
named as one of the defendants in a personal injury and liability suit
relating to an alleged unsafe walkway at a property. The General Partner
and Partnership have denied any wrongdoing and intend to vigorously
contest the matter. The Partnership has insurance, which would cover any
amounts less retention that may ultimately be paid.
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 2.         CHANGES IN SECURITIES.   None.

ITEM 3.         DEFAULTS UPON SENIOR SECURITIES.   None.

ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.   None.

ITEM 5.         OTHER INFORMATION.   None

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ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K.



| |  | (a) | The following exhibits are included herein or incorporated by
reference:
| |  | --- | ------------------------------------------------------------------------

|       |  |                                                                                                                                                                                                                        
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                                                                
|       |  |                                                                                                                                                                                                                        
|4      |  | Amended Agreement of Limited Partnership of Registrant.
(Incorporated by reference to the corresponding exhibit in the
Registrants Form 10-K for the year ended December 31, 1998)                                    
|       |  |                                                                                                                                                                                                                        
|10.1   |  | Promissory Note dated November 28, 1998 between Registrant
and National Realty Funding L.C. (Incorporated by reference to the
corresponding exhibit in the Registrants Form 10-K for the year
ended December 31, 1998)
|       |  |                                                                                                                                                                                                                        
|10.2   |  | Promissory Note dated March 31, 1999 between Registrant and
National Realty Funding L.C. (Incorporated by reference to the
corresponding exhibit in the Registrants Form 10-Q for the quarter
ended March 31, 1999)   
|       |  |                                                                                                                                                                                                                        
|99     |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                 



| |  | (b)                                                                           | Reports on Form 8-K:
| |  | ----------------------------------------------------------------------------- | --------------------
|
| |  | There were no reports filed on Form 8-K for the quarter ended March 31, 2003.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

| |  |       |  |                                          
| |  | ----- |  | -----------------------------------------
| |  | By:   |  | Captec Franchise Capital Partners L.P. IV
| |  |       |  | GP4 Asset Acquisition, LLC               
| |  |       |  | Its Manager                              
| |  |       |  |                                          
| |  | By:   |  | /s/ Patrick L. Beach

Patrick L. Beach   
| |  |       |  | President                                
| |  |       |  |                                          
| |  | Date: |  | May 15, 2003                             

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CERTIFICATIONS

I, Patrick L. Beach, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Captec Franchise
Capital Partners L.P. IV;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.          Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant, and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 45 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.          The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                                                                                              |  |  |  | 
|--------------------------------------------------------------------------------------------- |  |  |  | 
|Date: May 15, 2003                                                                            |  |  |  | 
|                                                                                              |  |  |  | 
|By: /s/ Patrick L. Beach
       Patrick L. Beach
       President, GP4 Asset Acquisition, LLC |  |  |  | 
|                                                                                              |  |  |  | 
|                                                                                              |  |  |  | 

The foregoing certification is as required by Section 302(a) of the
Sarbanes-Oxley Act of 2002 and amended Rules 13a-14 and 15d-14 of the
Securities Exchange Act of 1934, which state that the wording of such
certification may not be changed in any respect, even if such change would
appear inconsequential in nature. GP4 Asset Acquisition, LLC is a single member
limited liability company, the sole member of which is a limited liability
company of which Patrick L. Beach is the sole and managing member. As a result,
neither the Partnership or GP4 Asset Acquisition, LLC has a board of directors
or audit committee and Patrick L. Beach is only certifying officer and is
ultimately responsible for establishing and maintaining the registrants
disclosure controls.

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10-Q EXHIBIT INDEX

|            |  |                                                                                                                       
|----------- |  | ----------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                           
|            |  |                                                                                                                       
|EX-99       |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002