SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549  FORM 10-K  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2009  OR  [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______  Commission File Number 814-00731 VENTURE LENDING & LEASING V, INC. (Exact name of registrant as specified in its charter)  Maryland 14-1974295 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)   2010 North First Street, Suite 310, San Jose, CA 95131 (Address of principal executive offices) (Zip Code)  Registrants telephone number, including area code:  (408) 436-8577  Securities Registered Pursuant to Section 12(b) of the Act: None Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes __ NoX  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes __ NoX  Indicate by check mark whether the registrant has (i) filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days: Yes XNo  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the  preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes __ No__  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part II of this Form 10-K or any amendment to this Form 10-K:X  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (Check one):  Large accelerated filer _____ Accelerated filer _____ Non-accelerated filer X Smaller reporting company_____ Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes __ NoX       As the registrants shares are not publicly-traded, the aggregate market value of the voting stock held by non-affiliates of the registrant cannot be determined.  The number of shares outstanding of each of the issuers classes of common stock, as of March 25, 2010 was 100,000.  Documents Incorporated by Reference Document Description 10-K Part Specifically Identified Portions of the Registrants Proxy Statement for the Annual Meeting of Shareholders to be held May 12, 2010 III


PART I  ITEM 1. BUSINESS.  Introduction.  Venture Lending & Leasing V, Inc. (the Fund) was incorporated in Maryland on August 21, 2006, as a non-diversified, closed-end management investment company electing status as a business development company (BDC) under the Investment Company Act of 1940 (1940 Act).  The Fund is a wholly owned subsidiary of Venture Lending & Leasing V, LLC, a Delaware limited liability company (the Company).  The purpose of the Fund is to provide asset-based financing to venture-capital-backed companies, in the form of secured loans.  Additionally, the Fund may provide debt financing to public and late-stage private companies.  Prior to commencing its operations on February 21, 2007, the Fund had no operations other than the sale of 100,000 shares of common stock, $0.001 par value to the Company for $25,000 in September 2006.  As of December 31, 2009, the Fund meets the requirements, including diversification requirements, to qualify as a regulated investment company (RIC) under the Internal Revenue Code of 1986. The Funds shares of Common Stock, $.001 par value (Shares) are held entirely by the Company.  As capital is required to finance the acquisition of loans, additional capital is provided by the Company.  Investment Program.  General.  As a BDC, the Fund is required to invest in eligible portfolio companies and (with certain exceptions) make available to them significant managerial assistance.  Generally, an eligible portfolio company is a U.S. company (i.e., is organized and has its principal place of business in the U.S.) that is not an investment company (or excepted from the definition of investment company pursuant to Section 3(c) of the 1940 Act) that meets one of the following tests: (1) it has not issued a class of margin securities that is eligible for margin loans; (2) does not have any class of securities listed on a national securities exchange; (3) it is a very small and solvent company ($4 million or less in total assets and capital and surplus of not less than $2 million); or (4) it is controlled by a BDC or group of companies including a BDC and the BDC exercises a controlling influence over the portfolio company and has an affiliated person who is a director of the portfolio company. BDCs cannot acquire any assets other than those described in subparagraphs (1) through (8) below (Qualifying Assets) unless, at the time of the acquisition, the assets described in subparagraphs (1) through (8) below represent 70% of the value of the BDCs total assets (the 70% basket).  Below is a general summary of Qualifying Assets: 1.  Securities issued in transactions not involving a public offering from issuers which are eligible portfolio companies (including affiliated persons or persons that have been affiliated persons within the preceding 13 months) or from any other person, subject to such rules and regulations as the Commission may prescribe; 2.  Securities purchased in transactions not involving any public offering from an issuer, or from any person who is an officer or employee of the issuer, if the issuer is a U.S. company that is not an investment company, but the issuer is not an eligible portfolio company because it has issued a class of margin securities that is eligible for margin loans, and at the time of purchase the BDC owns at least 50% of (i) the greatest number of equity securities (on a fully diluted basis) of the issuer and (ii) the greatest amount of such issuer's debt securities held by the BDC at any point in time during the period when such issuer was an eligible portfolio company, and, (iii) the BDC is one of the 20 largest holders of the issuer's outstanding voting securities. 3.  Securities of any eligible portfolio company that is controlled by the BDC (either alone or as part of a group acting together) and the BDC exercises a controlling influence over the management or policies, and has an affiliated person who is a director of, the eligible portfolio company; 4.  Securities issued in transactions not involving a public offering from U.S. non-investment company issuers subject to bankruptcy, reorganization, insolvency or similar proceeding or otherwise unable to meet their obligations without assistance (purchase may be made from affiliated persons or persons that have been affiliated persons within the preceding 13 months or in limited circumstances other persons); 5.  Securities of an eligible portfolio company purchased from any person in transactions not involving a public offering when no public market for the securities exists and the BDC owned at least 60% of the outstanding equity (on a fully diluted basis) of the issuer immediately prior to the purchase; 6.  Securities received in exchange for or distributed with respect to the foregoing securities (including securities obtained pursuant to the exercise of options, warrants or rights relating to such securities); 7.  Cash, cash items, U.S. Government securities or high-quality debt securities maturing in one year or less from the time of investment; or 8.  Office furniture and equipment, interests in real estate, deferred organization and operating expenses, and other non-investment assets necessary and appropriate to the BDCs operations.      "Making available significant managerial assistance" is defined under the 1940 Act, in relevant part, as (i) an arrangement whereby the business development company, through its officers, directors, employees or general partners, offers to provide and, if accepted, does provide, significant guidance and counsel concerning the management, operations or business objectives of a portfolio company; or (ii) the exercise by a business development company of a controlling influence over the management or polices of the portfolio company by the business development company acting individually or as part of a group acting together which controls the portfolio company.  The officers of the Fund intend to offer to provide managerial assistance, including advice on equipment acquisition and financing, cash flow and expense management, general financing opportunities, acquisition opportunities and opportunities to access the public securities markets, to the great majority of companies to whom the Fund provides venture loans.  In some instances, directors of the Fund might serve on the Board of Directors or as officers of borrowers.  Venture Loans.  Venture loans generally consist of a promissory note secured by the equipment or other assets of the borrower.  The Fund generally obtains a security interest in the assets financed and receives periodic payments of interest and principal, and may receive a final payment constituting additional interest at the end of the transaction's term.  The interest rate and amortization terms of venture loans are individually negotiated between the Fund and each borrower.  Typically, loans are structured as commitments by the Fund to finance assets of the borrower over a specified period of time.  The commitment of the Fund to finance future asset acquisitions is typically subject to the absence of any default under the loan and compliance by the borrower with requirements relating to, among other things, the type of assets to be financed.  Although the Fund's commitments generally provide that the Fund is not required to continue to fund additional loans if there is a material adverse change in the borrower's financial condition, it is possible that a borrower's financial condition will not be as strong at the time the Fund finances an asset acquisition as it was at the time the commitment was entered into.  Warrants and Equity Securities.  The Fund generally acquires warrants to purchase equity securities of the borrower in connection with asset financings.  The terms of the warrants, including the expiration date, exercise price and terms of the equity security for which the warrant may be exercised, are negotiated individually with each borrower.  Substantially all the warrants and underlying equity securities are restricted securities under the Securities Act of 1933 (1933 Act) at the time of issuance; the Fund generally negotiates registration rights with the borrower that may provide (i) "piggyback" registration rights, which permit the Fund under certain circumstances to include some or all of the securities owned by it in a registration statement filed by the borrower or (ii) under rare circumstances, "demand" registration rights permitting the Fund under certain circumstances to require the borrower to register the securities under the 1933 Act (in some cases at the Fund's expense).  Investment Policies. For purposes of these investment policies and unless otherwise specified, references to the percentage of the Fund's total assets "invested" in securities of a company will be deemed to refer, in the case of financings in which the Fund commits to provide financing prior to funding the commitment, to the amount of the Fund's total assets represented by the value of the maximum amount of securities to be issued by the borrower of the Fund pursuant to such commitment; the Fund will not be required to divest securities in its portfolio or decline to fund an existing commitment because of a subsequent change in the value of securities the Fund has previously acquired or committed to purchase.  Diversification Standards. The Fund is classified as a "non-diversified" closed-end investment company under the 1940 Act.  However, the Fund seeks to qualify as a RIC, and therefore must meet diversification standards under the Internal Revenue Code.  To qualify as a RIC, the Fund must meet the issuer diversification standards under the Internal Revenue Code that require that, at the close of each quarter of the Fund's taxable year, (i) not more than 25% of the market value of its total assets is invested in the securities of a single issuer and (ii) at least 50% of the market value of its total assets is represented by cash, cash items, government securities, securities of other RICs and other securities (with each investment in such other securities limited so that not more than 5% of the market value of the Fund's total assets is invested in the securities of a single issuer and the Fund does not own more than 10% of the outstanding voting securities of a single issuer).  For purposes of the diversification requirements under the Internal Revenue Code, the percentage of the Fund's total assets "invested" in securities of a company will be deemed to refer, in the case of financings in which the Fund commits to provide financing prior to funding the commitment, to the amount of the Fund's total assets represented by the value of the securities issued by the borrower to the Fund at the time each portion of the commitment is funded.  The Fund will generally invest no more than 30% of its total assets in securities of companies in any single industry.  The broad industry categories in which the Fund anticipates that most of its investments will fall (and within each of which there may be several "industries" for purposes of the industry diversification policy) include computers and storage, semiconductor and equipment, medical devices,  software, and several other categories.  Investment Guidelines.  In selecting investments for the Fund's portfolio, Westech Investment Advisors Inc (the Manager) will endeavor to meet the investment guidelines established by the Fund's Board of Directors.  The Fund may, however, make investments that do not conform to one or more of these guidelines when deemed appropriate by the Manager.  Such investments might be made if the Manager believes that a failure to conform in one area is offset by exceptional strength in another or is compensated for by a higher yield, favorable warrant issuance or other attractive transaction terms or features.  Leverage.  The Fund is permitted to borrow money from and issue debt securities to banks, insurance companies and other lenders to obtain additional funds to originate venture loans.  Under the 1940 Act, the Fund may not incur borrowings unless, immediately after the borrowing is incurred, such borrowings would have "asset coverage" of at least 200 percent.  "Asset cover­age" means the ratio      which the value of the Fund's total assets, less all liabilities not represented by the borrowings and any other liabilities constituting "senior securities" under the 1940 Act, bears to the aggregate amount of such borrowings and senior securities.  The practical effect of this limitation is to limit the Fund's borrowings and other senior securities to 50% of its total assets less its liabilities other than the borrowings and other senior securities.  The use of leverage increases investment risk.  The Funds lenders require that the Fund pledge portfolio assets as collateral for loans.  If the Fund is unable to service the borrowings, the Fund may risk the loss of such pledged assets.  Lenders also require that the Fund agree to loan covenants limiting the Fund's ability to incur additional debt or otherwise limiting the Fund's flexibility, and loan agreements may provide for acceleration of the maturity of the indebtedness if certain financial tests are not met.  Temporary Investments.  Pending investment in asset financing transactions and pending distributions, the Fund invests excess cash in (i) securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, (ii) repurchase agreements fully collateralized by U.S. government securities or (iii) short-term high-quality debt instruments of U.S. corporations.  All such investments will mature in one year or less.  The U.S. government securities in which the Fund may invest include U.S. government securities backed by the full faith and credit of the U.S. government (such as Treasury bills, notes and bonds) as well as securities backed only by the credit of the issuing agency.  Corporate securities in which the Fund may invest include commercial paper, bankers' acceptances and certificates of deposit of domestic or foreign issuers.  The Fund also may enter into repurchase agreements that are fully collateralized by U.S. government securities with banks or recognized securities dealers, in which the Fund purchases a U.S. government security from the institution and simultaneously agrees to resell it to the seller at an agreed-upon date and price.  The repurchase price is related to an agreed-upon market rate of interest rather than the coupon of the debt security and, in that sense, these agreements are analogous to secured loans from the Fund to the seller.  Repurchase agreements carry certain risks not associated with direct investments in securities, including possible declines in the market value of the underlying securities and delays and costs to the Fund if the other party to the transaction defaults.  Other Investment Policies.  The Fund will not sell securities short, purchase securities on margin (except to the extent the Fund's permitted borrowings are deemed to constitute margin purchases), write puts or calls, purchase or sell commodities or commodity contracts or purchase or sell real estate.  The Fund will not underwrite the securities of other companies, except to the extent the Fund may be deemed an underwriter upon the disposition of restricted securities acquired in the ordinary course of the Fund's business.  The Fund's investment objective, investment policies and investment guidelines (other than its status as a BDC) are not fundamental policies and may be changed by the Fund's Board of Directors at any time without shareholder approval.       Regulation.As a BDC, the Fund is required to invest in eligible portfolio companies and (with certain exceptions) make available to them significant managerial assistance.  Eligible portfolio companies, and the regulations governing assets a BDC can acquire, are described under the heading Investment Program above. The Fund, as a BDC, may sell its securities at a price that is below its net asset value per share, provided that a majority of the Fund's disinterested directors has determined that such sale would be in the best interests of the Fund and its shareholders and upon the approval by the holders of a majority of its outstanding voting securities, including a majority of the voting securities held by non-affiliated persons, of such policy or practice within one year of such sale.  A majority of the disinterested directors also must determine in good faith, in consultation with the underwriters of the offering if the offering is underwritten, that the price of the securities being sold is not less than a price which closely approximates market value of the securities, less any distribution discounts or commissions.  As defined in the 1940 Act, the term "majority of the outstanding voting securities" of the Fund means the vote of (i) 67% or more of the Fund's Shares present at a meeting, if the holders of more than 50% of the outstanding Shares are present or represented by proxy, or (ii) more than 50% of the Fund's outstanding Shares, whichever is less.  Many of the transactions involving a company and its affiliates (as well as affiliates of those affiliates) which were prohibited without the prior approval of the SEC under the 1940 Act prior to its amendment by the 1980 provisions are permissible for BDCs, including the Fund, upon the prior approval of a majority of the Fund's disinterested directors and a majority of the directors having no financial interest in the transactions.  However, certain transactions involving certain persons related to the Fund, including its directors, officers, and the Managers, may still require the prior approval of the SEC.  In general, (i) any person who owns, controls, or holds power to vote, more than 5% of the Fund's outstanding Shares; (ii) any director, executive officer, or general partner of that person; and (iii) any person who directly or indirectly controls, is controlled by, or is under common control with, that person, must obtain the prior approval of a majority of the Fund's disinterested directors, and, in some situations, the prior approval of the SEC, before engaging in certain transactions involving the person or any company controlled by the Fund.  The 1940 Act generally does not restrict transactions between the Fund and its eligible portfolio companies.  While a BDC may change the nature of its business so as to cease being a BDC (and in connection therewith withdraw its election to be treated as a BDC) only if authorized to do so by a majority vote (as defined by the 1940 Act) of its outstanding voting securities, shareholder approval of changes in other fundamental investment policies of a BDC is not required (in contrast to the general 1940 Act requirement, which requires shareholder approval for a change in any fundamental investment policy).  Dividends and Distributions.  The Fund intends to distribute to its shareholder substantially all of its net investment income and net realized capital gains, if any, as determined for income tax purposes less appropriate reserves.  Applicable law, including provisions of the 1940 Act, may limit the amount of dividends and other distributions payable by the Fund.  Income dividends will generally be paid quarterly to shareholders of record on the last day of each preceding calendar quarter end.  Substantially all of the Fund's net capital gain (the excess of net long-term capital gain over net short-term capital loss) and net short-term capital gain, if any, will be distributed annually, or on a more frequent basis as determined by the Manager.  Until February 21, 2011, the Fund may make loan commitments to reinvest the proceeds of matured, repaid or resold investments, net of required distributions to shareholders, principal payments on borrowings and expenses or other obligations of the Fund, in new loans.  Following that date, the Fund will begin to distribute to investors all proceeds received from principal payments and sales of investments, net of reserves and expenses, principal repayments on the Fund's borrowings, amounts required to fund financing commitments entered into before such date, and any amounts paid on exercise of warrants.  Distributions of such amounts are likely to cause annual distributions to exceed the earnings and profits of the Fund available for distribution, in which case such excess will be considered a tax free return of capital to a shareholder to the extent of the shareholder's adjusted basis in its shares and then as capital gain.  The Fund may borrow money to fund shareholder distributions, to the extent consistent with the 1940 Act and a prudent capital structure.  Competition. Other entities and individuals compete for investments similar to those proposed to be made by the Fund, some of whom may have greater resources than the Fund.  Furthermore, the Fund's need to comply with provisions of the 1940 Act pertaining to BDCs and provisions of the Internal Revenue Code pertaining to RICs might restrict the Fund's flexibility as compared with its competitors.  The need to compete for investment opportunities may make it necessary for the Fund to offer borrowers more attractive transaction terms than otherwise might be the case.  Employees. The Fund has no employees; all of its officers are officers and employees of the Manager, and all of its required services are performed by officers and employees of the Manager. ITEM 1A.  RISK FACTORS.   GENERAL Reliance on Management.  The Fund is wholly dependent for the selection, structuring, closing and monitoring of its investments on the diligence and skill of the Manager, acting under the supervision of the Fund's Board of Directors.  Although the principals of the Manager have over 60 years' of combined experience in investing in venture lending transactions and equity investments, there can be no assurance that the Fund will attain its investment objective.  Furthermore, the Manager does not have substantial experience investing in special situations such as convertible and subordinated debt of public and late-stage private companies.  The officers of the Manager have primary responsibility for the selection of the companies in which the Fund invests, the      negotiation of the terms of such investments and the monitoring of such investments after they are made.  Although the officers of the Manager intend to devote such time as is necessary to the affairs of the Fund, they are not required to devote full time to the management of the Fund.  Furthermore, there can be no assurance that any officer will remain associated with the Manager or that, if an officer ceased to be associated with the Manager, the Manager would be able to find a qualified person or persons to fill their positions.  Long-Term Investment.  After the fourth anniversary following the first closing of the Company's offering of membership interests, the Fund will cease to make new equity investments as well as investments in venture loans (except pursuant to commitments made before the fourth anniversary following the first closing of the Companys offering of membership interest) and will distribute to its shareholder all proceeds received from principal payments and sales of: (i) reserves and expenses; (ii) principal repayments on the Funds borrowings; (iii) amounts required to fund financing commitments entered into before such fourth anniversary; and (iv) any amounts paid on exercise of warrants or otherwise paid to protect the value of existing investments (including, for example, pay-to-play provisions and purchases of equity securities in down rounds to avoid dilution).  The Fund's Articles of Incorporation provide that, on December 31, 2015, the Fund automatically will be dissolved without any action by its shareholders  From and after such dissolution, the Fund's activities will be limited to the winding-up of its affairs, the liquidation of its remaining assets and the distribution of the net proceeds thereof to its shareholder.  Although the Fund generally would not make any loan with a stated maturity date later than December 31, 2015, it is possible that, due to a default by a borrower or a transaction restructuring due to a borrower's financial difficulties, such a loan may remain outstanding in whole or in part beyond its original maturity date.  Furthermore, the Fund may not be able to sell warrants it receives from borrowers, or the equity securities (including those received upon exercise of warrants or conversion of debt instruments or in connection with restructuring of a troubled loan), to the extent those investments were retained by the Fund and not distributed earlier to its shareholder, for a significant period of time due to legal or contractual restrictions on resale or the absence of a liquid secondary market.  As a result, the liquidation process might not be completed for a significant period after the Fund's dissolution.  In addition, it is possible that, if certain of the Fund's assets are not liquidated within a reasonable time after the Fund's dissolution, the Fund may elect to make a distribution in kind of all or part of such assets to its shareholders.  In such case, the shareholders would bear any expenses attendant to the liquidation of such assets.  Competition.  Other entities and individuals compete for investments similar to those made by the Fund, some of whom, with respect to investments in the form of loans, and many of whom, with respect to the equity investments and convertible and subordinated debt, have greater resources than the Fund.  Competition could increase given the low barriers to entry in the industry.  Additionally, the Fund's need to comply with provisions of the Investment Company Act of 1940 Act (the 1940 Act) pertaining to BDCs and, if the Fund qualifies as a RIC, provisions of the Internal Revenue Code pertaining to RICs, might restrict the Fund's flexibility as compared with its competitors.  The need to compete for investment opportunities may make it necessary for the Fund to offer borrowers or companies in which it makes equity investments more attractive terms than otherwise might be the case.  Convertible Debt.  Convertible debt instruments issued by public and late-stage private companies comprise some of the special situations in which the Fund invests.  Convertible debt generally offers lower interest yields than non-convertible debt of similar quality.  The market value of convertible debt tends to decline as interest rates increase and, conversely, to increase as interest rates decline.  However, the market value of convertible debt often reflects the market price of common stock of the issuing company when that stock price is greater than the conversion price of the convertible debt.  The conversion price is the predetermined price at which the debt instrument could be exchanged for the associated stock.  As the market price of the underlying common stock declines, the price of the convertible debt tends to be influenced more by the yield of the debt instrument.  Thus, it may not decline in price to the same extent as the underlying common stock.  Subordinated Debt.  Part of the special situations in which the Fund invests consist of subordinated debt instruments, which tend to be predominantly high-yield non-convertible debt securities.  Investments in high-yield securities involve substantial risk of loss.  Sub-investment grade non-convertible debt securities, or comparable unrated securities, are commonly referred to as "junk debt" and are considered speculative with respect to the issuer's ability to pay interest and principal, and are susceptible to default or decline in market value due to adverse economic or business developments.  The market values for high-yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities.  Leverage.  The Fund borrows money from and issues debt securities to banks, insurance companies and other lenders to obtain additional funds to originate venture loans.  Under the 1940 Act, the Fund may not incur borrowings unless, immediately after the borrowing is incurred, such borrowings would have "Asset Coverage" of at least 200%.  "Asset Coverage" means the ratio which the value of the Fund's total assets, less all liabilities not represented by (i) the borrowings and (ii) any other liabilities constituting "senior securities" under the 1940 Act, bears to the aggregate amount of such borrowings and senior securities.  The practical effect of this limitation is to limit the Fund's borrowings and other senior securities to 50% of its total assets less its liabilities other than the borrowings and other senior securities.  The 1940 Act also requires that, if the Fund borrows money, provision be made to prohibit the declaration of any dividend or other distribution on the shares (other than a dividend payable in shares), or the repurchase by the Fund of shares, if, after payment of such dividend or repurchase of shares, the Asset Coverage of such borrowings would be below 200%.  If the Fund is unable to pay dividends or distributions in the amounts required under the Internal Revenue Code, it might not be able to qualify for the pass-through status as a RIC or, if qualified, to continue to so qualify.  The use of leverage increases investment risk.  The Fund's use of leverage is premised upon the expectation that the Fund's all-in borrowing costs will be lower than the return the Fund achieves on its investments.  To the extent the income or capital gains      derived from investments purchased with borrowed funds exceeds the cost of borrowing, the Fund's overall return will be greater than if leverage had not been used.  Conversely, if the income or capital gain from the investments purchased with borrowed funds is not sufficient to cover the cost of borrowing, or if the Fund incurs capital losses, the return to the Fund will be less than if leverage had not been used, and therefore the amount available for distribution will be reduced or potentially eliminated.  Furthermore, since the calculation of the investment management fee paid to the Manager is based in part on a percentage of the managed assets, such fee will be higher if the Fund utilizes leverage than if no borrowings were incurred.  Lenders have required that the Fund pledge portfolio assets as collateral for borrowings, and have required that the Company provide guarantees of the debt facility.  If the Fund is unable to service the borrowings, the Fund may risk the loss of such pledged assets.  Lenders have also required the Fund agree to loan covenants limiting the Funds ability to incur additional debt or otherwise limiting the Funds flexibility, and loan agreements provide for acceleration of the maturity of the indebtedness if certain financial tests are not met.  To minimize risks associated with lending money at fixed rates, the Fund enters into interest rate hedging transactions with respect to all or any portion of the Funds investments.  There can be no assurance that such interest rate hedging transactions will be available in forms acceptable to the Fund.  The variable interest rate that the Funds lenders charge cannot be perfectly hedged, and there may be a divergence between the interest rate obtained by the Fund on its interest rate hedging transactions and the interest rate charged to the Fund by its lenders.  In addition, entering into interest rate hedging transactions raises costs to the Fund.  Finally, it is possible that the Fund could incur losses from being over-hedged which would result if the loan that was hedged is repaid faster than expected.  Regulation.  The Fund has elected to be treated as a BDC under the Small Business Incentive Act of 1980, which modified the 1940 Act.  Although BDCs are now exempt from registration under the 1940 Act and are relieved from compliance with many provisions of the 1940 Act, there are now greater restrictions in some respects on permitted types of investments for BDCs.  Moreover, the applicable provisions of the 1940 Act continue to impose numerous restrictions on the activities of the Fund, including restrictions on leverage and on the nature of its investments.  While the Fund is not aware of any judicial rulings under, and is aware of only a few administrative interpretations of, the Small Business Incentive Act of 1980, there can be no assurance that such Act will be interpreted or administratively implemented in a manner consistent with the Fund's objectives or manner of operation.  Litigation.  The Fund could be subject to litigation by borrowers, based on theories of breach of contract to lend or "lender liability" or otherwise, in connection with its loan and investment transactions.  The defense of such a lawsuit, even if ultimately determined to be without merit, could be costly and time-consuming.  Tax Status.  The Fund must meet a number of requirements, described under "Federal Income Taxation," to qualify for the pass-through status as a RIC and, if qualified, to continue to so qualify.  For example, the Fund must meet specified asset diversification standards under the Internal Revenue Code which might be difficult to meet if the borrowers under some loans draw down their committed financing at a faster rate than other borrowers, particularly during the early periods of the Fund's operations.  If the Fund experiences difficulty in meeting the diversification requirement for any quarter of its taxable year, it might accelerate capital calls or borrowings in order to increase the portion of the Fund's total assets represented by cash, cash items and U.S.  government securities as of the close of the following fiscal quarter and thus attempt to meet the diversification requirement.  However, the Fund would incur additional interest and other expenses in connection with any such accelerated borrowings, and increased investments by the Fund in cash, cash items and U.S. government securities (whether the funds to make such investments are derived from called equity capital or from accelerated borrowings) are likely to reduce the Fund's return.  Furthermore, there can be no assurance that the Fund would be able to meet the diversification requirements through such actions.  Failure to qualify as a RIC would deny the Fund pass-through status and, in a year in which the Fund has taxable income, would have a significant adverse effect on the return of the Fund.  Allocation of Expenses.  If the Fund is not deemed to be engaged in a trade or business, individuals and certain other persons who are members of the Company will be required to include in their gross income an amount of certain Fund expenses relating to the production of gross income that are allocable to the Company.  These members, therefore, will be deemed to receive gross income from the Fund in excess of the distributions they actually receive.  Such allocated expenses may be deductible by an individual Member as a miscellaneous itemized deduction, subject to the limitation on miscellaneous itemized deductions not exceeding 2% of adjusted gross income to the extent the Fund is not engaged in a trade or business.  Calculation of Investment Management Fee.  Following the second anniversary of the first closing of the offering of membership interests in the Company, the Management Fee will be computed and paid quarterly, at an annual rate equal to the greater of: (i) 2.5% of the total value of the assets of the Fund (including amounts derived from borrowed funds), as of the last day of each such fiscal quarter, and (ii) the difference between 1.5% of the committed equity capital of the Company (regardless of when or if such committed capital is called) and the Company management fee payable for such quarter.  If, however, the total value of the combined assets of the Company and the Fund (including, in each case, amounts derived from borrowed funds, but excluding the value of the Companys investment in the Fund) does not exceed $25,000,000, the Management Fee will be calculated solely with reference to 2.5% of the total value of the assets of the Fund (including amounts derived from borrowed funds), as of the last day of each such fiscal quarter.  The foregoing calculation of the Management Fee could result in the fee being disproportionately large relative to the value of the Funds portfolio if the total assets of the Fund during such period are low compared to the committed equity capital of the Company.  This could occur, for example, if the loans in the Funds portfolio are repaid at a rapid rate during such period, or if a large number of the companies in which the Fund holds equity securities are acquired during such period.       INVESTMENT RISKS  International Investments.  The Fund could invest up to, but not more than, 30% of its total assets in foreign based companies.  Foreign investments are subject to most of the same risks as domestic investments, as well as the political, economic and other uncertainties associated with foreign activities, including the risk of war and political unrest, the impact of laws and policies of foreign governments and the United States affecting foreign investment, and the possibility of being subject to the jurisdiction of foreign courts in connection with legal disputes and the possible inability to subject foreign persons to the jurisdiction of courts in the United States.  Additionally, as discussed under Remedies Upon Default below, there may be practical and local law impediments to cost-effective recovery against collateral located in a foreign country.  Credit Risks.  Most of the companies with which the Fund enters into financing transactions have not achieved profitability, experience substantial fluctuations in their operating results or, in some cases, do not have significant operating revenues.  The ability of these companies to meet their obligations to the Fund, therefore, depends to a significant extent on the willingness of a borrower's equity venture capital investors or outside investors to provide additional equity financing, which in turn depends on the borrower's success in meeting its business plan, the market climate for venture capital investments and many other factors.  The companies to which the Fund provides financing frequently engage in the development of new products or technologies, and the success of these efforts, or the ability of the companies to successfully manufacture or market products or technologies developed, cannot be assured.  These companies frequently face intense competition, including competition from companies with greater resources, and may face risks of product or technological obsolescence, non-acceptance in the market, or rapidly changing regulatory environments, any of which could adversely affect their prospects.  The success of such companies often depends on the management talents and efforts of one person or small group of persons whose death, disability or resignation would adversely affect the company.  Remedies Upon Default.  In the event of a default on a portfolio loan, the available remedies to the Fund include legal action against the borrower and foreclosure or repossession of collateral given by the borrower.  The Fund can experience significant delays in exercising its rights as a secured lender, and might incur substantial costs in taking possession of and liquidating its collateral and in taking other steps to protect its investment.  The Fund generally will require that it have a first priority security interest in any equipment of a borrower financed with the proceeds of the Funds loans, although that security interest may extend to the borrowers other assets in which another lender might have a senior or parity security interest.  On occasion, the Fund will make loans to a borrower that has one or more other secured lenders (including the Funds immediate predecessor, Venture Lending & Leasing IV, Inc. (Fund IV)).  In such circumstances, the Fund may share all or a portion of its collateral with the other lender(s) and will enter into intercreditor agreements governing the respective rights of the Fund and such other lender(s), which could limit the Funds flexibility in pursuing its remedies as a secured creditor, and reduce the proceeds realized from foreclosing or taking possession of the collateral.  In the case of growth capital or working capital loans (where the loan proceeds can be used by the company for general corporate purposes), the Fund will typically receive a broader lien on substantially all of the borrowers assets, including its intellectual property.  The Fund utilizes certain of its funds in investments that involve the financing of equipment assets.  Equipment assets are often subject to rapid depreciation or obsolescence such that it is likely the value of the assets underlying a loan to finance such assets will depreciate during the term of the loan transaction below the amount of the borrowers obligations.  In addition, although borrowers are required under the transaction documents to provide customary insurance for the assets underlying a loan, and are prohibited from disposing of the assets without the Funds consent, compliance with these covenants cannot be assured and, in the event of non-compliance, the assets could become unavailable to the Fund due to destruction, theft, sale or other circumstances.  Realization of value from intellectual property collateral can also be time consuming and present special challenges, given the often unique nature and limited market for such assets.  The Funds ability to obtain payment beyond the collateral underlying the loan from the borrower might be limited by bankruptcy or similar laws affecting creditors rights.  In limited instances where the Fund takes security interests in a borrowers assets located in a foreign country, there may be practical and local law impediments to cost-effective recovery against such collateral.  Therefore, there can be no assurance that the Fund would ultimately collect the full amount owed on a defaulted loan.  Emerging Company Risks.  The possibility that the companies in which the Fund invests will not be able to commercialize their technology or product concept presents significant risk to the Fund.  Additionally, although some of such companies may already have a commercially successful product or product line at the time of investment, technology products and services often have a more limited market or life span than products in other industries.  Thus, the ultimate success of these companies may depend on their ability to continually innovate in increasingly competitive markets.  Most of the companies in which the Fund invests will require substantial additional equity financing to satisfy their continuing growth and working capital requirements.  Each round of venture financing is typically intended to provide a company with enough capital to reach the next stage of development.  The circumstances or market conditions under which such companies will seek additional capital is unpredictable.  It is possible that one or more of such companies will not be able to raise additional financing or may be able to do so only at a price or on terms which are unfavorable.  Privately-held Company Risks.  The Fund invests primarily in privately-held companies.  Generally, very little public information exists about these companies and the Fund is required to rely on the ability of the Manager to obtain adequate information to evaluate the potential returns from investing in these companies.  Moreover, these companies typically depend upon      the management talents and efforts of a small group of individuals and the loss of one or more of these individuals could have a significant impact on the investment returns from a particular company.  Also, these companies frequently have less diverse product lines and smaller market presence than larger companies.  They are thus generally more vulnerable to economic downturns and may experience substantial variations in operating results.  Global Economic Risks.  The ability of the Fund to provide an acceptable return may be adversely affected by economic and business factors to which the U.S. marketplace is subject.  These factors, which generally are beyond the control of the Manager, include: general economic conditions, such as inflation and fluctuations in general business conditions; the impact of further terrorist attacks against the United States; the effects of strikes, labor disputes and foreign political unrest; and uncertainty of the recovery of the U.S. economy.  Speculative Nature of Warrants and Equity Investments.  The value of the warrants that the Fund generally receives in connection with its financing investments is dependent on the value of the equity securities for which the warrants can be exercised.  The value of such warrants, direct equity investments, and equities received upon conversion of debt instruments is dependent primarily on the success of the company's business strategy and the growth of its earnings, but also depends on general economic and equity market conditions.  The prospects for achieving consistent profitability in the case of many companies in which the Fund invests are speculative.  The warrants, equity securities for which the warrants can be exercised, direct equity investments, and equities received upon conversion of debt instruments generally are restricted securities that cannot readily be sold for some period of time.  If the value of the equity securities underlying a warrant does not increase above the exercise price during the life of the warrant, the Fund would permit the warrant to expire unexercised and the warrant would then have no value.  Illiquidity of Investments.  Substantially all of the Funds portfolio investments (other than short-term investments) consist of securities that, at the time of acquisition, are subject to restrictions on sale and for which no ready market will exist.  Restricted securities cannot be sold publicly without prior agreement with the issuer to register the securities under the 1933 Act , or by selling such securities under Rule 144 or other provisions of the 1933 Act which permit only limited sales under specified conditions.  Venture loans and equity investments are privately negotiated transactions, and there is no established trading market in which such loans and equity investments can be sold.  Convertible and subordinated debt investments may also be privately negotiated transactions.  In the case of warrants or equity securities, the Fund generally will realize the value of such securities only if the issuer is able to make an initial public offering of its shares, or enters into a business combination with another company which purchases the Fund's warrants or equity securities or exchanges them for publicly-traded securities of the acquirer.  The feasibility of such transactions depends upon the entity's financial results as well as general economic and equity market conditions.  Furthermore, even if the restricted warrants or equity securities owned become publicly-traded, the Fund's ability to sell such securities may be limited by the lack (or limited nature) of a trading market for such securities.  When restricted securities are sold to the public, the Fund, under certain circumstances, may be deemed an "underwriter" or a controlling person with respect thereto for the purposes of the 1933 Act, and be subject to liabilities as such under that Act. Because of the illiquidity of the Fund's investments, a substantial portion of its assets are carried at fair value as determined by the Manager in accordance with the Funds policy as approved by the Board of Directors.  This value will not necessarily reflect the value of the assets which may be realized upon a sale.  Non-Diversified Status.  The Fund is classified as a non-diversified investment company under the 1940 Act.  The Fund  qualifies as a RIC under the Internal Revenue Code and will thereafter seek to continually meet the diversification standards there-under.  Nevertheless, the Funds assets may be subject to a greater risk of loss than if its investments were more widely diversified.  Challenges in Financial Markets.  The ability of the Fund to provide an acceptable return may be adversely affected by economic factors to which the marketplace is subject.  Volatility in the global financial markets reached unprecedented  levels during 2008 and 2009, and these conditions may continue into the future. The Funds estimates of fair value are based on the best information available to the Manager as of the date of valuation. Restrictions on the availability of financing as well as the current economic environment have resulted in a low volume of purchase and sale transactions, limiting the number of observable input available to management in making their estimates of fair value. This market turmoil could have a material adverse effect on the Funds business and operations.  In 2009, the Fund put in place a revolving loan facility in an initial amount of up to $30,000,000.  The Fund has the option to request that the lenders providing such facility increase the borrowing availability thereunder to up to $230,000,000, however, the lenders are under no obligation to do so.  Market turmoil could impact the Funds ability to increase the size of the facility, should it seek to do so, thereby decreasing the Funds ability to utilize leverage to maximize the return it achieves on investments. Market conditions could also adversely impact the ability of the Funds borrowers to meet their obligations to the Fund and the value of the Funds direct investments in companies.  Most of the companies in which the Fund invests have not achieved profitability and require substantial equity financing to satisfy their continuing growth and working capital requirements.  The economic downturn could decrease the demand for such borrowers products and technology, thereby impairing such borrowers financial condition and ability to raise additional equity financing from outside investors.  This could result in an increase in borrower defaults under their obligations to the Fund, or a decrease in the value of the Funds direct equity investments.  U.S. and global economic conditions could continue to deteriorate and remain weak for an extended period of time. Additionally, it is possible that market conditions could decrease the demand for venture loans.        CONFLICTS OF INTEREST  Transactions with Venture Lending & Leasing IV, Inc. (Fund IV).  The Manager also serves as investment manager for Fund IV.  The Funds board of directors determined that so long as Fund IV has capital available to invest in loan transactions with final maturities earlier than December 31, 2012 (the date on which Fund IV will be dissolved), the Fund will invest in each portfolio company in which Fund IV invests (Investments).  The amount of each Investment was allocated 50% to the Fund and 50% to Fund IV so long as Fund IV has capital available to invest.  Since May  2008, Fund IV no longer is permitted to enter into new commitments to borrowers; however, Fund IV will be permitted to fund existing commitments.  While investing the Funds capital in the same companies in which Fund IV is also investing could provide the Fund with greater diversification and access to larger transactions, it could also result in a slower pace of investment than would be the case if the Fund were investing in companies by itself.  Although the Fund  and Fund IV intend to invest in the same companies in the manner described above, the Fund may, at any time, with the approval of its Board of Directors, (i) discontinue investing with Fund IV with respect to any or all future investments or (ii) choose to invest in different proportions with Fund IV than described above.  In addition, the Fund has no control over Fund IV, which is not required to invest with the Fund in any particular proportion or at all, and may choose to discontinue investing with the Fund or to invest in different proportions than described in the preceding paragraph.  In the event that Fund IV and the Fund invest other than in the pro rata manner described above (which can occur only with each Board of Directors approval), the Manager may have a conflict of interest in determining which of Fund IV and the Fund will invest in a particular company and, if both, in what proportions.  The Fund may also engage in loan transactions with, or make equity investments in, companies that are preexisting borrowers from Fund IV or its predecessor funds.  To the extent that clients, other than Fund IV, advised by the Manager (but in which the Manager has no proprietary interest) invest in opportunities available to the Fund, the Manager will allocate such opportunities among the Fund and such other clients in a manner deemed fair and equitable considering all of the circumstances in accordance with procedures approved by the Funds Board of Directors (including a majority of the disinterested directors).  Intercreditor Agreements.  In each transaction in which both the Fund and Fund IV invest, it is expected that the Fund and Fund IV will enter into an intercreditor agreement pursuant to which the Fund and Fund IV will cooperate in pursuing their remedies following a default by the common borrower.  Generally, under such intercreditor agreements, each party would agree that its security interest would be treated in parity with the security interest of the other party, regardless of which security interest would have priority under applicable law.  Accordingly, proceeds realized from the sale of any collateral or the exercise of any other creditors rights will be allocated between the Fund and Fund IV pro rata in accordance with the amounts of their respective investments.  An exception to the foregoing arrangement would occur in situations where, for example, one of the lenders financed specific items of equipment collateral; in that case, usually the lender who financed the specific assets will have a senior lien on that asset, and the other lender will have a junior priority lien (even though they may ratably share liens of equal priority on other assets of the common borrower).  As a result of such intercreditor agreements, the Fund may have less flexibility in pursuing its remedies following a default than it would have had there been no intercreditor agreement, and the Fund may realize fewer proceeds.  In addition, because the Fund and Fund IV invest at the same time in the same borrower, such borrower would be required to service two loans rather than one.  Any additional administrative costs or burdens resulting there from may make the Fund a less attractive lender, and may make it more difficult for the Fund to acquire such loans.  Effect of Borrowings.  During the first two years of the Funds investment operations, the Management Fee is calculated with reference to the committed equity capital of the Company, regardless of when or if all of such capital is called.  Thereafter, the Management Fee will be computed and paid quarterly, at an annual rate equal to the greater of: (i) 2.5% of the total value of the Funds assets (including amounts derived from borrowed funds) as of the last day of each such fiscal quarter, and (ii) the difference between 1.5% of the amount of committed equity capital (regardless of when or if such committed capital is called) and the Company management fee payable for such quarter.  If, however, the total value of the combined assets of the Company and the Fund (including, in each case, amounts derived from borrowed funds, but excluding the value of the Companys investment in the Fund) does not exceed $25,000,000, the Management Fee will be calculated solely with reference to 2.5% of the total value of the assets of the Fund (including amounts derived from borrowed funds) as of the last day of each such fiscal quarter.  Therefore, decisions by the Manager to cause the Fund to borrow additional funds may increase the quarterly fees payable to the Manager.  The Funds overall borrowing limits, however, are set by the Funds Board of Directors in light of its fiduciary obligations.        Indemnification and Exculpation.  The Articles of Incorporation of the Fund provide for indemnification of directors, officers, employees, and agents (including the Manager) of the Fund to the full extent permitted by applicable state law and the 1940 Act, including the advance of expenses and reasonable counsel fees.  The Articles of Incorporation of the Fund also contain a provision eliminating personal liability of a Fund director or officer to the Fund or its shareholder for monetary damages for certain breaches of their duty of care.  ITEM 1B.  UNRESOLVED STAFF COMMENTS.  Not applicable.  ITEM 2. PROPERTIES.  All of the Funds office space is provided by the Manager.  ITEM 3. LEGAL PROCEEDINGS.  The Fund is not a party to any material legal proceedings.  ITEM 4. [REMOVED AND RESERVED].    PART II.  ITEM 5. MARKET FOR REGISTRANTS COMMON STOCK AND RELATED SHAREHOLDER MATTERS.  The Funds Common Stock is not listed on any securities exchange, and all holders of the Funds Common Stock are subject to agreements significantly restricting the transferability of their shares.  The number of holders of record of the Funds Common Stock at March 25, 2010 was 1.  The Fund has a policy of distributing securities as acquired.  The Fund values these securities at fair value at the time of acquisition in accordance with the Funds policy on valuation detailed in Note 2 to the financial statements.  In addition, some expenses of the Company may be paid by the Fund, and will be deemed as distributions to the Company.  The Fund has established a policy of declaring dividends on a quarterly basis to the extent that taxable income of the fund less applicable reserves exceeds warrant distributions and deemed distributions.  As of December 31, 2009, the Fund had distributed $35.6 million to date to its shareholder, of which $17.4 million was in cash.        ITEM 6. SELECTED FINANCIAL DATA.  The following table summarizes certain financial data and should be read in conjunction with the Managements Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included elsewhere in this Form 10-K. The selected financial data set forth below have been derived from the audited financial statements.  For the Year EndedFor the Year EndedFor the Year EndedFor the Period EndedDecember 31, 2009December 31, 2008December 31, 2007December 31, 2006*Statement of Operations Data:Investment income:Interest on loans$             24,298,202$            21,282,105$             5,334,634$                              -Other interest and other income99,861446,879613,222-Total investment income24,398,06321,728,9845,947,856-Expenses:Management fees4,798,2906,750,0005,783,733-Interest expense237,6771,714,343488,178-Banking and professional fees415,8531,479,097368,121-Organizational costs--113,493-Other operating expenses148,819129,91791,339-Total expenses5,600,63910,073,3576,844,864-Net investment income (loss)18,797,42411,655,627(897,008)-Net realized loss from investments(4,122,957)---Net change in unrealized lossfrom investments(4,803,944)(1,755,000)--Net realized and unrealized lossfrom hedging activities-(488,337)(458,320)-Net realized and unrealized lossfrom investment and hedging activities(8,926,901)(2,243,337)(458,320)-Net increase (decrease) in net assetsresulting from operations$              9,870,523$              9,412,290$              (1,355,328)$                              -AMOUNTS PER COMMON SHARE:Net increase (decrease) in net assetsresulting from operations$                     98.71$                     94.12$                    (13.55)$                              -Weighted Average Shares Outstanding100,000100,000100,000100,000As of Dec 31, 2009As of Dec 31, 2008As of Dec 31, 2007As of Dec 31, 2006Balance Sheet Data:Loans$          141,980,642$          170,594,873$              91,964,991$                              -Net assets$          175,761,560$          192,706,115$              57,076,432$                     25,000Borrowings under debt facility$                          -$                             -$              43,000,000$                              -* Period from August 21, 2006 (inception) through December 31, 2006        ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.   Overview  The Fund is a financial services company providing financing and advisory services to a variety of carefully selected venture-backed companies throughout the United States with a focus on growth oriented companies.  The Funds portfolio is well diversified and consists of companies in the communications, information services, media, and technology, including software and technology-enabled business services, bio-technology, and medical devices industry sectors, among others.  The Funds capital is generally used by our portfolio companies to finance acquisitions of fixed assets and working capital.  On February 21, 2007, the Fund completed its first closing of capital, made its first investment, and became a non-diversified, closed-end investment company that elected to be treated as a business development company under the Investment Company Act of 1940.  The Fund anticipates elected to be treated for federal income tax purposes as a regulated investment company under the Internal Revenue Code with the filing of its federal corporate income tax return for 2007.  Pursuant to this election, the Fund generally will not have to pay corporate-level taxes on any income distributed to our shareholder as dividends, allowing the Fund to substantially reduce or eliminate its corporate-level tax liability.  The Fund's investment objective is to achieve a high total return.  The Fund seeks to achieve its investment objective by providing debt financing to portfolio companies.  Historically, the Fund's investing activities have focused primarily on private debt securities.  The Fund generally receives warrants to acquire equity securities in connection with its portfolio investments.  The Fund generally distributes these warrants to its shareholder upon receipt.  The Fund also has guidelines for the percentage of total assets which will be invested in different types of assets.  The portfolio investments of the Fund consist of debt financing to early and late stage venture capital backed technology companies.  The borrowers ability to repay their loans may be adversely impacted by a number of factors, and as a result the loan may not be fully repaid.  Furthermore, the Funds security interest in any collateral over the borrowers assets may be insufficient to make up any shortfall in payments.  CRITICAL ACCOUNTING POLICIES The Manager has identified the most critical accounting estimates upon which the financial statements depend.  The Manager has determined the critical accounting estimates by considering accounting policies that involve the most complex or subjective decisions or assessments.  The two critical accounting policies relate to the valuation of loans and treatment of nonaccrual loans.  Performing loans and nonaccrual loans are held at fair value as determined by management, in accordance with the valuation methods described in the valuation of loans section of footnote 2 to the financial statements (Summary of Significant Accounting Policies). Critical factors in determining the fair value of a loan include payment history, collateral position, financial strength of borrower, prospects for future equity rounds, likelihood of sale or acquisition of the borrower, and length of expected holding period of the loan.  The actual value of the loans may differ from managements estimates, which would affect net increase (decrease) in net assets resulting from operations as well as assets. Results of Operations  For the years ended December 31, 2009, 2008 and 2007 Total investment income for the years ended December 31, 2009, 2008 and 2007 was $24.4 million, $21.7 million and $5.9 million, respectively, which primarily consisted of interest on venture loans outstanding.  The remaining income consisted of interest and dividends on the temporary investment of cash, the forfeiture of deposits from prospective borrowers, late fees from borrowers, other income from commitment fees, and warrants received for loans that will never be funded.   The increase in the investment income is primarily a result of the increased loan base on which interest is charged.  The average gross outstanding performing loans calculated on a monthly basis rose to $147.9 million for 2009 from $138.3 million for 2008 and from $41.2 million for 2007. The average interest rate on gross outstanding performing loans increased to 16.42% for the year ended 2009 from 15.39% for the year ended 2008 and from 14.11% for the year ended December 31, 2007.  Expenses for the years ended December 31, 2009, 2008 and 2007 were $5.6 million, $10.1 million and $6.8 million, respectively.  Management fees were calculated based on the Companys committed capital for the first two years of the Funds life and thereafter as a percentage of Fund assets.  Management fees for the Fund were $4.8 million, $6.8 million and $5.8 million for the years ended December 31, 2009, 2008 and 2007, respectively.  Management fees decreased in 2009 due to the decrease in assets in 2009. The increase in management fees in 2008 was due to the fact that the operation commenced in late February 2007 and therefore the management fee was prorated according to the number of days in the first year of 2007. Interest expense was $0.2 million,$1.7 million and $0.5 million for the years ended December 31, 2009, 2008 and 2007.  Borrowings under the debt facility was $0 for December 31, 2009 and 2008 and was $43.0 million as of December 31, 2007.  On August 22, 2008, the Fund fully paid off all of its borrowings under the debt facility with JP Morgan because the Fund was unable to reach an agreement with its lenders to renew the facility after being informed of their intention to increase the interest rate on the facility and not renew for a full term. Therefore, as of December 31, 2008, the Fund had no debt.On February 20, 2009, the Fund entered into agreements with Union Bank, N.A. that established a      secured revolving loan facility in an initial amount of up to $30,000,000.  On June 11, 2009, the Fund borrowed $1.0 million under the new debt facility and on September 11, 2009, the Fund fully paid its borrowing under the debt facility. Therefore, as of December 31, 2009, the Fund had no debt.  See the discussion under the Risk Factor entitled Leverage for information about the interest rate hedging transactions entered into by the Fund to attempt to limit risks associated with borrowing at variable rates but lending at fixed rates.  Banking and professional fees were $0.4 million, $1.5 million and $0.4 million for the years ended December 31, 2009, 2008 and 2007. Because the Fund had fully paid off all of its borrowings with JP Morgan in the third quarter of 2008, the remaining legal and banking related costs associated with the facility were written off during 2008 and this is the primary cause of the increased professional and legal fees in 2008. The decrease in cost in 2009 was primarily due to the decreases in banking fee as a result of the smaller size of the new debt facility in the current year compared to the facility in place in the prior year.  Other operating expenses were $0.1 million, for each of the years ended December 31, 2009, 2008 and 2007.  These expenses included director fees, custody fee, tax fees, and other expenses related to the operation of the Fund.  Other operating expenses remained relatively stable for the years presented.  The net realized loss from investments was $(4.1) million for December 31, 2009 and $0 for the years ended December 31, 2008 and 2007.The realized losses consist of write offs, net of recoveries of previously written off uncollectible loans. Net change in unrealized loss from investment activities was $(4.8) million, $(1.8) million and zero for the years ended December 31, 2009, 2008 and 2007, respectively.  The unrealized loss consists of fair market value adjustment taken against loans.  There was no fair market value adjustment made in 2007. The net realized and unrealized loss from hedging activities was zero, $(0.5) million and $(0.5) million for the years ended December 31, 2009, 2008 and 2007, respectively. The realized and unrealized loss from hedging activities include the net interest received or paid on the interest rate swap transactions beginning with the quarter ended September 30, 2008. Net increase (decrease) in net assets resulting from operations for the years ended December 31, 2009, 2008 and 2007 was $9.9 million, $9.4 million and $(1.4) million.  On a per share basis, for the years ended December 31, 2009, 2008 and 2007, there was a net increase (decrease) in net assets resulting from operations of $98.71, $94.12 and $(13.55), respectively.   Liquidity and Capital Resources -- December 31, 2009 and 2008 The Fund is owned entirely by the Company.  The Company is expected, but not required, to make further contributions to the capital of the Fund to the extent of the Companys members capital commitment to the Company and excess cash balances.  As of December 31, 2009 and 2008 the Company had received subscriptions for capital in the amount of $270.0 million, of which $202.5 million had been called and received respectively.  As of December 31, 2009 and 2008, $67.5 million of capital remains uncalled, respectively.  The remaining $67.5 million in committed capital as of December 31, 2009 is due to expire in February 2012 as the five year anniversary will have passed, at which time no further capital can be called.  On August 26,2008, the Fund paid approximately $0.8 million in order to terminate its swap agreement in connection with the repayment of borrowings under the funds debt facility (see Note 4 to financial statement). This amount has been recorded in realized and unrealized gain (loss) from hedging activities. On February 20, 2009, the Fund entered into agreements with Union Bank, N.A. that established a secured revolving loan facility in an initial amount of up to $30,000,000.  The Fund has the option to request that lenders providing such facility increase the borrowing availability thereunder to no more than $230,000,000 in the aggregate, as commitments may be obtained, however, the lenders are under no obligation to do so.  Additional fees would be required to be paid in order to upsize the facility. Borrowings by the Fund will be collateralized by the personal property and other assets of the Fund.  Loans under the facility may be, at the option of the Fund, either Reference Rate loans or LIBOR loans.  The Fund will pay interest on its borrowings and will also pay a fee on the unused portion of the facility.  The facility will terminate on February 18, 2011, but can be accelerated under an event of default such as failure by the Fund to make timely interest or principal payments.  As of December 31, 2009, the balance of the Funds outstanding debt is zero. As of December 31, 2009 and 2008, 19% and 11%, respectively of the Funds assets consisted of cash and cash equivalents. The Fund invested its assets in venture loans during 2009 and 2008.  Amounts disbursed under the Funds loan commitments was $76.9 million for the year ended December 31, 2009.  Net loan amounts outstanding after amortization and valuation adjustment were approximately $142.0 million as of December 31, 2009.  Unexpired unfunded commitments as of December 31, 2009 were approximately $62.4 million.  Year EndedCumulative Amount DisbursedPrincipal Amortization and Fair Market AdjustmentBalance Outstanding Fair ValueUnexpired
Unfunded CommitmentsDecember 31, 2009$311.0 million$169.0 million$142.0 million$62.4 millionDecember 31, 2008$234.1 million$63.5 million$170.6 million$29.0 million       Because venture loans are privately negotiated transactions, investments in these assets are relatively illiquid.  It is the Funds experience that not all unfunded commitments will be used by borrowers.  The Fund seeks to meet the requirements to qualify for the special pass-through status available to RICs under the Internal Revenue Code, and thus to be relieved of federal income tax on that part of its net investment income and realized capital gains that it distributes to its shareholder.  To qualify as a RIC, the Fund must distribute to its shareholder for each taxable year at least 90% of its investment company taxable income (consisting generally of net investment income and net short-term capital gain) (Distribution Requirement).  To the extent that the terms of the Funds venture loans provide for the receipt by the Fund of additional interest at the end of the loan term or provide for the receipt by the Fund of a purchase price for the asset at the end of the loan term (residual income), the Fund would be required to accrue such residual income over the life of the loan, and to include such accrued income in its gross income for each taxable year even if it receives no portion of such residual income in that year.  Thus, in order to meet the Distribution Requirement and avoid payment of income taxes or an excise tax on undistributed income, the Fund may be required in a particular year to distribute as a dividend an amount in excess of the total amount of income it actually receives.  Those distributions will be made from the Fund's cash assets, from amounts received through amortization of loans or from borrowed funds.  ITEM 7A - Quantitative and Qualitative Disclosures About Market Risk   The Fund's business activities contain elements of risk.  The Fund considers the principal types of market risk to be interest rate risk and valuation risk.  The Fund considers the management of risk essential to conducting its business and to maintaining profitability.  Accordingly, the Fund's risk management procedures are designed to identify and analyze the Fund's risks, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.  The Fund manages its market risk by maintaining a portfolio that is diverse by industry, size of investment, stage of development, and borrower.  The Fund has limited exposure to public market price fluctuations as the Fund primarily invests in private business enterprises and the Fund distributes all equity investments upon receipt.  The Fund's sensitivity to changes in interest rates is regularly monitored and analyzed by measuring the characteristics of assets and liabilities.  The Fund utilizes various methods to assess interest rate risk in terms of the potential effect on interest income net of interest expense, the value of net assets and the value at risk in an effort to ensure that the Fund is insulated from any significant adverse effects from changes in interest rates.  Based on the model used for the sensitivity of interest income net of interest expense, if the balance sheet were to remain constant and no actions were taken to alter the existing interest rate sensitivity, a hypothetical immediate 100 basis point change in interest rates would have affected net increase in net assets resulting from operations by less than 1% for the year ended December 31, 2009.  Although management believes that this measure is indicative of the Fund's sensitivity to interest rate changes, it makes estimates to adjust for potential changes in credit quality, size and composition of the balance sheet and other business developments that could affect net income.  Accordingly, no assurances can be given that actual results would not differ materially from the potential outcome simulated by these estimates.   ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA  Quarterly Results This information has been derived from unaudited financial statements that, in the opinion of management, include all normal recurring adjustments necessary for a fair presentation of such information.  The operating results for any quarter are not necessarily indicative of results for any future year.  The format of the statements have been modified, thus certain numbers have been combined in order to fit the format of the statements.  Prior to commencing its operations on February 21, 2007, the Fund had no other operations other than the sale to the Venture Lending & Leasing V, LLC of 100,000 shares of common stock, $0.001 par value for $25,000 in September 2006.  This issuance of stock was a requirement to apply for a finance lenders license from the California Commissioner of Corporations.       December 31, 2009 (Unaudited) Quarterly Information for the Three Months EndedMarch 31, 2009June 30, 2009September 30, 2009December 31, 2009Investment Income:Interest on loans$                5,869,202$                5,674,453$                5,781,224$                6,973,323Other interest and other income3,8017,87383,6864,501Total investment income5,873,0035,682,3265,864,9106,977,824Expenses:Management fees1,439,8321,126,7261,123,7331,107,999Interest expense30,92266,83672,63467,285Banking and professional fees115,836135,02470,41994,574Other operating expenses23,05626,29344,84154,629Total expenses1,609,6461,354,8791,311,6271,324,487Net investment income4,263,3574,327,4474,553,2835,653,337Net realized gain (loss) from investments(222,888)(2,176,922)(1,723,148)1Net change in unrealized gain (loss) frominvestments(4,142,710)(1,212,290)1,382,542(831,486)Net realized and unrealized gain (loss)from investment activities(4,365,598)(3,389,212)(340,606)(831,485)Net increase (decrease) in net assetsresulting from operations$                (102,241)$                    938,235$                 4,212,677$                4,821,852Amount per common share:Net increase (decrease) in net assetsresulting from operations$                      (1.02)$                         9.38$                       42.13$                       48.22Weighted average shares outstanding100,000100,000100,000100,000        December 31, 2008 (Unaudited)  Quarterly Information for the Three Months EndedMarch 31, 2008June 30, 2008September 30, 2008December 31, 2008Investment Income:Interest on loans$                3,682,304$                4,595,262$                6,010,991$                6,993,548Other interest and other income167,48598,797153,17327,424Total investment income3,849,7894,694,0596,164,1647,020,972Expenses:Management fees1,687,5001,687,5001,687,5001,687,500Interest expense563,651680,105342,034128,553Banking and professional fees175,491862,851511,017(70,262)Organizational costs----Other operating expenses17,43936,43530,17645,867Total expenses2,444,0813,266,8912,570,7271,791,658Net investment income1,405,7081,427,1683,593,4375,229,314Net realized loss from investments----Net change in unrealized loss frominvestment activities--(750,000)(1,005,000)Net realized and unrealized gain (loss)from hedging activities(738,132)501,904(252,109)-Net realized and unrealized gain (loss)from investment and hedging activities(738,132)501,904(1,002,109)(1,005,000)Net increase in net assetsresulting from operations$                   667,576$                 1,929,072$                2,591,328$                4,224,314Amount per common share:Net increase in net assetsresulting from operations$                         6.68$                       19.29$                       25.91$                       42.24Weighted average shares outstanding100,000100,000100,000100,000        December 31, 2007 (Unaudited)  Quarterly Information for the Three Months EndedMarch 31, 2007June 30, 2007September 30, 2007December 31, 2007Investment Income:Interest on loans$                   129,008$                   750,440$                1,673,805$                 2,781,381Other interest and other income120,526208,465190,06494,167Total investment income249,534958,9051,863,8692,875,548Expenses:Management fees721,2331,687,5001,687,5001,687,500Interest expense--48,318439,860Banking and professional fees69,20649,865114,519134,531Organizational costs113,493---Other operating expenses15,77518,49228,51928,553Total expenses919,7071,755,8571,878,8562,290,444Net investment income (loss)(670,173)(796,952)(14,987)585,104Net change in unrealized lossfrom investment and hedging activities--(44,635)(413,685)Net increase (decrease) in net assets$                (670,173)$                (796,952)$                  (59,622)$                   171,419resulting from operationsAmount per common share:Net increase (decrease) in net assetsresulting from operations$                      (6.70)$                      (7.97)$                      (0.60)$                         1.71Weighted average shares outstanding100,000100,000100,000100,000        ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  Not applicable.  ITEM 9A.  CONTROLS AND PROCEDURES. See response to Item 9A(T). ITEM 9A(T).  CONTROLS AND PROCEDURES. At the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended (the Exchange Act).  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Funds disclosure controls and procedures were effective in ensuring that information required to be disclosed was recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and in providing reasonable assurance that information required to be disclosed by the Fund in such reports is accumulated and communicated to the Funds management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. There have not been any changes in the Funds internal control over financial reporting identified in connection with Managements Report that occurred during the Funds fourth fiscal quarter ended December 31, 2009 that has materially affected, or is reasonably likely to materially affect, the Funds internal control over financial reporting.  MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.  Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on our evaluation under the framework in Internal Control  Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2009. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This annual report does not include an attestation report of the Funds registered public accounting firm regarding internal control over financial reporting.  Managements report is not subject to attestation by the Funds registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Fund to provide only managements report in this annual report. This report of management on internal control over financial reporting shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.  Changes in Internal Controls  There were no significant changes in the Fund's internal controls or in other factors that could significantly affect these controls during the fiscal year ended December 31, 2009.   ITEM 9.B.  OTHER INFORMATION Not applicable.       PART III  ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT  The following are the executive officers of the Fund.  All officers serve at the pleasure of the Funds Board.  Name and Position With FundAgeOccupation During Past Five YearsRonald W. Swenson, Chairman, and Director65Chairman, CEO, Director, and other positions for Westech Investment Advisors since 1994Maurice C. Werdegar, President and Chief Executive Officer45Vice President and other positions for Westech Investment Advisors since 2001Jay L. Cohan, Vice President, Assistant Secretary45Vice President, Assistant Secretary and other positions for Westech Investment Advisors since 1999Martin D. Eng, Vice President, CFO, Treasurer, and Secretary58Vice President, CFO, Treasurer and Secretary for Westech Investment Advisors since 2005.  VP Finance, ORACLE, Inc. 2005. VP and Corporate Treasurer, PeopleSoft, Inc. 2004-2005David R. Wanek, Vice President37Vice President and other positions for Westech Investment Advisors since 2001  The information required by this item concerning the directors of the Fund and Section 16(a) compliance is contained in the Funds Proxy Statement filed in connection with the Annual Meeting of Shareholders to be held on May 12, 20010 (Proxy Statement) under the captions Proposal 1 -- To Elect Six Directors of the Fund and Section 16(a) Beneficial Ownership Reporting Compliance and is incorporated herein by reference.  The Fund has adopted a Code of Ethics that is applicable to all of its officers.  A free copy of the Code of Ethics may be requested by contacting the Chief Financial Officer of the Fund.  ITEM 11. EXECUTIVE COMPENSATION  The information required by this item is contained in the Funds Proxy Statement under the caption Proposal 1 -- To Elect Six Directors of the Fund and is incorporated herein by reference.  ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS  The information required by this item is contained in the Funds Proxy Statement under the caption Annex A -- Beneficial Ownership of Fund Shares and is incorporated herein by reference.  ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE  The information required by this item is contained in the Funds Proxy Statement under the captions: Other Information -- Managers and is incorporated herein by reference.   ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES  The information required by this item is contained in the Funds Proxy Statement under the captions: Other Information  Independent Registered Public Accounting Firm.  PART IV.  ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES  (a) 1. Index to Financial Statements and Financial Statement Schedules  Report of Independent Registered Public Accounting Firm   Statements of Assets and Liabilities as of December 31, 2009 and 2008        Statements of Operations for the years ended December 31, 2009, 2008 and 2007  Statements of Changes in Net Assets for the years ended December 31, 2009, 2008 and 2007  Statements of Cash Flows for the years ended December 31, 2009, 2008, 2007  Notes to Financial Statements   Financial Statement Schedules for the years ended December 31, 2009, 2008 and 2007  No schedules are required because the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the required information is included in the financial statements and the notes thereto.  (a) 2. Exhibits   Exhibit Exhibit Title  3(i) Articles of Incorporation of the Fund filed with the Maryland Secretary of State on August 21, 2006, incorporated by reference to the Funds Registration Statement on Form 10 filed with the Securities and Exchange Commission on October 10, 2006.  3(ii) Amended and Restated Bylaws of the Fund, as amended as of December 31, 2009.  4.1 Form of Purchase Agreement between the Fund and the Company, incorporated by reference to the Funds Registration Statement on Form 10 filed with the Securities and Exchange Commission on October 10, 2006.  10.1 Form of Custodian Agreement between the Fund and Union Bank of California,  incorporated by reference to the Funds Registration Statement on Form 10 filed with the Securities and Exchange Commission on October 10, 2006.  10.3 Form of Management Agreement between the Fund, the Manager and the Adviser to the Manager, incorporated by reference to the Funds Registration Statement on Form 10 filed with the Securities and Exchange Commission on October 10, 2006.  31.1  32.2 Certifications pursuant to The Sarbanes-Oxley Act of 2002  Note: The form of the Funds Intercreditor Agreement was attached to the Funds Registration Statement on Form 10 for information purposes and is not being incorporated by reference herein since it is entered into in the ordinary course of the Funds business.        Signatures  Pursuant to the requirements of Section 13 or 15(d) 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.  VENTURE LENDING & LEASING V, INC. (Registrant)  By: /S/Maurice C. Werdegar By: /S/Martin D. Eng Maurice C. Werdegar Martin D. Eng President and Chief Executive Officer Chief Financial Officer Date:   March 25, 2010 Date:   March 25, 2010  Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.  NAME TITLE DATE  By: /S/ John Glynn Director March 25, 2009 John Glynn  By: /S/ Michael G. McCaffery Director March 25, 2009 Michael G. McCaffery  By: /S/ Roger V. Smith Director March 25, 2009 Roger V. Smith  By: /S/ Ronald W. Swenson Chairman & Director March 25, 2009 Ronald W. Swenson  By: /S/ George Von Gehr Director March 25, 2009 George Von Gehr  By: /S/ Maurice C. Werdegar President, CEO & Director March 25, 2009 Maurice C. Werdegar       REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholder of Venture Lending & Leasing V, Inc. We have audited the accompanying statements of assets and liabilities of Venture Lending & Leasing V, Inc. (the "Fund"), as of December 31, 2009 and 2008, and the related statements of operations, cash flows, and changes in net assets for each of the three years in the period ended December 31, 2009.  These financial statements are the responsibility of the Fund's management.  Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  Our procedures included confirmation of loans owned as of December 31, 2009, by correspondence with the borrowers or by other appropriate auditing procedures where replies from borrowers were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Venture Lending & Leasing V, Inc. as of December 31, 2009 and 2008, and the results of its operations, its cash flows, and changes in its net assets for each of the three years in the period ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 2, the financial statements include investments valued at $142,013,889 (80% of total assets) and $170,594,873 (88% of total assets) as of December 31, 2009 and 2008, respectively, whose fair values have been estimated by management in the absence of readily determinable fair values.  Also discussed in Note 2 is the information used by management in making these estimates. /S/ Deloitte & Touche LLP March 25, 2010 San Francisco, California


VENTURE LENDING & LEASING V, INC. Statements of Assets and Liabilities As of December 31, 2009 and 2008  December 31, 2009December 31, 2008ASSETSLoans, at estimated fair value(Cost of $147,804,586 and $172,349,873)$            141,980,642$            170,594,873Cash and cash equivalents33,064,84621,972,037Other investment (Cost of $768,247 and $0)33,247-Other assets2,201,0512,319,597Total assets177,279,786194,886,507LIABILITIESAccrued management fees1,107,9991,687,500Accounts payable and other accrued liabilities410,227492,892Total liabilities1,518,2262,180,392NET ASSETS$            175,761,560$            192,706,115Analysis of Net Assets:Capital paid in on shares of capital stock$            193,525,000$            193,525,000Return of capital distributions(10,307,488)(3,593,240)Distributable income (accumulated deficit)(7,455,952)2,774,355Net assets (equivalent to $1,757.62 and $1,927.06 per share based on100,000 shares of capital stock outstanding - SeeNote 6)$            175,761,560$            192,706,115    See notes to financial statements.      VENTURE LENDING & LEASING V, INC. Statements of Operations For the Years Ended December 31, 2009, 2008 and 2007  For the Year EndedFor the Year EndedFor the Year EndedDecember 31, 2009December 31, 2008December 31, 2007INVESTMENT INCOME:Interest on loans$             24,298,202$             21,282,105$                5,334,634Other interest and other income99,861446,879613,222Total investment income24,398,06321,728,9845,947,856EXPENSES:Management fees4,798,2906,750,0005,783,733Interest expense237,6771,714,343488,178Banking and professional fees415,8531,479,097368,121Organizational costs--113,493Other operating expenses148,819129,91791,339Total expenses5,600,63910,073,3576,844,864Net investment income (loss)18,797,42411,655,627(897,008)Net realized loss from investments(4,122,957)--Net change in unrealized lossfrom investments(4,803,944)(1,755,000)-Net realized and unrealized loss fromhedging activities-(488,337)(458,320)Net realized and unrealized loss frominvestment and hedging activities(8,926,901)(2,243,337)(458,320)Net increase (decrease) in net assetsresulting from operations$               9,870,523$               9,412,290$              (1,355,328)Net increase (decrease) in net assetsresulting from operations per share$                      98.71$                      94.12$                     (13.55)Weighted average shares outstanding100,000100,000100,000   See notes to financial statements.       VENTURE LENDING & LEASING V, INC. Statement of Changes in Net Assets For the Years Ended December 31, 2009, 2008 and 2007  For the Year EndedFor the Year EndedFor the Year EndedDecember 31, 2009December 31, 2008December 31, 2007Net increase in net assets resulting from operations:Net investment income$             18,797,424$             11,655,627$                (897,008)Net realized loss from  investments(4,122,957)--Net change in unrealized loss from investments(4,803,944)(1,755,000)-Net realized and unrealized loss fromhedging activities-(488,337)(458,320)Net increase (decrease) in net assetsresulting from operations9,870,5239,412,290(1,355,328)Distributions of income to shareholder(20,100,830)(5,282,607)-Return of capital to shareholder(6,714,248)-(3,593,240)Capital share transactions-131,500,00062,000,000Total increase (decrease)(16,944,555)135,629,68357,051,432Net assetsBeginning of year192,706,11557,076,43225,000End of year$           175,761,560$           192,706,115$             57,076,432    See notes to financial statements.         VENTURE LENDING & LEASING V, INC. Statements of Cash Flows For the Years Ended December 31, 2009, 2008 and 2007  For the Year Ended December 31, 2009For the Year Ended December 31, 2008For the Year Ended December 31, 2007CASH FLOWS FROM OPERATING ACTIVITIES:Net increase (decrease) in net assets resulting from operations$             9,870,523$             9,412,290$             (1,355,328)Adjustments to reconcile net increase (decrease) in net assetsresulting from  operations to net cash provided by (used in)operating activities:Net realized loss from investments4,122,957--Net change in unrealized loss from investments4,803,9441,755,000-Net realized and unrealized loss (gain) from hedging activities-(458,320)458,320Amortization of deferred costs related to borrowing facility124,0811,056,81176,357Net decrease (increase) in other assets289,428(1,094,723)(1,224,874)Net increase (decrease) in accounts payable, other accruedliabilities, and accrued management fees(662,165)(369,842)2,550,234Origination of loans(76,924,506)(132,990,081)(101,105,908)Principal payments on loans92,748,51251,908,7709,140,917Acquisition of equity securities(4,816,755)(4,586,178)(3,483,240)Net increase in other investment(768,247)--Net cash provided by (used in) operating activities28,787,772(75,366,273)(94,943,522)CASH FLOWS FROM FINANCING ACTIVITIES:Cash distribution to shareholder(17,400,000)--Deemed distribution to shareholder--(110,000)Contributions from shareholder-131,500,00062,000,000Payment of bank facility fees and costs(294,963)-(1,133,168)Borrowings under debt facility1,000,00030,400,00043,000,000Repayment of debt facility(1,000,000)(73,400,000)-Net cash provided by (used in) financing activities(17,694,963)88,500,000103,756,832Net increase in cash and cash equivalents11,092,80913,133,7278,813,310CASH AND CASH EQUIVALENTS:Beginning of year21,972,0378,838,31025,000End of year$           33,064,846$           21,972,037$               8,838,310SUPPLEMENTAL DISCLOSURES:CASH PAID DURING THE YEAR FOR:Interest$                237,677$             1,910,871$                  291,650NON-CASH ACTIVITIES:Receipt of equity securities as repayment of loan$             4,598,323$                696,429$                             -Distributions of equity securities to shareholder$               9,415,078$             5,282,607$               3,483,240   See notes to financial statements


VENTURE LENDING & LEASING V, INC. Notes to Financial Statements for the Years Ended December 31, 2009 and 2008  1. ORGANIZATION AND OPERATIONS OF THE FUND Venture Lending & Leasing V, Inc., (the Fund), was incorporated in Maryland on August 21, 2006 as a nondiversified closed-end management investment company electing status as a business development company (BDC) under the Investment Company Act of 1940 (Investment Company Act).  One hundred percent of the stock of the Fund is held by Venture Lending & Leasing V, LLC (the Company).  Prior to commencing its operations on February 21, 2007, the Fund had no operations other than the sale to the Company of 100,000 shares of common stock, $0.001 par value for $25,000 in September 2006.  This issuance of stock was a requirement in order to apply for a finance lender's license from the California Commissioner of Corporations. The Fund's investment objective is to achieve a high total return.  The Fund seeks to achieve its investment objective by providing debt financing to portfolio companies.  Historically, the Fund's investing activities have focused primarily on private debt securities.  The Fund generally receives warrants to acquire equity securities in connection with its portfolio investments.  The Fund generally distributes these warrants to its shareholder upon receipt.  The Fund also has guidelines for the percentage of total assets which will be invested in different types of assets.  The portfolio investments of the Fund consist of debt financing to early and late stage venture capital backed technology companies.  2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Accounting The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, money market funds, and demand deposits in banks with maturities of 90 days or less. Interest Income Interest income on loans is recognized using the effective interest method including amounts resulting from the amortization of discounts resulting from the allocation of amounts ascribed to equity securities received as part of the loan transaction.  Additionally, fees received as part of the transaction are added to the loan discount and amortized over the life of the loan. Valuation Procedures The Fund accounts for loans at fair value in accordance with the Valuation Methods below.  All valuations are determined under the direction of Westech Investment Advisors ( Manager or Management), in accordance with this Policy. The Funds loans are valued in connection with the issuance of its periodic financial statements, the issuance or repurchase of the Funds shares at a price equivalent to the current net asset value per share, and at such other times as required by law.  On a quarterly basis, Management will submit to the Board of Directors (Board) a Valuation Report, which details the rationale for the valuation of investments. Valuation Methods At December 31, 2009 and 2008, the financial statements include nonmarketable investments ($142,013,889 and $170,594,873 or approximately 80% and 88% of the total assets) with fair values determined by the Manager in the absence of readily determinable market values.  Because of the inherent uncertainty of these valuations, estimated fair values of such investments may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material.  Below is the information used by the Manager in making these estimates.  Fair value is the price that would be received to sell an asset or paid to lower a liability in an orderly transaction between market participants.  There is no secondary market for the loans, hence management determines fair value based on hypothetical markets.  Venture loans are generally held to maturity and are recorded at estimated fair value.  Management determines whether to adjust the estimated fair value of a loan based on a number of factors including but not limited to the borrowers payment history, available cash and burn rate, revenues, net income or loss, the likelihood that the borrower will be able to secure additional financing in the future, as well as an evaluation of the general interest rate environment.  The amount of any valuation adjustment is determined based upon a credit analysis of the borrower and an analysis of the expected recovery from the borrower, including consideration of factors such as the nature and quality of the Funds security interests in collateral, the estimated value of the Funds collateral, the size of the loan,      and the estimated time that will elapse before the Fund achieves a recovery. Money market funds and debt instruments held as Cash and Cash Equivalents are valued at their most recently posted net asset value, if available, or at amortized cost, provided such amount is not materially different from quoted price. Debt securities held as Short-term Investments are valued based on current bid quotations of recognized dealers or, when market quotations are not readily available, based on appraisals received from a pricing service using a computerized matrix system, or based upon appraisals derived from information concerning the securities or similar securities received from recognized dealers in the securities.  Notwithstanding the foregoing, debt securities with remaining maturities of ninety (90) days or fewer generally are valued by amortizing the difference between their last available fair value and their par value, provided such amount is not materially different from quoted price.  As of December 31, 2009 and 2008, the Fund held no short-term investments. Warrants and Stock Warrants and stock that are received in connection with loan transactions generally will be assigned a fair value at the time of acquisition. These securities are then distributed by the Fund to the Company at the assigned value. Warrants are valued based on a modified Black-Scholes option pricing model which takes into account underlying stock value, expected term, volatility, risk-free interest rate, among other factors.  Warrants are typically distributed immediately upon receipt to the Company.  Nonaccrual Loans The Funds policy is to place a loan on nonaccrual status when the loan stops performing and management deems that it is unlikely that the loan will return to performing status.  When a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed for the quarter in which the loan was placed on nonaccrual status.  Any uncollected interest related to quarters prior to when the loan was placed on nonaccrual status is added to the principal balance, and the aggregate balance of the principal and interest is evaluated in accordance with the policy for valuation of loans in determining managements best estimate of fair value. Interest received by the Fund on nonaccrual loans will be recorded on a cash basis. As of December 31, 2009 and 2008, loans with a cost basis of $11.3 million and $4.8 million and a fair value of $ 5.9 million and $3.1 million, respectively, have been classified as nonaccrual. Commitment Fees Unearned income and commitment fees on loans are recognized using the effective-interest method over the term of the loan.  Commitment fees are carried as liabilities when received for commitments upon which no draws have been made.  When the first draw is made, the fee is treated as unearned income and is recognized as described above.  If a draw is never made, the commitment fee less any applicable legal costs becomes recognized as other income after the commitment expires. Interest Rate Swap The Fund entered into an interest rate swap agreement to hedge its interest rate on its borrowings under its debt facility. Unrealized gains and losses from hedging activities have been separately reported from unrealized gains and losses from investment activities and are included in net realized and unrealized gain (loss) from hedging activities in these financial statements.  Also included in realized and unrealized gain (loss) from hedging activities is the net interest received or paid on the interest rate swap transactions beginning with the quarter ended September 30, 2008 (amounts were previously included in interest expense and were not considered material). As of December 31, 2009, the Fund did not have any swap transactions. Credit Risks  Most of the companies with which the Fund enters into financing transactions have not achieved profitability, experience substantial fluctuations in their operating results or, in some cases, do not have significant operating revenues.  The ability of these companies to meet their obligations to the Fund, therefore, depends to a significant extent on the willingness of a borrower's equity venture capital investors or outside investors to provide additional equity financing, which in turn depends on the borrower's success in meeting its business plan, the market climate for venture capital investments generally and many other factors.  The companies to which the Fund provides financing frequently engage in the development of new products or technologies, and the success of these efforts, or the ability of the companies to successfully manufacture or market products or technologies developed, cannot be assured.  These companies frequently face intense competition, including competition from companies with greater resources, and may face risks of product or technological obsolescence, non-acceptance in the market, or rapidly changing regulatory environments, any of which could adversely affect their prospects.  The success of such companies often depends on the management talents and efforts of one person or small group of persons whose death, disability or resignation would adversely affect the company. Emerging Company Risks  The possibility that the companies in which the Fund invests will not be able to commercialize their technology or product concept presents significant risk to the Fund.  Additionally, although some of such companies may already have a commercially successful product or product line at the time of investment, technology products and services often have a more limited market or life span than products in other industries.  Thus, the ultimate success of these companies may depend on their ability to continually innovate in increasingly competitive markets.  Most of the companies in which the Fund invests will require substantial additional equity financing to satisfy their continuing growth and working capital requirements.  Each round of venture financing is typically      intended to provide a company with enough capital to reach the next stage of development.  The circumstances or market conditions under which such companies will seek additional capital is unpredictable.  It is possible that one or more of such companies will not be able to raise additional financing or may be able to do so only at a price or on terms which are unfavorable.  Challenges in Financial Markets  The ability of the Fund to provide an acceptable return may be adversely affected by economic factors to which the marketplace is subject.  Volatility in the global financial markets reached unprecedented  levels during 2008 and 2009, and these conditions may continue into the near future. The Funds estimates of fair value are based on the best information available to the Manager as of the date of valuation. Restrictions on the availability of financing as well as the current economic environment have resulted in a low volume of purchase and sale transactions, limiting the number of observable input available to Management in making their estimates of fair value. This market turmoil could have a material adverse effect on the Funds business and operations.  In 2009, the Fund put in place a revolving loan facility in an initial amount of up to $30,000,000.  The Fund has the option to request that the lenders providing such facility increase the borrowing availability thereunder to up to $230,000,000, however, the lenders are under no obligation to do so.  Market turmoil could impact the Funds ability to increase the size of the facility, should it seek to do so, thereby decreasing the Funds ability to utilize leverage to maximize the return it achieves on investments. Market conditions could also adversely impact the ability of the Funds borrowers to meet their obligations to the Fund and the value of the Funds direct investments in companies.  Most of the companies in which the Fund invests have not achieved profitability and require substantial equity financing to satisfy their continuing growth and working capital requirements.  The economic downturn could decrease the demand for such borrowers products and technology, thereby impairing such borrowers financial condition and ability to raise additional equity financing from outside investors.  This could result in an increase in borrower defaults under their obligations to the Fund, or a decrease in the value of the Funds direct equity investments.  U.S. and global economic conditions could continue to deteriorate and remain weak for an extended period of time. Additionally, it is possible that market conditions could decrease the demand for venture loans.  Recently Issued Accounting Pronouncements On June 30, 2009, the Financial Accounting Standards Board (the FASB) issued the FASB Accounting Standards Codification (the Codification).  The Codification is effective for interim and annual periods ending after September 15, 2009 and is the source, along with guidance issued by the Securities and Exchange Commission, of authoritative U.S. accounting and reporting standards for nongovernmental entities.  The Codification is a major restructuring of accounting and reporting standards designed to simplify user access to all authoritative accounting principles generally accepted in the United States of America (U.S. GAAP) by providing the authoritative literature in a topically organized structure.  The adoption of this statement did not have a material impact on the Funds financial statements. In March 2008, the FASB issued Accounting Standards Codification (ASC) 815-10 (formerly FAS No. 161), Disclosures about Derivative Instruments and Hedging Activities, an amendment of SFAS 133(ASC 815-10). ASC 815-10 requires entities with derivative instruments to provide enhanced disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts and gains and losses on derivative instruments, and disclosures about credit risk related contingent features in derivative agreements.  The required information is intended to provide financial statement users an enhanced understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedge items affect an entitys financial position, financial performance and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.  This statement was effective for the Fund in the first quarter of fiscal 2009.  The adoption of this statement did not have a material effect on the Funds financial statements. In April 2009, the FASB issued ASC 820-10 (formerly SFAS No. 157-4), Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (ASC 820-10).This ASC provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. This ASC also includes guidance on identifying circumstances that indicate a transaction is not orderly. This ASC emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. This ASC was effective for interim and annual periods ending after June 15, 2009. The adoption of this statement did not have a material effect on the Funds financial statements.  The Fund adopted the Subsequent Events topic of the Codification ([Topic 855/ASC 855]) (formerly FASB Statement of Financial Accounting Standards No. 165, Subsequent Events).  Subsequent events have been evaluated through March 25, 2010, which is the date that these financial statements were available to be issued.  In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (ASU 2010-06), Improving Disclosures about Fair Value Measurements, which, among other things, amends ASC 820 to require entities to separately present purchases, sales, issuances, and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis      rather than on a net basis), and which clarifies existing disclosure requirements provided by ASC 820  regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy.  ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements (which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years).  Management is currently assessing the impact that the adoption of ASU 2010-06 will have on the Funds financial statement disclosures.  Tax Status As long as the Fund qualifies as a Regulated Investment Company (RIC), it will not pay any federal or state corporate income tax on income that is distributed to its shareholder (pass-through status).  Should the Fund not qualify as a RIC or lose its RIC status, it could be taxed as an ordinary corporation on its taxable income for that year (even if that income is distributed to its shareholder), and all distributions out of its earnings and profits will be taxable to its shareholder as ordinary income.  As of December 31, 2009, the Fund had no uncertain tax positions. The Fund's tax years open to examination by major jurisdictions are 2006 and forward.  3. SUMMARY OF INVESTMENTS Loans generally are made to borrowers pursuant to commitments whereby the Fund agrees to finance assets and provide working capital up to a specified amount for the term of the commitments, upon the terms and subject to the conditions specified by such commitment.  As of December 31, 2009, the Fund's investments in loans are primarily to companies based within the United States and are diversified among borrowers in the industries shown below.  The percentage of net assets that each industry group represents is shown with the industry totals below.  (The sum of the percentages does not equal 100 percent because the percentages are based on net assets as opposed to total loans). ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability was exchanged in an orderly transaction; it was not a forced liquidation or distressed sale. Loan balances are summarized by borrower.  Typically a borrower's balance will be composed of several loans drawn under a commitment made by the Fund with the interest rate on each loan fixed at the time each loan is funded.  Each loan drawn under a commitment has a different maturity date and amount.  For the year ended December 31, 2009 and 2008 the weighted average interest rate on gross performing loans was 16.42% and 15.39%, respectively.  Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate based on many factors including volatility, early payoffs, and recovery of interest from non-performing assets.        Loans as of December 31, 2009 are in non-affiliates and consist of the following (industry classifications are unaudited): Percentage ofEstimated FairPar ValueFinalBorrowerNet AssetsValue 12/31/0912/31/09Maturity DateBiotechnologyBioabsorbable Therapeutics, Inc.$172,963$912,963*Microchip Biotechnologies, Inc.3,749,7283,749,72811/1/12Pathway Genomics, Corp.2,681,8352,681,83512/1/12SanBio, Inc.470,563470,5636/1/10Trellis Bioscience, Inc.173,790173,79012/1/10Subtotal:4.1%$7,248,879$7,988,879Carrier NetworkingKodiak Networks, Inc.$196,266$196,2664/1/10Opvista, Inc.842,8381,682,838*TimeData, Corp.211,465211,4653/1/12Wavebender, Inc.103,372103,3721/1/11Subtotal:0.8%$1,353,941$2,193,941Computers & StorageCloudshield, Inc.$1,343,874$1,343,8744/1/11D-Wave Systems, Inc.940,132940,13212/1/12Gear Six, Inc.291,222291,22212/1/10NComputing, Inc.445,277445,2779/1/10Vidyo, Inc.809,898809,89810/1/10Subtotal:2.2%$3,830,403$3,830,403Enterprise NetworkingEnvivio, Inc.$1,451,594$1,451,5941/1/11PacketMotion, Inc.798,291798,2913/1/11Vyatta, Inc.999,379999,3792/1/11Subtotal:1.8%$3,249,264$3,249,264InternetAggregate Knowledge, Inc.$529,127$529,12712/1/11Arcadia Entertainment, Inc.79,505229,505*Blekko, Inc.307,107307,10712/1/11BuzzLogic, Inc.486,303486,3038/1/11cc:Betty, Inc.301,733301,7338/1/12Collarity, Inc.535,618715,618*Cuil, Inc.3,563,0053,563,00512/1/12Delve Networks, Inc.320,605320,6057/1/11Donnerwood Media, Inc.483,185483,1855/1/11eduFire, Inc.192,863292,8632/1/12       EForce Media, Inc.762,4321,512,432*Fwix, Inc.22,18122,1811/1/13Genius.com , Inc.673,332673,33212/1/12iGroup Network, Inc.372,082372,0824/1/12Inigral, Inc.92,88392,8838/1/11Insider Guides, Inc.2,698,7512,698,7514/1/12Instructables, Inc.170,623170,6234/1/12Loomia, Inc.351,522351,52212/1/11MMJK, Inc.1,431,3151,431,31512/1/12Multiply, Inc.570,185570,1859/1/11PerformLine, Inc.237,945237,94512/1/11Philotic,  Inc.204,635204,63511/1/12Plastic Jungle, Inc.1,289,8571,289,8579/1/12Quantcast, Corp.4,169,0984,169,0981/1/13Radar Networks, Inc.297,134297,13410/1/10RPM Communications, Inc.62,632222,632*Semantic Sugar, Inc.270,261270,2617/1/12SugarSync, Inc.288,289288,2895/1/11TheFind, Inc.760,747760,74712/1/11ThisNext, Inc.375,549375,5495/1/11Topsy Labs, Inc.1,490,0191,490,0191/1/13UStream.TV, Inc.1,604,2591,604,2595/1/12Videojax, Inc.51,331311,331*Worktopia, Inc.573,291573,29111/1/11Youku.com, Inc.2,795,8912,795,8911/1/12Subtotal:16.2%$28,415,295$30,015,295Medical DevicesAccuri Cytometers, Inc.$328,882$328,8829/1/10AirXpanders, Inc.493,179493,1799/1/11Ample Medical, Inc.18,73432,734*Biomerix, Corp.924,209924,20912/1/11Cellscape, Corp.183,091183,0918/1/12ConforMIS, Inc.7,575,6467,575,6466/1/12CV Ingenuity, Corp.202,669202,6698/1/12CyberHeart, Inc.975,031975,0318/1/11Evera Medical, Inc.364,779564,7799/1/11iBalance Medical, Inc.793,637793,6379/1/10Intellidx, Inc.1,063,1141,163,1144/1/11Nellix, Inc.4,069,9404,069,94012/1/11PEAK Surgical, Inc.2,206,1002,206,1007/1/12PinPointe U.S.A., Inc.1,167,0491,167,0497/1/12Softscope Medical Technologies, Inc.262,893262,8936/1/11Suneva Medical, Inc.878,666878,66611/1/12Varix Medical, Inc.192,363192,3639/1/11Subtotal:12.3%$21,699,982$22,013,982       Other HealthcareAdvanced ICU Care, Inc.$109,827$109,82710/1/10NanoSphere, Inc.1,890,2881,890,2888/1/10Skylight Healthcare Systems, Inc.2,415,7662,415,76610/1/11Subtotal:2.5%$4,415,881$4,415,881Other TechnologyAstro Gaming, Inc.$897,216$897,2167/1/12Daylight Solutions, Inc.1,353,2081,353,20812/1/12EcoSMART Technologies, Inc.1,731,6871,731,68710/1/12EoPlex Tehcnologies,  Inc.527,634527,6346/1/11Integrity Block, Inc.72,91392,913*Global MailExpress, Inc.1,254,6241,254,6244/1/13Oryxe Energy International, Inc.391,642521,642*Sezmi, Corp.1,793,6461,793,6462/1/12Solaria, Corp.2,463,2652,463,2653/1/11Soliant Energy, Inc.610,442610,4427/1/12Sub-One Technology, Inc.424,104424,10412/1/11Subtotal:6.6%$11,520,381$11,670,381SecurityDragnet Solutions, Inc.$574,091$574,0916/1/11Guardian Analytics, Inc.619,189619,1898/1/11Nevis Networks, Inc.123,762303,762*TrustedID, Inc.645,609645,6096/1/11Subtotal:1.1%$1,962,651$2,142,651Semiconductors & EquipmentAlereon, Inc.$528,072$528,0727/1/10Azuro, Inc.1,418,0871,418,0879/1/11Cswitch036,944*Discera, Inc.198,132198,1321/1/11Insilica, Inc.502,965502,96511/1/10Integrated Materials, Inc.117,533117,5333/1/10Intelleflex, Corp.811,691811,6914/1/11InvenSense, Inc.282,415282,4151/1/11Newport Media, Inc.3,186,4483,186,4485/1/12Revera, Inc.486,037486,0372/1/11SiPort, Inc.1,889,7101,889,7107/1/12Teknovus, Inc.1,448,8941,448,8949/1/11Tela Innovations, Inc.459,437459,4377/1/11Zenverge, Inc.588,121588,1217/1/11Subtotal:6.8%$11,917,542$11,954,486       SoftwareAnchor Intelligence, Inc.$648,108$648,10812/1/11Athena Design Systems, Inc.20,84953,849*Atlantis Computing, Inc.191,426191,4269/1/12Berkeley Design Automation, Inc.421,775421,7754/1/11BlueRoads, Corp.101,989811,989*Cloudmark, Inc.2,581,9602,581,96012/1/11Cloudshare, Inc.2,210,1222,210,1222/1/12Demandbase, Inc.293,081293,08111/1/10Emergent Game Technologies, Inc.2,515,7702,515,77012/1/12Future Point Systems, Inc.181,817181,8174/1/12Gazillion, Inc.1,312,7001,312,7003/1/11Integrien, Corp.394,734394,7347/1/10JasperSoft, Inc.862,849862,8495/1/11Kabira Technologies, Inc.1,069,8921,069,89212/1/10Kareo, Inc.101,619101,61912/1/10Knowledge Adventure, Inc.2,462,6902,462,6905/1/12Market6, Inc.301,142301,1427/1/10MarketFish, Inc.225,979225,9799/1/12Medsphere Systems, Corp.1,490,7891,490,7895/1/12Orb Networks, Inc.158,962158,9628/1/10Palantir Technologies, Inc.5,509,0855,509,08511/1/12RingCube Technologies, Inc.765,749765,74910/1/11RivalWatch, Inc.205,850205,8509/1/12Skydeck, Inc.401,579401,5792/1/12SOA Software, Inc.1,863,6531,863,6534/1/11Universal Ad, Inc.154,304304,304*Verix, Inc.1,221,3141,221,3148/1/11Viewdle, Inc.380,423380,42312/1/11Widevine Technologies, Inc.1,777,4751,777,4754/1/12Xtime, Inc.499,574499,5747/1/11Zoove, Corp.104,936104,9367/1/11Subtotal:17.3%$30,432,195$31,325,195Technology ServicesOpSource, Inc.$1,935,343$1,935,34312/1/11SG Micro, Inc.380,841380,8414/1/11Subtotal:1.3%$2,316,184$2,316,184WirelessCellfire, Inc.$1,041,066$1,041,0664/1/11DeFi Mobile, Ltd.337,344337,344*Dilithium Networks, Inc.1,530,9071,530,9076/1/11Emotive Communications, Inc.143,630393,630*Hands-On Mobile, Inc.638,217638,2175/1/10July Systems, Inc.523,480523,480*       Nextivity, Inc.1,376,0362,066,036*Ortiva Wireless, Inc.1,018,0361,018,0365/1/11Quickoffice, Inc.1,634,6201,634,62010/1/12SandLinks, Inc.125,324255,324*Send Me, Inc.1,529,0531,529,0534/1/12Silent Communication Ltd.602,305602,3059/1/12SmartDrive Systems, Inc.240,106240,1066/1/10Venturi Wireless, Inc.892,694892,6941/1/12Vivotech, Inc.1,985,2261,985,2268/1/11Subtotal:7.7%$13,618,044$14,688,044Total: (Cost $147,804,586)81.0%$141,980,642$147,804,586 *As of December 31, 2009, loans with a cost basis of $11.3 million and fair value of $5.9 million have been classified as nonaccrual.  These loans have been accelerated from an original maturity and are due in their entirety.  During the period for which these loans have been on nonaccrual status, no interest income has been recognized.  Loans as of December 31, 2008 are in non-affiliates and consist of the following (industry classifications are unaudited): Percentage ofEstimated FairPar ValueFinalBorrowerNet AssetsValue 12/31/0812/31/08Maturity DateBiotechnologyAcumen Pharmaceuticals, Inc.$416,309$416,3098/1/10Bioabsorbable Therapeutics, Inc.988,657988,657*LightSpeed Genomics, Inc.267,043267,0436/1/11SanBio, Inc.1,859,3761,859,37610/1/10Trellis Bioscience, Inc.560,046560,04612/1/10Subtotal:2.1%$4,091,431$4,091,431Carrier NetworkingAsoka, Inc.$546,096$546,0963/1/10Demi Energy, Inc.121,702121,7024/1/11Kodiak Networks, Inc.711,785711,7854/1/10Opvista, Inc.1,774,0181,774,0185/1/10Wavebender, Inc.345,666345,6669/1/10Subtotal:1.8%$3,499,267$3,499,267Computers & StorageCloudshield, Inc.$2,341,019$2,341,0194/1/11D-Wave Systems, Inc.231,049231,0497/1/10Gear Six, Inc.586,852586,8527/1/10NComputing, Inc.906,331906,3319/1/10Vidyo, Inc.1,655,0421,655,04210/1/10Subtotal:3.0%$5,720,293$5,720,293Enterprise Networking       Envivio, Inc.$2,809,673$2,809,6731/1/11GridNetworks, Inc.964,148964,1486/1/11PacketMotion, Inc.1,292,2881,292,2883/1/11Vyatta, Inc.1,214,3151,214,3152/1/11Subtotal:3.3%$6,280,424$6,280,424InternetAggregate Knowledge, Inc.$772,387$772,38712/1/11Arcadia Entertainment Inc.309,508309,5088/1/11Authentic Response, Inc.448,609448,60912/1/11Blekko, Inc.887,555887,5558/1/11BuzzLogic Inc.911,221911,2215/1/11Collarity, Inc.4,717,5194,717,51912/1/12Cuil, Inc.480,435480,4357/1/11Delve Networks, Inc.583,387583,3875/1/11Donnerwood Media, Inc.780,4361,530,436*EForce Media, Inc.611,751611,7515/1/10Flock, Inc.230,417230,4178/1/10Genius.com Incorporated124,838124,8388/1/10iGroup Network, Inc.141,574141,5748/1/11Inigral, Inc.2,100,6712,100,67111/1/11Insider Guides, Inc.1,443,0741,443,0747/1/11Like.com478,763478,76312/1/11Loomia, Inc.863,958863,9589/1/11Multiply, Inc.511,342511,3429/1/11NetBase Solutions, Inc.163,269163,2697/1/11Philotic,  Inc.397,400397,40012/1/10ProQuo, Inc.1,604,5131,604,51312/1/11Quantcast Corporation2,272,4732,272,47312/1/11Radar Networks, Inc.604,757604,75710/1/10RPM Communications, Inc.579,620579,62012/1/10Sharpcast, Inc.482,272482,27212/1/10TheFind, Inc.274,759274,7598/1/10ThisNext, Inc.1,140,5601,140,56012/1/11Ustream.TV, Inc.696,777696,7775/1/11Videojax, Inc.167,964167,96410/1/10Youku.com, Inc.4,065,3284,065,32812/1/11Subtotal:15.0%$28,847,137$29,597,137Medical DevicesAccuri Cytometers, Inc.$719,964$719,9649/1/10AirXpanders, Inc.568,885568,8859/1/11Ample Medical, Inc.182,100182,10012/1/10Biomerix Corporation1,440,3091,440,30912/1/11Broncus Technologies, Inc.4,776,0064,776,0068/1/11CyberHeart, Inc.1,446,1251,446,1258/1/11       Emphasys Medical, Inc.5,798,6385,798,6381/1/11EnteroMedics, Inc.4,741,4814,741,48112/1/11Evera Medical, Inc.652,304652,3043/1/11HandyLab, Inc.1,891,3771,891,37712/1/10iBalance Medical, Inc.1,130,2351,130,2359/1/10Intellidx, Inc.1,821,1661,821,1664/1/11Nellix, Inc.6,178,6196,178,61912/1/11NeoGuide Systems, Inc.1,668,8731,668,8737/1/10Percutaneous Systems, Inc.336,520336,5209/1/09Softscope Medical Technologies, Inc.441,834441,8346/1/11Varix Medical Corporation272,577272,5774/1/11VasoNova, Inc.296,167296,1676/1/11Subtotal:17.8%$34,363,180$34,363,180Other HealthcareAdvanced ICU Care, Inc.$257,271$257,27110/1/10NanoSphere, Inc.4,040,5654,040,5658/1/10Skylight Healthcare Systems, Inc.3,920,0003,920,00010/1/11Subtotal:4.3%$8,217,836$8,217,836Other TechnologyEoPlex Tehcnologies,  Inc.$874,681$874,6816/1/11Integrity Block, Inc.123,197123,19712/1/11Oryxe Energy International, Inc.868,850868,8505/1/10Sezmi Corporation2,447,6722,447,6725/1/11Solaria Corporation4,319,9354,319,9353/1/11Sub-One Technology, Inc.622,595622,59512/1/11Triformix, Inc.66,75866,7583/1/09Subtotal:4.8%$9,323,688$9,323,688SecurityDragnet Solutions, Inc.$898,618$898,6186/1/11Guardian Analytics Inc.999,191999,1918/1/11Nevis Networks Inc.177,023357,023*TrustedID, Inc.935,522935,5226/1/11Subtotal:1.6%$3,010,354$3,190,354Semiconductors & EquipmentAlereon, Inc.$1,230,053$1,230,0537/1/10Azuro, Inc.1,917,3301,917,3309/1/11Bitwave Semiconductor, Inc.463,960463,96012/1/09Cswitch Corporation603,107603,1076/1/10Discera, Inc.408,041408,0411/1/11Insilica, Inc.1,239,0941,239,0947/1/10Intergrated Materials, Inc.949,757949,7573/1/10       Intelleflex Corporation1,368,9501,368,9504/1/11InvenSense, Inc.622,027622,0271/1/11LV Sensors, Inc.2,525,4552,525,4556/1/11NetXen, Inc.434,524434,52410/1/10Revera, Inc.824,875824,8752/1/11Siport, Inc.1,419,6271,419,6277/1/11Teknovus, Inc.1,877,8461,877,8469/1/11Tela Innovations, Inc.802,908802,9087/1/11Zenverge, Inc.372,747372,7473/1/11Subtotal:8.9%$17,060,301$17,060,301SoftwareAnchor Intelligence, Inc.$957,600$957,60012/1/11Athena Design Systems, Inc.118,491118,491*Berkeley Design Automation, Inc.1,195,1121,195,1124/1/11BlueRoads Corporation287,125862,125*Canopy Financial, Inc.1,576,9891,576,9897/1/11Cloudmark, Inc.2,034,7182,034,71812/1/11Coghead, Inc.729,763979,763*Demandbase, Inc.566,045566,04511/1/10Enkata Technologies, Inc.140,433140,4334/1/10Evincii, Inc.181,982181,98210/1/10Future Point Systems, Inc.434,897434,8974/1/11Integrien, Inc.628,337628,3377/1/10IT Structures, Ltd.1,590,9891,590,9892/1/12JasperSoft, Inc.1,369,6601,369,6605/1/11Kabira Technologies, Inc.1,993,8451,993,84512/1/10Kareo, Inc.164,801164,8017/1/10Market6, Inc.784,091784,0917/1/10NR2B Research, Inc.2,210,7422,210,7423/1/11Orb Networks, Inc.269,315269,3158/1/10RingCube Technologies, Inc.1,118,3491,118,3494/1/11SOA Software, Inc.2,957,2452,957,2454/1/11Universal Ad, Inc.423,708423,70810/1/10Verix, Inc.1,857,0161,857,0165/1/11Visible World, Inc.658,263658,26312/1/10Xtime, Inc.834,845834,8457/1/11Zoove Corporation156,071156,0717/1/11Subtotal:13.1%$25,240,432$26,065,432Technology ServicesOpSource, Inc.$3,192,296$3,192,29612/1/11SG Micro, Inc.645,515645,5154/1/11Subtotal:2.0%$3,837,811$3,837,811       WirelessCellfire, Inc.$2,140,000$2,140,0004/1/11DeFi Mobile, Ltd,308,247308,2472/1/11Dilithium Networks, Inc.2,357,3762,357,3766/1/11Emotive Communications, Inc.604,789604,7891/1/11Hands-On Mobile, Inc.1,893,7881,893,7885/1/10Heysan, Inc.385,110385,1109/1/11July Systems, Inc.484,935484,9355/1/10Nextivity, Inc.2,344,3002,344,3005/1/11Ortiva Wireless, Inc.1,587,3221,587,3225/1/11Quickoffice, Inc.335,390335,3907/1/10SandLinks, Inc.626,890626,8906/1/10ScanR, Inc.1,359,0141,359,0147/1/11Send Me, Inc.2,276,1352,276,13512/1/11SmartDrive Systems, Inc.627,710627,7106/1/10Venturi Wireless, Inc.929,810929,81011/1/10Vivotech, Inc.2,841,9032,841,9038/1/11Subtotal:11.0%$21,102,719$21,102,719Total: (Cost of$172,349,873)88.5%$170,594,873$172,349,873  *As of December 31, 2008, loans with a cost basis of $4.8 million and fair value of $3.1 million have been classified as nonaccrual. During the period for which these loans have been on nonaccrual status, no interest income has been recognized. The Fund provides asset-based financing primarily to start-up and emerging growth venture-capital-backed companies.  These loans are generally secured by assets of the borrowers.  As a result, the Fund is subject to general credit risk associated with such companies.  At December 31, 2009 and 2008, the Fund had unexpired unfunded commitments to borrowers of $62.4 million and $29.0 million, respectively.  Valuation Hierarchy  Under ASC 820-10, the Fund categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Funds valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:  Level 1Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.Level 2Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.Level 3Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.  The Funds cash equivalents were valued at the net asset value of the money market fund. As a result, these measurements are classified as Level 1. The Fund uses estimated exit values when determining the value of its investments.  Because loan transactions are individually negotiated and unique, and there is no market in which these assets trade, the inputs for these assets, which are discussed in the Valuation Methods listed above, are classified as Level 3.          The following table presents the balances of assets measured at fair value on a recurring basis:  As of December 31, 2009Level 1Level 3TotalASSETS:Loans to borrowers$                      -$    141,980,642$    141,980,642Other investment-33,24733,247Cash equivalents33,064,846-33,064,846Total assets$     33,064,846$    142,013,889$    175,078,735As of December 31, 2008Level 1Level 3TotalASSETS:Loans to borrowers$                      -$    170,594,873$    170,594,873Cash equivalents21,972,037-21,972,037Total assets$     21,972,037$    170,594,873$    192,566,910  The following table provides a summary of changes in Level 3 assets measured at fair value on a recurring basis:  For the Year EndedDecember 31, 2009Loans to borrowersOther investmentBeginning balance$ 170,594,873$                    -Acquisitions and originations76,924,506875,000Principal reductions(97,346,836)(106,753)Net change in unrealized loss frominvestments(4,068,944)(735,000)Net realized loss from investments(4,122,957)-Ending balance$ 141,980,642$          33,247  4. LONG-TERM DEBT FACILITY On February 20, 2009, the Fund entered into agreements with Union Bank, N.A. that established a secured revolving loan facility in an initial amount of up to $30,000,000.  The Fund has the option to request that lenders providing such facility increase the borrowing availability thereunder to no more than $230,000,000 in the aggregate, as commitments may be obtained, however, the lenders are under no obligation to do so.  Additional fees would be required to be paid in order to upsize the facility. Loans under the facility may be, at the option of the Fund, either Reference Rate loans or LIBOR loans. The interest rate on this facility is LIBOR plus 2.50 percent or Reference Rate plus 0.75 percent. The facility will terminate on February 18, 2011, but can be accelerated under an event of default such as failure by the Fund to make timely interest or principal payments.  On June 11, 2009, the Fund borrowed $1.0 million and on September 11, 2009, the Fund fully paid its borrowing under the debt facility. The balance of the Funds outstanding debt as of December 31, 2009 is zero. Borrowings under this facility are collateralized by receivables under loans advanced by the Fund with assignment to the financial institution, plus other assets of the Fund.  The amortization schedule for each borrowing under the facility is expected to correspond to the amortization of the loans supporting each borrowing.  The Fund pays a commitment fee of 0.40 percent (annual fee paid quarterly) based on the total commitment related to the facility. This fee reduces to 0.25 percent when the facility is more than fifty percent utilized.      Bank fees of $155,000 were incurred in connection with initially procuring the facility.  Legal costs of $138,721 were incurred in negotiating the facility. Both the bank fees and the legal costs have been capitalized and are being amortized on a straight line basis over the expected life of the facility (February 2011). The facility is revolving and as such does not have a specified repayment schedule, though advances are secured by the assets of the Fund and thus repayments will be required as assets decline.  The facility contains various covenants including financial covenants related to: (i) Debt to Net Worth Ratio, (ii) Minimum Debt Service Coverage Ratio, (iii) Interest Coverage Ratio, (iv) Asset Coverage, (v) Asset Coverage Under Investment Company Act, (vi) Maximum Loan Loss Reserves, and (vii) Unfunded Commitment Ratio. There are also various restrictive covenants, including limitations on (i) the incurrence of liens, (ii) consolidations, mergers and asset sales, and (iii) capital expenditures. As of December 31, 2009, the Fund was in compliance with these covenants.  5. EARNINGS PER SHARE Basic earnings per share are computed by dividing net income (loss) by the weighted average common shares outstanding.  Diluted earnings (loss) per share are computed by dividing net income (loss) by the weighted average common shares outstanding, including the dilutive effects of potential common shares (e.g., stock options).  The Fund has no instruments that would be potential common shares; thus, reported basic and diluted earnings (loss) per share are the same. 6. CAPITAL STOCK As of December 31, 2009 and December 31, 2008, there were 10,000,000 shares of $0.001 par value common stock authorized, and 100,000 shares issued and outstanding.  Total committed capital of the Company is $270.0 million.  Total contributed capital to the Company through December 31, 2009 and December 31, 2008 was $202.5 million, respectively, of which $193.5 million was contributed to the Fund. For the years ended December 31, 2009, 2008 and 2007, distributions of $7.6 million, $5.3 million, and $3.6 million , respectively were made to the Funds shareholder, and were comprised of the following: 200920082007Cash distributions$17,400,000$                 -$             -Deemed distributions--110,000Distributions of equity securities9,415,0785,282,6073,483,240Total distributions to shareholder$26,815,078$  5,282,607$3,593,240  At December 31, 2009, 2008 and 2007, distributable earnings include unrealized depreciation on loans and hedging activities of $(5,823,944), $(1,755,000), and $(458,320), respectively. 7. MANAGEMENT AND RELATED PARTIES Management As compensation for its services to the Fund, the Manager receives a management fee (Management Fee) computed and paid at the end of each quarter at an annual rate of 2.5 percent of the Companys committed equity capital (regardless of when or if the capital is called) as of the last day of each fiscal quarter in a two-year period commencing with the first capital closing, which took place on February 21, 2007.  Following this two-year period, Management Fees are calculated and paid at the end of each quarter at an annual rate of 2.5 percent of the Funds total assets (including amounts derived from borrowed funds) as of the last day of each quarter.  Management feesof $4.8 million , $6.8 million and $5.8 million were recognized as expenses for the year ended December 31, 2009, 2008 and 2007, respectively.  Related Parties Certain officers and directors of the Company also serve as officers and directors of Westech Investment Advisors (Manager).  The Articles of Incorporation of the Fund provide for indemnification of directors, officers, employees, and agents (including the Manager) of the Fund to the full extent permitted by applicable state law and the 1940 Act, including the advance of expenses and reasonable counsel fees.  The Articles of Incorporation of the Fund also contain a provision eliminating personal liability of a Fund director or officer to the Fund or its shareholder for monetary damages for certain breaches of their duty of care. For this reason, the Fund has acquired the Directors & Officers policy.        Transactions with Venture Lending & Leasing IV, Inc (Fund IV)   The Manager also serves as investment manager for Fund IV.  The Funds Board of Directors determined that so long as Fund IV has capital available to invest in loan transactions with final maturities earlier than December 31, 2012 (the date on which Fund IV will be dissolved), the Fund will invest in each portfolio company in which Fund IV invests (Investments).  The amount of each Investment was allocated 50% to the Fund and 50% to Fund IV so long as Fund IV has capital available to invest.  Since May 2008, Fund IV no longer is permitted to enter into new commitments to borrowers; however, Fund IV will be permitted to fund existing commitments.  While investing the Funds capital in the same companies in which Fund IV is also investing could provide the Fund with greater diversification and access to larger transactions, it could also result in a slower pace of investment than would be the case if the Fund were investing in companies by itself.  Although the Fund  and Fund IV intend to invest in the same companies in the manner described above, the Fund may, at any time, with the approval of its Board of Directors, (i) discontinue investing with Fund IV with respect to any or all future investments or (ii) choose to invest in different proportions with Fund IV than described above.  In addition, the Fund has no control over Fund IV, which is not required to invest with the Fund in any particular proportion or at all, and may choose to discontinue investing with the Fund or to invest in different proportions than described in the preceding paragraph.  In the event that Fund IV and the Fund invest other than in the pro rata manner described above (which can occur only with each Board of Directors approval), the Manager may have a conflict of interest in determining which of Fund IV and the Fund will invest in a particular company and, if both, in what proportions.  The Fund may also engage in loan transactions with, or make equity investments in, companies that are preexisting borrowers from Fund IV or its predecessor funds.  To the extent that clients, other than Fund IV, advised by the Manager (but in which the Manager has no proprietary interest) invest in opportunities available to the Fund, the Manager will allocate such opportunities among the Fund and such other clients in a manner deemed fair and equitable considering all of the circumstances in accordance with procedures approved by the Funds Board of Directors (including a majority of the disinterested directors).  Intercreditor Agreements. In each transaction in which both the Fund and Fund IV invest, it is expected that the Fund and Fund IV will enter into an intercreditor agreement pursuant to which the Fund and Fund IV will cooperate in pursuing their remedies following a default by the common borrower.  Generally, under such intercreditor agreements, each party would agree that its security interest would be treated in parity with the security interest of the other party, regardless of which security interest would have priority under applicable law.  Accordingly, proceeds realized from the sale of any collateral or the exercise of any other creditors rights will be allocated between the Fund and Fund IV pro rata in accordance with the amounts of their respective investments.  An exception to the foregoing arrangement would occur in situations where, for example, one of the lenders financed specific items of equipment collateral; in that case, usually the lender who financed the specific assets will have a senior lien on that asset, and the other lender will have a junior priority lien (even though they may ratably share liens of equal priority on other assets of the common borrower).  As a result of such intercreditor agreements, the Fund may have less flexibility in pursuing its remedies following a default than it would have had there been no intercreditor agreement, and the Fund may realize fewer proceeds.  In addition, because the Fund and Fund IV invest at the same time in the same borrower, such borrower would be required to service two loans rather than one.  Any additional administrative costs or burdens resulting there from may make the Fund a less attractive lender, and may make it more difficult for the Fund to acquire such loans. 8. OTHER INVESTMENT In May 2009, the Fund repossessed the collateral from a borrower who was having financial difficulties.  At the time of the repossession, the loan from the borrower had a cost basis of $2,433,298 and a book value of $1,213,298.  The repossessed assets were immediately contributed to a newly formed LLC (Sensors Licensing, LLC, SL LLC) in conjunction with a licensing agreement between SL LLC and an unaffiliated third party.  The Fund and Fund IV. have a 50% ownership interest in SL LLC.  At the time the assets were contributed to SL LLC they were valued at $1,750,000 based on expectations of cash flows from the licensing arrangement.  The Fund took a realized loss on the loan in the amount of $1,558,298 at the time the transaction was consummated.  The realized loss is the difference between the Funds portion of the value of the assets repossessed and the book value of $2,433,298.  SL LLC collected $200,000 and distributed $100,000 to the Fund.  The unaffiliated third party cancelled the licensing agreement during the three months ended June 30, 2009. SL LLC continues to distribute proceeds from the sale of equipment as cash becomes available.  Because the collateral is highly customized and no current buyer or lessee has been identified, the Fund had taken a $735,000 fair market reduction during the three months ended June 30, 2009, which represents the difference between the previously determined fair value, the collections to date, and the expected liquidation value of the assets should no buyer or lessee be found.The Funds portion of the expected liquidation value of the asset as of December 31, 2009 is $33,247.       9.          FINANCIAL HIGHLIGHTS  Accounting principles generally accepted in the United States of America require disclosure of financial highlights of the Fund for the periods presented, the year ended December 31, 2009, 2008, and 2007.  The total rate of return is defined as the return based on the change in value during the period of a theoretical investment made at the beginning of the period.  The total rate of return assumes a constant rate of return for the Fund during the period reported and weights each cash flow by the amount of time held in the Fund.  This required methodology differs from an internal rate of return.  The Fund did not commence operations until February 21, 2007. The ratios of expenses and net investment income to average net assets, calculated below are computed based upon the aggregate weighted average net assets of the Fund for the periods presented.  Net investment income is inclusive of all investment income net of expenses, and excludes net realized or unrealized gains and losses. Beginning and ending net asset values per share are based on the beginning and ending number of shares outstanding.  Other per share information is calculated based upon the aggregate weighted average net assets of the Fund for the period presented.  The following per share data and ratios have been derived from the information provided in the financial statements: For the Year Ended December 31, 2009For the Year Ended December 31, 2008For the Year Ended December 31, 2007Total return5.62%7.63%(5.15%)Per share amounts:Net asset value, beginning of period$1,927.06$570.76$0.25Net investment income (loss)187.97116.56(8.97)Net change in unrealized and realized loss frominvestment and hedging activities(89.26)(22.43)(4.59)Net increase (decrease) in net assets from operations98.7194.13(13.56)Capital contributions-1,315.00620.00Return of capital to shareholder(67.14)--Income distributions to shareholder(201.01)(52.83)(35.93)Net asset value, end of period$1,757.62$1,927.06$570.76Net assets, end of period$175,761,560$192,706,115$57,076,432Ratios to average net assets:Expenses3.06%8.18%15.58%Net investment income (loss)10.26%9.47%(2.04%)          Exhibit 31.1 CERTIFICATION PURSUANT TO 
18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002  I, Martin D. Eng, certify that:  1.  I have reviewed this annual report on Form 10-K of Venture Lending & Leasing V, Inc.;  2.  Based on my knowledge, this 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 report;  3.  Based on my knowledge, the financial statements, and other financial information included in this 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 report;  4.  The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 132-15(f) and 15d-15(f)) for the registrant and have:  a)  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;  c)  evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  d)  disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and  5.  The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants Board of Directors (or persons performing the equivalent functions):  a)  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and  b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.  Date: March 25, 2010  /S/ Martin D. Eng Martin D. Eng Chief Financial Officer      Exhibit 31.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002  I, Maurice C. Werdegar, certify that:  1.  I have reviewed this annual report on Form 10-K of Venture Lending & Leasing V, Inc.;  2.  Based on my knowledge, this 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 report;  3.  Based on my knowledge, the financial statements, and other financial information included in this 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 report;  4.  The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 132-15(f) and 15d-15(f)) for the registrant and have:  a)  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;  c)  evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  d)  disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and  5.  The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants Board of Directors (or persons performing the equivalent functions):  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.  Date: March 25, 2010  /S/ Maurice C. Werdegar Maurice C. Werdegar President and Chief Executive Officer      Exhibit 32.1  CERTIFICATION PURSUANT TO 
18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Venture Lending & Leasing V, Inc. (the "Fund") on Form 10-K for the year ending December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Maurice C. Werdegar, President and Chief Executive Officer of the Fund, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Fund.  /S/ Maurice C. Werdegar Maurice C. Werdegar
President and Chief Executive Officer
March 25, 2010        Exhibit 32.2  CERTIFICATION PURSUANT TO 
18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Venture Lending & Leasing V, Inc. (the "Fund") on Form 10-K for the year ending December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Martin D. Eng, Chief Financial Officer of the Fund, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Fund.  /S/ Martin D. Eng Martin D. Eng Chief Financial Officer
March 25, 2010