FORM 10-Q


                                        SECURITIES AND EXCHANGE COMMISSION

                                              Washington, D.C. 20549


          QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


(Mark One)
{ X }  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended  March 31, 1997

{   }  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to


For Quarter Ended   March 31, 1997           Commission file number  33-32125

                                Redwood Equipment Leasing Income Fund L.P.
                          (Exact Name of Registrant as Specified in its Charter)


             Delaware                                           52-1650971
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                            Identification Number)



225 East Redwood Street, Baltimore, Maryland                        21202
(Address of Principal Executive Offices)                         (Zip Code)

Registrant's Telephone Number, Including Area Code:        (410) 727-4083


                                                   N/A
                          (Former Name, Former Address, and Former Fiscal Year,
                                      if Changed Since Last Report.)


  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

             Yes     X                                             No

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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.



                                                       INDEX


                                    Page No.

Part I.    Financial Information


     Item 1.    Financial Statements

                       Balance Sheets                                    1
                       Statements of Operations                          2
                       Statements of Partners' Capital                   3
                       Statements of Cash Flows                          4
                       Notes to Financial Statements                    5-6


     Item 2.    Management's Discussion and Analysis of
                   Financial Condition and Results of Operations         7



Part II.   Other Information


     Item 1. through Item 6.                                             8

     Signatures                                                          9


<PAGE>
REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
                                                            March 31,       December 3
                                                               1997            1996


Assets

<S>                                                        <C>             <C>       
 Cash and cash equivalents                                 $  314,255      $2,772,471
 Lease payment and other receivables                           36,030          33,098
 Deposit                                                       10,000          10,000
 Investment in direct finance leases, net                   1,449,139       1,631,824

  Total assets                                             $1,809,424      $4,447,393


Liabilities and Partners' Capital

 Accounts payable and accrued expenses                     $   12,520      $   18,656
 Amounts due to affiliates                                     15,113          12,403
 Advance rentals                                               11,907          40,634

  Total liabilities                                            39,540          71,693


 Partners' Capital
  General Partner                                            (113,411)        (85,305)
  Assignor Limited Partner:
  Assignment of limited partnership interests - $25 stated
    value per unit, 401,180 units outstanding               1,882,782       4,460,235
  Limited partnership interests - $25 stated value per
   unit, 40 units outstanding                                     313             570
  Special Limited Partners                                        200             200

  Total partners' capital                                   1,769,884       4,375,700

  Total liabilities and partners' capital                  $1,809,424      $4,447,393

</TABLE>


See accompanying notes to financial statements

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REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Statements of Operations
For the three months ended March 31,
(Unaudited)
<TABLE>
<CAPTION>

                                            1997          1996

Revenues
<S>                                      <C>           <C>
 Direct finance lease revenue            $ 38,603      $ 51,796
 Interest income                           25,372        31,581

                                           63,975        83,377


Expenses
 Administrative expenses including
  amounts to related party                 23,211        19,491
 Management fees to advisor                 2,905         3,053
 Professional fees                          4,000         4,450
 Amortization of acquisition and
  organization costs                        3,334         3,520

                                           33,450        30,514


Net earnings                             $ 30,525      $ 52,863


Net earnings per unit of assignee
 limited partnership interest            $   0.08      $   0.13

</TABLE>


See accompanying notes to financial statements

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 REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

 Statements of Partners' Capital
 For the three months ended March 31, 1997 and 1996
         (Unaudited)
<TABLE>
<CAPTION>
                                 Assignee    Assignor Special
                                 Limited     Limited  Limited   General
                                 Partners    Partner  Partners  Partner      Total


<S>                          <C>           <C>      <C>      <C>        <C>
Balance at December 31, 1996 $   4,460,235 $    570 $    200 $  (85,305)$   4,375,700

Net earnings                        30,217        3                 305        30,525

Distributions to partners
 Operations                       (200,590)     (20)             (4,094)     (204,704)
 Return of capital              (2,407,080)    (240)            (24,317)   (2,431,637)

Balance at March 31, 1997    $   1,882,782 $    313 $    200 $ (113,411)$   1,769,884



Balance at December 31, 1995 $   5,020,712 $    626 $    200 $  (73,866)$   4,947,672

Net earnings                        51,801        5               1,057        52,863

Distributions to partners         (200,590)     (20)             (4,094)     (204,704)

Balance at March 31, 1996    $   4,871,923 $    611 $    200 $  (76,903)$   4,795,831
</TABLE>

 See accompanying notes to financial statements

             -3-
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REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Statements of Cash Flows
For the three months ended March 31,
(Unaudited)
<TABLE>
<CAPTION>
                                                                   1997             1996


Cash flow from operating activities
<S>                                                           <C>               <C>       
 Net earnings                                                 $     30,525      $   52,863
 Adjustments to reconcile net earnings to net 
  cash provided by operating activities
   Amortization of acquisition and organization costs                3,334           3,520
   Changes in assets and liabilities
    (Increase) decrease in lease payment and other receivables      (2,932)         18,602
    Decrease in accounts payable and accrued expenses               (6,136)         (5,092)
    Increase in amounts due to affiliates                            2,710           3,678
    Decrease in advance rentals                                    (28,727)         (1,322)

Net cash provided by (used in) operating activities                 (1,226)         72,249

Cash flows from investing activities-
 principal received on direct finance leases                       179,351         176,033

Cash flows from financing activities-
 distributions to partners                                      (2,636,341)       (204,704)


Net increase (decrease) in cash and cash equivalents            (2,458,216)         43,578

Cash and cash equivalents
 Beginning of period                                             2,772,471       2,500,697

 End of period                                                $    314,255      $2,544,275
</TABLE>

See accompanying notes to financial statements

-4-

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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                                           Notes to Financial Statements
                                                  March 31, 1997
                                                    (Unaudited)


Note 1 - The Partnership and Basis of Preparation

         The  accompanying  financial  statements of Redwood  Equipment  Leasing
Income Fund L.P. (the  "Partnership")  do not include all of the information and
note  disclosures   normally  included  in  financial   statements  prepared  in
accordance with generally accepted accounting principles.  The unaudited interim
financial  statements  reflect  all  adjustments  which are,  in the  opinion of
management, necessary to a fair statement of the results for the interim periods
presented.  All such adjustments are of a normal recurring nature. The unaudited
interim financial  information  should be read in conjunction with the financial
statements contained in the 1996 Annual Report.


Note 2 - Cash and Cash Equivalents

         The  Partnership  considers all  short-term  investments  with original
maturities  of  three  months  or  less  as  cash  equivalents.  Cash  and  cash
equivalents  consist of cash,  money market accounts and other liquid short term
investments and are stated at cost,  which  approximates  market value, at March
31, 1997 and December 31, 1996.


Note 3 - Related Party Transactions

         The  Partnership's  General  Partner earned an asset  management fee of
$5,344 and $6,141 (3% of  distributions  to  investors)  and received or was due
reimbursement  of $9,250 and $9,245  for  certain  costs  incurred  relating  to
administrative services for the Partnership for the three months ended March 31,
1997 and 1996, respectively.

         As the management  agent,  Signet is entitled to an equipment and lease
management fee equal to 1.5% of gross lease rental payments as well as a fee for
services  provided in acquiring  and disposing of leased  assets.  For the three
months  ended  March  31,  1997 and  1996,  Signet  earned  $2,905  and  $3,053,
respectively in management and disposition fees.


Note 4 - Leases

         Investment in direct  finance leases with initial terms ranging from 34
to 82 months at March 31, 1997 and December 31, 1996 includes the following:
<TABLE>
<CAPTION>

                                                                  March 31, 1997           December 31, 1996

<S>                                                               <C>                        <C>
          Lease payments receivable                               $ 1,044,130                $ 1,259,277
          Estimated residual value                                    542,237                    542,237
          Acquisition fees, net                                        15,182                     18,516
          Unearned income                                            (129,854)                  (165,650)
          Reserve for residual value loss                             (22,556)                   (22,556)

                                                                  $ 1,449,139                $ 1,631,824
</TABLE>

          During the first quarter of 1997, the Partnership  learned that one of
its lessees is in default under the terms of its lease. However, pursuant to the
Security  Agreement and Assignment of Lease,  all rental  payments due from this
lessee have been guaranteed by the lease originator.  The guarantee  obligations
have been honored by the lease originator and  accordingly,  the Partnership has
timely received all rental payments due under the lease.

          All leases in the  Partnership's  portfolio  are  classified as direct
finance leases.

                                                      -5-


<PAGE>
                                   REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                                           Notes to Financial Statements
                                                  March 31, 1997
                                                    (Unaudited)

Note 5 - Net Earnings per Unit of Assigned Limited Partnership Interest

          Net  earnings  per unit of assignee  limited  partnership  interest is
disclosed  on the  Statements  of  Operations  and is based upon  401,180  units
outstanding.


Note 6 - Subsequent Event

          In May 1997, the Partnership  will make a cash  distribution  totaling
$178,125 of which 99% will be  allocated  to  assignee  limited  partners.  This
distribution will be derived from principal  payments received on direct finance
leases.  Holders of assignee  limited  partnership  interests  will receive cash
distributions of $.44 per $25 unit.



                                                      -6-

<PAGE>
                   REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

Liquidity and Capital Resources

         At March 31, 1997, the Partnership had a working capital  position that
included cash and cash  equivalents of $314,255 and accounts payable and accrued
expenses of $12,520. The Partnership invests its cash balances in a money market
account. The Partnership is reserving $136,130 as working capital reserves,  but
has the  discretion to increase or decrease  reserves as deemed  necessary.  The
unexpended  offering  proceeds and working  capital  reserves are  sufficient to
satisfy the Partnership's liquidity requirements.

         Cash and cash equivalents decreased $2,458,216 during the first quarter
of 1997. This decrease  represented the combined effect of a loss of $1,226 from
operating activities,  $179,351 received in principal payments on direct finance
leases, and $2,636,341 distributed to partners.

         The  Partnership  made a distribution  of $204,704 on February 10, 1997
from funds generated from operations,  and principal  payments on direct finance
leases.  The Partnership made a return of capital  distribution of $2,431,637 on
March 4, 1997 and  increased the total  distributions  from the  Partnership  to
$8,902,063 to Unitholders or 88.75% of gross offering proceeds.


Results of Operations

         Direct finance lease revenue decreased $13,193 during the first quarter
of 1997 as compared to the first quarter of 1996.  This  decrease  resulted from
scheduled  lease  terminations  and an expected  decline in the portion of lease
payments recognized as revenue (versus return of principal) for existing leases.

         Interest  income  decreased  $6,209 during the first quarter of 1997 as
compared to the first  quarter of 1996,  due  primarily  to lower cash  balances
after the return of capital distribution.

         Total expenses  increased by $2,936 during the first quarter of 1997 as
compared to the first quarter of 1996 due to increases in state taxes.

         During the first quarter of 1997, the  Partnership  learned that one of
its lessees is in default under the terms of its lease. However, pursuant to the
Security  Agreement and Assignment of Lease,  all rental  payments due from this
lessee have been guaranteed by the lease originator.  The guarantee  obligations
have been honored by the lease originator and  accordingly,  the Partnership has
timely received all rental payments due under the lease.


Equipment Lease Acquisitions

         During the first  quarter of 1997,  the  Partnership  made no equipment
lease acquisitions.  As noted in prior reports,  the Partnership has entered the
Liquidation  Phase  during  which the  remaining  funds (net of  reserves)  were
distributed to investors.  Future quarterly  distributions  will be dependent on
funds  generated  from  operations,  principal  payments and proceeds from lease
sales.  The Partnership  will distribute  $178,125 in May 1997 which was derived
primarily from principal  payments  received  during the quarter ended March 31,
1997.



                                                      -7-
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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.


PART II.  OTHER INFORMATION


Item 1.     Legal Proceedings

                  Inapplicable

Item 2.     Changes in Securities

                  Inapplicable

Item 3.     Defaults upon Senior Securities

                  Inapplicable

Item 4.     Submission of Matters to a Vote of Security Holders

                  Inapplicable

Item 5.     Other Information

                  Inapplicable

Item 6.     Exhibits and Reports on Form 8-K

                  a)  Exhibits:  None

                  b)  Reports on Form 8-K:    None



                                                        -8-

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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.




                                                    SIGNATURES


     Pursuant  to the  requirements  of Section  13 or 15 (d) of the  Securities
Exchange Act of 1934, as amended,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                                  REDWOOD EQUIPMENT LEASING
                                                              INCOME FUND L.P.




DATE:       5/9/97                           By:     /s/   John M.  Prugh
                                                          John M. Prugh
                                                          President and Director
                                                          Redwood Leasing, Inc.
                                                          General Partner



DATE:       5/9/97                           By:     /s/   Timothy M.  Gisriel
                                                          Timothy M. Gisriel
                                                          Treasurer
                                                          Redwood Leasing, Inc.
                                                          General Partner




                                                        -9-

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