SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q


           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly Period Ended June 30, 1998

                                       OR

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


                        Commission File Number: 000-23309


                               LINC CAPITAL, INC.
             (Exact name of registrant as specified in its charter)



                    Delaware                         06-0850149
          (State or other jurisdiction of         (I.R.S. Employer
          incorporation or organization)         Identification No.)

                       303 East Wacker Drive, Suite 1000,
                             Chicago, Illinois 60601
               (Address of principal executive offices) (Zip Code)


                                 (312) 946-1000
              (Registrant's telephone number, including area code)



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 |_|


At August 12,  1998,  5,183,688  shares of the  Registrant's  Common  Stock were
outstanding.

<PAGE>





                               LINC CAPITAL, INC.
                               TABLE OF CONTENTS

PART I.                      FINANCIAL INFORMATION
   Item 1.    Financial Statements:
              Consolidated Statements of Operations -
                Three  and six  months  ended  June  30,  1997  and 1998     
                (unaudited)..................................................3
              Consolidated Balance Sheets -
                December 31, 1997 (audited) and June 30, 1998
                (unaudited)..................................................4
              Consolidated Statements of Cash Flows -
                Three  and six  months  ended  June  30,  1997  and 1998     
                (unaudited)..................................................5
              Notes to Consolidated Financial Statements.....................7

   Item 2.    Management's Discussion and Analysis of Financial             
                Condition and Results of Operations.........................14

PART II.                       OTHER INFORMATION
Item 4.    Submission of Matters to a Vote of Security Holders..............18
Item 6.    Exhibits and Reports on Form 8-K.................................18

SIGNATURES      ............................................................18






<PAGE>

PART I - FINANCIAL INFORMATION
LINC Capital, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share data)


                                            Three months ended  Six months ended
                                                   June 30,          June 30,
                                                   --------          --------
                                                1997     1998     1997     1998
                                                ----     ----     ----     ----
Net Revenues:
   Sales of equipment.......................   $4,741    9,080   10,252   14,800
   Cost of equipment sold...................    3,739    7,397    8,222   12,097
                                                -----    -----    -----   ------
   Gross profit from sales of equipment.....    1,002    1,683    2,030    2,703
   Rental and operating lease revenue.......    1,740    2,258    3,164    4,714
   Direct finance lease income..............    1,529    3,160    2,598    5,268
   Fee income...............................      390      338      789      594
   Gain on sale of lease financing
      receivables...........................      --     2,891      --     3,588
   Gain on remarketing of leased equipment..       88      540      277      787
   Gain on equity participation rights......       23      610       97    2,678
   Interest income..........................      128      378      338      804
   Other income.............................      240      294      300      521
                                                -----   ------    -----   ------
           Total net revenues...............    5,140   12,152    9,593   21,657
                                                -----   ------    -----   ------

Expenses:
   Selling, general and administrative......    2,035    4,174    3,963    7,855
   Interest.................................    1,026    2,366    1,844    4,036
   Depreciation of equipment under rental
      agreements and operating leases.......      957    1,397    1,858    2,902
   Provision for credit losses..............      245    1,724      479    2,327
                                                -----    -----    -----   ------
           Total expenses...................    4,263    9,661    8,144   17,120
                                                -----    -----    -----   ------

Income from continuing operations before
   income taxes and minority interest.......      877    2,491    1,449    4,537
Income tax expense..........................      322      985      534    1,775
                                                  ---      ---      ---    -----
Income from continuing operations before
   minority interest........................      555    1,506      915    2,762
Minority interest...........................      --       --       (13)     -- 
                                                 ----    -----      ----    ----
Net income from continuing operations.......      555    1,506      902    2,762

Discontinued operations:
  Income (loss) from discontinued
   operations, net of income tax (benefit)
   for the three months ended June 30, 1997
   of $94, and the six months ended
   June 30, 1997 of ($3)....................       63      --       (55)     --
                                                 ====    =====      ====    ====
Net income..................................     $618    1,506      847    2,762
                                                 ====    =====      ====   =====

Per common share:
   Net income from continuing operations
           Basic............................    $0.19     0.29     0.31     0.54
           Diluted..........................    $0.18     0.28     0.30     0.52

   Net income
           Basic............................    $0.21     0.29     0.29     0.54
           Diluted..........................    $0.20     0.28     0.28     0.52


          See accompanying notes to consolidated financial statements.



<PAGE>

LINC Capital, Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
                                                         December 31,   June 30,
                                                         ------------   --------
           ASSETS                                            1997         1998
           ------                                            ----         ----
                                                          (Audited)  (Unaudited)
                          
Net investment in direct finance leases and loans.....      $67,264     111,004
Equipment held for rental and operating leases, net...       22,007      24,892
Accounts receivable...................................        6,583       7,737
Securitization residual interest......................        3,017      13,415
Other assets..........................................        8,210      15,763
Goodwill..............................................        1,896       8,749
Cash and cash equivalents.............................          --        5,883
                                                           --------     --------
        Total assets..................................     $108,977     187,443
                                                           ========     =======
                                                                                

            LIABILITIES AND STOCKHOLDERS' EQUITY
            ------------------------------------

Senior credit facility and other senior notes payable..     $38,117      90,446
Recourse debt..........................................       2,955      12,861
Nonrecourse debt.......................................      17,951      16,418
Accounts payable.......................................       2,985       7,190
Accrued expenses.......................................       2,905       6,030
Customer holdbacks.....................................       1,738       7,424
Subordinated debentures................................       5,386       5,534
Deferred income taxes..................................         236       1,257
                                                            -------       -----
        Total liabilities..............................     $72,273     147,160
                                                            -------     -------


Stockholders' equity:

   Preferred stock, $0.01 par value, 1,000,000
    shares authorized; none outstanding................        --           --
   Common stock $0.001 par value, 15,000,000
    shares authorized; 5,199,591 and 5,249,591
    shares issued; 5,133,688 and 5,183,688 outstanding.          5            5
   Additional paid-in capital..........................     28,840       29,567
   Deferred compensation from issuance of options......       (171)        (146)
   Stock note receivable...............................       (511)        (182)
   Treasury stock, at cost; 65,903 shares..............       (287)        (287)
   Retained earnings...................................      7,902       10,664
   Accumulated other comprehensive income..............        926          662
                                                            ------       ------
        Total stockholders' equity.....................     36,704       40,283
                                                          --------      -------
Total liabilities and stockholders' equity.............   $108,977      187,443
                                                          ========      =======


         See accompanying notes to consolidated financial statements.

<PAGE>

LINC Capital, Inc. and Subsidiaries
Consolidated Cash Flow Statements (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
                                                                      Three months ended      Six months ended
                                                                           June 30,               June 30,
                                                                           --------               --------
                                                                       1997        1998       1997        1998
                                                                       ----        ----       ----        ----
<S>                                                                 <C>        <C>         <C>        <C>  
Cash flows from operating activities:
  Net income....................................................       $618       1,506        847       2,762
    Adjustments to reconcile net income to net cash
     provided by continuing operations
       Net (income) loss from discontinued operations...........        (63)        --          55         --
       Depreciation and amortization ...........................      1,030       1,569      1,933       3,164
       Direct finance lease income..............................     (1,529)     (3,160)    (2,598)     (5,268)
       Payments on direct finance leases .......................      5,479      21,083      9,839      28,236
       Deferred income taxes ...................................        338         474        464       1,021
       Provision for credit losses..............................        245       1,724        479       2,327
       Gain on sale of lease financing receivables .............        --       (2,891)       --       (3,588)
       Gain on equity participation rights......................        (23)       (610)       (97)     (2,678)
       Amortization of discount.................................         63          75        124         148
       Deferred compensation ...................................        --          --         --           25
       Minority interest .......................................        --          --         202         --
    Changes in assets and liabilities
       Decrease (increase) in receivables.......................      1,123      (1,303)      (726)     (1,638)
       Increase in securitization residual interest.............        --       (8,540)       --      (10,398)
       Increase in other assets ................................     (3,523)    (10,448)      (633)    (13,307)
       Increase (decrease) in accounts payable..................     (1,443)        109       (550)      1,662
       Increase (decrease) in accrued expenses .................      1,623         576       (434)        546
       Increase (decrease) in customer holdbacks ...............     (3,096)      5,698       (646)      5,686
                                                                     ------       -----       ----       -----
Cash provided by continuing operations .........................        842       5,862      8,259       8,700
  Cash flows from discontinued operations.......................      3,881         --       7,851         --
                                                                      -----       -----      -----       -----    
Cash provided by operating activities...........................      4,723       5,862     16,110       8,700
                                                                      -----       -----     ------       -----
                                                                                                               
Cash flows from investing activities:
  Cost of equipment acquired for lease and rental ..............    (12,147)    (70,001)   (22,784)   (101,925)
  Fixed assets purchased .......................................       (107)       (291)      (503)       (468)
  Cash used in acquisitions, net of cash acquired ..............        --      (36,481)       --      (39,180)
  Proceeds from sale of investments ............................         23         610         97       2,678
                                                                    -------    ---------   --------   ---------
Net cash used in investing activities ..........................    (12,231)   (106,163)   (23,190)   (138,895)
                                                                    -------    ---------   -------    ---------
                                                                                                               
           See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>


LINC Capital, Inc. and Subsidiaries
Consolidated Cash Flow Statements (Unaudited) - (Continued)
(Dollars in thousands)
<TABLE>
<CAPTION>

                                                                      Three months ended      Six months ended
                                                                           June 30,               June 30,
                                                                           --------               --------
                                                                                                                
                                                                       1997        1998       1997        1998
                                                                       ----        ----       ----        ----
<S>                                                                  <C>        <C>         <C>        <C>    

Cash flows from financing activities:
   Net increase in notes payable................................      9,050      32,187     17,550      56,487
   Proceeds from recourse and nonrecourse debt..................        --        3,477        --        4,697
   Repayment of recourse and nonrecourse debt...................     (1,303)     (5,914)    (2,481)    (13,277)
   Proceeds from sales of lease financing receivables,
     net of securitization residual interest....................        --       71,676        --       87,842
   Purchase of stock ...........................................        --         --          (17)        --
   Sale of stock ...............................................        106        --          106         --
   Proceeds from stock notes receivable ........................        --         --          --          329
   Payment of notes from discontinued operations................     (5,036)       --       (8,078)        --
                                                                     ------     -------     ------     -------
Net cash provided by financing activities.......................      2,817     101,426      7,080     136,078
                                                                     ------     -------      -----     -------

Net increase (decrease) in cash.................................     (4,691)      1,125        --        5,883
Cash at beginning of period ....................................      4,691       4,758        --          --
                                                                      =====       =====       =====      =====

Cash at end of period ..........................................       $--        5,883        --        5,883
                                                                     ======       =====       =====      =====

Supplemental disclosures of cash flow information:
   Interest paid ...............................................     $1,080       2,354       1,844      3,738
   Income taxes paid ...........................................        $45         167          70        848

           See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>

LINC Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)

(1)  The  Company

     LINC Capital, Inc. (the "Company") is a finance company specializing in the
origination,  acquisition,  securitization and servicing of equipment leases and
in  the  rental  and  distribution  of  analytical  instruments.  The  Company's
principal businesses are (i) the direct origination of leases to emerging growth
companies primarily serving the healthcare and information technology industries
("Select  Growth  Leasing"  activities),  (ii) the  acquisition and financing of
lease  portfolios  originated  by other lessors and the  acquisition  of leasing
companies  ("Portfolio Finance & Lessor  Acquisition"  activities) and (iii) the
rental and  distribution  of  analytical  instruments  to companies  serving the
environmental,    chemical,    pharmaceutical   and   biotechnology   industries
("Instrument Rental and Distribution" activities).

(2)    Significant Accounting Policies

       Basis  of  Presentation

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance  with generally  accepted  accounting  principles and the
rules and  regulations  of the  Securities  and Exchange  Commission for interim
financial statements.  Accordingly, the interim statements do not include all of
the information and disclosures required for annual financial statements. In the
opinion of the  Company's  management,  all  adjustments  (consisting  solely of
adjustments of a normal recurring  nature)  necessary for a fair presentation of
these  interim   results  have  been   included.   Inter-company   accounts  and
transactions  have  been  eliminated.  For  further  information,  refer  to the
consolidated  financial  statements and notes thereto  included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997. The results for
the  three-month  and six-month  periods ended June 30, 1998 are not necessarily
indicative of the results that may be expected for the full year ending December
31, 1998.

     The balance  sheet at December  31, 1997 has been  derived from the audited
financial  statements  included in the Company's  Annual Report on Form 10-K for
the year ended December 31, 1997.

       Earnings Per Share

     Earnings per share  amounts have been  determined  in  accordance  with the
provisions  of SFAS No. 128 and  reflect  the  application  of Staff  Accounting
Bulletin  No. 98 issued by the  Securities  and  Exchange  Commission  effective
February 3, 1998.  SFAS No. 128  replaced the  calculation  of primary and fully
diluted  earnings per share with basic and diluted  earnings  per share.  Unlike
primary  earnings  per share,  basic  earnings  per share  excludes any dilutive
effect of options.  Diluted earnings per share is very similar to the previously
reported  fully diluted  earnings per share.  All earnings per share amounts for
all  periods  have been  presented  and  restated to conform to the SFAS No. 128
requirements. See note 9.


<PAGE>


         Reclassifications

     Certain  reclassifications  have been made to the 1997 financial statements
to conform to the 1998 presentation.

 (3)    Acquisitions

     Effective  January 31, 1998, the Company  purchased all of the  outstanding
common stock of Comstock Leasing,  Inc., a small-ticket  lessor  specializing in
office-based information technology equipment. Additionally, effective March 31,
1998,  the Company  acquired the assets of Monex  Leasing,  Ltd., a  Texas-based
lessor of  telecommunications,  business,  and other  equipment.  The  aggregate
consideration for these two acquisitions  included  $2,699,000 in cash payments,
net of cash  acquired,  $2,678,000 in  installment  notes,  50,000 shares of the
Company's common stock valued at approximately  $725,000,  and future contingent
payments of up to $3,900,000  in cash and 48,528 shares of the Company's  common
stock.  The fair  value of  assets  purchased  and  liabilities  assumed  in the
acquisitions were $30,389,000 and $25,864,000,  respectively.  Both acquisitions
have been accounted for using the purchase  method of accounting and the results
of operations of the acquired  businesses have been included in the consolidated
financial  statements since the dates of acquisition.  These acquisitions had no
significant  impact on results of  operations  for the six months ended June 30,
1998.

     Effective  June 30, 1998,  the Company  acquired the assets and business of
Spectra  Precision  Credit Corp.  (Spectra),  the finance  subsidiary of Spectra
Precision,  Inc. Spectra  Precision,  Inc. is an  international  manufacturer of
laser-based  leveling  and  alignment  instruments,   machine  control  systems,
surveying  instruments and software.  Spectra provides leasing,  financing,  and
rental  services  to direct  sales  offices and  dealer/distributors  of Spectra
Precision's  products.  The  consideration  paid  was  $39,939,000,  net of cash
acquired, including the assumption of $3,458,000 of Spectra's liabilities,  plus
future  contingent  consideration of up to $3,500,000.  The fair value of assets
purchased in the acquisition was $35,829,000. The acquisition has been accounted
for using the purchase method of accounting and the results of operations of the
acquired  business has been included in the  consolidated  financial  statements
since the date of acquisition.

      The following  unaudited pro forma consolidated  results of operations for
the six months  ended June 30,  1997 and 1998 are  presented  as if the  Spectra
acquisition  had  been  made at the  beginning  of each  period  presented.  The
unaudited  pro forma  information  is not  necessarily  indicative of either the
results of operations that would have occurred had the purchase been made during
the periods presented or the future results of the combined operations.

                                                           Pro Forma
                                                   Six months ended June 30,
                                                  1997                   1998
                                                  ----                   ----
                                                         (In thousands,
                                                    except per share amounts)
Pro forma net revenues......................       $11,768           $24,233
Pro forma net income from continuing    
 operations.................................         1,063             2,530
Pro forma net income from continuing
 operations per common share
   Basic....................................         $0.36             $0.49
   Diluted..................................         $0.35             $0.47



(4)    Net Investment in Direct Finance Leases and Loans

     Net investment in direct finance leases and loans is as follows:

                                                  December 31,   June 30,
                                                     1997          1998
                                                 -------------  -----------
                                                       (In thousands)

Lease and loan contracts receivable in
   installments .........................          $ 78,036      $ 127,594
Estimated residual value of leased
   equipment .............................            4,677          8,802
Unearned income ...........................         (13,276)       (22,430)
Allowance for doubtful receivables .......           (2,173)        (2,962)
                                                   --------      ---------
Net investment ...........................         $ 67,264      $ 111,004
                                                   ========      =========
<PAGE>
     At June 30, 1998 future lease and loan contract  payments to be received on
direct finance leases and loans are as follows:


                                                         Amount
                                                       ------------
                                                      (In thousands)
         Year Ending December 31,
              1998...................................   $   29,712
              1999...................................       40,030
              2000...................................       30,220
              2001...................................       17,654
              2002 and thereafter....................        9,978
                                                       ------------
         Future lease contract payments..............    $ 127,594
                                                       ============

     At June 30, 1998 certain future lease contract  payments have been assigned
to financial institutions (note 8).

(5)   Equipment Held for Rental and Operating Leases, Net

     The net book value of equipment held for rental and operating  leases is as
follows:

                                                December 31,   June 30,
                                               -------------  ----------
                                                  1997          1998
                                                ---------     --------
                                                    (In thousands)
    Equipment under operating leases.........    $ 6,649      $ 7,253
    Equipment under rental agreements........     15,358       17,639
                                                --------     --------
    Net book value...........................    $22,007      $24,892
                                                =========    =========

     The  book  values  presented  in the  above  table  are net of  accumulated
depreciation  of  $7,067,000,  and  $8,054,000 at December 31, 1997 and June 30,
1998, respectively.  Equipment under rental agreements is comprised primarily of
analytical instruments.

     At June 30, 1998  future  contract  payments  to be  received on  operating
leases are as follows:

                                                           Amount
                                                         ----------
                                                      (In thousands)
         Year Ending December 31,
              1998...................................      $ 1,306
              1999...................................        2,327
              2000...................................        1,089
              2001...................................          515
              2002 and thereafter....................          452
                                                       ------------
         Future contract lease payments to be received     $ 5,689
                                                       ============

     At June 30, 1998 certain  future  contract  payments  have been assigned to
financial institutions (note 8).

(6)   Securitization Facility

     Under  the  Company's   securitization  facility,  the  Company  sells  and
transfers a pool of leases to a wholly-owned, bankruptcy remote, special purpose
subsidiary  established for the purpose of purchasing the Company's leases. This
subsidiary in turn simultaneously sells and transfers its interest in the leases
to a bank conduit facility which issues securities to investors.  The securities
are collateralized by an undivided interest in the leases, the leased equipment,
and certain  collateral  accounts.  A securitization  is treated as a sale and a
gain  on  sale  of  lease   financing   receivables   is  recognized   upon  the
securitization.  The difference between the aggregate  principal balance and the
proceeds received, net of an allowance for doubtful receivables, is reflected on
the balance  sheet as the  securitization  residual  interest.  A portion of the
proceeds from the sale of leases is required to be held in a separate restricted
account as collateral for the leases sold. This amount is recorded as restricted
cash and included in other assets on the balance sheet at June 30, 1998.

     During June 1998, the Company  securitized  leases with a net book value of
$80,367,000.  The  securitization  was  treated  as a sale and a gain on sale of
lease financing receivables of $2,891,000 was recognized.
<PAGE>
(7)    Loss Experience and Reserves

     The following table sets forth the amount of  delinquencies as a percentage
of Gross Contract  Balance of leases and loans  included in the Company's  owned
and securitized  lease portfolio as of the period  indicated and net charge-offs
as a percentage of the  Company's  remaining  net  investment in direct  finance
leases and loans as of the end of the period indicated.  Additionally, the table
sets forth loss reserves  provided for on the Gross Contract  Balance as well as
holdback reserves on portfolio acquisitions as of December 31, 1997 and June 30,
1998.

                                                      December 31,    June 30,
                                                          1997          1998
                                                      ------------   ----------
                                                             (In thousands)
Select Growth:
      Gross Contract Balance......................      $56,654       $64,842

      31 - 60 days past due.......................        11.31%         2.38%
      61 - 90 days past due.......................         0.00%         0.58%
      Over 90 days past due.......................         0.00%         0.00%

Portfolio Finance:
      Gross Contract Balance......................      $31,630        $91,723

      31 - 60 days past due.......................         0.39%         1.15%
      61 - 90 days past due.......................         0.18%         0.33%
      Over 90 days past due.......................         0.02%         0.28%


Small Ticket and Vendor:
      Gross Contract Balance......................       $9,352       $83,738

      31 - 60 days past due.......................        11.70%         1.65%
      61 - 90 days past due.......................         5.76%         1.59%
      Over 90 days past due.......................         9.98%         0.54%

Totals:
      Gross Contract Balance......................      $97,636      $240,303

      31 - 60 days past due.......................         7.81%         1.65%
      61 - 90 days past due.......................         0.61%         0.84%
      Over 90 days past due.......................         0.96%         0.30%

Average net investment in leases and loans owned
 & managed........................................      $58,234      $153,512
Net charge-offs...................................          171         1,666
Net charge-off percentage.........................         0.29%         1.09%


Allowance for doubtful receivables included in:
  Net investment in direct finance leases and loans        $2,173        $2,962
  Securitization residual interest                            328         1,141
  Holdback reserves on portfolio
     acquisitions                                             603         4,544
                                                        ----------    ----------
Total allowance and holdbacks                              $3,104        $8,647
                                                        ==========    ==========

     The decrease in  delinquencies as a percentage of Gross Contract Balance at
June 30, 1998 from year end is  attributable  to improvement in collections  and
charge-offs  taken on  certain  delinquent  Select  Growth  leases.  During  the
quarter,  the Company recovered the assets related to three Select Growth leases
and  either  sold  the  assets  or  wrote  them  down to net  realizable  vlaue.
Charge-offs  for these  accounts  totaled  $1,456,000  on an net  investment  of
$5,799,000.

<PAGE>
(8)   Debt

      Notes Payable

     Notes payable to banks and others were as follows:

                                                       December 31,    June 30,
                                                         1997           1998
                                                      ------------   ----------
                                                              (In thousands)
   Senior credit facility..................                $35,850      $85,500
   Other...................................                  2,267        4,946
                                                          --------     --------
                                                           $38,117      $90,446
        Total..............................               ========     ========

     At  December  31,  1997 and June  30,  1998,  the  Company  along  with its
divisions LINC Quantum Analytics and LINC Capital Partners,  ("the  Borrowers"),
had available a senior credit facility in the amount of  $100,000,000,  of which
$35,850,000,   and   $85,500,000  at  December  31,  1997  and  June  30,  1998,
respectively,  was outstanding. The weighted-average interest rate on the senior
credit  facility  at  December  31,  1997 and June 30, 1998 was 7.32% and 7.00%,
respectively.  In August  1998,  the  facility  was  amended  and  increased  to
$125,000,000.  The  facility,  as amended,  provides  for interest at LIBOR plus
1.25% to 1.75% or, at the  Company's  option,  prime  plus up to 0.25%  with the
precise rate dependent on certain  leverage  tests.  Additionally,  the facility
calls for the Company to pay a quarterly  commitment  fee of 0.25% on the unused
daily  balance  below  $25,000,000  and 0.50% on the unused daily  balance above
$25,000,000.  The facility is secured by substantially  all of the assets of the
borrowers  and is used by the  borrowers  to finance  acquisition  of  equipment
pending  completion  of  permanent  financing  and for  normal  working  capital
purposes.  The  facility  matures  October  31,  1998 at which point in time the
remaining  balance of the  facility  may be  converted  to a term loan  maturing
October 31, 2000.

      Recourse and Nonrecourse Debt

     The Company  permanently  finances leases with financial  institutions,  on
either a nonrecourse  and/or partial  recourse  basis.  In connection with these
financings, the Company receives a cash payment equal to the discounted value of
the future rentals less, in certain  cases,  a holdback or cash reserve.  In the
event of default by a lessee  under a lease which has been  assigned to a lender
under  these  financings,  the  lender  has  recourse  to the  lessee and to the
underlying  leased equipment but no recourse to the Company except to the extent
of the recourse portion of the financing.

     At  June  30,  1998  the  future  principal   maturities  of  recourse  and
nonrecourse debt are as follows:

                                                      Amount
                                                   -------------
                                                  (In thousands)
    Year Ending December 31,
         1998...................................       $  7,315
         1999...................................         10,785
         2000...................................          6,734
         2001...................................          3,516
         2002 and thereafter....................            929
                                                   -------------
    Total recourse and nonrecourse
       discounted lease rentals.................       $ 29,279
                                                   =============
<PAGE>
(9)    Earnings per Share

     The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share from continuing operations.
<TABLE>
<CAPTION>


                                                  Three months ended              Six months ended
                                                        June 30,                      June 30,
                                               --------------------------     -------------------------
                                                 1997           1998             1997          1998
                                               ----------    ------------     -----------   -----------
                                                        (In thousands, except per share data)
<S>                                            <C>             <C>             <C>           <C>  
Numerator for basic and diluted earnings
 per share from continuing operations
   Net income from continuing operations            $555           1,506             902         2,762
                                               ----------    ------------     -----------   -----------
Denominator for basic earnings per share
   Weighted average shares                     2,946,854       5,183,688       2,948,234     5,158,826
   Effect of dilutive stock options              102,926         203,387         102,926       201,389
                                               ----------    ------------     -----------   -----------
Denominator for diluted earning per share
   Adjusted weighted average shares            3,049,780       5,387,075       3,051,160     5,360,215
                                               ----------    ------------     -----------   -----------
Net income from continuing operations:
   Basic earnings per share                         $.19             .29             .31           .54
                                               ==========    ===========      ===========   ===========
   Diluted earnings per share                       $.18             .28             .30           .52
                                               ==========    ============     ===========   ===========

</TABLE>

(10)    Comprehensive Income

     Effective  January 1, 1998,  the Company  adopted SFAS No. 130,  "Reporting
Comprehensive  Income." SFAS No. 130 establishes standards for the reporting and
presentation of comprehensive  income and its components in financial statements
by requiring minimum pension liability  adjustments,  unrealized gains or losses
on available-for-sale  securities and foreign currency translation  adjustments,
which prior to adoption were reported separately in shareholders'  equity, to be
included in other comprehensive earnings.

     The  components of  comprehensive  income,  net of related tax, for the six
months ended June 30, 1997 and 1998 are as follows:

                                              Six months ended June 30,
                                            ------------------------------
                                              1997              1998
                                            ----------       ----------
                                                    (In thousands)
Net income ..............................      $847            $2,762

Other comprehensive income, net of tax:
   Unrealized holding loss arising
   during period net of reclassification
   adjustment for gains included
   in net income ........................       (20)             (264)
                                               ----             ------
Comprehensive income ....................      $827            $2,498
                                               ====             ======

     Accumulated other  comprehensive  income,  net of tax, at December 31, 1997
and June 30, 1998  consists of  unrealized  gains on  securities of $926,000 and
$662,000, respectively.


<PAGE>



(11)    Segment Information

     The Company's  operations have been classified into two business  segments:
select  growth/portfolio  finance and instrument  rental and  distribution.  The
select  growth/portfolio  finance segment includes the Select Growth Leasing and
Portfolio  Finance & Lessor  Acquisition  activities.  The instrument rental and
distribution segment includes Instrument Rental & Distribution activities.
<TABLE>
<CAPTION>
                                                    Select                
                                                    Growth/        Instrument
                                                   Portfolio        Rental &
                                                    Finance       Distribution      Consolidated    
                                                    -------       ------------      ------------    
                                                                 (In thousands)
<S>                                                  <C>              <C>             <C>  
Six months ended June 30, 1997
    Total net revenues........................       $4,490           5,103           9,593
    Depreciation and amortization expense.....          209           1,724           1,933
    Total expenses............................        3,417           4,727           8,144
    Income from continuing operations before
      income taxes and minority interest......        1,073             376           1,449
    Capital expenditures......................       20,889           2,398          23,287
    Total assets..............................       60,976          20,689          81,665

Six months ended June 30, 1998
    Total net revenues........................      $15,609           6,048          21,657
    Depreciation and amortization expense.....        1,197           1,892           3,089
    Total expenses............................       12,098           5,022          17,120
    Income from continuing operations before
      income taxes and minority interest......        3,511           1,026           4,537
    Capital expenditures......................       98,309           4,084         102,393
    Total assets..............................      161,382          26,061         187,443
</TABLE>

<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of  Operations

Net Income

     Net income from continuing  operations  ("net income") for the three months
ended June 30, 1998 was $1.5 million, or $0.28 per diluted common share compared
to  $555,000,  or $0.18 per diluted  common share for the  comparable  period in
1997.  Net  income for the six months  ended June 30,  1998 was $2.8  million or
$0.52 per diluted  common share compared to $902,000 or $0.30 per diluted common
share for the six months ended June 30, 1997.  The increase in net income in the
three and six months  ended June 30,  1998  compared  to the  earlier  period is
primarily  due to increased  earnings from the  completion  of  securitizations,
gains  recognized  on the sale of equity  participation  rights,  and  increased
earnings  contributions  from the  Company's  Instrument  Rental &  Distribution
activities.  New lease  originations  grew from $23.9 million for the six months
ended June 30, 1997 to $107.8  million  (excluding  leases  funded in connection
with  acquisitions)  for the six months  ended June 30, 1998.  Interest  expense
increased  as  a  result  of  an  increase  in  borrowings  to  fund  new  lease
originations,  and selling,  general, and administrative expenses increased as a
result  of two  acquisitions  and  the  building  of  the  Company's  sales  and
operations  organization.  Additionally,  the  provision  for doubtful  accounts
increased  from 5.0% of net  revenues  for the six months ended June 30, 1997 to
10.7% of net revenues of the comparable current year period.


Results of Continuing Operations

      Three Months  ended June 30, 1997  Compared to Three Months ended June 30,
1998

     Income before taxes and minority  interest for the Company's  Select Growth
Leasing and Portfolio  Finance & Lessor  Acquisition  activities  increased $1.1
million for the three  months ended June 30, 1998 from $0.6 million for June 30,
1997 to $1.7  million  for June 30,  1998.  Income  before  taxes  and  minority
interest for the Company's Instrument Rental & Distribution activities increased
from $0.3 million to $0.8 million for the three months ended June 30, 1998.

     Sales of analytical instruments increased from $4.7 million to $9.1 million
and costs of analytical  instruments  sold  increased  from $3.7 million to $7.4
million due to an increase in volume resulting from increased market penetration
and a promotional  trade-in  program offered by  Hewlett-Packard,  the Company's
largest  supplier.  However,  net  margins  on sales of  analytical  instruments
declined  from 21.1% to 18.5%  primarily  as a result of lower gross  margins on
sale type leases  originated in the Company's  Instrument  Rental & Distribution
activities during the three months ended June 30, 1998.

     Rental and  operating  lease  revenue  increased  from $1.7 million to $2.3
million primarily due to acquisitions of portfolios of operating leases upon the
Company's re-entry into Portfolio Finance & Lessor Acquisition  activities after
the expiration of a non-compete agreement in September 1997.

     Direct finance lease income increased from $1.5 million to $3.2 million due
to a  substantially  higher  level  of  finance  lease  receivables  outstanding
resulting  from the  acquisitions  of Comstock  Leasing and Monex Leasing and an
increase in lease  originations in the Company's other leasing  businesses.  The
average finance lease receivables outstanding increased 132%.

     As a  consequence  of the  decline in the number of leases  serviced by the
Company for unrelated parties due to a non-compete  agreement,  which expired in
September  1997,  fee income,  for the  three-month  period,  declined from $0.4
million to $0.3 million.  The total decline was partially  offset by an increase
in servicing fees received in connection  with the servicing of the  securitized
leases.

     During the second  quarter of 1998, the Company  securitized  leases with a
net book value of $80.4 million  realizing a gain on the sale of lease financing
receivables of $2.9 million.  No leasese were  securitized by the Company in the
second quarter of 1997.

     Gains on remarketing  of leased  equipment of $0.5 million were realized in
the three months ended June 30, 1998 compared to $0.1 million in the  comparable
period in 1997. The increase resulted from increased lease maturities in 1998.

     Gains on equity  participation  rights of $0.6 million were realized in the
three months ended June 30, 1998. Gains on equity participation rights fluctuate
based on the timing of the sale of the Company's equity participation rights and
their related value.

     Interest income  increased from $0.1 million to $0.4 million  primarily due
to an increase in interest-bearing  notes receivable and equipment loans held by
the Company.

     Other  income,  which  consists  primarily  of interim  rents  received  in
connection with Select Growth Leasing activities, increased from $0.2 million to
$0.3 million primarily due to the increase in the volume of Select Growth leases
originated by the Company.

     Net  selling,  general  and  administrative  expenses  increased  from $2.0
million  to  $4.2  million  primarily  as a  result  of  additional  operations,
marketing  and sales  personnel  associated  with the  Company's  re-entry  into
Portfolio Finance & Lessor Acquisition  activities,  increased business activity
and the acquisitions completed in the first quarter of 1998.

     Interest expense  increased from $1.0 million to $2.4 million due primarily
to an  increase  in average  borrowings.  The  increase  in  average  borrowings
resulted  from  increased  lease   originations  and  the  acquisitions  of  two
businesses in the first quarter.

     Depreciation  of  equipment,  increased  from $1.0 million to $1.4 million.
Such increase was  attributable  to a 55% increase in equipment  held for rental
and operating leases primarily  resulting from the acquisitions of portfolios of
operating leases referred to above.

     The provision for credit losses increased from $0.2 million to $1.7 million
due to a six fold  increase  in lease  originations  from $11.8  million for the
three months ended June 30, 1997 to $72.3  million  (excluding  leases funded in
connection with the acquisition of Spectra Precision Credit Corporation) for the
three months ended June 30, 1998.  The provision  also  increased in response to
certain  charge  offs made in the second  quarter of 1998.  The  provision  as a
percentage  of lease  originations,  excluding the lease  portfolio  acquired in
connection with the acquisition, increased 15% from the comparable percentage in
the prior year period primarily as a result of the above referenced charge offs.

     The Company's effective tax rate was 39.5% for the three month period ended
June 30, 1998 compared to 36.7% in the same period of 1997. The increase results
from the reduction in deferred taxes for prior periods recognized in 1997.

      Six Months ended June 30, 1997 Compared to Six Months ended June 30, 1998

     Income before taxes and minority  interest for the Company's  Select Growth
Leasing and Portfolio  Finance & Lessor  Acquisition  activities  increased $2.4
million from $1.1 million for the six months ended June 30, 1997 to $3.5 million
in the six months ended June 30, 1998. Income before taxes and minority interest
for the Company's  Instrument Rental and Distribution  activities increased from
$0.4 million to $1.0 million in the current period.

     Sales of  analytical  instruments  increased  from  $10.3  million to $14.8
million and costs of analytical  instruments sold increased from $8.2 million to
$12.1 million due to an increase in volume during the second  quarter  resulting
from increased market penetration and a promotional  trade-in program offered by
Hewlett-Packard,  the Company's largest supplier.  However, net margins on sales
of analytical  instruments declined from 19.8% to 18.3% primarily as a result of
lower gross margins on sale type leases  originated in the Company's  Instrument
Rental & Distribution activities during the six months ended June 30, 1998.

     Direct  finance  lease  income more than  doubled from $2.6 million to $5.3
million as a result of a substantially higher level of finance lease receivables
outstanding due to the acquisitions and increase in lease originations.  Average
finance lease receivables outstanding increased 111%.

     Fee income  declined from $0.8 million to $0.6 million as a consequence  of
the  decline in the  number of leases  serviced  by the  Company  for  unrelated
parties due to a non-compete agreement, which expired in September 1997.

     During the first half of 1998, the Company  securitized  leases with a book
value  of  $98.0  million  realizing  a gain  on the  sale  of  lease  financing
receivables  of $3.6 million.  No leases were  securitized by the Company in the
first half of 1997.

     Gains on remarketing  of leased  equipment of $0.8 million were realized in
the six months  ended June 30,  1998  compared  to $0.3  million in the  earlier
period.  The increase in gains from the comparable  period in 1997 resulted from
increased lease maturities in 1998.

     During the first half of 1998,  the Company  experienced an increase in the
value of certain warrants held by the Company and consequently elected to sell a
portion of these warrants realizing a gain of $2.7 million.  For the same period
in 1997, the Company sold certain equity  participation  rights realizing a gain
of $0.1 million.

     Interest  income  increased  from $0.3  million to $0.8  million  due to an
increase in  interest-bearing  notes  receivable and equipment loans held by the
Company.

     Other  income,  which  consists  primarily  of interim  rents  received  in
connection with Select Growth Leasing activities, increased from $0.3 million to
$0.5 million primarily due to the increase in the volume of Select Growth leases
originated by the Company.

     Net  selling,  general  and  administrative  expenses  increased  from $4.0
million to $7.9  million.  This  increase  primarily  resulted  from  additional
operations, marketing and sales personnel associated with the Company's re-entry
into  Portfolio  Finance & Lessor  Acquisition  activities,  increased  business
activity and two acquisitions completed in the first quarter of 1998.

     Interest expense  increased from $1.8 million to $4.0 million due primarily
to  increased  direct  finance  lease  originations  and  acquisitions  and  the
resulting increase in borrowings.

     Depreciation of equipment increased from $1.9 million to $2.9 million. Such
increase  was  attributable  to an  increase  in  equipment  held for rental and
operating  leases  primarily  resulting from the  acquisitions  of portfolios of
operating leases referred to above.

     The provision for credit losses increased from $0.5 million to $2.3 million
due to a  substantially  higher volume of new leases  originated.  The provision
also  increased in response to certain charge offs made in the second quarter of
1998.  Lease  fundings,  excluding  portfolios  acquired in connection  with the
Company's  acquisitions,  increased 352% over the comparable period in the prior
year.

     The  Company's  effective  tax rate  increased  from  36.9%  to  39.1%  due
primarily from the reduction in deferred  taxes for prior periods  recognized in
1997.

Liquidity and Capital Resources

      General

     The Company's  activities  are capital  intensive  and require  access to a
substantial amount of credit to fund new equipment leases. The Company funds its
operations  primarily  through cash flow from  operations,  borrowings under the
Senior Credit  Facility,  proceeds from  securitizations,  and  non-recourse and
recourse  loans.  The Company  will  continue to require  access to  significant
additional  capital to maintain and expand its volume of leases  originated  and
portfolio  of rental  equipment as well as fund its  Portfolio  Finance & Lessor
Acquisition activities. The Company believes that cash flow from its operations,
net proceeds from  securitization  transactions and other borrowings and amounts
available  under its  Senior  Credit  Facility  will be  sufficient  to fund the
Company's operations for the foreseeable future.

      Cash Flow

     Cash flows from operating and financing  activities  provided by continuing
operations  are generated  primarily  from receipts on direct finance leases and
rentals  of  analytical  instruments,  gross  profit  on the sale of  analytical
instruments,  realization  of  residual  values,  the  financing  of  new  lease
originations and rental  inventory,  and  securitizations.  Cash flows from such
activities  increased  from $23.3 million for the six months ended June 30, 1997
to $144.4 million for the six months ended June 30, 1998. The increase  resulted
primarily  from  the  growth  in  the  Company's   Portfolio  Finance  &  Lessor
Acquisition activities and the securitizations completed in 1998.

      Credit Facilities

     As of June 30, 1998,  the Company had $100 million  available for borrowing
under its Senior  Credit  Facility of which $85.5  million was  outstanding.  In
August 1998, the facility was amended and increased to $125 million. The amended
facility  provides  for  interest at LIBOR plus 1.25% to 1.75% or the prime rate
plus up to 0.25% depending on certain leverage tests, and matures on October 31,
1998.

     In 1997, the Company entered into a  Securitization  Facility in an initial
amount of $60 million. In accordance with the terms of the facility, the Company
increased  the facility to $100 million  during the second  quarter of 1998.  At
June 30, 1998,  $96.8 million of the facility was utilized.  In August 1998, the
facility was increased to $150 million. The Securitization Facility provides for
an interest  rate which is 0.55% in excess of 30 day LIBOR and may be  converted
into an amortizing term facility at any time. The terms of the facility  permits
the  securitization  of  substantially  all  of  the  leases  originated  in the
Company's  Portfolio  Finance & Lessor  Acquisition  activities  and  Instrument
Rental &  Distribution  activities  as well as the  substantial  majority of the
leases originated in the Company's Select Growth Leasing activities.

Recently Issued Accounting Pronouncements

     SFAS No.  131,  "Disclosure  about  Segments of an  Enterprise  and Related
Information,"  will affect the  disclosure  requirements  for the Company's 1998
financial  statements.  The  Company  does not expect  that the  adoption of the
disclosure requirements of this pronouncement will have a material impact on its
financial statements.

     SFAS  No.  133,   Accounting   for  Derivative   Instruments   and  Hedging
Activities,"  establishes  accounting  and reporting  standards  for  derivative
instruments and for hedging activities,  and will not apply to the Company until
the year ended  December 31, 2000.  The Company has not yet evaluated the effect
of the pronouncement on its financial statements.

Note on Forward Looking Information

     Certain  statements  in this Form 10-Q and in other  filings by the Company
with the  Securities and Exchange  Commission  and in the Company's  written and
oral statements made by or with the approval of an authorized  executive officer
constitute "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934,
and the Company intends that such  forward-looking  statements be subject to the
safe harbors created thereby. The words "believe", "expect" and "anticipate" and
similar expressions identify forward-looking  statements.  These forward-looking
statements  reflect the Company's current view with respect to future events and
financial  performance,  but are  subject  to  many  uncertainties  and  factors
relating to the Company's operations and business environment including, but not
limited  to,  those  surrounding  such  forward  looking  statements  and  those
contained in the Company's other filings with the Commission  including the Risk
Factors set forth in the Company's  Registration  Statement in Form S-1 (Reg. No
333-34729),  which may cause the actual  results of the Company to be materially
different from any future results  expressed or implied by such  forward-looking
statements. Examples of such uncertainties, include, but are not limited to, the
volume of new leases originated, the backlog of unfunded leases and the adequacy
of financial resources.  The Company undertakes no obligation to publicly update
or revise any forward-looking statements whether as a result of new information,
future events or otherwise.
<PAGE>



PART II - OTHER INFORMATION

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

     a)  The Annual Meeting of Shareholders was held on May 19, 1998.

     b) As set forth in the Company's  Notice of Annual Meeting of  Shareholders
and Proxy  Statement  dated  April 22,  1998 as Item 1, all seven of the current
directors  of the Company  were elected to the Board of Directors of the Company
until the Annual Meeting of  Shareholders  in 1999. The directors  elected were:
Martin E.  Zimmerman,  Robert E. Laing,  Allen P. Palles,  Charles J.  Aschauer,
Stanley Green, Curtis S. Lane, and Terrence J. Quinn. There were 2,691,125 (52%)
common  shares voted for and  2,492,563  (48%) common  shares not voted for each
director elected.

     c) As set forth in the Company's  Notice of Annual Meeting of  Shareholders
and Proxy  Statement  dated April 22,  1998,  as Item 2, KPMG Peat  Marwick LLP,
independent certified public accountants, as auditors, was approved to audit the
financial statements for the year ending December 31, 1998. There were 2,691,125
(52%) common shares voted for this  proposal and  2,492,563  (48%) common shares
not voted.

Item 6.     Exhibits and Reports on Form 8-K

     a)  Exhibits

      Exhibit
      Number   Document Description


      27.1     Financial Data Schedule
      27.2     Restated Financial Data Schedule

     b)  Reports on Form 8-K

     The Company  did not file any reports on Form 8-K during the quarter  ended
June 30, 1998.


                                   SIGNATURES


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

                                           LINC CAPITAL, INC.
Dated: August 13, 1998

                                         By:        /s/ Martin E. Zimmerman
                                                    -----------------------
                                            Martin E. Zimmerman
                                            Chairman of the Board and Chief
                                            Executive Officer
                                            (Principal Executive Officer)

                                         By:        /s/ Allen P. Palles
                                                    -------------------
                                            Allen P. Palles
                                            Executive Vice President and
                                            Chief Financial Officer
                                            (Principal  Financial
                                             and Accounting Officer)