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 September 30, 2000

                                       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 Identification No.)
incorporation or organization)

   303 East Wacker Drive, 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 September 30, 2000,  5,265,050 shares of the  Registrant's  Common Stock were
outstanding.


<PAGE>



                               LINC CAPITAL, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


<S>                                                                                          <C>
PART I.   FINANCIAL INFORMATION                                                             PAGE

            Item 1.  Financial Statements:
                     Consolidated Balance Sheets -
                      September 30, 2000 and December 31, 1999 (unaudited) ..............    3
                     Consolidated Statements of Operations -
                      Three and nine months ended September 30, 2000 and 1999 (unaudited)    4
                     Consolidated Statements of Cash Flows -
                      Three and nine months ended September 30, 2000 and 1999 (unaudited)    5
                     Notes to Consolidated Financial Statements .........................    7

            Item 2.  Management's Discussion and Analysis of Financial
                     Condition and Results of Operations ................................   15

            Item 3.  Quantitative and Qualitative Disclosures About Market Risk .........   20



PART II.  OTHER INFORMATION

             Item 1.  Legal Proceedings .................................................   20

             Item 2.  Changes in Securities and Use of Proceeds .........................   20

             Item 3.  Defaults Upon Senior Securities ...................................   21

             Item 5.  Other Information .................................................   21

             Item 6.  Exhibits and Reports on Form 8-K ..................................   21

         SIGNATURES   ...................................................................   22
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                 LINC Capital, Inc. and Subsidiaries
                                                Consolidated Balance Sheets (Unaudited)
                                               (Dollars in thousands, except share data)


<S>                                                                             <C>              <C>
                                                                                September 30,  December 31,
                                                                                    2000          1999
                                                                                ------------   ------------
     ASSETS
     Net investment in direct finance leases and loans .......................   $ 321,911    $ 436,820
     Equipment held for rental and operating leases, net .....................      22,857       26,115
     Accounts receivable .....................................................       8,109       13,354
     Restricted cash .........................................................       9,048       11,254
     Investments in marketable securities.....................................      20,382        2,448
     Other assets ............................................................      10,746       15,278
     Goodwill ................................................................         ---        3,225
     Cash and cash equivalents ...............................................       3,412        4,394
                                                                              ------------ ------------
     Total assets ............................................................   $ 396,465    $ 512,888
                                                                              ============ ============


     LIABILITIES AND STOCKHOLDERS' EQUITY
     Senior credit facility and other senior notes payable ...................   $  80,428    $ 102,754
     Recourse debt ...........................................................       1,861        3,152
     Nonrecourse debt ........................................................     276,328      348,098
     Accounts payable ........................................................       9,641       15,208
     Accrued expenses ........................................................       6,316        8,795
     Customer holdbacks ......................................................       5,457        7,607
     Subordinated debentures .................................................       6,377        6,059
                                                                               -----------  -----------
     Total liabilities .......................................................   $ 386,408    $ 491,673
                                                                               -----------  -----------


     Redeemable preferred stock, $25,000 par value, 225
       shares authorized, issued and
       outstanding, stated at redemption value ...............................       5,960            -

     STOCKHOLDERS' EQUITY
     Common stock, $0.001 par value, 15,000,000 shares
       authorized; 5,330,953 shares issued;
       5,265,050 shares outstanding ..........................................           5            5
     Additional paid-in capital ..............................................      29,462       29,797
     Deferred compensation from issuance of options ..........................        (11)         (12)
     Stock note receivable ...................................................       (182)        (182)
     Treasury stock, at cost; 65,903 shares ..................................       (287)        (287)
     Accumulated other comprehensive income ..................................      20,359          932
     Accumulated deficit .....................................................    (45,249)      (9,038)
                                                                             ------------- ------------
                                                Total stockholders' equity       $   4,097    $  21,215
                                                                            ------------- ------------
                                 Total liabilities and stockholders equity       $ 396,465    $ 512,888
                                                                             ============= ============


                                     See accompanying notes to consolidated financial statements.
</TABLE>

<TABLE>
<CAPTION>


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



                                                                       Three Months ended         Nine Months ended
                                                                            September 30,           September 30,
<S>                                                                      <C>          <C>         <C>          <C>
                                                                         2000         1999        2000         1999
          REVENUES:
                Sales of equipment ..............................   $   7,778    $   6,053    $  28,401    $  22,062
                Direct finance lease income .....................       8,510        9,981       28,168       22,914
                Interest income .................................         481          803        2,270        2,441
                Rental and operating lease revenue ..............       2,010        2,918        6,268        8,295
                Servicing fees and other income .................         527        1,411        2,217        5,359
                Gain (loss) on sale of lease receivables ........       - - -          648          (9)        1,003
                Gain on equipment residual values ...............         247          275          688          838
                Gain on sale of equity participation rights .....          14          150          342        1,388
                                                                   -----------   -----------   ---------   ----------
              Total revenues ....................................      19,567       22,239       68,345       64,300
                                                                   -----------   -----------   ---------   ----------

          EXPENSES:
                Cost of equipment sold ..........................       6,213    $   4,781    $  22,788    $  17,848
                Selling, general and administrative .............       6,037        6,097       19,646       17,658
                Interest ........................................       6,654        6,939       23,316       15,969
                Depreciation of equipment under rental agreements
                  and operating leases ..........................       1,514        1,967        4,525        5,520
                Amortization of intangibles .....................         374          342        1,239          852
                Provision for credit losses and impairment in
                  value of securitization retained interest......      18,672        4,313       26,938        7,201
                Impairment loss on assets .......................       1,595        - - -        6,104        - - -
                Restructuring charges ...........................       - - -          700        - - -          700
                                                                --------------   ----------   ---------     ---------
           Total expenses .......................................      41,059       25,139      104,556       65,748
                                                                --------------   ----------   ---------     ---------
          Loss before income taxes ..............................    (21,492)      (2,900)     (36,211)      (1,448)
          Income tax benefit.....................................      - - -         1,529        - - -        1,123
                                                                --------------   ----------   ---------     ---------

          Net loss...............................................  $ (21,492)   $  (1,371)   $ (36,211)    $   (325)

          Net loss per common share:
                 Basic...........................................   $  (4.11)   $   (0.26)   $   (6.94)    $  (0.06)
                 Diluted.........................................   $  (4.11)   $   (0.26)   $   (6.94)    $  (0.06)


                                     See accompanying notes to consolidated financial statements.

</TABLE>
<TABLE>
<CAPTION>
                       LINC Capital, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows (Unaudited)
                             (Dollars in thousands)


                                                                       Three Months ended         Nine Months ended
                                                                          September 30,             September 30,
<S>                                                                    <C>          <C>          <C>           <C>
                                                                       2000         1999          2000          1999
Cash flows from operating activities:
   Net loss .....................................................   $ (21,492)   $  (1,371)   $ (36,211)   $   (325)
          Adjustments to reconcile net loss to net cash
          provided by operations:
             Depreciation and amortization.......................       1,978        2,327        6,428        6,802
             Direct finance lease income.........................     (8,510)      (9,981)     (28,168)     (22,914)
             Payments on direct finance leases...................      45,464       48,912      163,745      107,318
             Deferred income taxes...............................       - - -      (2,126)       - - -       (1,414)
             Provision for credit losses and impairment in value
                of securitization retained interest..............      18,672        4,313       26,938        7,201
             (Gain) loss on sale of lease receivables............       - - -        (648)            9      (1,003)
             Gain on equity participation rights.................        (14)        (150)        (342)      (1,388)
             Impairment loss on assets...........................       1,595        - - -        6,104       - - -
             Amortization of discount................ ...........         111           93          318          268
             Deferred compensation...............................       - - -            4            1         (15)
   Changes in assets and liabilities:
             Decrease (increase) in receivables..................       2,993        (473)        5,245      (2,719)
             Decrease (increase) in restricted cash..............         236      (2,453)        2,206      (5,944)
             Decrease (increase) in investments, other assets
               and goodwill......................................       5,897      (5,809)        1,215      (6,544)
             Increase (decrease) in accounts payable.............     (4,984)          973      (5,567)        6,199
             Increase (decrease) in accrued expenses.............       (589)          907      (2,478)          755
             Decrease in customer holdbacks......................         (2)      (2,853)      (2,150)      (4,271)
Cash provided by operating activities............................      41,355       31,665      137,293       82,006

Cash flows from investing activities:
      Cost of equipment acquired for lease and rental............     (2,387)     (68,733)     (65,518)    (266,337)
      Cash used in acquisitions, net of cash acquired............      - - -       (2,545)       - - -       (4,042)
      Receipts on securitization retained interest...............      - - -           727           88        5,622
      Fixed assets purchased.....................................      - - -         (415)        (630)      (1,094)
      Proceeds from sale of investments..........................          14        1,154          454        1,388
Net cash used in investing activities ...........................     (2,373)     (69,812)     (65,606)    (264,463)

(continued on following page)

                                     See accompanying notes to consolidated financial statements.
</TABLE>





<TABLE>
<CAPTION>

                                                  LINC Capital, Inc. and Subsidiaries
                                    Consolidated Statements of Cash Flows (Unaudited) - (Continued)
                                                        (Dollars in thousands)


                                                                     Three Months ended           Nine Months ended
                                                                        September 30,               September 30,
                                                                      2000         1999         2000           1999
                                                                      ---------------------------------------------
Cash flows from financing activities:
<S>                                                                  <C>          <C>         <C>           <C>
      Net decrease in notes payable.............................     (6,752)      (9,111)     (21,862)       (1,556)
      Proceeds from recourse and nonrecourse debt...............      - - -       257,597       63,803       436,132
      Repayments of recourse and nonrecourse debt...............    (33,984)    (142,255)    (137,328)     (190,055)
      Proceeds from sales of lease receivables..................      - - -        22,224       17,093        26,421
      Proceeds from issuance of redeemable preferred stock......      - - -         - - -        5,625        - - -
      Repurchase of receivables from conduit facility, net of
       securitization retained interest ........................      - - -      (81,183)       - - -       (81,183)
      Sale of stock.............................................      - - -        - - -        - - -            395
                                                                    --------      --------     --------     --------
Net cash provided by (used in) financing activities.............    (40,736)       47,272      (72,669)      190,154
                                                                    --------       ------      --------      -------

Net increase (decrease) in cash.................................     (1,754)        9,125         (982)        7,697
Cash at beginning of period.....................................      5,166        - - -          4,394        1,428
                                                                    --------      --------      --------     --------
Cash at end of period...........................................   $  3,412     $   9,125     $   3,412    $   9,125
                                                                    ========     =========     =========    =========


Supplemental disclosures of cash flow information:
      Interest paid.............................................   $  6,654     $   7,174     $  23,855    $  16,355
      Income taxes paid.........................................   $  - - -     $     185     $     286    $     754

          See accompanying notes to consolidated financial statements.

</TABLE>
                      LINC Capital, Inc. and Subsidiaries
             Notes to Consolidated Financial Statements (Unaudited)

(1)  The Company

     LINC  Capital,  Inc.  (the  "Company")  is a finance  company that provides
leasing,  asset-based financing,  and equipment rental and distribution services
to businesses. Prior to April, 2000, the Company's principal activities were (i)
the direct origination of leases and accounts  receivable and other asset-backed
financing to emerging growth companies primarily serving the telecommunications,
high-tech manufacturing,  Internet-related and information technology industries
("Select  Growth  Finance"),  (ii) the financing of leases  generated by smaller
equipment  lessors  ("Portfolio   Finance"),   (iii)  the  rental,  leasing  and
distribution  of  analytical  instruments  and related  equipment  to  companies
serving the environmental,  pharmaceutical and biotechnology  industries and the
leasing and distribution of equipment to  Internet-related  businesses  ("Rental
and  Distribution"),   and  (iv)  the  establishment  of  leasing  programs  for
manufacturers and distributors ("Vendor Finance").

     The Company has ceased  operations in its Select Growth Finance,  Portfolio
Finance and Vendor Finance business units, which constitute substantially all of
the Company's  leasing  activities,  and has transferred  servicing of the lease
portfolio to an outside  party.  The Company is continuing the operations of its
analytical  instrument Rental and Distribution  business,  pending its sale. See
Note 3.

(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, 1999. The results for
the  three-month  and  nine-month  periods  ended  September  30,  2000  are not
necessarily  indicative  of the results  that may be expected  for the full year
ending December 31, 2000.

     The balance  sheet at December 31, 1999 has been derived from the financial
statements  included in the  Company's  Annual  Report on Form 10-K for the year
ended December 31, 1999.

        Reclassifications

     Certain  reclassifications  have been made in the 1999 financial statements
to conform to the 2000 presentation.


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


(3)  Debt  Covenant  Violations,  Standstill  Agreement and  Continuance  of the
     Company as a Going Concern

     The Company is in  violation  of the minimum  tangible  net worth,  minimum
earnings,  leverage and interest  coverage  covenants under its senior revolving
credit facility (the "Loan Agreement").  The violations under the Loan Agreement
have also resulted in cross-defaults in the agreements relating to the Company's
commercial paper conduit  securitization  facility (the "Conduit  Facility") and
its term securitization  completed in July 1999 (the "Term Securitization").  In
April 2000, the lenders  delivered a default letter that terminated the lenders'
commitment to advance  funds under the Loan  Agreement.  New lease  originations
have  therefore been  suspended,  with the exception of a small number of leases
originated as a by-product of the Company's Rental and Distribution  activities,
which the Company continues to operate.

     On September 27, 2000, the Company entered into a Standstill Agreement with
the lenders under the Loan Agreement.  The Standstill Agreement became effective
in late October 2000 when various conditions precedent had been satisfied. Under
the terms of the Standstill Agreement,  the interest rate on amounts outstanding
under the Loan Agreement have been increased by 1.25%. The Standstill  Agreement
includes  provisions  that restrict the Company's  access to cash,  except for a
monthly  allocation  to cover  operating  expenses  and payments to suppliers of
equipment to its analytical  instrument  Rental and Distribution  business,  and
requires that the revolving debt,  which stood at $78.4 million on September 30,
2000,  be reduced to $76 million by October 3, 2000,  $70 million by October 31,
2000, $63 million by November 30, 2000 and zero by December 31, 2000.  Repayment
of this debt will  require  the sale of  substantial  amounts  of the  Company's
assets, including its Rental and Distribution business. The Standstill Agreement
provides  for the  payment of a  standstill  fee of up to $1  million,  of which
$500,000 was paid on October 23, 2000.  The balance of the Standstill fee is due
on termination of the  Standstill  Agreement,  which is the earlier of a default
under the  Standstill  Agreement or December 31, 2000. If the revolving  debt is
fully  repaid by  December  15,  2000,  the  forbearance  fee will be reduced by
$250,000.  The  forbearance  fee  will be  taken  as an  expense  for  financial
reporting purposes in the quarter ending December 31, 2000.

     The commercial  paper liquidity  facility  available to support the Conduit
Facility has been extended by the liquidity  providers to December 19, 2000. The
Company has been precluded from funding new lease  transactions into the Conduit
Facility since March 31, 2000.  Should liquidity not be available to the Conduit
Facility  beyond  December 19, 2000,  the interest rate on this  facility  would
immediately  increase by approximately 300 basis points,  with further increases
over time,  and the Company may be required by the  liquidity  providers to sell
the lease portfolio held by the Conduit Facility.

     The Company has entered  into  agreements  providing  for the  servicing of
substantially  all of its lease portfolio by a third party,  effective in August
2000. As a consequence of the transfer of servicing of lease  portfolios held by
the Term  Securitization  and the  Conduit  Facility  to this third  party,  the
Company   will  no  longer   receive   servicing   fees  from  either  the  Term
Securitization  or the Conduit  Facility.  Such  servicing fees in the year 2000
were $980,000. The outsourcing of servicing of the lease portfolio has permitted
the Company to substantially  reduce its overhead.  Employee  headcount has been
reduced  from  221  at  December  31,  1999,  including  53 in  the  Rental  and
Distribution operations,  to 72 at November 16, 2000, including 38 in Rental and
Distribution.

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

     As a result of the  defaults  in the Term  Securitization  and the  Conduit
Facility, all cash flow from the leases owned by the Term Securitization and the
Conduit Facility is being used to amortize the debt  certificates  issued by the
Term  Securitization and the amount owed to the Conduit Facility,  respectively.
As a  consequence,  recovery  of the  Company's  retained  interest  in the Term
Securitization  and the Conduit  Facility has been deferred from its  originally
expected  recovery  period.  Because of the substantial  extension of the period
over  which   recovery  of  the   Company's   retained   interest  in  the  Term
Securitization  and the Conduit  Facility is expected  and the  relatively  high
level of  delinquencies  and defaults  experienced in the lease portfolio during
the period from July 1, 2000 to September 30, 2000, the Company has  established
reserves  equal to $6.1  million  against the  retained  interest in the Conduit
Facility and $11 million against the Class C Certificate  held by the Company in
the Term  Securitization.  These  reserves  increased the allowance for doubtful
receivables,  which is a component of the  Company's  net  investment  in direct
finance  leases and loans.  The  Company has not  established  a reserve for the
Class  B-2  Certificate  that it holds in the Term  Securitization,  which has a
carrying value of approximately $2.3 million at September 30, 2000.  Recovery of
the value of the Class B-2 Certificate is dependent on future performance of the
portfolio.

     In the event that the  Company is unable to  successfully  comply  with the
terms  of the  Standstill  Agreement,  the  Company  may  be  required  to  seek
protection under the Bankruptcy Code. Also, if various unsecured creditors whose
obligations  are past due were to enforce  their  claims,  the Company  could be
forced into bankruptcy. In addition, even if the Company were to comply with the
Standstill Agreement and forestall action by its unsecured creditors,  there can
be no assurance  that the Company  will have  sufficient  liquidity  and capital
resources  to continue  operating  as a going  concern.  While the  accompanying
financial  statements  reflect  substantial  valuation  adjustments for impaired
assets,  they may not fully reflect the  adjustments  that would be necessary if
the Company ceased to be a going concern.

(4)     Impairment of Assets

     During the quarter ended June 30, 2000,  as a result of the  discontinuance
of its leasing activities and substantial downsizing,  the Company recognized an
impairment  loss of $4,509,000.  Included in the impairment  loss was $1,600,000
relating  to the  estimated  excess  cost of the space  lease for the  Company's
corporate  headquarters  and  $1,240,000 on furniture,  fixtures,  computers and
other office  equipment,  equal to the difference  between the net book value of
these assets and their  estimated  fair value.  Also included in the  impairment
loss was $1,669,000  relating to the goodwill associated with the acquisition of
LINC IF+E in August 1999, part of the Company's Rental and Distribution business
unit,  as the  estimated  expected  future cash flows are less than the carrying
value.

     During the quarter  ended  September  30,  2000,  the  Company  recorded an
additional impairment loss of $1,595,000,  equal to the goodwill associated with
the  remainder  of  the  Company's  Rental  and  Distribution  business,  as the
estimated expected future cash flows are less than the carrying value.

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

<TABLE>
<CAPTION>

(5)  Net Investment in Direct Finance Leases and Loans

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

<S>                                                           <C>               <C>
                                                              September 30,      December 31,
                                                                   2000              1999
                                                               ----------        -----------

                                                                      (In thousands)

      Lease and loan contracts receivable in installements        $387,621        $501,557
      Estimated residual value of leased equipment..........        18,548          17,386
      Broker fees...........................................         3,749           3,857
      Initial direct costs..................................         3,440           4,482
      Unearned lease income.................................      (59,136)        (78,544)
      Allowance for doubtful receivables....................      (32,311)        (11,918)
                                                             --------------   -------------
      Net Investment........................................      $321,911        $436,820
                                                             ==============   =============
</TABLE>

     At September 30, 2000, $52.0 million of lease receivables were more than 30
days past due, of which $22.8 million were more than 90 days past due.

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

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

                                                   September 30,    December 31,
                                                      2000               1999
                                                   -----------      ------------
                                                          (In thousands)

      Equipment under operating leases............   $4,505            $6,993
      Equipment under rental agreements...........   18,352            19,122
                                                   ------------    ------------
      Net book value..............................  $22,857           $26,115
                                                   ============   =============


     The  book  values  presented  in the  above  table  are net of  accumulated
depreciation  of $10,775,000  and $10,128,000 at September 30, 2000 and December
31, 1999, respectively. Equipment under rental agreements is comprised primarily
of analytical instruments.



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


(7)     Debt

    Notes Payable

    Notes Payable to banks and others were as follows:
                                                    September 30,  December 31,
                                                       2000            1999
                                                    -------------  ------------
                                                           (In thousands)

      Senior credit facility..................        $78,400        $99,700
      Other...................................          2,028          3,054
                                                  ------------    ------------
                         Total................        $80,428       $102,754
                                                  ============    ============


     At September 30, 2000 and December 31, 1999,  $78,400,000 and  $99,700,000,
respectively,  was  outstanding  under  a  senior  credit  facility  (the  "Loan
Agreement").  The  weighted-average  interest  rate  on the  Loan  Agreement  at
September  30, 2000 and  December  31,  1999 was 8.13% and 7.65%,  respectively.
Under the terms of the  Standstill  Agreement,  interest rates under the various
borrowing options have been increased 1.25% over the rates previously  available
under the Loan Agreement.  The facility is secured by  substantially  all of the
assets of the Company and was used by the Company to finance the  acquisition of
equipment  pending  completion  of permanent  financing  and for normal  working
capital purposes.  Since December 31, 1999, the Company has been in violation of
the  covenants  of its Loan  Agreement  relating  to minimum  earnings,  minimum
tangible net worth,  leverage and interest coverage. It was also in violation of
covenants  contained in the agreements  relating to the Conduit Facility and the
insurance  policy that provides credit  enhancement to the Term  Securitization.
For further information, see Note 3.

    Nonrecourse and Recourse Debt

     At September 30, 2000 and December 31, 1999,  the Company had  $141,083,000
and $134,228,000 of nonrecourse debt recorded on its consolidated  balance sheet
under its Conduit Facility,  with  weighted-average  interest rates of 8.16% and
6.26%, respectively.  Additionally, at September 30, 2000 and December 31, 1999,
$117,455,000  and  $179,891,000  was recorded as nonrecourse debt under the Term
Securitization. The weighted-average interest rate on the Term Securitization is
6.24%. The Company also permanently finances leases with financial institutions,
on either a nonrecourse  or partial  recourse  basis.  At September 30, 2000 and
December 31, 1999, the Company had  $19,651,000 and  $37,131,000,  respectively,
outstanding under these financings.

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


(8)     Loss per Share


     The following  table sets forth the  computation  of basic and diluted loss
per share.
<TABLE>
<CAPTION>


                                                          Three months ended       Nine months ended
                                                           September 30,            September 30,
<S>                                                      <C>           <C>            <C>       <C>
                                                         2000          1999           2000       1999
                                                        ------      --------       -------     -------
                                                              (In thousands, except share data)

 Net loss from operations.                               $ (21,492)      $(1,371)   $(36,211)     $(325)
                                                             $ 133        - - -          335       - - -
                                                        ----------- ------------- ----------- ----------
       Numerator for basic and diluted loss per share

         Net loss available to common stockholders....    $(21,625)      $(1,371)   $(36,546)     $(325)
                                                        ----------- ------------- ----------- ----------
       Denominator for basic earnings per share-
             weighted average shares outstanding......    5,265,050     5,265,050   5,265,050  5,250,753

         Effect of dilutive stock options.............       - - -         - - -       - - -      - - -
                                                        ----------- ------------- ----------- ----------

 Denominator for diluted loss per share...............    5,265,050     5,265,050   5,265,050  5,250,753

Net loss

        Basic loss per share..........................      $(4.11)       $(0.26)     $(6.94)    $(0.06)
                                                        =========== ============= =========== ==========
        Diluted loss per share........................      $(4.11)       $(0.26)     $(6.94)    $(0.06)
                                                        =========== ============= =========== ==========
</TABLE>


(9)     Comprehensive Income

     The components of comprehensive income (loss) for the three months and nine
months ended September 30, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>


                                                          Three months ended         Nine months ended
                                                            September 30,               September 30,
<S>                                                       <C>          <C>            <C>          <C>
                                                          2000         1999           2000         1999
                                                         -------     --------       --------     --------
                                                                         (In thousands)
  Net loss...........................................     $(21,492)  $(1,371)      $(36,211)      $(325)
       Other comprehensive income (loss):
          Unrealized gain on securities..............        20,319       206         19,442        607
          Foreign currency translation adjustment....          (41)       140            (16)       271
                                                        ----------- ------------- ----------- ----------
       Comprehensive income (loss)...................      $(1,214)   $(1,025)      $(16,785)      $553
                                                        =========== ============= =========== ==========
</TABLE>


     Accumulated  other  comprehensive  income  (loss) at September 30, 2000 and
December  31, 1999  consists of  unrealized  gains  (losses)  on  securities  of
$20,213,000  and  $771,000  and   accumulated   foreign   currency   translation
adjustments of $146,000 and $161,000, respectively. Included in unrealized gains
on  securities  at  September  30,  2000  is  $19,863,000   relating  to  Corvis
Corporation.  Corvis  Corporation  completed an initial  public  offering in the
third quarter of 2000 and the Company exchanged  warrants it owned in Corvis for
common stock.


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

     The Company has 325,357 shares of Corvis common stock, which are subject to
a lockup  agreement  expiring  in late  January  2001.  These  shares  have been
classified  as  "available  for sale" at September  30, 2000 and valued at their
market price of $61.05 on that date, for a total of $19.9 million. The price has
materially  fluctuated since that date. The price of the shares of Corvis at the
close of  business  on  November  17,  2000 was  $33.31,  which  would value the
Company's holdings at $10.8 million.  The valuation of the Company's holdings in
Corvis may  fluctuate  materially  in the future and the  Company is not readily
able to dispose of its holdings  until the  expiration  of the lockup  period in
late January 2001.


(10) Segment Information

     As previously  indicated,  the Company has ceased substantially all leasing
activities  and the Company has entered into a  non-binding  letter of intent to
sell its analytical  instrument Rental and Distribution  business.  Management's
focus  is  on  selling  assets  to  raise  cash  to  repay  debt.   Under  these
circumstances,  the Company  believes  that the  reporting of the  activities of
business segments is no longer relevant or meaningful.


(11)  Redeemable Preferred Stock

     On  February  1,  2000,  the  Company  issued  $5,625,000  of  Series  A 8%
Cumulative  Redeemable Preferred Stock. The issuance of this series of preferred
stock was coupled  with  warrants to purchase  326,250  shares of the  Company's
common stock at $5.49 per share.  Additional  warrants  for 652,500  shares were
issuable at September  30, 2000,  since the  preferred  shares were not redeemed
prior to that time. The Preferred  Stock bears dividends at 8% per annum through
December 31, 2000, 10% per annum from January 1, 2001 through  December 31, 2001
and 12% per annum  thereafter.  At September  30, 2000,  $335,000 of accrued but
unpaid  dividends are included in the preferred stock amount on the consolidated
balance sheet.  The Preferred  Stock is mandatorily  redeemable upon a change of
control or on January 31, 2005, whichever occurs first. The Company has not paid
or  declared  the  dividends  payable  as a result  of  defaults  under the Loan
Agreement. As a consequence, the dividend rate has been increased to 9%.


(12)  Subsequent Events

     On October 15,  2000,  the Company  entered  into a  non-binding  letter of
intent to sell its analytical instrument Rental and Distribution  business.  The
sale is subject to the completion of due diligence and financing arrangements as
well as execution of definitive binding agreements and approval by the Company's
lenders under the Loan Agreement.


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


     At October 31,  2000,  the Company was in  violation  of a provision of the
Standstill  Agreement that limits the "over-advance" (as defined) under the Loan
Agreement to $12 million. At that date, the over-advance was approximately $12.1
million. In addition,  at October 31, 2000, the principal  outstanding under the
Loan  Agreement was $73.9  million,  as compared to the required  balance of $70
million.  The Company has requested  that the lenders  under the Loan  Agreement
extend the  standstill  period  from  December  31, 2000 to January 31, 2001 and
adjust the over-advance and permitted maximum  principal balance  outstanding to
higher levels than those  currently  required.  The lenders are  considering the
Company's request. If the lenders elect not to amend the Standstill Agreement or
to waive the above described  events of default,  the balance due under the Loan
Agreement will be immediately due and payable.  In such case, the Company may be
required to seek protection under the Bankruptcy Code.

     At September 30, 2000, the Company's holdings in Corvis Corporation,  which
are classified as "available for sale"  securities were valued at $19.9 million.
At November 17, 2000 such holdings were valued at $10.8  million.  The valuation
of the Company's  holdings in Corvis,  as well as its other holdings in warrants
of private  companies can be expected to fluctuate in value  materially.  On the
basis of the current value of Corvis  Corporation,  the likely net proceeds from
the pending sale of its Analytical Instrument Rental and Distribution  business,
the net proceeds  that may be realized  from the sale or collection of its lease
portfolio  and the  estimated  value of its other  assets,  the Company does not
believe that such proceeds  will be sufficient to satisfy its remaining  secured
indebtedness  under  the Loan  Agreement.  Accordingly,  the  Company  currently
expects  that  there  will no assets  available  to  satisfy  the  claims of its
unsecured creditors,  including, but not limited to the holders of the Company's
8.25%  Subordinated  Debentures,  or the  holders  of its  Series  A  Cumulative
Preferred Stock.


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

Results of Operations

Three Months ended  September 30, 2000 compared to Three Months ended  September
30, 1999

     Sales of equipment increased to $7.8 million from $6.1 million,  while cost
of  equipment  sold  increased  to $6.2  million  from $4.8  million  due to the
acquisition  of  Internet  Finance &  Equipment,  Inc.  in August 1999 (now LINC
IF+E),  which  distributes and leases  telecommunications,  routing and Internet
enabling  equipment,  and an increase in sales of analytical  instruments in the
Company's other Rental and Distribution business. In September 2000, the Company
discontinued  the  activities  of LINC IF+E.  The net margin on sales  decreased
slightly to 20.1% from 21%.

     Direct  finance  lease income  decreased to $8.5 million from $10.0 million
and interest  income  declined from $0.8 million to $0.5 million.  Both declines
are as result of the decline in leases and loans  outstanding.  At September 30,
1999, the Company's net investment in leases and loans was $411.9 million versus
$321.9 million at September 30, 2000.

     Direct finance lease income and interest  income,  minus interest  expense,
was $2.3 million,  or 26.0% of direct  finance lease income and interest  income
(the "Interest  Margin")  compared to $3.8 million,  or 35.7%, in the prior year
period.  The decrease in the  Interest  Margin is due to an increase in interest
rates  beginning in the second half of 1999 and,  beginning  in April 2000,  the
inability  of the  Company to move  leases from its  relatively  more  expensive
revolving line of credit into a securitization facility.

     Rental and operating lease revenue  decreased to $2.0 million from $2.9 due
to a declining portfolio of equipment held for rental and operating leases.

     Servicing  fees and  other  income  decreased  to $0.5  million  from  $1.4
million. Servicing fees and other income primarily consists of fees received for
servicing  off-balance  sheet  securitized  leases,  fees received for servicing
third party lease  portfolios,  interim rents received by Select Growth Finance,
and late fees.  The decrease over the prior year period relates to a decrease in
each of these types of income.

     There  were no gains  on sale of lease  receivables  in the  quarter  ended
September  30,  2000,  versus $0.6 million in the same period of the prior year.
These  amounts  represent  gains or  losses on lease  receivables  sold to third
parties and fluctuate based on the volume of lease  receivables  sold in a given
period.

     Gains on equipment residual values were approximately $0.3 million for each
period.  Gains on equipment residual values fluctuate based on the dollar volume
of leases maturing in a given period and the economics of those sales.

     During the third quarter of 2000, the Company  recognized  negligible gains
on equity  participation  rights versus a gain of $0.2 million in the comparable
prior year period.  Equity  participation gains and losses fluctuate from period
to period based on the value of securities  in the  Company's  portfolio and the
timing of the sale of these securities.

     Selling,  general and administrative  expenses, net of initial direct costs
capitalized,  decreased to $6.0 million from $6.1 million. The cost savings from
the  substantial  reductions in employee  headcount and other overhead  expenses
were largely offset by severance and other termination related costs, incentives
necessary  to retain key  employees  and  professional  fees.

     Interest  expense  decreased to $6.7 million  from $6.9  million,  due to a
decline in interest-bearing  debt ($435.9 million at September 30, 1999 compared
to $365.0  million at September  30, 2000),  partially  offset by an increase in
interest rates.

     Depreciation  of equipment  decreased to $1.5 million from $2.0 million due
to a decrease in operating leases and rental equipment.

     Amortization of intangibles increased to $0.4 million from $0.3 million due
to the  amortization  of issuance  costs  resulting  from a term  securitization
completed  during the third quarter of 1999,  partially  offset by a decrease in
goodwill  amortization  due to the  write-off  at December  31, 1999 of goodwill
associated with the acquisitions of Comstock Leasing Inc., Monex Leasing,  Ltd.,
Spectra Precision Credit Corp. and Connor Capital Corporation.

     The provision for credit losses and  impairment in value of  securitization
retained interest increased to $18.7 million from $4.3 million.  The increase in
the  provision is the result of the  Company's  decision in the third quarter of
2000 to fully reserve for its retained  interest in the Conduit Facility and for
the Class  Certificate  it holds in the Term  Securitization,  in the  aggregate
amount of $17.1 million.

     At September 30, 2000, the Company recorded a loss of $1.6 million relating
to the impairment of goodwill on its Rental and Distribution  business. See Note
4 to Consolidated Financial Statements

     The Company did not record a tax benefit on the pre-tax  loss for the third
quarter of 2000 since  realization  of the tax benefit  cannot be  assured.  The
Company recorded an income tax benefit of $1.5 million on a pre-tax loss of $2.9
million for the same period of the prior year.

Nine Months ended September 30, 2000 compared to Nine Months ended September 30,
1999

     Sales of equipment  increased to $28.4  million from $22.1 million and cost
of equipment  sold  increased to $22.8 million from $17.8 million as a result of
the  acquisition  of LINC IF+E in August 1999. Net margins on sales of equipment
increased  to 19.8%  from  19.1% due to  higher  margins  obtained  by LINC IF+E
compared to margins on the sale of analytical  instruments,  partially offset by
slightly lower margins achieved on the sale of analytical instruments.

     Direct  finance lease income  increased to $28.2 million from $22.9 million
as a result  of a  substantially  higher  level  of  finance  lease  receivables
outstanding  during the early part of 2000,  arising from acquired companies and
from internal lease originations, a greater portion of which are retained on the
Company's balance sheet.

     Interest income declined to $2.3 million from $2.4 million primarily due to
a decrease in  interest-bearing  notes receivable held by the Company during the
later part of the nine month period ended  September  30, 2000.  Direct  finance
lease income and interest income,  minus interest expense,  was $7.1 million, or
23.4% of direct finance lease income and interest income (the "Interest Margin")
compared to $9.4 million,  or 37.0%,  in the prior year period.  The decrease in
the Interest  Margin is due to an increase in interest  expense caused by higher
interest  rates  beginning in the second half of 1999 and a decrease in interest
income recorded on the Company's  securitization  retained  interest,  resulting
from the repurchase of lease  receivables  from the Company's  commercial  paper
conduit facility in connection with completion of a term securitization.

     Rental and  operating  lease  revenue  decreased  to $6.3 million from $8.3
million due to a  substantial  decline in the size of the portfolio of equipment
held for rental and operating leases.

     Servicing  fees and  other  income  decreased  to $2.2  million  from  $5.4
million. Servicing fees and other income primarily consists of fees received for
servicing  off-balance  sheet  securitized  leases,  fees received for servicing
third party lease  portfolios,  interim rents received by Select Growth Finance,
and late fees. The decrease over the prior year period primarily relates to $1.2
million in deferred  incentive  fees realized in connection  with servicing of a
portfolio  owned by a third party during the first quarter of the prior year and
a decrease in fees received for servicing  securitized  leases  resulting from a
reduction in off-balance sheet securitized leases.  Additionally,  interim rents
received by Select  Growth  Finance and late fees  collected  by Vendor  Finance
decreased between periods.

     Gain (loss) on the sale of lease receivables decreased to a negligible loss
from a gain of $1.0 million.  These amounts  represent  gains or losses on lease
receivables  sold to third  parties and  fluctuate  based on the volume of lease
receivables sold in a given period and the economics of those sales.

     Gains on  equipment  residual  values  decreased  to $0.7 million from $0.8
million. Gains on equipment residual values fluctuate based on the dollar volume
of leases maturing in a given period.

     During the first nine months of 2000, the Company recognized a gain of $0.3
million on certain equity  participation rights versus a gain of $1.4 million in
the  comparable  prior  year  period.  Equity  participation  gains  and  losses
fluctuate  from  period  to  period  based  on the  value of  securities  in the
Company's portfolio and the timing of the sale of these securities.

     Selling,  general and administrative  expenses, net of initial direct costs
capitalized,  increased  to $19.6  million  from  $17.7  million.  The  increase
resulted  primarily from an increase in personnel and operating costs associated
with the  acquisition  of LINC IF+E in August 1999 in the  Company's  Rental and
Distribution business unit,  professional fees incurred related to the Company's
violation of covenants  under its Loan  Agreement,  Conduit  Facility,  and Term
Securitization,  and a decrease in initial  direct  costs  capitalized  due to a
decrease in lease originations between periods.

     Interest  expense  increased  to $23.3  million  from  $16.0  million,  due
primarily to increased  borrowings  resulting from growth in lease  originations
and lease portfolios acquired, with the resulting increase in borrowings, and an
increase in the Company's  weighted average interest rates on outstanding  debt.
In addition,  interest expense  increased over the same period in the prior year
as a result of the repurchase by the Company during the quarter ended  September
30, 1999 of $99.0 million in lease receivables previously sold to its commercial
paper  conduit  facility  utilizing  proceeds  of a  term  securitization  which
increased the level on nonrecourse debt.

     Depreciation  of equipment  decreased to $4.5 million from $5.5 million due
to a decrease in equipment held for rental and operating leases.

     Amortization of intangibles increased to $1.2 million from $0.9 million due
to the  amortization  of issuance  costs  resulting  from a term  securitization
completed  during the third quarter of 1999,  partially  offset by a decrease in
goodwill  amortization  due to the  write-off  of goodwill  associated  with the
acquisitions of Comstock Leasing Inc., Monex Leasing,  Ltd.,  Spectra  Precision
Credit  Corp.  and Connor  Capital  Corporation  at  December  31,  1999 and the
write-off of goodwill  associated with the  acquisition of Internet  Finance and
Equipment at June 30, 2000.

     The provision for credit losses and  impairment in value of  securitization
retained interest increased to $26.9 million from $7.2 million.  The increase is
the result of the  Company's  decision to  substantially  increase  its bad debt
allowance as a percentage  of its net  investment in leases and loans due to the
increased  level of  deliquent  and  defaulted  leases and to fully  reserve its
retained interest in its Conduit  Securitization  and the Class C Certificate it
holds in its Term Securitization. The Company holds an interest in the Class B-2
Certificates  issued by the Term  Securitization  that it  carries at a value of
approximately $2.3 million at September 30, 2000.

     At June 30, 2000, the Company  recorded an impairment  loss of $4.5 million
related to the impairment of goodwill  associated  with the  acquisition of LINC
IF+E in August 1999, the impairment of furniture,  fixtures, computers and other
office equipment, and an estimated loss on the Company's corporate headquarters'
lease  agreement.  At September  30, 2000,  the Company  recorded an  additional
impairment loss of $1.6 million  associated with the remainder of its Rental and
Distribution business. See Note 4 to Consolidated Financial Statements.

     The  Company  did not  record a tax  benefit on the  pre-tax  loss of $36.2
million for the nine months ended  September 30, 2000 since  realization  of the
tax benefit cannot be assured.  The Company  recorded income tax benefit of $1.1
million on a pre-tax loss of $1.4 million for the same period of the prior year.


Liquidity and Capital Resources

     General

     The  Company's  activities  are capital  intensive  and  require  access to
substantial  amounts of credit to fund new  equipment  leases.  The  Company has
financed its  operations to date  primarily  through cash flow from  operations,
borrowings  under its Loan  Agreement  with its senior  lenders  and its Conduit
Facility, other non-recourse and recourse loans, the Term Securitization and the
sale of equity.  For  further  information,  see Notes 3 and 12 to  Consolidated
Financial Statements.

     Cash Flow

     Cash flows from operating and financing  activities are generated primarily
from  receipts on direct  finance and  operating  leases,  rentals of analytical
instruments, gross profit on the sale of analytical instruments,  realization of
equipment residual values,  and financing of new lease  origination's and rental
inventory  through  credit  facilities  and  securitizations.  Cash  flows  from
operating and financing  activities for the nine months ended September 30, 2000
and 1999 were a net of $64.6  million  and  $272.2  million,  respectively.  The
decrease  in 2000 from 1999  results  primarily  from no new debt  financing  or
securitizations  during  the  second and third  quarters  of 2000,  as well as a
decrease  in the volume of  securitizations  completed  in the first  quarter of
2000,  partially  offset by an increase in payments  received on direct  finance
leases.

     Credit Facilities

     In the past, the Company  utilized its secured  revolving  credit  facility
provided  by a  syndicate  of  banks  under  the  Loan  Agreement  to  fund  the
acquisition   and   origination  of  leases  and  the  purchase  of  rental  and
distribution  inventory.  At September 30, 2000,  the Company had borrowed $78.4
million,   with  a   weighted-average   interest  rate  of  8.13%.  For  further
information, see Note 3 to Consolidated Financial Statements.

     Commercial Paper Conduit Securitization Facilities

     The Company,  through a special purpose subsidiary,  has a commercial paper
conduit  securitization  facility  in an amount of $289  million  (the  "Conduit
Facility").

     At the time of placing leases in the securitization facilities, the Company
enters  into  interest  rate cap and  interest  rate swap  agreements  to manage
interest  rate  risk.  For  further  information,  see  Note  3 to  Consolidated
Financial Statements.

     Term Securitization

     In July 1999, the Company, through a special purpose subsidiary,  completed
a term securitization in the amount of $237 million (the "Term Securitization").
$199  million of A-1  Certificates  rated AAA by  Standard  and Poor's and Fitch
IBCA,  Inc.  and Aaa by  Moody's  Investor  Service,  Inc.,  $9  million  of B-1
Certificates  rated BBB by Fitch IBCA,  Inc., and $9 million of B-2 Certificates
rated BB by Fitch IBCA,  Inc., were issued in the private  market.  A portion of
the B-2  Certificates  (approximately  $3 million) and the C Certificate  of $17
million  were  retained  by the  Company.  The  remaining  balance  of  the  A-1
Certificates,  the B-1 Certificates, and the B-2 Certificates at October 1, 2000
was $98.6 million, $6.4 million, and $8.9 million, respectively. The Company has
fully reserved its investment in the C  Certificates.  For further  information,
see Note 3 to Consolidated Financial Statements.

     Preferred Stock

     On  February  1,  2000,  the  Company  issued  $5,625,000  of  Series  A 8%
Cumulative  Redeemable  Preferred  Stock (the "Series A Preferred  Stock").  The
issuance of this series of preferred stock was coupled with warrants to purchase
326,250 shares of the Company's  common stock at $5.49 per share (the "Preferred
Stock  Warrants").  Additional  Preferred Stock Warrants for 652,500 shares were
issuable at  September  30,  2000,  since the Series A  Preferred  Stock was not
redeemed  prior to that time.  The Series A Preferred  Stock accrues  cumulative
preferred  dividends at 8% per annum  through  December 31, 2000,  10% per annum
from January 1, 2001 through December 31, 2001 and 12% per annum thereafter. The
Series A Preferred Stock is required to be redeemed by the Company upon a change
of control or on January 31, 2005,  whichever  occurs first.  As a result of the
violation of certain covenants under the Loan Agreement,  the Company was unable
to declare or make payment of the  dividend on the Series A Preferred  Stock due
on March 31, June 30, 2000 or September 30, 2000. As a consequence,  the Company
is in default of certain  provisions of the terms and conditions of the Series A
Preferred  Stock and the dividend rate on such  preferred  stock  accruing after
March 31, 2000 has been  increased  by 1 percentage  point.  See also Note 12 to
Consolidated Financial Statements.

Note on Forward Looking Information

     Certain  statements  in this Form  10-Q and in the  future  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 and phrases "expects", "intends",
"believe",  "will  seek",  and "will  realize" and similar  expressions  as they
relate  to  the  Company  or  its  management  are  intended  to  identify  such
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  which may cause the actual results of the
Company to be  materially  different  from results  expressed or implied by such
forward-looking statements. Examples of such uncertainties, include, but are not
limited to, the Company's plans for reducing overhead and for selling portfolios
of leases,  the  Company's  plans and  intentions  with regard to its rental and
distribution  operations,  and the  availability  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.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     There have been no material  changes  from the 1999  Annual  Report on Form
10-K related to the Company's  exposure to market risk from interest  rates.  At
December 31, 1999,  termination  of the interest rate swap and interest rate cap
agreements  would have  resulted  in a credit to earnings  of $2.1  million.  At
September 30, 2000,  termination of the interest rate swap and interest rate cap
agreements would have resulted in a credit to earnings of $0.3 million.

Part II - Other Information

Item 1.  Legal Proceedings

     The Company is the subject of  lawsuits  alleging  that the Company has not
made timely payment of amounts owed for services  provided to the Company or for
equipment  purchased by the Company in the ordinary course. The aggregate amount
owed with respect to these claims is approximately $175,000.

     The  Company is in default of certain of its  obligations  relating  to the
acquisition  of one  of its  Vendor  Finance  origination  units  and  has  been
threatened  with  litigation as a consequence  of such default.  The Company has
been advised by the former owner of one of its Vendor Finance  origination units
that  certain   claims   asserted  by  those  owners  have  been  submitted  for
arbitration. A Demand For Arbitration and Statement of Claim has been filed with
the American  Arbitration  Association  in Chicago,  Illinois by Monex  Leasing,
Ltd., Monex Group, Inc.,  Catherine Ross and Monex Finance. The aggregate amount
alleged to be due and owing to such former  owner is  approximately  $3,649,584.
The Company is in the process of defending such claims.

     In  addition,  the former owner of the  Company's  LINC  Comstock  unit has
alleged  that he  believes  that  the  Company  is in  default  of a  settlement
agreement  entered into  between the Company and such former  owner  relating to
disputed contingent payments.  This former owner has threatened  litigation with
respect to such  alleged  default.  The Company  does not believe  that it is in
default of the settlement agreement.

Item 2.  Changes in Securities and Use of Proceeds

     On  February  1,  2000,  the  Company  issued  $5,625,000  of  Series  A 8%
Cumulative  Redeemable  Preferred  Stock (the "Series A Preferred  Stock").  The
issuance of this series of preferred stock was coupled with warrants to purchase
326,250  shares of the  Company's  common  stock at $5.49 per share.  Additional
warrants  for 652,500  shares were  issuable at September  30,  2000,  since the
Series A  Preferred  Stock was not  redeemed  prior to that  time.  The Series A
Preferred Stock accrues cumulative  preferred  dividends at 8% per annum through
December 31, 2000, 10% per annum from January 1, 2001 through  December 31, 2001
and 12% per annum  thereafter.  The Series A  Preferred  Stock is required to be
redeemed  by the  Company  upon a change of  control  or on  January  31,  2005,
whichever occurs first. As a result of the violation of certain  covenants under
the Loan  Agreement,  the Company has been unable to declare or make  payment of
the dividends on the Series A Preferred Stock. As a consequence, the Company may
be in default of certain  provisions of the terms and conditions of the Series A
Preferred  Stock and the dividend rate on such  preferred  stock  accruing after
March 31, 2000 has been increased by 1 percentage  point. The total arrearage in
the payment of dividends on November 16, 2000 was $335,000.

Item 3.  Defaults Upon Senior Securities

     The  Company  has been in  violation  of the  minimum  tangible  net worth,
minimum  earnings,  leverage  and  interest  coverage  covenants  under its Loan
Agreement  since December 31, 1999. On September 27, 2000,  the Company  entered
into a Standstill  Agreement  with the lenders under the Loan  Agreement,  which
became effective in late October 2000 when various conditions precedent had been
satisfied.  The  violations  under  the Loan  Agreement  have also  resulted  in
cross-defaults  in the agreements  relating to the Conduit Facility and the Term
Securitization.  The amount outstanding under the Loan Agreement at November 16,
2000 was $73.9 million.  The amount  outstanding  under the Conduit Facility and
the Term  Securitization  at October 20, 2000, the most recent  settlement date,
was $118.9  million  and $113.9  million  (of which $2.3  million is held by the
Company),  respectively.  For further  information,  see Note 3 to  Consolidated
Financial  Statements and  Management's  Discussion and Analysis - Liquidity and
Capital Resources.

     The Company is in default with respect to certain of its obligations  under
the  Standstill  Agreement.  Negotiations  are in progress to obtain a waiver of
such  defaults and an amendment of the terms of the  Standstill  Agreement.  See
Notes 3 and 12 to Consolidated Financial Statements.

Item 5.  Other Information

Annual Meeting

     The Company has not  scheduled an Annual  Meeting of  Shareholders  at this
time due to the time commitment and costs associated with such a meeting.


Item 6.  Exhibits and Reports on Form 8-K

        Exhibits

        Exhibit
        Number           Document Description
        -------          ------------------------
         27.1            Financial Data Schedule

        Reports on Form 8-K

     On  October  16,  2000,  the  Company  filed a current  report on Form 8-K,
reporting under Item 5 and Item 7. The filing contained  information relating to
the  Standstill  Agreement,  the  letter  of  intent  to  sell  the  Rental  and
Distribution business, and other matters.
<PAGE>

                                   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: November 20, 2000






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

                                           By:  /s/ Mark A. Arvin
                                                ----------------------
                                                Mark A. Arvin
                                                Senior  Vice  President, Finance
                                                (Principal Accounting Officer)