================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20594

                                    FORM 10-Q

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

                  For the Quarterly Period Ended June 30, 2000

                         Commission File Number 1-11011

                              THE FINOVA GROUP INC.
             (Exact Name of Registrant as Specified in Its Charter)

             Delaware                                   86-0695381
  (State or Other Jurisdiction of           (I.R.S. Employer Identification No.)
   Incorporation or Organization)

    4800 North Scottsdale Road                          85251-7623
          Scottsdale, AZ                                (Zip Code)
(Address of Principal Executive Offices)

        Registrant's Telephone Number, Including Area Code: 480-636-4800

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 [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

As of August 10, 2000,  61,304,000 shares of Common Stock ($0.01 par value) were
outstanding.

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<PAGE>
                              THE FINOVA GROUP INC.

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

Part I  Financial Information                                               1

Item 1. Financial Statements                                                1

        Condensed Consolidated Balance Sheets                               1

        Condensed Statements of Consolidated Income                         2

        Condensed Statements of Consolidated Cash Flows                     3

        Notes to Interim Condensed Consolidated Financial Information       4

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                           8

Item 3. Quantitative and Qualitative Disclosure About Market Risk          14

Part II Other Information                                                  15

Item 1. Legal Proceedings                                                  15

Item 4. Submission of Matters to a Vote of Security Holders                15

Item 6. Exhibits and Reports on Form 8-K                                   15

Signatures                                                                 16
<PAGE>
                          PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                              THE FINOVA GROUP INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               June 30,       December 31,
                                                                2000             1999
                                                            ------------     ------------
ASSETS:
<S>                                                         <C>              <C>
Cash and cash equivalents                                   $    430,926     $    100,344
Investment in financing transactions:
  Loans and other financing contracts                         10,567,500       10,446,356
  Leveraged leases                                               816,008          837,083
  Fee-based receivables                                          626,741          583,885
  Operating leases                                               612,601          592,495
  Direct financing leases                                        593,416          494,175
  Financing contracts held for sale                                               167,983
                                                            ------------     ------------
                                                              13,216,266       13,121,977
  Less reserve for credit losses                                (270,572)        (264,983)
                                                            ------------     ------------
Net investment in financing transactions                      12,945,694       12,856,994
Investments                                                      401,874          446,489
Goodwill, net of accumulated amortization                        356,450          367,241
Other assets                                                     355,538          279,225
                                                            ------------     ------------
                                                            $ 14,490,482     $ 14,050,293
                                                            ============     ============
LIABILITIES:
Accounts payable and accrued expenses                       $    116,030     $    167,073
Due to clients                                                   166,419          146,607
Interest payable                                                 120,144          114,397
Senior debt                                                   11,873,157       11,407,767
Deferred income taxes                                            437,581          439,518
                                                            ------------     ------------
                                                              12,713,331       12,275,362
                                                            ------------     ------------
Commitments and contingencies
Company-obligated mandatory redeemable convertible
  preferred securities of subsidiary trust solely
  holding convertible debentures
  of FINOVA, net of expenses ("TOPrS")                           111,550          111,550

SHAREOWNERS' EQUITY:
Common stock, $0.01 par value, 400,000,000
  shares authorized, and 64,849,000 shares issued                    648              648
Additional capital                                             1,107,696        1,109,521
Retained income                                                  720,762          689,466
Accumulated other comprehensive income                             3,428           33,812
Common stock in treasury, 3,552,000 and
  3,597,000 shares, respectively                                (166,933)        (170,066)
                                                            ------------     ------------
                                                               1,665,601        1,663,381
                                                            ------------     ------------
                                                            $ 14,490,482     $ 14,050,293
                                                            ============     ============
</TABLE>

See notes to interim consolidated condensed financial statements.

                                       1
<PAGE>
                              THE FINOVA GROUP INC.
                   CONDENSED STATEMENTS OF CONSOLIDATED INCOME
                  (Dollars in Thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                 Three Months Ended                  Six Months Ended
                                                       June 30,                          June 30,
                                            -----------------------------     -----------------------------
                                                2000             1999             2000             1999
                                            ------------     ------------     ------------     ------------
<S>                                         <C>              <C>              <C>              <C>
Interest and income earned from
  financing transactions                    $    338,706     $    266,978     $    677,899     $    512,201
Operating lease income                            27,200           28,868           54,532           56,721
Interest expense                                (204,479)        (139,153)        (393,561)        (270,336)
Operating lease depreciation                     (17,285)         (16,720)         (33,161)         (33,947)
                                            ------------     ------------     ------------     ------------
Interest margins earned                          144,142          139,973          305,709          264,639
Volume-based fees                                 11,678           11,264           24,276           23,999
                                            ------------     ------------     ------------     ------------
Operating margin                                 155,820          151,237          329,985          288,638
Provision for credit losses                      (39,800)         (17,000)        (137,800)         (26,500)
                                            ------------     ------------     ------------     ------------
Net interest margins earned                      116,020          134,237          192,185          262,138
Gains on disposal of assets                       12,651           18,760           33,681           31,130
                                            ------------     ------------     ------------     ------------
                                                 128,671          152,997          225,866          293,268
Operating expenses                               (60,720)         (63,339)        (139,787)        (120,839)
                                            ------------     ------------     ------------     ------------
Income before income taxes and
  preferred dividends                             67,951           89,658           86,079          172,429
Income taxes                                     (24,073)         (35,050)         (30,843)         (66,819)
                                            ------------     ------------     ------------     ------------
Income before preferred dividends                 43,878           54,608           55,236          105,610
Preferred dividends, net of tax                     (945)            (945)          (1,891)          (1,891)
                                            ------------     ------------     ------------     ------------
NET INCOME                                  $     42,933     $     53,663     $     53,345     $    103,719
                                            ============     ============     ============     ============

Basic earnings per share                    $       0.70     $       0.87     $       0.88     $       1.76
                                            ============     ============     ============     ============
Adjusted weighted average shares
  outstanding                                 61,000,000       61,412,000       60,955,000       58,869,000
                                            ============     ============     ============     ============

Diluted earnings per share                  $       0.69     $       0.83     $       0.86     $       1.66
                                            ============     ============     ============     ============
Adjusted weighted average shares
  outstanding                                 63,938,000       66,042,000       64,243,000       63,693,000
                                            ============     ============     ============     ============

 Dividends per common share                 $       0.18     $       0.16     $       0.36     $       0.32
                                            ============     ============     ============     ============
</TABLE>

See notes to interim consolidated condensed financial statements.

                                       2
<PAGE>
                              THE FINOVA GROUP INC.
                 CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
                             (Dollars in Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                Six Months Ended June 30,
                                                               ---------------------------
                                                                  2000            1999
                                                               -----------     -----------
<S>                                                            <C>             <C>
OPERATING ACTIVITIES:
  Net income                                                   $    53,345     $   103,719
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Provision for credit losses                                    137,800          26,500
    Depreciation and amortization                                   51,281          49,204
    Deferred income taxes                                           19,358          55,017
  Change in assets and liabilities, net of effects
   from acquisitions
    Decrease (increase) in other assets                             18,336         (14,809)
    Decrease in accounts payable and accrued expenses              (51,043)        (64,953)
    Increase in interest payable                                     5,747           8,505
    Other                                                            1,422          (5,057)
                                                               -----------     -----------
    Net cash provided by operating activities                      236,246         158,126
                                                               -----------     -----------
INVESTING ACTIVITIES:
  Proceeds from sales of investments, net of gains                  23,995
  Proceeds from sales of residual positions,
    net of gains                                                    53,314          81,705
  Proceeds from sales of commercial mortgage
    backed securities ("CMBS") assets, net of gains                115,770         160,667
  Expenditures for investments and other income
    producing activities                                           (47,182)        (24,410)
  Principal collections on financing transactions
    and revolving credit facilities                              1,451,225       1,080,748
  Expenditures for financing transactions                       (1,677,004)     (1,630,586)
  Expenditures for revolving credit facilities                    (249,068)       (508,949)
  Expenditures for CMBS transactions                                              (280,624)
  Expenditures for fee-based receivables                        (2,652,259)     (2,736,135)
  Proceeds from collections on fee-based receivables             2,609,403       2,846,239
  Cash received in acquisitions                                                     20,942
  Other                                                              1,676           1,442
                                                               -----------     -----------
    Net cash used in investing activities                         (370,130)       (988,961)
                                                               -----------     -----------
FINANCING ACTIVITIES:
  Net borrowings under commercial paper and
    short-term loans                                             1,261,295         555,839
  Long-term borrowings                                             120,000         955,000
  Repayment of long-term borrowings                               (915,900)       (484,077)
  Proceeds from exercise of stock options                            1,308          27,627
  Common stock repurchased for treasury                                            (75,584)
  Dividends                                                        (22,049)        (18,741)
  Net change in due to clients                                      19,812        (107,411)
                                                               -----------     -----------
    Net cash provided by financing activities                      464,466         852,653
                                                               -----------     -----------

INCREASE IN CASH AND CASH EQUIVALENTS                              330,582          21,818

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                     100,344          49,518
                                                               -----------     -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                       $   430,926     $    71,336
                                                               ===========     ===========
</TABLE>

See notes to interim consolidated condensed financial statements.

                                       3
<PAGE>
                              THE FINOVA GROUP INC.
          NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999

NOTE A BASIS OF PREPARATION

     The  consolidated  financial  statements  present the  financial  position,
results  of  operations  and  cash  flows  of The  FINOVA  Group  Inc.  and  its
subsidiaries (collectively, "FINOVA" or the "Company"), including FINOVA Capital
Corporation and its subsidiaries (collectively, "FINOVA Capital").

     The interim condensed consolidated  financial information is unaudited.  In
the opinion of management all adjustments, consisting of normal recurring items,
necessary to present  fairly the  financial  position as of June 30,  2000,  the
results of  operations  for the quarter  and six months  ended June 30, 2000 and
1999 and cash flows for the six months  ended June 30, 2000 and 1999,  have been
included.  Interim results of operations are not  necessarily  indicative of the
results of  operations  for the full year.  The  enclosed  financial  statements
should be read in connection  with 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.

NOTE B SIGNIFICANT ACCOUNTING POLICIES

     The Company reports other comprehensive income in accordance with Statement
of Financial  Accounting  Standards ("SFAS") No. 130,  "Reporting  Comprehensive
Income." Total comprehensive  income was $22.9 million and $72.7 million for the
three months ended June 30, 2000 and 1999,  respectively  and $23.0  million and
$108.3  million for the six months  ended June 30, 2000 and 1999,  respectively.
The  primary  component  of  comprehensive  income  other  than net  income  was
unrealized holding gains (losses).

NEW ACCOUNTING STANDARDS

     In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivatives and
Hedging  Activities - Deferral of the Effective Date of FASB Statement No. 133,"
("SFAS No. 137").  This  statement  defers the effective date of SFAS No. 133 to
all fiscal  quarters of all fiscal years beginning after June 15, 2000. SFAS No.
133, "Accounting for Derivative  Instruments and Hedging Activities," ("SFAS No.
133") standardizes the accounting for derivative instruments,  including certain
derivative  instruments  embedded in other  contracts,  by  recognition of those
items as assets or  liabilities  in the  statement  of  financial  position  and
measurement at fair value. The Company is currently assessing the impact of SFAS
No. 133 on the Company's financial position and results of operations.

NOTE C SEGMENT REPORTING

MANAGEMENT'S POLICY FOR IDENTIFYING REPORTABLE SEGMENTS

     FINOVA's  reportable  business  segments are strategic  business units that
offer  distinctive  products and services  that are marketed  through  different
channels.

RECONCILIATION OF SEGMENT INFORMATION TO CONSOLIDATED AMOUNTS

     Management  evaluates the business performance of each group based on total
net revenue,  income before allocations and managed assets. Total net revenue is
operating margin plus gains on disposal of assets.  Income before allocations is
income  before  income taxes and preferred  dividends,  excluding  allocation of
corporate overhead expenses and the unallocated  portion of provision for credit
losses.   Managed  assets   include  each  segment's   investment  in  financing
transactions plus securitizations and participations sold.

                                       4
<PAGE>
Information for FINOVA's reportable segments reconciles to FINOVA's consolidated
totals as follows:

                                                   Six Months Ended June 30,
                                                 -----------------------------
(Dollars in Thousands)                               2000             1999
                                                 ------------     ------------
Total net revenue (loss):
  Commercial Finance                             $    121,510     $    104,273
  Specialty Finance                                   187,384          187,296
  Capital Markets                                      79,779           39,468
  Corporate and other                                 (25,007)         (11,269)
                                                 ------------     ------------
Consolidated total                               $    363,666     $    319,768
                                                 ============     ============

Income (loss) before allocations:
  Commercial Finance                             $    (26,810)    $     40,827
  Specialty Finance                                   148,020          153,278
  Capital Markets                                      22,363           12,747
  Corporate and other, overhead and
    unallocated provision for credit losses           (57,494)         (34,423)
                                                 ------------     ------------
Income from continuing operations
  before income taxes                            $     86,079     $    172,429
                                                 ============     ============

                                                            June 30,
                                                 -----------------------------
                                                     2000             1999
                                                 ------------     ------------
Managed assets:
  Commercial Finance                             $  4,021,887     $  3,351,296
  Specialty Finance                                 8,643,330        7,367,903
  Capital Markets                                     950,625          892,234
  Corporate and other                                  92,707           96,615
                                                 ------------     ------------

Consolidated total                                 13,708,549       11,708,048
Less securitizations and participations sold         (492,283)        (512,382)
                                                 ------------     ------------
Investment in financing transactions             $ 13,216,266     $ 11,195,666
                                                 ============     ============

                                       5
<PAGE>
NOTE D EARNINGS PER SHARE

     Basic  earnings per share  exclude the effects of dilution and are computed
by dividing  income  available to common  shareowners  by the  weighted  average
amount of common stock  outstanding for the period.  Diluted  earnings per share
reflect  the  potential  dilution  that  could  occur  if  options,  convertible
preferred  stock or other  contracts to issue stock were  exercised or converted
into  common  stock.  Basic and  diluted  earnings  per share  calculations  are
presented  for the  three and six  months  ended  June 30,  2000 and 1999 on the
Condensed Statements of Consolidated Income and are detailed below:

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED                SIX MONTHS ENDED
                                                          JUNE 30,                           JUNE 30,
(Dollars in thousands, except per share data)       2000             1999             2000             1999
                                                ------------     ------------     ------------     ------------
<S>                                             <C>              <C>              <C>              <C>
BASIC EARNINGS PER SHARE COMPUTATION:
Net income                                      $     42,933     $     53,663     $     53,345     $    103,719

Weighted average shares outstanding               61,286,000       61,660,000       61,241,000       59,117,000
Contingently issued shares (1)                      (286,000)        (248,000)        (286,000)        (248,000)
                                                ------------     ------------     ------------     ------------
Adjusted weighted average shares                  61,000,000       61,412,000       60,955,000       58,869,000
                                                ============     ============     ============     ============

Basic earnings per share                        $       0.70     $       0.87     $       0.88     $       1.76
                                                ============     ============     ============     ============
DILUTED EARNINGS PER SHARE COMPUTATION:

Net income                                      $     42,933     $     53,663     $     53,345     $    103,719
Preferred dividends, net of tax                          945              945            1,891            1,891
                                                ------------     ------------     ------------     ------------
Income before preferred dividends               $     43,878     $     54,608     $     55,236     $    105,610
                                                ============     ============     ============     ============

Weighted average shares outstanding               61,286,000       61,660,000       61,241,000       59,117,000
Contingently issued shares (1)                      (286,000)        (165,000)        (286,000)        (165,000)
Incremental shares from assumed conversions:
Stock options                                                       1,609,000          350,000        1,803,000
Convertible preferred securities                   2,938,000        2,938,000        2,938,000        2,938,000
                                                ------------     ------------     ------------     ------------
Total potential dilutive common shares             2,938,000        4,547,000        3,288,000        4,741,000
                                                ------------     ------------     ------------     ------------
Adjusted weighted average shares                  63,938,000       66,042,000       64,243,000       63,693,000
                                                ============     ============     ============     ============

Diluted earnings per share                      $       0.69     $       0.83     $       0.86     $       1.66
                                                ============     ============     ============     ============
</TABLE>

Note:

----------
(1)  Shares represent performance-based restricted stock.

NOTE E PORTFOLIO QUALITY

     The following  table presents a  distribution  (by line of business) of the
Company's  investment  in financing  transactions  before the reserve for credit
losses at the dates indicated.

                                       6
<PAGE>
                      INVESTMENT IN FINANCING TRANSACTIONS
                               BY LINE OF BUSINESS
                                  June 30, 2000
                             (Dollars In Thousands)
<TABLE>
<CAPTION>
                                             Revenue Accruing                    Nonaccruing (5)
                                  -----------------------------------  ------------------------------
                                   Market                 Repossessed            Repossessed  Lease &  Total Carrying
                                   Rate(1)   Impaired(5)   Assets(2)   Impaired    Assets      Other       Amount       %
                                   -------   -----------   ---------   --------    ------      -----       ------      ---
<S>                               <C>           <C>          <C>       <C>        <C>        <C>       <C>          <C>
Commercial Finance Group
 Corporate Finance/Business
   Credit                       $ 1,863,356  $   64,328    $           $135,516    $ 6,712    $         $ 2,069,912    15.7
 Rediscount Finance               1,111,171       3,233       9,228         610      2,962                1,127,204     8.5
 Distribution & Channel Finance     411,723      23,212                  20,458                             455,393     3.4
 Commercial Services                264,647                               5,618      1,266                  271,531     2.1
 Growth Finance                      51,056                               3,253                              54,309     0.4
                                -----------  ----------    --------    --------    -------    -------   -----------   -----
                                  3,701,953      90,773       9,228     165,455     10,940                3,978,349    30.1
                                -----------  ----------    --------    --------    -------    -------   -----------   -----
Specialty Finance Group
 Transportation Finance           2,466,543       8,662                  38,574                           2,513,779    19.0
 Resort Finance                   1,523,452      95,437      15,257                 20,783                1,654,929    12.5
 Healthcare Finance                 801,251      34,837       4,794      62,897                 2,836       906,615     6.9
 Franchise Finance                  868,217                   1,909       4,083      2,169        198       876,576     6.6
 Communications Finance             753,112       3,911                   2,412                             759,435     5.8
 Specialty Real Estate Finance      690,122                  35,585       3,289      6,016        152       735,164     5.6
 Commercial Equipment Finance       525,784                              12,288     19,369        568       558,009     4.2
 Public Finance                     184,460                               5,616                             190,076     1.4
                                -----------  ----------    --------    --------    -------    -------   -----------   -----
                                  7,812,941     142,847      57,545     129,159     48,337      3,754     8,194,583    62.0
                                -----------  ----------    --------    --------    -------    -------   -----------   -----
Capital Markets Group
 Realty Capital                     482,386                               4,614                             487,000     3.7
 Mezzanine Capital                  379,992      13,667                  39,178                             432,837     3.3
 Investment Alliance                 26,638       4,151                                                      30,789     0.2
                                -----------  ----------    --------    --------    -------    -------   -----------   -----
                                    889,016      17,818                  43,792                             950,626     7.2
                                -----------  ----------    --------    --------    -------    -------   -----------   -----

Other (3)                            72,653                                 721                19,334        92,708     0.7
                                -----------  ----------    --------    --------    -------    -------   -----------   -----
TOTAL (4)                       $12,476,563  $  251,438    $ 66,773    $339,127    $59,277    $23,088   $13,216,266   100.0
                                ===========  ==========    ========    ========    =======    =======   ===========   =====
</TABLE>
----------
NOTES:

(1)  Represents original or renegotiated  market rate terms,  excluding impaired
     transactions.
(2)  The Company earned income totaling $2.3 million on repossessed  assets year
     to date  during  2000,  including  $1.3  million in  Specialty  Real Estate
     Finance,  $0.5 million in Resort  Finance,  $0.4 in Rediscount  Finance and
     $0.1 million in Healthcare Finance.
(3)  Primarily  includes  other assets  retained from  disposed or  discontinued
     operations.
(4)  Excludes $492.3 million of assets securitized and participations sold which
     the  Company  manages,  including  securitizations  of  $303.4  million  in
     Commercial  Equipment  Finance and $117.3 million in Franchise  Finance and
     participations of $28.5 million in Corporate Finance/Business Credit, $20.7
     million in Public  Finance,  $15.0  million  in  Rediscount  Finance,  $4.4
     million in Communications Finance and, $3.0 million in Resort Finance.
(5)  Impaired  accruing assets plus  nonaccruing  assets as a percent of managed
     assets (less participations) was 4.9% at June 30, 2000.

                                       7
<PAGE>
RESERVE FOR CREDIT LOSSES:

     The  reserve  for credit  losses at June 30,  2000  represents  2.0% of the
Company's investment in financing  transactions and securitized assets.  Changes
in the reserve for credit losses were as follows:

                                                     Six Months Ended June 30,
                                                    ---------------------------
                                                       2000              1999
                                                    ---------         ---------
                                                      (Dollars in Thousands)

Balance, beginning of period                        $ 264,983         $ 207,618
Provision for credit losses                           137,800            26,500
Write-offs                                           (134,026)          (26,097)
Recoveries                                              1,674             1,442
Reserves related to acquisitions                          245            23,763
Other                                                    (104)            4,376
                                                    ---------         ---------
Balance, end of period                              $ 270,572         $ 237,602
                                                    =========         =========

     At June 30, 2000 the total  carrying  amount of  impaired  loans was $590.6
million,  of which $251.4  million were revenue  accruing.  A reserve for credit
losses of $114.7 million has been  established for $263.4 million of nonaccruing
impaired  loans and $37.3  million has been  established  for $103.6  million of
accruing impaired loans.  Additionally,  specific reserves of $34.1 million have
been  established for other accounts.  Thus, 69% of FINOVA's  reserve for credit
losses was allocated to specific  accounts.  The remaining  $84.5 million of the
reserve for credit  losses is  designated  for general  purposes and  represents
management's  best  estimate of  inherent  losses in the  portfolio  considering
delinquencies,  loss experience and collateral. Actual results could differ from
those  estimates,  and  there  can be no  assurance  that the  reserves  will be
sufficient  to cover  portfolio  losses.  Additions  to the general and specific
reserves are reflected in current  operations.  Management may transfer reserves
between the general and specific reserves as considered necessary.

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

                COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2000
                      TO THE SIX MONTHS ENDED JUNE 30, 1999

     THE  FOLLOWING  DISCUSSION  RELATES  TO  THE  FINOVA  GROUP  INC.  AND  ITS
SUBSIDIARIES  (COLLECTIVELY  "FINOVA" OR THE "COMPANY") INCLUDING FINOVA CAPITAL
CORPORATION AND ITS SUBSIDIARIES (COLLECTIVELY, "FINOVA CAPITAL").

RESULTS OF OPERATIONS

     Net income for the six months ended June 30, 2000 was $53.3 million  ($0.86
per diluted share)  compared to $103.7 million ($1.66 per diluted share) for the
six  months  ended  June 30,  1999.  Net  income was down as a result of several
factors,  including:  $80 million in special charges to pre-tax  earnings in the
first  quarter of 2000,  a  subsequent  increase  in cost of funds  following  a
reduction in credit  ratings,  higher costs  associated with borrowing under the
Company's domestic  commercial paper back-up bank facilities,  the costs to exit
the  origination  and sale of commercial real estate loans to the CMBS market in
the second quarter of 2000 and an increase in nonaccruing  accounts in the first
six months of 2000.

     INTEREST MARGINS EARNED.  Interest margins earned represents the difference
between (a) interest and income earned from financing transactions and operating
lease  income and (b) interest  expense and  depreciation  on operating  leases.
Interest margins earned in dollars were up 15.5% in the first six months of 2000
compared to the first six months of 1999 ($305.7  million vs.  $264.6  million).
The  increase  was due  primarily to portfolio  growth  (managed  assets)  which
increased  by  17.1%,  partially  offset  by a  higher  cost of  funds  in 2000.
Portfolio  growth  resulted  primarily  from $4.65 billion of new business added
during the 12 months ended June 30, 2000.  Annualized  portfolio  growth for the
first six  months of 2000 was  4.0%,  excluding  $168.0  million  of  commercial
mortgage-backed  securities (CMBS) loans held for sale at December 31, 1999. The
lower growth rate in the first six months of 2000, when compared to 21.8% in the
same period for 1999, is primarily  attributable to a higher beginning portfolio
base and  slightly  lower new  business.  Most of the new  business  in 2000 was
generated by the Specialty Finance Group,  which can attract better returns than
FINOVA's  other segments in the current  market.  Total new business for the six
months ended June 30, 2000 was $1.93  billion,  down slightly from $2.14 billion
in the same  period of 1999.  Interest  margins  earned as a percent  of average
earning  assets was 4.9% in the first six months of 2000,  down from 5.2% in the
same  period  of 1999.  The  decrease  was  primarily  due to a higher  level of
non-earning assets and investments, lower nonrecurring income and higher cost of
funds, as noted above. The events of the second quarter increased  FINOVA's cost
of funds  applicable to $4.5 billion in drawdowns under its domestic  commercial

                                       8
<PAGE>
paper back-up bank  facilities by 0.30% during the second  quarter of 2000.  Had
the borrowings  from those back-up  facilities  been  outstanding for the entire
second quarter, the cost of funds effect would have been 0.70%.

     VOLUME-BASED  FEES.  Volume-based  fees have  been  generated  by  FINOVA's
Distribution & Channel Finance,  Commercial Services and Realty Capital lines of
business.  These  fees are  predominately  based on  volume-originated  business
rather than the balance of outstanding financing transactions during the period.
Fee-based volume for the six months ended June 30, 2000 was $2.65 billion,  down
$364.5  million,  or 12.1%,  from the $3.02  billion  generated in the first six
months  of 1999.  The  decline  in volume  in 2000 was  primarily  due to Realty
Capital exiting from the origination and sale of commercial real estate loans to
the CMBS market in April 2000. Volume-based fees generated were $24.3 million in
the first six months of 2000 which exceeded the $24.0 million earned in the 1999
period,  as higher  rates  earned on that  business in 2000 (0.92% vs.  0.80% in
1999) mitigated the effects of the lower volume.

     PROVISION FOR CREDIT LOSSES.  The provision for credit losses was higher in
the first six months of 2000  ($137.8  million  vs.  $26.5  million)  due to the
special charge to bolster the reserve for credit losses after a $70 million loss
on a major customer of FINOVA's  Distribution & Channel Finance  division in the
first  quarter of 2000 and due to other  write-offs  totaling  $62.4  million in
2000.  The bulk of the $38.5 million in write-offs in the second quarter of 2000
were  from  multiple  customers  in two  businesses,  Mezzanine  Finance  ($15.3
million) and  Corporate  Finance  ($14.2  million).  Write-offs  as a percent of
average  managed assets were 1.95%  annualized for the first six months of 2000,
up from 0.44% annualized for the same period of 1999.

     FINOVA monitors  developments  affecting loans and leases in its portfolio,
taking into account each borrower's  financial  developments and prospects,  the
value of collateral,  legal developments and other available information.  Based
upon  those  developments,  FINOVA  adjusts  its  loan  loss  reserve  and  when
considered  appropriate  writes  down  the  value  of the  loans.  Depending  on
developments,  there  is the  possibility  that the loan  loss  reserves  and/or
writedowns will increase in the future.

     GAINS ON DISPOSAL OF ASSETS. Gains on disposal of assets were $33.7 million
pre-tax in the first six months of 2000, up 8.2% from the $31.1 million reported
in the first six months of 1999.  Gains in 2000  consisted  of $5.2 million from
the sale of  residuals  coming  off  lease and  $28.5  million  from the sale of
investments and loans, including $4.6 million from the sale of Harris Williams &
Co. to its  management  and $15.9 million from sales of  Healtheon/Web  MD stock
during the period. At June 30, 2000, FINOVA held approximately 624,000 shares of
Healtheon/Web  MD common stock.  While in the aggregate  FINOVA has historically
recognized  gains on such  disposals,  the timing and amount of these  gains are
sporadic in nature. There can be no assurance FINOVA will recognize gains in the
future, depending, in part, on market conditions at the time of sale.

     OPERATING EXPENSES. Operating expenses were $139.8 million in the first six
months of 2000 compared to $120.8  million in the  comparable  1999 period.  The
increase was due to $11.8 million  incurred to exit the  origination and sale of
commercial  real  estate  loans to the CMBS  market,  $10 million  incurred  for
deferred  compensation and executive severance in the first quarter of 2000, and
to an increase in personnel  costs,  principally  related to employees added via
acquisitions  in  1999.   These   increases  were  partially   offset  by  lower
performance-based  compensation  accruals in 2000 related to lower  earnings and
the decrease in the company's stock price.  Operating  efficiency,  which is the
ratio of  operating  expenses  to  operating  margins and gains was 38.4% in the
first six months of 2000, compared to 37.8% in the same period of 1999.

     INCOME  TAXES.  Income  taxes  were  lower for the first six months of 2000
compared to the  corresponding  period in 1999  primarily due to the decrease in
pre-tax income and a beneficial IRS tax audit adjustment of $5.7 million.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     Managed  assets  were $13.71  billion at June 30,  2000  compared to $13.61
billion at December 31, 1999.  Included in managed  assets at June 30, 2000 were
$13.22 billion in funds employed, $420.7 million of securitized assets and $71.6
million of participations sold to third parties.  The increase in managed assets
was due to funded new  business of $1.93  billion for the six months  ended June
30, 2000,  partially offset by prepayments and asset sales accompanied by normal
portfolio amortization.

     The reserve for credit losses  increased to $270.6 million at June 30, 2000
from $265.0  million at December  31,  1999.  At June 30, 2000 and  December 31,
1999, the reserve for credit losses  represented 2.0% and 2.1% of ending managed
assets,  respectively  (excluding  participations,  financing contracts held for
sale and,  for  2000,  limited  recourse  securitizations).  Nonaccruing  assets
increased  to  $421.5  million  or  3.1% of  ending  managed  assets  (excluding
participations) at June 30, 2000 from $295.1 million or 2.2% at the end of 1999.
The largest additions to nonaccruing assets occurred in Corporate Finance ($48.1
million),  Transportation  Finance  ($38.6  million loan to Tower Air, Inc.) and
Healthcare Finance ($10 million related to one loan).

                                       9
<PAGE>
     The  Corporate  Finance  exposure  consists of loans to two  separate,  but
related,  companies. The first, which has approximately $17 million outstanding,
is experiencing  material  operating losses and is currently for sale. The other
company,  with approximately $31 million outstanding,  is not performing in line
with its  business  plan and is  experiencing  modest  losses.  A $13.4  million
reserve  has  been   specifically   allocated  to  these   accounts  to  reflect
management's current best estimate of the potential loss exposure.

     FINOVA's $56.5 million balance with Tower Air, Inc. has been split into two
pieces.  A newer  747-200  aircraft,  with a $17.9 million  valuation,  has been
repossessed by FINOVA and is being converted to a cargo  aircraft.  FINOVA is in
possession of a letter of intent from a major  corporation to lease the aircraft
upon  completion  of the  conversion.  The  remaining  $38.6  million  has  been
classified  as  nonaccruing  and  represents  FINOVA's  balance on the remaining
aircraft.  A $6 million reserve has been specifically  allocated to this account
to reflect management's current best estimate of the potential loss exposure.

     FINOVA's Healthcare Finance division has a total of $24 million outstanding
to Genesis Health Ventures, Inc. and Subsidiaries ("Genesis") and its affiliate,
The Multicare Companies,  Inc. and Subsidiaries  ("Multicare").  The $14 million
related to Genesis is current and payments  are  expected to  continue.  The $10
million Multicare loan is delinquent and is not expected to resume paying in the
near future;  therefore, it has been classified as a nonaccruing account. A $1.9
million  reserve  has been  specifically  allocated  to this  account to reflect
management's current best estimate of the potential loss exposure.

     Earning impaired assets increased slightly during the six months ended June
30,  2000 to $251.4  million  from  $240.1  million at December  31,  1999,  but
remained  a  consistent   percentage  of  ending   managed   assets   (excluding
participations) at 1.8%. While there was a significant amount of movement in and
out of the impaired  category,  two of the larger  additions  were $95.4 million
relating  to Sunterra  Corporation  ("Sunterra"),  a customer of Resort  Finance
which filed Chapter 11 bankruptcy  during the second quarter,  and $13.5 million
related to MicroAge,  Inc. The Sunterra loans are secured by marketable  assets,
primarily   completed  but  unsold   timeshare   units,   at  13  of  Sunterra's
approximately  90  resorts.  FINOVA  believes  the  value of the  collateral  is
sufficient to enable  recovery of the principal loan balances  outstanding  plus
any accrued  interest.  An  additional  $20 million  outstanding  to Sunterra is
secured by  consumer  timeshare  receivables.  On these  receivables,  FINOVA is
collecting  cash  on a  current  basis  in  accordance  with  the  terms  of the
agreements;  therefore,  this  portion  is  classified  as a  performing  asset.
MicroAge,  Inc. and its subsidiary,  Pinacor,  Inc., filed bankruptcy during the
second  quarter.  Other  additions to the impaired  category were primarily from
Corporate Finance and Healthcare  Finance while most of the reductions  occurred
via migration to  nonaccruing  status (most notably Tower Air,  Inc.).  FINOVA's
policy is to suspend income  recognition  for leases,  loans and other financing
contracts at the earlier of the date at which  payments  become 90 days past due
or when, in the opinion of  management,  a full recovery of income and principal
becomes doubtful.

     FINOVA's 31 to 90 day  delinquencies  rose from 66 basis points at December
31, 1999 to 112 basis points at June 30, 2000. The increase was due primarily to
three Healthcare  Finance  customers that moved into this category in the second
quarter of 2000.

     At  June  30,  2000,   FINOVA  had  $11.87  billion  of  debt  outstanding,
representing 6.7 times the Company's  equity base of $1.78 billion.  At year-end
1999, FINOVA's debt was 6.4 times the equity base of $1.77 billion.

     FINOVA's internally generated funds, available credit lines and asset sales
have financed growth in funds employed and liquidity during the six months ended
June 30, 2000.  During May and June 2000,  FINOVA drew down $4.5 billion against
domestic  commercial  paper  back-up  bank  facilities  and  used  the  proceeds
primarily for repayment of commercial  paper and to fund normal  operations.  Of
this amount,  $1.6 billion is due May 15, 2001.  The other $2.9 billion is to be
repaid over a three-year  period from 2001 to 2003. FINOVA also has $150 million
(Canadian) due under a bank facility that matures in July 2001. During the first
six months of 2000,  FINOVA issued $120 million of new long-term  borrowings and
repaid  $915.9  million of long-term  borrowings.  Subsequent  to June 30, 2000,
FINOVA's  credit ratings were reduced by Standard & Poor's  Ratings  Group.  See
Recent  Developments and Business  Outlook for further  discussion of the rating
agency downgrade.

     In May 2000, FINOVA completed a loan and lease  securitization  with assets
originated by the  Commercial  Equipment  Finance  division,  which  resulted in
initial  proceeds to FINOVA of $302  million.  Deutsche Bank Alex Brown acted as
structuring agent for this transaction,  which includes a 364-day  commitment to
purchase up to $375 million of equipment loans and leases on a revolving  basis.
A non-cash  gain of $200 thousand was recorded on the  transaction.  During July
2000,  FINOVA structured two additional  securitizations  totaling $800 million.
See Recent  Developments  and  Business  Outlook for further  discussion  of the
securitization transactions.

                                       10
<PAGE>
SEGMENT REPORTING

     FINOVA's business is organized into three market groups, which are also its
reportable segments:  Commercial Finance, Specialty Finance and Capital Markets.
Management  principally  relies on total revenue,  income before allocations and
managed  assets  in  evaluating  the  business  performance  of each  reportable
segment.

     Total  revenue  is the sum of  operating  margin and gains on  disposal  of
assets.  Income before  allocations  is income  before  income taxes,  preferred
dividends,  corporate  overhead  expenses  and the  unallocated  portion  of the
provision for credit losses. Managed assets include each segment's investment in
financing transactions plus securitizations and participations sold.

     COMMERCIAL  FINANCE.  Commercial Finance includes  traditional  asset-based
businesses that provide  financing  through revolving credit facilities and term
loans  secured  by  assets  such  as  receivables  and  inventories,  as well as
providing factoring and management services.

     Total net revenue was $121.5 million in 2000 compared to $104.3 million for
the first six months of 1999,  an increase of 16.5%.  The increase was primarily
due to a 20.0% increase in managed assets over the last twelve months, partially
offset by the effects of  competitive  pressures  on pricing in the  asset-based
lending businesses.  Corporate Finance/Business Credit managed assets grew 28.1%
over the last twelve months;  however, their non-accruing assets grew to 6.8% of
managed assets compared to 3.6% in June 1999.  Commercial Services increased its
revenue  primarily  due to growth in  asset-based  loans and  fee-based  volume.
Fee-based  volume for the business unit  increased to $782.1  million vs. $579.8
million in 1999, partially offset by lower rates earned on that volume, 0.74% in
2000 vs. 0.89% in 1999.  Distribution  and Channel  Finance  (DCF) had fee-based
volume of $1.66  billion  during the first six months of 2000  compared to $1.49
billion in 1999.  The rate earned on that volume  also  increased  from 0.97% to
1.01% in 2000. The Rediscount  Finance business grew its managed assets by 18.7%
over 1999 and its net revenue by 18.1% over the same period.

     Income before allocations  declined from $40.8 million in 1999 to a loss of
$26.8  million in the first six months of 2000,  primarily  due to a $70 million
special  charge to bolster  the  reserve  for credit  losses  following  a first
quarter 2000 write-off related to a major customer of DCF. Excluding the special
charge, the segment had income before allocations of $43.2 million,  an increase
of  approximately  6%. Net write-offs for the group totaled $97.7 million in the
first six months of 2000  compared to $19.2  million in 1999.  Excluding the $70
million  special  charge,  net  write-offs as an  annualized  percent of average
managed assets for the Commercial  Finance Group were 1.41% compared to 1.27% in
the first six  months of 1999.  Operating  expenses  as a percent  of  operating
margin and gains improved from 54.1% in 1999 to 52.0% in 2000 for the Commercial
Finance segment. This is primarily due to operating efficiencies realized in the
Commercial Services and Rediscount Finance lines of business compared to 1999.

     Managed assets grew to $4.02 billion over the last twelve months from $3.35
billion, an increase of 20.0%. The growth in managed assets was primarily due to
the addition of $661.9 million of managed assets acquired in connection with the
acquisition of Fremont Financial  Corporation.  Excluding the assets acquired in
the Fremont acquisition, managed assets for the segment remained relatively flat
from June 1999;  however,  Rediscount  Finance grew 18.7%,  partially  offset by
12.3% asset compression in Corporate  Finance/Business  Credit.  The lower asset
levels in this unit are  primarily  due to a  slowdown  in new  business  growth
resulting from increasingly competitive pricing pressures and the higher cost of
funds.

     The Commercial Finance Group had new loan business of $300.5 million in the
first six months of 2000 compared to $642.6 million in 1999. The group, which is
considered  more   generalist  than  FINOVA's  more  profitable   niche-oriented
businesses,  is expected to continue  its slower  growth rate during  2000.  The
Company as a whole  expects to  significantly  slow  managed  asset growth on an
annual basis.  There can be no assurance that FINOVA's asset base will grow. See
Recent Developments and Business Outlook for further discussion.

     SPECIALTY  FINANCE.  Specialty  Finance  provides a wide variety of lending
products  such as  leases,  loans,  accounts  receivable  and  cash  flow  based
financing,  as well as servicing and  collection  services to a number of highly
focused industry specific niches.

     Total net  revenue  was  $187.4  million  in the  first six  months of 2000
compared  to  $187.3  million  in 1999.  Revenue  did not grow in spite of 17.3%
growth in managed assets over the last twelve months and 9.1% annualized  growth
during  the first half of 2000,  due to a lower  level of gains on  disposal  of
assets ($7.7  million in 2000 vs.  $14.4  million in 1999) and to the effects of
higher cost of funds. The lower gains were primarily  attributable to the timing
of assets coming off lease and the company's  ability to re-lease  assets at end
of term.  While in the aggregate  FINOVA has  historically  recognized  gains on
disposals,  the  timing  and  amount of these  gains  are  sporadic  in  nature.
Additionally,  certain business units within this segment will sometimes receive
equity  interests  to  complement  their  financing  arrangements.  Depending on

                                       11
<PAGE>
various factors,  including management's discretion,  FINOVA may opt to exercise
and sell its position in these equities when permitted to do so.

     Income before  allocations was $148.0 million for the six months ended June
30, 2000  compared to $153.3  million for the same period in 1999.  The decrease
was  primarily  due to lower gains and an increase in net  write-offs  from $4.0
million to $7.9 million in 2000.  Annualized  net  write-offs as a percentage of
average managed assets for the group rose to 0.18% from 0.11% in 1999.

     Managed assets grew to $8.64 billion in 2000 from $7.37 billion in the same
period of 1999, an increase of 17.3%. The growth in managed assets was driven by
new business of $993.2  million in 2000 compared to $848.5  million in 1999. The
growth  in  managed   assets  was  spread  across  most   business   units  with
Communications  Finance,  Franchise Finance,  Healthcare Finance, Resort Finance
and  Transportation  Finance  all  growing in excess of 15% over the last twelve
months,  while Public Finance and Specialty  Real Estate  Finance  experienced a
decline.  The group as a whole was able to increase  backlog to $1.60 billion at
June 30, 2000  compared to $1.30  billion at December  31,  1999.  In the second
quarter  of  2000,   the   Commercial   Equipment   Finance  unit   completed  a
securitization  resulting in initial proceeds of $302 million.  The structure of
the transaction  includes a 364-day  commitment to securitize up to $375 million
on a revolving basis. See Financial  Condition,  Liquidity and Capital Resources
for additional discussion of the securitization.

     CAPITAL  MARKETS.   Capital  Markets,  in  conjunction  with  institutional
investors,  provide  debt and equity  capital  funding and  provided  commercial
mortgage banking services until those operations were discontinued in the second
quarter of 2000.  Mezzanine  Capital  (formerly Sirrom Capital  Corporation) was
added to this segment late in the first quarter of 1999.

     Total net revenue was $79.8  million in 2000  compared to $39.5  million in
1999.  The  increase in 2000 was  primarily  due to the  addition  of  Mezzanine
Capital and Harris  Williams & Co.,  both  acquired late in the first quarter of
1999. Also  contributing to the increase in net revenue was the continued growth
of Realty Capital's bridge and mezzanine  financing  activities,  which offset a
decline in net revenue  generated by Realty  Capital's exit from the origination
and sale of  commercial  real  estate  loans to the CMBS  market in April  2000.
Realty Capital's bridge and mezzanine financing portfolio grew to $487.0 million
by June 30, 2000 compared to $171.3 million at June 30, 1999.  Realty  Capital's
CMBS volume  declined to $193.6 million in 2000 from $947.1 million for the same
period in 1999,  while the rate  earned on that volume  increased  to 0.69% from
0.53%.

     The  Mezzanine  Capital  and Harris  Williams & Co.  units  provided  $64.6
million of net revenue  during 2000 compared to $17.1  million in 1999.  The net
revenue in 2000 from these two business  units  included  $28.8 million of gains
from sale of equity and warrant  positions,  and a $4.6 million gain on the sale
of Harris Williams & Co. to its management,  as well as the elimination of $1.9
million  of   management   incentives.   Gains   generated   from  the  sale  of
Healtheon/WebMD  stock in 2000  amounted  to $15.9  million.  FINOVA  recorded a
pre-tax  unrealized gain of $4.3 million through other  comprehensive  income on
the balance  sheet  related to 623,832  shares of  Healtheon/WebMD  stock in its
portfolio at June 30, 2000.  FINOVA  periodically  assesses its position in this
unit's investment  portfolio and may opt to exercise and sell its position based
on various factors, including management's discretion, when permitted to do so.

     Income before  allocations grew to $22.4 million in 2000 from $12.7 million
in 1999. This increase was primarily  attributable to the increased net revenue,
partially  offset by $22.9 million of net  write-offs  in the Mezzanine  Capital
portfolio,  $11.8 million incurred by Realty Capital's exit from the origination
and sale of loans to the CMBS market,  and higher operating  expenses due to the
inclusion of Mezzanine  Capital and Harris Williams & Co. for virtually the full
six months ended June 30, 2000.

     Managed  assets grew to $950.6  million  despite the  elimination of Realty
Capital's  on-balance  sheet CMBS product,  which totaled $243.5 million at June
30,  1999.  This  reduction  was  offset by $315.7  million  of growth in Realty
Capital's bridge and mezzanine financing portfolio.

     Mezzanine  Capital's managed assets declined to $432.8 million in 2000 from
$456.6 million in 1999. The  compression is primarily due to  transitioning  its
new business  originations using FINOVA's underwriting  standards.  Loan backlog
for the segment as a whole,  excluding  fee-based  volume,  decreased  to $190.8
million from $257.2 million in 1999.

RECENT DEVELOPMENTS AND BUSINESS OUTLOOK

     On March  27,  2000,  FINOVA  announced  the  retirement  of its  Chairman,
President and Chief Executive Officer,  Samuel L. Eichenfield,  for personal and
health  reasons.  Following  Mr.  Eichenfield's  retirement  as a  director  and
officer,  the FINOVA Board of Directors elected Matthew M. Breyne as a director,
President  and Chief  Executive  Officer of FINOVA.  FINOVA  Capital's  board of
directors  has elected Mr.  Breyne as Chairman,  President  and Chief  Executive
Officer of FINOVA Capital. He previously served as President and Chief Operating
Officer of FINOVA Capital and continues to serve as a director of that company.

                                       12
<PAGE>
     FINOVA also  announced  that it would take a special  $80  million  pre-tax
charge to earnings in the first  quarter of 2000 to bolster  loss  reserves  and
provide  for payment of  deferred  compensation  and  executive  severance.  The
additional  loss reserves  related to a $70 million loss on a major  customer in
the  Distribution  and Channel  Finance line of business.  The  remainder of the
charge  will be  used to  provide  for  payment  of  deferred  compensation  and
executive severance for Mr. Eichenfield.

     On May 5, 2000,  FINOVA renewed a $500 million,  364-day  revolving  credit
agreement for another year to 2001.  Two  additional  364-day  commercial  paper
back-up  facilities  aggregating $1.6 billion were scheduled to renew on May 16,
2000. FINOVA received  commitments to renew  approximately $1.1 billion of these
facilities. The $1.1 billion, along with the $500 million renewal on May 5th and
$2.4 billion previously in place, was not adequate to provide  dollar-for-dollar
coverage on $4.3 billion of commercial paper  outstanding.  As a result,  FINOVA
exercised its term-out  option under the $1.6 billion of  facilities,  which are
payable on May 15, 2001 and also drew down its other  commercial  paper  back-up
bank  facilities  as  discussed in Financial  Condition,  Liquidity  and Capital
Resources.

     On May 8, 2000,  FINOVA  announced  that it had engaged Credit Suisse First
Boston to assist in the  exploration of strategic  alternatives  with financial,
strategic and other potential partners.  This process is continuing with various
forms of transactions under review, including a sale of the company.

     In light of these recent events,  several credit ratings  agencies  reduced
the  senior  debt  and  commercial  paper  credit  ratings  for  FINOVA  Capital
Corporation.  Including the July 31st downgrades,  the credit ratings for FINOVA
Capital are as follows:

                                          Senior Debt         Commercial Paper
                                          -----------         ----------------
Moody's Investors Service Inc.                Baa2                  P-3
Standard & Poor's Ratings Group               BBB-                  A-3
Fitch Investors Services, Inc.                BBB                   F-2
Duff & Phelps Credit Rating Co.               BBB                   D-2
Dominion Bond Rating Services (Canada)        BBB (high)            R-2 (high)

     FINOVA   expects  to  use  cash  flow  from   operations,   proceeds   from
securitizations  and  proceeds  from  other  asset  sales  to  satisfy  its debt
obligations and operational  needs, and to fund reduced amounts of new business.
In May  2001,  FINOVA  is  obligated  to repay  approximately  $1.6  billion  of
borrowings under the back-up bank facilities, which is in addition to other debt
maturities.  These repayments will require additional asset sales, new financing
arrangements, infusion of debt or equity or similar arrangements.

     During  July  2000,  FINOVA  structured  two  securitizations   with  total
commitments of $800 million. One securitization, with Chase Securities acting as
structuring agent, includes a commitment to purchase up to $500 million of loans
on a  revolving  basis  until  February  2001,  which may be  extended by mutual
agreement,  and is funded through a commercial  paper conduit.  As with FINOVA's
other securitizations, other events, such as the performance of the portfolio or
of  FINOVA,  could  result  in  termination  of  the  securitizations.   If  the
securitizations are not extended or renewed, loan collections will thereafter be
applied to reduce the securitization balance rather than to fund the obligations
to the underlying  borrowers.  Proceeds to FINOVA through the first two fundings
of  the  Chase  securitization   aggregated   approximately  $475  million.  The
securitization   assets  were  originated  through  FINOVA's  Corporate  Finance
division.  An  additional  $300  million  securitization,  structured  by Morgan
Stanley  Dean  Witter,  is  available  for  future  funding.   Assets  for  this
securitization will originate through FINOVA's Franchise Finance division.

     On August 9, 2000, FINOVA signed an agreement to sell  substantially all of
the assets  related to its  Commercial  Services  division.  The  transaction is
expected  to close  in the  third  quarter  of 2000 and is  subject  to  certain
conditions, including regulatory approvals.

     On August 10, 2000,  the Board of Directors of FINOVA  declared a quarterly
dividend of $0.18 per share on FINOVA's  common  stock.  The dividend is payable
October 2, 2000 to shareholders of record on September 1, 2000.

     FINOVA  continues to seek new  business by  emphasizing  customer  service,
providing competitive interest rates and focusing on selected market niches. The
Company as a whole  expects to  significantly  slow  managed  asset growth on an
annual basis. There can be no assurance that FINOVA's asset base will grow.

NEW ACCOUNTING STANDARDS

     In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivatives and
Hedging  Activities - Deferral of the Effective Date of FASB Statement No. 133,"
("SFAS No. 137").  This  statement  defers the effective date of SFAS No. 133 to
all fiscal  quarters of all fiscal years beginning after June 15, 2000. SFAS No.
133, "Accounting for Derivative  Instruments and Hedging Activities," ("SFAS No.
133") standardizes the accounting for derivative instruments,  including certain
derivative  instruments  embedded in other  contracts,  by  recognition of those

                                       13
<PAGE>
items as assets or  liabilities  in the  statement  of  financial  position  and
measurement at fair value. The Company is currently assessing the impact of SFAS
No.133 on the Company's financial position and results of operations.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This report  contains  forward-looking  statements,  such as predictions or
forecasts.  FINOVA  assumes no obligation to update those  statements to reflect
actual results, changes in assumptions or other factors.

     The  forward-looking  statements  are subject to known and  unknown  risks,
uncertainties  and other  factors  that  could  cause  actual  results to differ
materially from those predicted. Those factors include:

     *    FINOVA's ability to address its financing requirements in light of its
          existing debt obligations and market conditions.
     *    Pending and  potential  litigation  relating to the special  charge to
          earnings announced on March 27, 2000.
     *    The  results of  efforts  to  implement  FINOVA's  business  strategy,
          including the evaluation of strategic alternatives.
     *    The ability to attract and retain key personnel and customers.
     *    Conditions that adversely impact FINOVA's  borrowers and their ability
          to meet their obligations to FINOVA.
     *    The adequacy of FINOVA's loan loss reserves.
     *    Other risks detailed in FINOVA's SEC reports,  including on page 15 of
          FINOVA's 10-K for 1999.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Subsequent  to the  announcements  of the special  charge of $80 million to
bolster  loss  reserves  and provide for  payment of deferred  compensation  and
executive  severance  in the first  quarter  of 2000 and the draws  against  the
Company's  commercial  paper back-up bank  facilities,  FINOVA  Capital's credit
ratings were downgraded by Moody's Investors  Service,  Inc.,  Standard & Poor's
Ratings Group,  Fitch Investors  Services,  Inc. and Duff & Phelps Credit Rating
Co. On July 31,  2000,  Standard & Poor's  Ratings  Group again  reduced  FINOVA
Capital's credit ratings.  The draws on the commercial paper back-up  facilities
and credit  downgrades are expected to decrease 2000 EPS by $0.30 to $0.40.  See
Recent Developments and Business Outlook for further discussion.

                                       14
<PAGE>
                            PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Between  March 29 and May 23, 2000,  five  shareowner  lawsuits  were filed
against FINOVA and Samuel Eichenfield,  FINOVA's former chairman, president, and
chief  executive  officer;  two of the lawsuits  also named FINOVA  Capital as a
defendant,  and one named three other executive officers.  The first lawsuit was
filed in the United  States  District  Court for the District of New York;  that
action has been transferred to the United States District Court for the District
of Arizona, where the remaining four lawsuits were filed. Motions to consolidate
all five lawsuits into one action are currently pending.

     All of the  lawsuits  purport  to be on  behalf  of  the  named  plaintiffs
(William K. Steiner, Uri Borenstein,  Jerry Krim, Mark Kassis, and the Louisiana
School  Employees  Retirement  System),  and others who purchased  FINOVA common
stock during the class period of July 15, 1999,  through  either March 26, 2000,
or May 7, 2000. The suit brought by the Louisiana  School  Employees  Retirement
System also purports to be on behalf of all those who purchased  FINOVA  Capital
7.25%  Notes  which are due  November  8,  2004,  pursuant  to the  registration
statement and prospectus supplement dated November 1, 1999.

     The  complaints  generally  allege  that  the  defendants  made  materially
misleading  statements regarding FINOVA's loss reserves,  and otherwise violated
the federal  securities laws in an effort to bolster FINOVA's stock price, among
other reasons. The complaints all seek unspecified damages,  interest, and other
relief;  the Louisiana School Employees  Retirement  System complaint also seeks
rescission with regard to the notes purchased.

     FINOVA has not had an opportunity to fully assess the likelihood of success
in the matters, but believes the claims are without merit, and in any event does
not  expect  the  actions to have a  material  adverse  impact on the  Company's
financial condition. FINOVA and the other defendants intend to vigorously defend
against the claims.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Annual  Meeting of Shareowners of the Company was held on May 11, 2000.
At that meeting,  Shareowners  owning  50,749,860 shares of the Company's Common
Stock  ("Shares") were present in person or by proxy.  The Shareowners  approved
each matter submitted by the following votes:

<TABLE>
<CAPTION>
         Item                                              For        Against     Abstain*
         ----                                              ---        -------     --------
<S>                                                    <C>              <C>        <C>
Election of Mr. Robert H. Clark, Jr. as a Director     50,339,551       N/A        410,309
Election of Ms. Shoshana B. Tancer as a Director       50,268,452       N/A        481,408
</TABLE>

----------
*    Abstain includes broker non-votes.

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

(a)  The following exhibits are filed herewith:

Exhibit No.                Document
-----------                --------
   10.A      Employment Agreement for Matthew M. Breyne dated April 1, 2000.+

   10.B      Executive Retention Plan adopted May 26, 2000.+

   12        Computation of Ratio of Income to Fixed Charges (interim period).

   27        Financial Data Schedule

----------
+    Relating to management compensation
(b)  Reports on Form 8-K:

     A report on Form 8-K,  dated July 26,  2000 was filed by  Registrant  which
reported  under Items 5 and 7 the  revenues,  net income and selected  financial
data and ratios for the quarter ended June 30, 2000 (unaudited).

                                       15
<PAGE>
                              THE FINOVA GROUP INC.

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.


                                        THE FINOVA GROUP INC.
                                        (Registrant)


Dated: August 11, 2000                  By: /s/ Bruno A. Marszowski
                                           -------------------------------------
                                           Bruno A. Marszowski, Senior Vice
                                           President, Chief Financial Officer
                                           and Controller Principal Financial
                                           and Accounting Officer

                                       16
<PAGE>
                              THE FINOVA GROUP INC.
                         COMMISSION FILE NUMBER 1-11011
                                  EXHIBIT INDEX
                             JUNE 30, 2000 FORM 10-Q

Exhibit No.                Document
-----------                --------
   10.A      Employment Agreement for Matthew M. Breyne dated April 1, 2000.

   10.B      Executive Retention Plan adopted May 26, 2000.

   12        Computation of Ratio of Income to Fixed Charges (interim period).

   27        Financial Data Schedule

                                       17