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

                                  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 March 31, 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 May 11,  2000,  61,299,000  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 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 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)

                                                      March 31,    December 31,
                                                        2000           1999
                                                    ------------   ------------
ASSETS:
Cash and cash equivalents                           $     38,695   $    100,344
Investment in financing transactions:
   Loans and other financing contracts                10,721,268     10,446,356
   Leveraged leases                                      846,640        837,083
   Fee-based receivables                                 707,875        583,885
   Operating leases                                      605,177        592,495
   Direct financing leases                               600,001        494,175
   Financing contracts held for sale                                    167,983
                                                    ------------   ------------
                                                      13,480,961     13,121,977
   Less reserve for credit losses                       (269,339)      (264,983)
                                                    ------------   ------------
Net investment in financing transactions              13,211,622     12,856,994
Investments                                              441,305        446,489
Goodwill, net of accumulated amortization                361,960        367,241
Other assets                                             333,071        279,225
                                                    ------------   ------------
                                                    $ 14,386,653   $ 14,050,293
                                                    ============   ============

LIABILITIES:
Accounts payable and accrued expenses               $    130,407   $    167,073
Due to clients                                           219,057        146,607
Interest payable                                          99,296        114,397
Senior debt                                           11,742,426     11,407,767
Deferred income taxes                                    431,338        439,518
                                                    ------------   ------------
                                                      12,622,524     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                                     1,109,000      1,109,521
Retained income                                          688,862        689,466
Accumulated other comprehensive income                    23,493         33,812
Common stock in treasury, 3,629,000 and 3,597,000
  shares, respectively                                  (169,424)      (170,066)
                                                    ------------   ------------
                                                       1,652,579      1,663,381
                                                    ------------   ------------
                                                    $ 14,386,653   $ 14,050,293
                                                    ============   ============

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)

                                                        Three Months Ended
                                                             March 31,
                                                  -----------------------------
                                                      2000             1999
                                                  ------------     ------------
Interest and income earned from financing
  transactions                                    $    339,193     $    245,222
Operating lease income                                  27,332           27,853
Interest expense                                      (189,082)        (131,183)
Operating lease depreciation                           (15,876)         (17,226)
                                                  ------------     ------------
Interest margins earned                                161,567          124,666
Volume-based fees                                       12,598           12,735
                                                  ------------     ------------
Operating margin                                       174,165          137,401
Provision for credit losses                            (98,000)          (9,500)
                                                  ------------     ------------
Net interest margins earned                             76,165          127,901
Gains on disposal of assets                             21,030           12,370
                                                  ------------     ------------
                                                        97,195          140,271
Operating expenses                                     (79,067)         (57,499)
                                                  ------------     ------------
Income before income taxes and preferred
  dividends                                             18,128           82,772
Income taxes                                            (6,770)         (31,769)
                                                  ------------     ------------
Income before preferred dividends                       11,358           51,003
Preferred dividends, net of tax                           (946)            (946)
                                                  ------------     ------------
NET INCOME                                        $     10,412     $     50,057
                                                  ============     ============

Basic earnings per share                          $       0.17     $       0.89
                                                  ============     ============

Adjusted weighted average shares outstanding        60,903,000       56,294,000
                                                  ============     ============

Diluted earnings per share                        $       0.17     $       0.83
                                                  ============     ============

Adjusted weighted average shares outstanding        61,635,000       61,318,000
                                                  ============     ============

 Dividends per common share                       $       0.18     $       0.16
                                                  ============     ============

See notes to interim consolidated condensed financial statements.

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

                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                         2000         1999
                                                       ---------    ---------
OPERATING ACTIVITIES:
  Net income                                           $  10,412    $  50,057
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Provision for credit losses                           98,000        9,500
    Depreciation and amortization                         24,501       24,315
    Deferred income taxes                                 (1,131)      35,283
  Change in assets and liabilities, net of effects
   from acquisitions
    Decrease in other assets                              18,317        8,018
    Decrease in accounts payable and accrued expenses    (36,666)     (64,789)
    Decrease in interest payable                         (15,101)     (11,927)
    Other                                                    563      (14,565)
                                                       ---------    ---------
    Net cash provided by operating activities             98,895       35,892
                                                       ---------    ---------
INVESTING ACTIVITIES:
  Proceeds from sales of investments, net of gains         8,965
  Proceeds from sales of residual positions,
    net of gains                                           2,134       49,128
  Proceeds from sales of commercial mortgage
    backed securities ("CMBS") assets, net of gains      115,770
  Principal collections on financing transactions        578,569      366,679
  Expenditures for investments and other income
    producing activities                                 (28,114)      (9,318)
  Expenditures for financing transactions               (898,553)    (776,238)
  Expenditures for CMBS transactions                                 (159,069)
  Net change in fee-based receivables                   (123,990)       7,720
  Net change in revolving credit facilities             (211,803)    (324,601)
  Cash received in acquisitions                                        20,942
  Other                                                      700          739
                                                       ---------    ---------
    Net cash used in investing activities               (556,322)    (824,018)
                                                       ---------    ---------
FINANCING ACTIVITIES:
  Net borrowings under commercial paper and
    short-term loans                                     675,329      285,935
  Long-term borrowings                                   120,000      855,000
  Repayment of long-term borrowings                     (461,260)    (309,225)
  Proceeds from exercise of stock options                    275        8,683
  Dividends                                              (11,016)      (8,967)
  Net change in due to clients                            72,450       (1,786)
                                                       ---------    ---------
    Net cash provided by financing activities            395,778      829,640
                                                       ---------    ---------

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS         (61,649)      41,514

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD           100,344       49,518
                                                       ---------    ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD               $  38,695    $  91,032
                                                       =========    =========

See notes to interim consolidated condensed financial statements.

                                       3
<PAGE>
                              THE FINOVA GROUP INC.
          NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION
               FOR THE THREE MONTHS ENDED MARCH 31, 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.  (the  "Company")
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 March 31, 2000,
the results of operations for the three months ended March 31, 2000 and 1999 and
cash  flows for the  three  months  ended  March  31,  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 $93 thousand and $35.6
million for the three  months ended March 31, 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:

                                                   Three Months Ended March 31,
                                                   ----------------------------
(Dollars in Thousands)                                 2000            1999
                                                   ------------    ------------
Total net revenue (loss):
  Commercial Finance                               $     60,762    $     51,706
  Specialty Finance                                      99,063          94,231
  Capital Markets                                        44,909           9,416
  Corporate and other                                    (9,539)         (5,582)
                                                   ------------    ------------
Consolidated total                                 $    195,195    $    149,771
                                                   ============    ============

Income (loss) before allocations:
  Commercial Finance                               $    (41,986)   $     24,348
  Specialty Finance                                      77,316          77,743
  Capital Markets                                        21,809             (17)
  Corporate and other, overhead and
    unallocated provision for credit losses             (39,011)        (19,302)
                                                   ------------    ------------
Income from continuing operations
  before income taxes                              $     18,128    $     82,772
                                                   ============    ============


                                                             March 31,
                                                   ----------------------------
                                                       2000            1999
                                                   ------------    ------------
Managed assets:
  Commercial Finance                               $  4,137,986    $  3,258,093
  Specialty Finance                                   8,518,738       7,337,715
  Capital Markets                                       925,696         925,366
  Corporate and other                                    93,401          94,477
                                                   ------------    ------------
Consolidated total                                   13,675,821      11,615,651
Less securitizations and participations sold           (194,860)       (529,635)
                                                   ------------    ------------
Investment in financing transactions               $ 13,480,961    $ 11,086,016
                                                   ============    ============

                                       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.  For the three  months  ended  March 31,  2000  convertible
preferred stock and related dividends were antidilutive and, therefore, excluded
from the calculation of diluted  earnings per share.  Basic and diluted earnings
per share  calculations  are presented for the three months ended March 31, 2000
and 1999 on the  Condensed  Statements of  Consolidated  Income and are detailed
below:

                                                        THREE MONTHS ENDED
                                                            MARCH 31,
                                                   ----------------------------
(Dollars in thousands, except per share data)          2000            1999
                                                   ------------    ------------
BASIC EARNINGS PER SHARE COMPUTATION:
Net income                                         $     10,412    $     50,057
                                                   ============    ============

Weighted average shares outstanding                  61,197,000      56,545,000
Contingently issued shares (1)                         (294,000)       (251,000)
                                                   ------------    ------------
Adjusted weighted average shares                     60,903,000      56,294,000
                                                   ============    ============

Basic earnings per share                           $       0.17    $       0.89
                                                   ============    ============
DILUTED EARNINGS PER SHARE COMPUTATION:
Net income                                         $     10,412    $     50,057
Preferred dividends, net of tax                                             946
                                                   ------------    ------------
Income before preferred dividends                  $     10,412    $     51,003
                                                   ============    ============

Weighted average shares outstanding                  61,197,000      56,545,000
Contingently issued shares (1)                         (291,000)       (167,000)
Incremental shares from assumed conversions:
Stock options                                           729,000       2,002,000
Convertible preferred securities                                      2,938,000
                                                   ------------    ------------
Total potential dilutive common shares                  729,000       4,940,000
                                                   ------------    ------------
Adjusted weighted average shares                     61,635,000      61,318,000
                                                   ============    ============

Diluted earnings per share                         $       0.17    $       0.83
                                                   ============    ============

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
                                 MARCH 31, 2000
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                           Revenue Accruing                       Nonaccruing
                                 ----------------------------------  -------------------------------
                                    Market              Repossessed            Repossessed   Lease &  Total Carrying
                                   Rate (1)   Impaired   Assets (2)  Impaired     Assets      Other        Amount       %
                                 -----------  --------    --------   --------    --------   --------    -----------   -----
<S>                              <C>          <C>         <C>        <C>         <C>        <C>         <C>            <C>
Commercial Finance Group
  Corporate Finance              $ 1,099,307  $ 38,198    $          $ 49,054    $  1,992   $          $ 1,188,551      8.8
  Rediscount Finance               1,049,904               10,819         631       3,005                1,064,359      7.9
  Business Credit                    877,424     9,552                 39,178       5,883                  932,037      6.9
  Distribution & Channel Finance     534,152    11,799                 16,149                              562,100      4.2
  Commercial Services                288,855     2,000                  2,912       1,714                  295,481      2.2
  Growth Finance                      51,840                            2,184                               54,024      0.4
                                 -----------  --------    -------    --------    --------   -------    -----------    -----
                                   3,901,482    61,549     10,819     110,108      12,594                4,096,552     30.4
                                 -----------  --------    -------    --------    --------   -------    -----------    -----
Specialty Finance Group
  Transportation Finance           2,490,173    64,674                                                   2,554,847     19.0
  Resort Finance                   1,543,037               15,378                  21,636                1,580,051     11.7
  Commercial Equipment Finance       802,886                5,138      13,658      19,934     2,362        843,978      6.3
  Franchise Finance                  831,606                3,837       4,168       2,348       172        842,131      6.2
  Healthcare Finance                 761,873     9,442      5,133      53,340                 2,711        832,499      6.2
  Specialty Real Estate Finance      721,332               35,998       4,155       6,083       152        767,720      5.7
  Communications Finance             748,497     3,909                  4,394                              756,800      5.6
  Public Finance                     180,926     6,078                    103                              187,107      1.4
                                 -----------  --------    -------    --------    --------   -------    -----------    -----
                                   8,080,330    84,103     65,484      79,818      50,001     5,397      8,365,133     62.1
                                 -----------  --------    -------    --------    --------   -------    -----------    -----
Capital Markets Group
  Realty Capital                     455,459                            4,614                              460,073      3.4
  Mezzanine Capital                  390,974    10,986                 34,929                              436,889      3.2
  Investment Alliance                 24,648     4,086                                                      28,734      0.2
                                 -----------  --------    -------    --------    --------   -------    -----------    -----
                                     871,081    15,072                 39,543                              925,696      6.8
                                 -----------  --------    -------    --------    --------   -------    -----------    -----

Other (3)                             71,926     1,099                                       20,555         93,580      0.7
                                 -----------  --------    -------    --------    --------   -------    -----------    -----
TOTAL (4)                        $12,924,819  $161,823    $76,303    $229,469    $ 62,595   $25,952    $13,480,961    100.0
                                 ===========  ========    =======    ========    ========   =======    ===========    =====
</TABLE>

----------
NOTES:
(1)  Represents original or renegotiated  market rate terms,  excluding impaired
     transactions.
(2)  The Company earned income totaling $1.3 million on repossessed  assets year
     to date  during  2000,  including  $0.6  million in  Specialty  Real Estate
     Finance,  $0.3  million  in Resort  Finance,  $0.1  million  in  Healthcare
     Finance,  $0.2 million in Rediscount Finance and $0.1 million in Commercial
     Equipment Finance.
(3)  Primarily  includes  other assets  retained from  disposed or  discontinued
     operations.
(4)  Excludes $194.9 million of assets securitized and participations sold which
     the  Company  manages,  including  securitizations  of  $118.7  million  in
     Franchise Finance and participations of $20.9 million in Corporate Finance,
     $20.7 million in Public Finance,  $13.1 million in Rediscount Finance, $7.9
     million in Communications  Finance,  $5.6 million in Business Credit,  $6.3
     million in Resort Finance and $1.7 million in Other.

                                       7
<PAGE>
RESERVE FOR CREDIT LOSSES:

         The reserve for credit losses at March 31, 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:


                                                Three Months Ended March 31,
                                                ----------------------------
                                                  2000              1999
                                                ---------         ---------
                                                   (Dollars in Thousands)

     Balance, beginning of period               $ 264,983         $ 207,618
     Provision for credit losses                   98,000             9,500
     Write-offs                                   (94,583)           (9,142)
     Recoveries                                       713               739
     Reserves related to acquisitions                 245            25,151
     Other                                            (19)            4,411
                                                ---------         ---------
     Balance, end of period                     $ 269,339         $ 238,277
                                                =========         =========

         At March 31,  2000 the total  carrying  amount  of  impaired  loans was
$391.3  million,  of which $161.8 million were revenue  accruing.  A reserve for
credit  losses of $95.7  million  has been  established  for  $169.7  million of
nonaccruing  impaired  loans and $32.2 million has been  established  for $123.6
million of accruing  impaired loans. The remaining $141.4 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.  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 THREE MONTHS ENDED MARCH 31, 2000
                    TO THE THREE MONTHS ENDED MARCH 31, 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 three months ended March 31, 2000 was $10.4  million
($0.17 per diluted  share)  compared to $50.1 million  ($0.83 per diluted share)
for the three months ended March 31, 1999. Net income was down as a result of an
$80 million  special  charge to pre-tax  earnings to bolster and replenish  loss
reserves and provide payment of deferred  compensation and executive  severance.
The additional loss reserves were added following a first-quarter 2000 write-off
related to a $70 million  loss on a major  customer of FINOVA's  Distribution  &
Channel  Finance  (DCF)  division.  The  remainder of the charge will be used to
provide payment of deferred  compensation and executive  severance for Samuel L.
Eichenfield,  FINOVA's former chairman,  president and chief executive  officer,
who retired on March 24, 2000.

         Excluding the special charge,  net income for the first quarter of 2000
would have been $58.8 million ($0.92 per diluted  share),  a 17% increase in net
income  and an 11%  increase  in  earnings  per share over the  comparable  1999
quarter.

         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 were up 30% in the first quarter of
2000 compared to the first quarter of 1999 ($161.6 million vs. $124.7  million).
The  increase  was due  primarily to portfolio  growth  (managed  assets)  which
increased  by 18%,  21% when  excluding  $345 million of assets held for sale at
Realty Capital at March 31, 1999.  Portfolio growth resulted primarily from $4.8
billion  of new  business  added  during  the 12 months  ended  March 31,  2000.
First-quarter  annualized  portfolio growth was 7.1%,  excluding $168 million of
commercial mortgage-backed securities (CMBS) loans held for sale at December 31,
1999. The lower growth rate in the first quarter of 2000, when compared to 22.3%
in the same period for 1999,  is primarily  attributable  to lower  new-business
volume  generated by the company's  Commercial  Finance segment ($108 million in
the first  quarter of 2000 vs. $346  million in the  comparable  1999  quarter),
partially offset by an increase in new business volume by the Specialty  Finance
segment ($834  million in the first quarter of 2000 vs. $648 million  during the
same period in 1999). The fact that the 2000 new business volume was compared to
a much larger beginning  portfolio base ($13.6 billion in 2000 vs. $10.6 billion
in 1999)  also  contributed  to the lower  annualized  percentage  growth of the
portfolio in the first quarter of 2000. Total new business for the first quarter

                                       8
<PAGE>
of 2000 was $984 million, down slightly from $1.061 billion in the first quarter
of 1999.  Interest  margins  earned as a percent of average  earning assets were
5.15% in the first  quarter of 2000, up slightly from 5.09% in the first quarter
of 1999,  primarily due to more favorable  borrowing  costs resulting from lower
spreads  (approximately  0.17%)  on  commercial-paper  borrowings  in the  first
quarter of 2000 when compared to the first quarter of 1999.

         To alleviate  administrative  burdens, FINOVA terminated a $300 million
securitization  agreement that the company's  Corporate Finance division entered
into in 1995 and 1996,  which has very little economic  impact,  but does reduce
the interest margin percentage by approximately 0.10% going forward.

         VOLUME-BASED   FEES.   Volume-based  fees  are  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 first  quarter of 2000 was  $1.390  billion,  down $83
million,  or 5.6%,  from the $1.473  billion  generated in the first  quarter of
1999.  The  decline in volume in 2000 was  primarily  due to lower CMBS  volume,
partially offset by higher volume in FINOVA's  remaining  fee-based  businesses.
Volume-based  fees  generated  were $12.6  million in the first  quarter of 2000
which  approximated the $12.7 million earned in the 1999 period, as higher rates
earned on that  business in 2000 (0.92% vs. 0.86% in 1999)  helped  mitigate the
effects of the lower  volume.  In April  2000,  Realty  Capital  exited from the
origination  and sale of  commercial  real estate loans to the CMBS market.  See
Recent Developments and Business Outlook for further discussion.

         PROVISION FOR CREDIT LOSSES. The provision for credit losses was higher
in the 2000  quarter  ($98.0  million vs. $9.5  million)  due to the special $70
million  charge to bolster the reserve for credit  losses after the DCF loss and
due to other  write-offs  totaling  $23.9  million in 2000,  which  were  spread
relatively  evenly among FINOVA's  three  operating  segments,  compared to $8.4
million in 1999.  Write-offs,  excluding the one-time $70 million  charge,  as a
percent of average  managed assets were 0.71%  annualized in 2000, up from 0.31%
annualized in 1999. Excluding the special charge, the company expects write-offs
to range from 0.50% to 0.60% of average  managed assets for the full-year  2000.
There can be no assurance that these levels will be achieved, depending in part,
on conditions that could adversely  affect FINOVA's  borrowers and their ability
to meet their obligations to FINOVA.

         GAINS ON  DISPOSAL  OF ASSETS.  Gains on  disposal of assets were $21.0
million  pre-tax  in the first  quarter of 2000,  up 70% from the $12.4  million
reported in the first quarter of 1999.  Gains in 2000  consisted of $1.1 million
from the sale of residuals  coming off lease and $19.9  million from the sale of
investments and loans,  $12.5 million of which came from sales of  Healtheon/Web
MD stock  during the  quarter.  At March 31,  2000,  FINOVA  held  approximately
924,000 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 increased to $79.1 million in
the first quarter of 2000 from $57.5 million in the comparable 1999 quarter, due
to the previously  mentioned $10 million accrual for deferred  compensation  and
executive severance,  as well as to an increase in personnel costs,  principally
related to employees added via acquisitions in 1999. Operating efficiency, which
is the ratio of operating expenses to operating margins and gains, excluding the
special  charge for  deferred  compensation  and  severance,  was 35.4% in 2000,
compared to 38.4% in 1999. The improvement is principally due to lower incentive
compensation  accruals in 2000 related to lower earnings and the decrease in the
company's stock price.

         INCOME  TAXES.  Income  taxes were lower for the first three  months of
2000 compared to the corresponding  period in 1999 primarily due to the decrease
in pre-tax income.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

         Managed assets were $13.68 billion at March 31, 2000 compared to $13.61
billion at December 31, 1999.  Included in managed assets at March 31, 2000 were
$13.48 billion in funds employed,  $118.7 million of securitized  assets managed
by  FINOVA  and $76.2  million  of  participations  sold to third  parties.  The
increase in managed  assets was due to funded new business of $984.4 million for
the three months ended March 31, 2000, partially offset by prepayments and asset
sales accompanied by normal portfolio amortization.

         The reserve for credit losses  increased to $269.3 million at March 31,
2000 from $265.0  million at December 31,  1999.  At March 31, 2000 and December
31,  1999,  the reserve for credit  losses  represented  2.0% of ending  managed
assets  (excluding  participations  and  financing  contracts  held  for  sale).
Nonaccruing  assets increased to $318.0 million or 2.3% of ending managed assets
(excluding  participations) at March 31, 2000 from $295.1 million or 2.2% at the
end of 1999.  The largest  account that was moved into this category  during the
quarter  had  a  balance  of   approximately   $8.8  million.   FINOVA's   share
(approximately  $32  million)  of a large  syndicated  credit  facility  held in
Healthcare Finance is the overall largest account in nonaccruing  assets. It has
been a  nonaccruing  asset since the third  quarter of 1999 and is  currently in
bankruptcy.  FINOVA does not expect any activity that might change the status of
this account until late 2000 or early 2001.

                                       9
<PAGE>
         Revenue accruing  impaired assets were $161.8 million or 1.2% of ending
funds  employed at March 31, 2000,  compared to $240.1 million or 1.8% of ending
funds employed at December 31, 1999. The largest account in this category was an
airline  customer  from the  Transportation  Finance  line of  business  with an
account balance of approximately $56 million. This customer filed for bankruptcy
in the first  quarter of 2000.  FINOVA's  position  in the account is secured by
Boeing 747 aircraft.  FINOVA is  negotiating  with the trustee for  repossession
and/or continued use of its collateral.

         At March 31, 2000, a Healthcare  Finance  customer was granted a 60-day
moratorium on a large credit facility in which FINOVA  participated with a group
of banks.  The  account  was  current at March 31,  2000.  FINOVA's  exposure is
approximately   $24  million.   Also,  in  early  April,  a  computer   reseller
headquartered in Arizona that is a Distribution & Channel Finance customer filed
bankruptcy.  FINOVA has an exposure of approximately $12 million on this account
primarily from an inventory  financing line. These two  collateralized  accounts
are being evaluated for any potential impairment.

         FINOVA's  thirty-one  to ninety  day  delinquencies  rose from 66 basis
points at December 31, 1999 to 108 basis points at March 31, 2000.  The increase
resulted from the airline  customer  mentioned  above moving into this category.
Excluding that customer,  delinquencies  would have been  approximately 65 basis
points, consistent with the prior quarter.

         At March 31,  2000,  FINOVA  had $11.74  billion  of debt  outstanding,
representing 6.7 times the Company's  equity base of $1.76 billion.  Included in
debt at March 31, 2000 was  approximately  $4.55 billion of commercial paper and
short-term borrowings supported by unused long-term revolving-credit agreements.
At year-end 1999, FINOVA's debt was 6.4 times the equity base of $1.77 billion.

         FINOVA renewed a $500 million,  364-day  revolving  credit agreement on
May  3,  2000.  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  renewed  on May 3rd,  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
notified  the lending  institutions  on May 8, 2000 that it would  exercise  its
term-out  option under the $1.6 billion of facilities  and draw on these and its
other credit  agreements,  as needed.  The  proceeds,  along with cash flow from
operations,  will be used to retire debt,  satisfy other obligations and to fund
new business.  The $1.6 billion in borrowings are payable on May 15, 2001. Draws
under the credit facilities are due during 2001, 2002, or 2003.

         Growth in funds  employed  has been  financed  by  FINOVA's  internally
generated  funds and new  borrowings.  During the three  months  ended March 31,
2000,  FINOVA issued $120 million of new long-term  borrowings  and recognized a
net increase in commercial paper outstanding of $675.3 million.  During the same
period,  FINOVA repaid  $461.2  million of long-term  borrowings.  Subsequent to
quarter end, FINOVA Capital Corporation's credit ratings were reduced by Moody's
Investor  Services,  Inc.,  Standard & Poor's  Ratings  Group,  Fitch  Investors
Services, Inc., Duff & Phelps Credit Rating Co and Dominion Bond Rating Service,
which  rates  FINOVA's  debt in Canada.  See Recent  Developments  and  Business
Outlook for further discussion of the rating agency downgrades.

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 $60.8  million in 2000  compared to $51.7 million
for the first  three  months of 1999,  an increase of 17.5%.  The  increase  was
primarily due to a 27.0% 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,  slower growth rate in volume-based fees and a
lower level of  prepayment  related  income and fees.  Distribution  and Channel
Finance had fee-based  volume of $831.5 million during the first three months of
2000  compared  to $803.5  million in 1999.  The rate earned on that volume also
increased from 0.93% to 1.00%.  Commercial  Services'  fee-based  volume rose to
$390.5 million from $285.7 million in 1999, an increase of 36.7%;  however,  the
rate  earned on that  volume  declined  to 0.73% from 0.89% for the first  three
months of 1999.  The group also  generated  a small  level of  fee-based  volume
($11.7 million) by its Growth Finance unit in 2000.

                                       10
<PAGE>
         Income before allocations declined from $24.3 million in 1999 to a loss
of $42.0  million  in the first  three  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 $28.0 million,  an
increase of  approximately  15%.  Net  write-offs  for the group  totaled  $78.6
million in the first  three  months of 2000  compared  to $6.1  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 was 0.86%
compared to 0.84% in the first three months of 1999.

         Managed  assets grew to $4.14  billion over the last twelve months from
$3.26 billion,  an increase of 27.0%. 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 and strong growth in the
Rediscount Finance operation, which grew 20.3% over the last twelve months.

         However, the first quarter annualized growth represented a 5.5% decline
from  year-end  1999.  The  decline  was  primarily  due to  compression  in the
Corporate   Finance/Business  Credit  portfolio,   which  dropped  nearly  21.0%
annualized  during the first  quarter from $2.27 billion to $2.15  billion.  The
Commercial  Finance Group had new loan  business of $108.1  million in the first
three months compared to $346.4 million in 1999. The group,  which is considered
more  generalist  than FINOVA's  more  profitable  niche-oriented  businesses is
expected to slow its 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,  even  excluding  sales of assets
through possible  securitizations,  which would reduce owned assets.  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  increased  5.1% to $99.1  million in the first three
months of 2000 compared to $94.2 million in 1999. The increase was primarily due
to 16.1%  growth  in  managed  assets  over the last  twelve  months  and  12.3%
annualized  growth during the first quarter,  partially offset by the effects of
competitive  pricing  pressures in certain  business  units and a lower level of
gains on disposal of assets  during the first  quarter of 2000 ($3.0  million in
2000 vs. $9.6 million in 1999).  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.

         Income before  allocations  was consistent with the prior year at $77.3
million  compared to $77.7 million in 1999,  primarily due to the lower level of
gains and the  increase in net  write-offs  from $2.3 million to $5.8 million in
the first quarter of 2000. Net write-offs in 2000 were spread among the business
units.  Annualized net write-offs as a percentage of average  managed assets for
the group rose to 0.28% from 0.12%.

         Managed  assets grew to $8.52 billion in the first quarter of 2000 from
$7.34  billion in the same period of 1999,  an increase of 16.1%.  The growth in
managed  assets was driven by new business of $833.5  million in the first three
months of 2000 compared to $648.2  million in 1999. The growth in managed assets
was spread  across  most  business  units  with  Franchise  Finance,  Healthcare
Finance,  Resort Finance and Transportation Finance all growing in excess of 15%
over the last twelve months,  while only Public  Finance  experienced a decline.
The group as a whole was able to increase  backlog  from $1.30  billion to $1.60
billion by the end of the first quarter of 2000.

         CAPITAL  MARKETS.  Capital Markets,  in conjunction with  institutional
investors,  provides  commercial  mortgage  banking services and debt and equity
capital funding.  Mezzanine  Capital  (formerly Sirrom Capital  Corporation) was
added to this segment late in the first quarter of 1999.

         Total net revenue was $44.9  million for the first three months of 2000
compared to $9.4 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
CMBS activities.  Realty Capital's bridge and mezzanine financing portfolio grew
to $460.1  million  by the end of the first  quarter of 2000  compared  to $84.9
million in 1999.  Realty Capital's CMBS volume declined to $140.9 million in the
first quarter of 2000 from $383.5 million for the same period in 1999, while the
rate earned on that volume increased to 0.75% from 0.41%.

         In early April,  FINOVA  repositioned  its Realty  Capital  business by
ending the preferred  partner program entered into with an investment  banker in
December  1999 and exiting  from the  origination  and sale of  commercial  real
estate loans to the CMBS market.  The Realty Capital  division will now focus on
its  on-balance  sheet bridge and mezzanine  financing  activities.  The Company
estimates  this change will decrease  2000 diluted EPS by an estimated  $0.15 to
$0.20.

                                       11
<PAGE>
         The Mezzanine  Capital and Harris  Williams & Co. units  provided $35.9
million of net revenue  during the first three  months of 2000  compared to $2.3
million in 1999. The net revenue in 2000 included $20.4 million related to gains
from sale of equity and  warrant  positions.  Included in this amount were $12.5
million  of  gains  generated  from the sale of  Healtheon/WebMD  stock.  FINOVA
recorded a pre-tax unrealized gain of $14.6 million through other  comprehensive
income on the balance sheet related to 923,832 shares of  Healtheon/WebMD  stock
in its portfolio at March 31, 2000. FINOVA periodically assesses its position in
this unit's investment portfolio and will exercise its position based on various
factors, including management's discretion.

         Income  before  allocations  grew to $21.8  million in the first  three
months  of  2000  from  a  breakeven  in  1999.   This  increase  was  primarily
attributable to the increased net revenue,  partially  offset by $7.6 million of
net write-offs in the Mezzanine Capital portfolio and higher operating  expenses
due to the addition of Mezzanine Capital and Harris Williams & Co. for an entire
quarter.

         Managed assets remained flat at approximately  $925 million despite the
elimination of Realty  Capital's  on-balance  sheet CMBS product,  which totaled
$345.5 million at March 31, 1999. This reduction was offset by $375.2 million of
growth in Realty Capital's bridge and mezzanine financing portfolio.

         The acquired assets of Mezzanine  Capital declined to $436.9 million in
2000 from $477.5  million at March 31, 1999.  FINOVA  expects this  portfolio to
further  compress during the first half of 2000 as it transitions to originating
new business using FINOVA's underwriting standards. Loan backlog for the segment
as a whole increased to $271.3 million from $160.7 million in 1999.

YEAR 2000 COMPLIANCE

         FINOVA   successfully   completed  all  work   necessary  to  make  its
mission-critical  systems  Year  2000  compliant  in  1999  and  experienced  no
significant problems during the transition to the new year. The Company incurred
expenses of $207,000 and capital costs of $1.7 million  related to its Year 2000
compliance efforts. No material  expenditures related to the Year 2000 issue are
expected to be incurred in the future.

         FINOVA's  estimate of future costs does not include time and costs that
may be incurred  as a result of the failure of any third  parties to become Year
2000 compliant.  FINOVA monitored  activity with customers and others during the
first quarter of 2000 to determine if their applications are Year 2000 compliant
and to assess the potential  impact on FINOVA related to this issue. At the date
of this filing, no significant impact has been noted.

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.

         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.

         In early April,  FINOVA  repositioned  its Realty  Capital  business by
ending the preferred  partner  program  entered into with an investment  banking
firm in December  1999 and exiting from the  origination  and sale of commercial
real estate loans to the CMBS market. The Realty Capital division will now focus
on its on-balance  sheet real estate loan  products.  This change is expected to
decrease 2000 EPS by an estimated $0.15 to $0.20.

         In early April,  FINOVA  Capital  entered  into a $500  million  credit
facility  with various  lenders to provide  additional  liquidity  following the
announcements  noted above. Those facilities required that they be repaid in the
event the company borrowed under the commercial paper back-up facilities. FINOVA
repaid the amounts  borrowed  under that facility in May 2000 after it drew upon
its other credit agreements, as discussed more fully below.

         On May 1, 2000,  FINOVA  Capital  issued  $105  million of medium  term
notes. On May 5, 2000, FINOVA Capital renewed a $500 million,  364-day revolving
credit agreement.  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 3rd 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

                                       12
<PAGE>
notified  the lending  institutions  on May 8, 2000 that it would  exercise  its
term-out  option under the $1.6 billion of facilities,  which are payable in 364
days, and draw on these and its other credit agreements as needed. The proceeds,
along with cash flow from operations, will be used to retire debt, satisfy other
obligations and to fund new business.

         FINOVA has  subsequently  been  receiving  funding  under those  credit
facilities.  FINOVA expects that its available credit facilities, cash flow from
operations,  proceeds from assets available for sale and other resources will be
sufficient  to  satisfy  its debt  obligations,  operational  needs  and to fund
reduced  amounts of new  business at least  through the second  quarter of 2001.
FINOVA is managing its business to help assure its ability to satisfy  those and
its other obligations in due course.

         In light of recent events,  on May 8, 2000,  FINOVA  announced that its
board of directors had retained Credit Suisse First Boston to assist the Company
with a comprehensive evaluation of its strategic alternatives.

         After the May 8th  announcement,  the credit ratings for FINOVA Capital
have been reduced as follows:

                                         Senior Debt         Commercial Paper
                                       ---------------      -------------------
                                       From        To       From         To
                                       ----       ----      ----        ----
Moody's Investors Service Inc.         Baa1       Baa2      P-2         P-3
Standard & Poor's Ratings Group         A-        BBB+      A2      Credit Watch
Fitch Investors Services, Inc.          A         BBB       F-1         F-2
Duff &Phelps Credit Rating Co.          A         BBB       D-1         D-2

         Dominion  Bond Rating  Service,  which rates  FINOVA's  debt in Canada,
reduced  its Senior  Debt  rating  from  A(low) to  BBB(high)  and  reduced  its
Commercial  Paper  rating from  R1(low) to R2(high).  To  supplement  internally
generated cash flows, the company is evaluating alternative funding sources such
as  asset-backed  facilities  and  securitizations.  The draws on the commercial
paper back-up facilities and credit downgrades are expected to decrease 2000 EPS
by $0.30 to $0.40.

         The costs to exit the CMBS  market  place,  draws on  commercial  paper
back-up facilities and increase in cost of funds are expected to reduce 2000 EPS
by $0.45 to $0.60.

         FINOVA  intends to  significantly  slow its  overall  growth rate on an
annual  basis in an effort to  maintain or  gradually  reduce its debt to equity
ratio from the March 31,  2000 level of 6.7:1.  There can be no  assurance  that
FINOVA's asset base will grow, even excluding  sales of assets through  possible
securitizations, which would reduce owned assets.

         FINOVA continues to seek new business by emphasizing  customer service,
providing competitive interest rates and focusing on selected market niches.

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.

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.

     *    Other risks detailed in FINOVA's SEC reports,  including on page 15 of
          FINOVA's 10-K for 1999.

                                       13
<PAGE>
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 and the draws against the Company's commercial paper back-up
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. 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.

         Excluding the effect of the credit  downgrades,  there were no material
changes  from the  information  provided in the report on Form 10-K for the year
ended December 31, 1999.

                                       14
<PAGE>
                           PART II OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

         On March 29, 2000,  an action was filed in the United  States  District
Court for the Southern  District of New York against FINOVA,  FINOVA Capital and
four executive officers, including Samuel Eichenfield, FINOVA's former chairman,
president and chief executive  officer.  A similar action was subsequently filed
in the United States  District Court for the District of Arizona  against FINOVA
and Mr.  Eichenfield.  The  actions  purport to be on behalf of the  plaintiffs,
William K. Steiner and Uri Borenstein,  respectively,  and all other shareowners
who purchased  FINOVA common stock during the same class period of July 15, 1999
through March 26, 2000. The complaints  allege that  defendants  made materially
misleading  statements  regarding FINOVA's loss reserves relating to one account
and  otherwise  violated  the  federal  securities  laws in an effort to bolster
FINOVA's stock price,  among other  reasons.  The  complaints  seek  unspecified
damages,  interest and other relief. FINOVA has not had an opportunity to assess
the  likelihood  of success in the  matters,  but 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 6. EXHIBITS AND REPORTS ON FORM 8-K.

         (a) The following exhibits are filed herewith:

Exhibit No.                               Document
-----------                               --------

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

    27         Financial Data Schedule

         (b) Reports on Form 8-K:

         A report on Form 8-K,  dated  April  18,  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 March 31, 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: May 15, 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
                            MARCH 31, 2000 FORM 10-Q

Exhibit No.                               Document
-----------                               --------

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

    27         Financial Data Schedule

                                       17