UNITED STATES SECURITIES AND EXCHANGE COMMISSION


                             Washington, D.C. 20549

                                   -----------

                                   FORM 10-KSB

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

For the fiscal year ended December 31, 2002       Commission File Number 0-25278


                  PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

          California                                     68-0293258
-------------------------------              ----------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

2401 Kerner Boulevard, San Rafael, California            94901-5527
--------------------------------------------------------------------------------
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code:     (415) 485-4500
                                                        --------------

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities  registered  pursuant to Section  12(g) of the Act:  Units of Limited
Partnership Interest

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB.
_____________

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
                            -------                     -------

The Registrant's revenue for its most recent fiscal year was $1,421,000.

As of December 31, 2002,  1,524,931 Units of Limited  Partnership  interest were
outstanding.  No  market  exists  for the  Units  of  Partnership  interest  and
therefore there exists no aggregate market value at December 31, 2002.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

Transitional Small Business Disclosure Format:

                       Yes                          No     X
                            -------                     -------


                                  Page 1 of 26
<PAGE>

                  PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.

                         2002 FORM 10-KSB ANNUAL REPORT


                                TABLE OF CONTENTS


                                                                            Page

                                     PART I

Item 1.       Business.....................................................   3
Item 2.       Properties...................................................   4
Item 3.       Legal Proceedings............................................   4
Item 4.       Submission of Matters to a Vote of Security Holders..........   5


                                     PART II

Item 5.       Market for the Registrant's Securities and Related
              Security Holder Matters......................................   5
Item 6.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations....................................   6
Item 7.       Financial Statements.........................................   9
Item 8.       Disagreements on Accounting and Financial Disclosure Matters.  23


                                    PART III

Item 9.       Directors and Executive Officers of the Registrant...........  23
Item 10.      Executive Compensation.......................................  24
Item 11.      Security Ownership of Certain Beneficial Owners and
              Management...................................................  24
Item 12.      Certain Relationships and Related Transactions...............  24
Item 13.      Exhibits, Financial Statement Schedules and Reports on
              Form 8-K.....................................................  25
Item 14.      Controls and Procedures......................................  25


Signatures.................................................................  26



                                       2
<PAGE>

                                     PART I

Item 1.       Business.
              --------

General Development of Business.

         Phoenix  Leasing  American  Business Fund,  L.P., a California  limited
partnership  (the  "Partnership"),  was  organized  on  December  3,  1992.  The
Partnership was registered  with the Securities and Exchange  Commission with an
effective  date of October  19,  1993 and shall  continue  to operate  until its
termination date unless dissolved sooner due to the sale of substantially all of
the assets of the Partnership or a vote of the Limited Partners. The Partnership
will  terminate  no later than  December  31,  2007.  The  General  Partner is a
California limited partnership, Phoenix Leasing Associates III L.P., the general
partner of which is Phoenix Leasing  Associates III, Inc., a Nevada  corporation
and a  wholly-owned  subsidiary of Phoenix  Leasing  Incorporated,  a California
corporation. The General Partner or its affiliates also is or has been a general
partner in other limited  partnerships formed to invest in capital equipment and
other assets.

         The  registration  was  for  2,500,000  units  of  limited  partnership
interest  at a price of $20 per  unit.  The  Partnership  completed  its  public
offering on October 6, 1996. The  Partnership  sold 1,603,335  units for a total
capitalization  of $32,066,700.  Of the proceeds  received through the offering,
the Partnership has incurred  $4,808,933 in organizational and offering expenses
for a net capitalization of $27.3 million.

         From the initial  formation  of the  Partnership  through  December 31,
2002,  the total  investments  in equipment  leases and  financing  transactions
(loans) including the Partnership's pro rata interest in an investment made by a
joint  venture,  approximate  $75,654,000.  The  average  initial  firm  term of
contractual  payments  from  equipment  subject to lease was 48 months,  and the
average  initial  net  monthly  payment  rate as a  percentage  of the  original
purchase price was 2.93%. The average initial term of contractual  payments from
loans was 48 months and the weighted average interest was 14.28%.

         The Partnership has acquired significant amounts of equipment or assets
with the net  offering  proceeds.  In  addition,  the  Partnership  has acquired
equipment  through the use of debt  financing.  The cash flow  generated by such
investments  in  equipment  leases  or  financing  transactions  will be used to
provide for debt service,  to provide cash distributions to the Partners and the
remainder will be reinvested in capital equipment or other assets.

         The Partnership  will maintain  working  capital  reserves in an amount
which  will  fluctuate  from  time to  time  depending  upon  the  needs  of the
Partnership,  but which  will be at least  one  percent  of the  gross  offering
proceeds during the Partnership's operational phase.


Narrative Description of Business.

         The   objectives   of  the   Partnership   are  to:  (1)  produce  cash
distributions on a continuing basis over the life of the Program through leasing
equipment and financing assets primarily to companies engaged in the development
of technologies  and other growth industry  businesses,  franchisees,  and other
third party lessees and customers;  (2) reinvest,  during the operating phase of
the Program (after payment of expenses, including debt service requirements, and
distributions to the Partners),  in additional  equipment and assets to increase
the  overall  size  of  the  portfolio;  and  (3)  commence  liquidation  of the
Partnership's  portfolio  of  investments  seven  years  after  the close of the
offering of units of limited partnership interests.

         To achieve  these  objectives  the  Partnership  has  invested and will
invest in various  types of capital  equipment  and other  assets,  and  provide
leasing and secured financing of the same to third parties on either a long-term
or short-term  basis.  The  Partnership has invested and will invest in, or have
collateral in, various types of assets including: (1) production, manufacturing,
fabrication and test equipment; (2) lab and medical equipment; (3) furniture and
fixtures;   (4)  personal  computers  and  workstations,   computer   peripheral
equipment, computer mainframes, CAE/CAD/CAM equipment, communications equipment,
office systems and computer software products;  (5) property management systems,
including  computer  reservations  systems,  and  phone  and  telecommunications
systems;  and (6)  various  types of  other  equipment,  furnishings,  fixtures,
leasehold  improvements  and  assets,  including  to a  limited  extent  certain
intangible assets.

         A substantial  portion of the net offering  proceeds of the Partnership
has been invested in equipment leases subject to full payout leases. Full payout
leases are leases under which the noncancellable  rental payments due during the
initial term of the lease are at least  sufficient to recover the purchase price

                                       3
<PAGE>

of the  equipment.  Operating  leases,  which  generally  have  terms of shorter
duration than full payout  leases,  are leases that will return to the lessor an
amount less than the purchase price of the equipment  from rental  payments over
the initial term of the lease. Upon the expiration of the initial lease term, it
is necessary to extend the lease term with the existing lessee, enter into a new
lease with another lessee or sell the equipment.

         Competition.  The Partnership  will be competing for equipment  leasing
and financing business with many well-established companies having substantially
greater financial  resources.  The types of businesses the Partnership  competes
with will be banks, finance companies, leasing companies and other institutional
or governmental  lenders.  Competitive  factors include  pricing,  technological
innovation, payment terms, collateral requirements and methods of financing. The
General Partner intends to concentrate the  Partnership's  activities in markets
in which the General Partner and its affiliates have developed an expertise.

Other.

         A brief  description of the type of assets in which the Partnership has
invested in through December 31, 2002, together with information  concerning the
uses of assets is set forth in Item 2.


Item 2.       Properties.
              ----------

         The  Partnership  is engaged in the  equipment  leasing  and  financing
industry and as such,  does not own or operate any  principal  plants,  mines or
real property. The primary assets held by the Partnership are its investments in
leases and loans to businesses located throughout the United States.

         As of  December  31,  2002,  the  Partnership  owns  equipment  and has
outstanding  loans to borrowers  with an aggregate  original cost of $4,106,000.
The following  table  summarizes the type of equipment  owned or financed by the
Partnership at December 31, 2002:

                                                                   Percentage of
    Asset Types                               Cost of Assets(1)    Total Assets
-------------------                        ----------------------  -------------
                                           (Amounts in Thousands)

Equipment:
Computer Hardware                                 $  617                15%
Lab Test Equipment                                   559                14
Software                                             213                 5
Furniture and Fixtures                                40                 1
Leasehold Improvements                               159                 4
Miscellaneous Equipment                              124                 3
Manufacturing Equipment                              125                 3
Communications Equipment                               2              --
                                                  ------            ------

     Total Equipment                               1,839                45
                                                  ------            ------

Financing:
Financing to Emerging Growth Companies             1,338                32
Financing to Other Businesses                        929                23
                                                  ------            ------

     Total Financing                               2,267                55
                                                  ------            ------

         Total Assets                             $4,106               100%
                                                  ======            ======

(1)      These  amounts  include the cost of equipment  on  financing  leases of
         $1,943,000 at December 31, 2002.


Item 3.       Legal Proceedings.
              -----------------

         The  Registrant is not a direct party to any pending legal  proceedings
which would have a material adverse impact on its financial position.


                                       4
<PAGE>

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

         No matters were  submitted to a vote of Limited  Partners,  through the
solicitation of proxies or otherwise, during the fourth quarter.


                                     PART II

Item 5.       Market for the Registrant's Securities and Related Security Holder
              ------------------------------------------------------------------
              Matters.
              --------

         (a)  The Registrant's  limited  partnership  interests are not publicly
              traded.   There  is  no  market  for  the   Registrant's   limited
              partnership interests and it is unlikely that any will develop.

         (b)  Approximate number of equity security investments:

                                                   Number of Unit Holders
                Title of Class                     as of December 31, 2002
              ----------------------              -----------------------

              Limited Partners                                1,566
              General Partner                                     1



                                       5
<PAGE>

Item 6.       Management's  Discussion  and Analysis of Financial  Condition and
              ------------------------------------------------------------------
              Results of Operations.
              ---------------------

Critical Accounting Policies

         In  response  to the SEC's  Release  No.  33-8040,  "Cautionary  Advice
Regarding Disclosure About Critical Accounting Policies," we identified the most
critical  accounting  principles  upon which our financial  status  depends.  We
determined  the critical  principles  by  considering  accounting  policies that
involve the most complex or subjective  decisions or assessments.  We identified
our most  critical  accounting  policies to be those  related to  allowance  for
losses on loans and leases.  We state these accounting  policies in the notes to
the  financial  statements  and at  relevant  sections  in this  discussion  and
analysis.

Results of Operations

         Phoenix Leasing American Business Fund, L.P. (the Partnership) reported
net income of $423,000 during the year ended December 31, 2002, as compared to a
net loss of $735,000  during 2001. The increase in net income for the year ended
December 31, 2002,  compared to the same period in the prior year,  is primarily
due to a decrease in provision for losses on leases and loans.

         Total revenue  decreased by $1,074,000  during the year ended  December
31, 2002,  as compared to the same period in 2001.  The decrease in total income
for the year ended  December  31,  2002,  compared to the prior year,  is due to
declines in interest income from notes receivable,  earned income from financing
leases, interest income and the absence of a gain on sale of securities.

         Interest  income from notes  receivable  decreased  by $375,000 for the
year ended December 31, 2002,  compared to 2001,  which is  attributable  to the
decline in notes receivable balances. At December 31, 2002, the notes receivable
balance  was  $434,000,  compared  to  $1,534,000  at  December  31,  2001.  The
Partnership made no new investments in notes  receivable  during the years ended
December 31, 2002 and 2001.

         Earned income from financing  leases  decreased by $274,000  during the
year ended  December 31, 2002, as compared to the same period in 2001,  due to a
decrease in the Partnership's investment in financing leases. The net investment
in financing leases was $621,000 at December 31, 2002, as compared to $1,381,000
at December 31, 2001.  The  investment  in financing  leases,  as well as earned
income  from  financing  leases,  will  decrease  over  the  lease  term  as the
Partnership  amortizes  income  over the life of the lease  using  the  interest
method.  The Partnership  made no new investments in financing leases during the
years ended December 31, 2002 and 2001.

         Interest  income  decreased by $221,000 for the year ended December 31,
2002, compared to the same period in 2001, which is attributable to the decrease
in interest income from the Partnership's  operating bank account. This decrease
is due to declining interest rates.

         The  Partnership  reported no gain on sale of  securities  for the year
ended  December 31, 2002,  compared to $176,000 for the year ended  December 31,
2001. The securities sold in 2001 consisted of common stock received through the
exercise  of stock  warrants  granted to the  Partnership  as part of  financing
agreements  with  emerging  growth  companies  that  are  publicly  traded.  The
Partnership  received  proceeds  of $176,000  from the sale of these  securities
during the year ended December 31, 2001.

         The  Partnership  reported a gain on sale of  equipment of $138,000 for
the year ended December 31, 2002,  compared to $79,000 in 2001. The  Partnership
sold  equipment  with an aggregate  original cost of $6 million  during the year
ended December 31, 2002, compared to $4.2 million in 2001.

         Total  expenses  for the year ended  December  31,  2002  decreased  by
$2,232,000, compared to the same period in the prior year. The Partnership had a
decrease in provision for losses on leases and loans of $1,743,000  for the year
ended  December  31,  2002,  compared to the same period in the  previous  year.
During the year ended December 31, 2001, the high provision for losses on leases
and loans was due primarily to the  recognition of additional  loss reserves for
impaired  loans and leases  deemed to have a probable  loss.  Other factors that
contributed to the decrease in total  expenses were a decrease in  depreciation,
amortization of acquisition  fees,  management fees,  reimbursed  administrative
costs to the General Partner and legal expenses.  These decreases are the result
of the continued reduction in the size of the lease and loan portfolio.

         Management  considers  various factors in determining the allowance for
loan  and  lease  losses.  Management  periodically  specifically  reviews  each
individual   loan  and  lease  in  the   Partnership's   portfolio  for  payment

                                       6
<PAGE>

delinquencies and other identified weaknesses. When management determines that a
lease loss is probable or loan is impaired, it provides for the loss and takes a
specific  write-down  to reduce the  reported  value of that lease or loan.  For
loans, the reported value is reduced to the present value of the expected future
cash  flows  discounted  at  the  original   effective   interest  rate  or,  if
collectibility  is collateral  dependent  (which is generally the case),  to the
fair value of the collateral.  For leases,  the reported value is reduced to the
amount  expected  to be  recovered  which is  generally  the  fair  value of the
collateral.  In addition,  in order to estimate  unidentified  probable  losses,
management considers the average charge-offs as a percentage of the portfolio in
recent  quarters in  estimating  this portion of the  allowance.  A  significant
amount of the loans and leases in the Growth  Capital  portfolio  are  dependent
upon computer  peripheral  collateral  which is susceptible to accelerated  fair
value  declines  due to  potential  technological  obsolescence.  This factor is
considered by management in calculating  the allowance for loan and lease losses
through historical loss factors and individual loan and lease reviews.

         In the year ended  December  31,  2002,  leases with 2  customers  were
deemed as  probable  losses  and loans with 1 customer  became  impaired  in the
Partnership's Growth Capital portfolio. The book value of these leases and loans
were $499,000, as of December 31, 2001. These leases and loans were written down
by $100,000  during 2002.  Thus far during the first  quarter of 2003, no leases
were deemed as a probable loss and 1 loan, with a book value of $33,000,  became
impaired in the Growth  Capital  portfolio.  As of  December  31,  2002,  Growth
Capital loans and leases with a book value of $6,000 were between 30 and 90 days
past due. As of December  31, 2002,  the  Partnership  has $786,000  invested in
leases  and loans in the  Growth  Capital  portfolio,  which is made up of early
stage companies in various growth industries,  some of which have been adversely
affected by the recent economic downturn. Potential future increases in loan and
lease  delinquencies and defaults due to continued  weaknesses in the economy as
well as potential  significant  declines in technology related collateral values
could cause the provision  for losses on leases and loans and the  write-offs to
continue at higher than historical  levels. The General Partner will continue to
monitor the leases and loans in this portfolio for indications of  deterioration
in the portfolio and impairment and will record a provision for losses on leases
and loans as soon as losses become probable.

         Inflation  affects the  Partnership  in relation to the current cost of
equipment  placed on lease and the residual  values  realized when the equipment
comes  off-lease and is sold.  During the last several years  inflation has been
low, thereby having very little impact upon the Partnership.

Liquidity and Capital Resources

         The  Partnership's  primary source of liquidity comes from  contractual
obligations with lessees and borrowers for fixed terms at fixed payment amounts.
The future  liquidity of the  Partnership  is dependent  upon the payment of the
Partnership's  contractual  obligations  from its lessees and borrowers.  As the
initial lease terms of the Partnership's short term operating leases expire, the
Partnership  will  re-lease or sell the equipment as it becomes  available.  The
future  liquidity  of the  Partnership  will depend  upon the General  Partner's
success in collecting  the  contractual  amounts owed, as well as re-leasing and
selling the Partnership's equipment when the lease terms expire.

         The Partnership reported net cash from leasing and financing activities
of $2,253,000 during the year ended December 31, 2002, as compared to $5,058,000
during the same period in 2001.  This  decrease is reflective of the decrease in
payments  received  from  financing  leases and  principal  payments  from notes
receivable.  The  Partnership  made no new  investments in financing  leases and
notes receivable during the years ended December 31, 2002 and 2001.

         As of December 31, 2002, the Partnership  reported equipment being held
for lease  with an  original  cost of  $297,000  and a net book  value of $0, as
compared to equipment  being held for lease with an original  cost of $2,248,000
and a net book value of $15,000 at December 31, 2001.  The General  Partner,  on
behalf of the Partnership, is actively engaged in the remarketing and selling of
the  Partnership's  equipment as it comes  available.  The Partnership  received
proceeds from the sale of equipment of $173,000 for the year ended  December 31,
2002,  compared to $90,000 for the same period in the previous year. At December
31, 2002, the  Partnership  owned  equipment with an aggregate  original cost of
approximately $2 million, as compared to $8 million at December 31, 2001.

         In July 2002,  the  Partnership  negotiated an agreement with a bank to
borrow up to $6 million for the purchase of equipment  and other  property to be
subject to lease.  The Partnership  paid a commitment fee of $45,000,  which has
been completely  amortized as of December 31, 2002. As of December 31, 2002, the
Partnership  had not drawn down any loan proceeds nor does it expect to draw any
proceeds for the remainder of the commitment period which expires in July 2003.

                                       7
<PAGE>

         The cash  distributed  to partners  during the year ended  December 31,
2002 was $3,825,000,  as compared to $3,856,000  during the same period in 2001.
In accordance with the partnership agreement,  the limited partners are entitled
to 96% of the  cash  available  for  distribution  and the  General  Partner  is
entitled to four percent.  As a result, the limited partners received $3,672,000
and  $3,702,000 in cash  distributions  during the years ended December 31, 2002
and  2001,   respectively.   As  of  December  31,  2002,  the  cumulative  cash
distributions  to limited partners was $28,446,000 as compared to $24,774,000 at
December 31, 2001. The General Partner received $153,000 and $154,000 during the
years  ended  December  31,  2002  and  2001,   respectively.   The  Partnership
anticipates  making  distributions  to partners during 2003 at least at the same
rate as in 2002.

         As  stated in the  Partnership's  prospectus,  redemptions  were at the
discretion of the General Partner. Redemptions were $83,000 and $148,000 for the
years ended December 31, 2002 and 2001, respectively.

         The cash to be  generated  from  leasing and  financing  operations  is
anticipated to be sufficient to meet the  Partnership's  continuing  operational
expenses and debt service.

         Forward-looking statements in this report are made pursuant to the safe
harbor  provisions  of the  Private  Securities  Litigation  Reform Act of 1995.
Actual  results could differ from those  anticipated  by some of the  statements
made above. Limited Partners are cautioned that such forward-looking  statements
involve risks and uncertainties including without limitation the following:  (i)
the  Partnership's  plans are subject to change at any time at the discretion of
the General Partner of the Partnership,  (ii) future technological  developments
in the industry in which the Partnership operates, (iii) competitive pressure on
pricing or services,  (iv) substantial  customer defaults or cancellations,  (v)
changes  in  business  conditions  and the  general  economy,  (vi)  changes  in
government regulations affecting the Partnership's core businesses and (vii) the
ability of the Partnership to sell its remaining assets.

         In  accordance  with  section  13.2(a)  of  the  amended  and  restated
agreement of limited  partnership,  the estimated  annual average Unit valuation
(unaudited) is estimated by the General Partner to be $5 per limited partnership
unit at December 31, 2002.



                                       8
<PAGE>

                          Item 7. FINANCIAL STATEMENTS
                                  --------------------

                  PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.
                  --------------------------------------------

                          YEAR ENDED DECEMBER 31, 2002
                          ----------------------------




                                       9
<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To the Partners of Phoenix Leasing American Business Fund, L.P.
San Rafael, California:

We have  audited the  accompanying  balance  sheet of Phoenix  Leasing  American
Business Fund, L.P. (the "Partnership") (a California limited partnership) as of
December 31, 2002, and the related  statements of operations  and  comprehensive
income (loss),  partners' capital and cash flows for the year then ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit. The financial  statements of Phoenix Leasing American  Business Fund,
L.P, as of December 31, 2001,  were audited by other auditors whose report dated
February  8,  2002,   expressed  an  unqualified   opinion  on  those  financial
statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Phoenix  Leasing  American
Business  Fund,  L.P. as of December 31, 2002, and the results of its operations
and its cash  flows for the year  then  ended,  in  conformity  with  accounting
principles generally accepted in the United States of America.




San Ramon, California,                                      Armanino McKenna LLP
  January 31, 2003


                                       10
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    ----------------------------------------

To the Partners of Phoenix Leasing American Business Fund, L.P.:

We have  audited the  accompanying  balance  sheet of Phoenix  Leasing  American
Business Fund, L.P. (a California limited  partnership) as of December 31, 2001,
and the related  statements of operations and  comprehensive  income,  partners'
capital and cash flows for the years  ended  December  31, 2001 and 2000.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Phoenix  Leasing  American
Business  Fund,  L.P. as of December 31, 2001, and the results of its operations
and its cash flows for the years ended December 31, 2001 and 2000, in conformity
with accounting principles generally accepted in the United States.




San Francisco, California,                                   Arthur Andersen LLP
February 8, 2002




This is a copy of the audit report  previously  issued by Arthur Andersen LLP in
connection with Phoenix Leasing  American  Business Fund,  L.P.'s filing on Form
10-KSB for the year ended  December  31,  2001.  This audit  report has not been
reissued by Arthur Andersen LLP in connection with this filing on Form 10-KSB.



                                       11
<PAGE>

                  PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.
                                  BALANCE SHEET
                 (Amounts in Thousands Except for Unit Amounts)


                                                               December 31, 2002
                                                               -----------------
ASSETS

Cash and cash equivalents                                             $7,419

Accounts receivable (net of allowance for losses on accounts
   receivable of $84)                                                     73

Notes receivable (net of allowance for losses on notes
   receivable of $26)                                                    434

Net investment in financing leases (net of allowance for lease
  losses of $33)                                                         621

Equipment on operating leases and held for lease (net of
   accumulated depreciation of $192)                                    --

Capitalized acquisition fees (net of accumulated amortization
   of $2,981)                                                             34

Other assets                                                               3
                                                                      ------

     Total Assets                                                     $8,584
                                                                      ======


LIABILITIES AND PARTNERS' CAPITAL

Liabilities:

   Accounts payable and accrued expenses                              $  155
                                                                      ------

     Total Liabilities                                                   155
                                                                      ------

Partners' Capital:

   General Partner                                                        89

   Limited Partners, 2,500,000 units authorized, 1,603,335 units
     issued and 1,524,931 units outstanding                            8,340
                                                                      ------

     Total Partners' Capital                                           8,429
                                                                      ------

     Total Liabilities and Partners' Capital                          $8,584
                                                                      ======

        The accompanying notes are an integral part of these statements.

                                       12
<PAGE>

                  PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.
            STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
               (Amounts in Thousands Except for Per Unit Amounts)



                                                For the Years Ended December 31,
                                                       2002        2001
                                                       ----        ----

REVENUE
   Rental income                                      $   670    $   748
   Interest income, notes receivable                      328        703
   Gain on sale of equipment                              138         79
   Interest income                                        138        359
   Earned income, financing leases                        133        407
   Gain on sale of securities                            --          176
   Other income                                            14         23
                                                      -------    -------

     Total Revenue                                      1,421      2,495
                                                      -------    -------

EXPENSES

   Provision for losses on leases and loans               396      2,139
   Depreciation                                           179        409
   General and administrative expenses                    116         96
   Amortization of acquisition fees                       109        234
   Legal fees                                              72        132
   Management fees to General Partner                      56        112
   Reimbursed administrative costs to General
     Partner                                               55         68
   Lease related operating expenses                        15         40
                                                      -------    -------

     Total Expenses                                       998      3,230
                                                      -------    -------

NET INCOME (LOSS)                                         423       (735)

Other comprehensive loss:
   Unrealized losses on securities:
     Unrealized holding losses arising during period     --           (2)
                                                      -------    -------

Other comprehensive loss                                 --           (2)
                                                      -------    -------

COMPREHENSIVE INCOME (LOSS)                           $   423    $  (737)
                                                      =======    =======


NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT        $   .17    $  (.57)
                                                      =======    =======

ALLOCATION OF NET INCOME (LOSS):
   General Partner                                    $   156    $   145
   Limited Partners                                       267       (880)
                                                      -------    -------

                                                      $   423    $  (735)
                                                      =======    =======

        The accompanying notes are an integral part of these statements.

                                       13
<PAGE>

                  PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.
                         STATEMENTS OF PARTNERS' CAPITAL
                 (Amounts in Thousands Except for Unit Amounts)

<TABLE>
<CAPTION>
                                                                             Accumulated
                                       General                                  Other
                                      Partner's        Limited Partners'     Comprehensive  Total
                                       Amount         Units        Amount       Income      Amount
                                       ------         -------------------       ------      ------

<S>                                   <C>           <C>         <C>          <C>          <C>
Balance, December 31, 2000            $       95    1,551,526   $   16,558   $        2   $   16,655

Redemptions of capital                      --        (14,626)        (148)        --           (148)

Other comprehensive loss                    --           --           --             (2)          (2)

Distributions to partners ($2.40 per
  limited partnership unit)                 (154)        --         (3,702)        --         (3,856)

Net income (loss)                            145         --           (880)        --           (735)
                                      ----------   ----------   ----------   ----------   ----------

Balance, December 31, 2001                    86    1,536,900       11,828         --         11,914

Redemptions of capital                      --        (11,969)         (83)        --            (83)

Distributions to partners ($2.40 per
  limited partnership unit)                 (153)        --         (3,672)        --         (3,825)

Net income                                   156         --            267         --            423
                                      ----------   ----------   ----------   ----------   ----------

Balance, December 31, 2002            $       89    1,524,931   $    8,340   $     --     $    8,429
                                      ==========   ==========   ==========   ==========   ==========
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       14
<PAGE>

                  PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.
                            STATEMENTS OF CASH FLOWS
                             (Amounts in Thousands)

                                                For the Years Ended December 31,
                                                        2002       2001
                                                        ----       ----
Operating Activities:
--------------------

   Net income (loss)                                   $   423   $  (735)

   Adjustments to reconcile net income (loss)
     to net cash provided by operating
     activities:
       Depreciation                                        179       409
       Amortization of acquisition fees                    109       234
       Gain on sale of equipment                          (138)      (79)
       Provision for losses on financing leases             51       673
       Provision for losses on notes receivable            396     1,364
       Provision for (recovery of) losses on
         accounts receivable                               (51)      102
       Gain on sale of securities                         --        (176)
       Decrease in accounts receivable                     101         2
       Decrease in accounts payable and accrued
         expenses                                         (306)     (325)
       Decrease (increase) in other assets                  (4)       67
                                                       -------   -------
   Net cash provided by operating activities               760     1,536
                                                       -------   -------

Investing Activities:
--------------------

   Principal payments, financing leases                    794     1,572
   Principal payments, notes receivable                    699     1,950
   Proceeds from sale of equipment                         173        90
   Proceeds from sale of securities                       --         176
   Payment of acquisition fees                            --        (153)
                                                       -------   -------

   Net cash provided by investing activities             1,666     3,635
                                                       -------   -------

Financing Activities:
--------------------

   Distributions to partners                            (3,825)   (3,856)
   Redemptions of capital                                  (83)     (148)
                                                       -------   -------

   Net cash used in financing activities                (3,908)   (4,004)
                                                       -------   -------

Increase (decrease) in cash and cash equivalents        (1,482)    1,167

Cash and cash equivalents, beginning of year             8,901     7,734
                                                       -------   -------

Cash and cash equivalents, end of year                 $ 7,419   $ 8,901
                                                       =======   =======

Supplemental Disclosure of Non-Cash Investing
---------------------------------------------
  Activities:
  ----------
  Reclassification of financing leases to equipment
     on operating leases                               $     8   $   999

        The accompanying notes are an integral part of these statements.

                                       15
<PAGE>

                  PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2002


Note 1.       Organization and Partnership Matters.
              ------------------------------------

         Phoenix  Leasing  American  Business Fund,  L.P., a California  limited
partnership  (the  "Partnership"),  was formed on December 3, 1992, to invest in
capital  equipment  of various  types and to lease such  equipment to or provide
financing to, on either a long-term or short-term  basis,  companies  engaged in
the   development  of  technologies   and  other  growth  industry   businesses,
franchisees,  and additional third party lessees and customers.  The Partnership
met minimum  investment  requirements  on January 27,  1994.  The  Partnership's
termination date is December 31, 2007.

         For financial reporting purposes, Partnership net income and net losses
will be allocated 99% to the Limited Partners and 1% to the General Partner.  In
addition, the General Partner will be allocated gross rental and interest income
in amounts equal to the excess,  if any, of the cumulative  distributions to the
General Partner over the cumulative  gross rental and interest income  allocated
to the General  Partner.  Syndication  costs will be allocated 1% to the General
Partner and 99% to the Limited Partners.

         The  General  Partner is  entitled  to receive 4% of all  distributions
until the Limited  Partners have  recovered the greater of 177% of their initial
capital  contributions  or 100% of their initial  capital  contributions  plus a
cumulative return of 11% per annum. Thereafter, the General Partner will receive
15% of all cash distributions.  From inception of the Partnership until December
31, 1999, the General Partner's  interest in Cash Available for Distribution was
subordinated  in any  calendar  quarter  until  the  Limited  Partners  received
quarterly distributions equal to 2.75% of their capital contributions (i.e., 11%
per annum), prorated for any partial period.

         In the event the General  Partner has a deficit  balance in its capital
account  at the  time  of  Partnership  liquidation,  it  will  be  required  to
contribute the amount of such deficit to the Partnership.

         As compensation for management services, the General Partner receives a
fee, payable monthly,  subject to certain limitations,  in an amount equal to 2%
of the  Partnership's  gross revenues for the quarter from which such payment is
being made,  which  revenues  shall  include,  but are not  limited  to,  rental
receipts,  maintenance  fees,  proceeds  from the sale of equipment and interest
income.

         The General  Partner  will be  compensated  for  services  performed in
connection  with the  analysis  of  assets  available  to the  Partnership,  the
selection  of such  assets  and the  acquisition  thereof,  including  obtaining
lessees for the equipment,  negotiating and concluding  master lease  agreements
with certain lessees. As compensation for such acquisition services, the General
Partner will receive a fee equal to 4%, subject to certain  limitations,  of (a)
the purchase price of equipment  acquired by the Partnership or equipment leased
to  customers  by  manufacturers,  the  financing  for which is  provided by the
Partnership,   or  (b)  financing  provided  to  businesses  payable  upon  such
acquisition  or financing,  as the case may be.  Acquisition  fees are amortized
over the life of the assets principally on a straight-line  basis. There were no
acquisition  fees paid to the General  Partner in the years ended  December  31,
2002 and 2001.

         A schedule of compensation  due and related  distributions  made to the
General Partner for the years ended December 31, follows:

                                                   2002      2001
                                                   ----      ----
                                               (Amounts in Thousands)

       Management fees                             $ 56      $112
       Cash distributions                           153       154
                                                   ----      ----

                                                   $209      $266
                                                   ====      ====

         Redemptions  of  limited  partnership  units  will  only be made to the
extent permitted by applicable laws and regulations,  the Partnership  Agreement
and if, in the opinion of the General Partner, it is in the best interest of the

                                       16
<PAGE>

Partnership. In addition, redemptions will not be made if such redemptions would
cause the  Partnership to be categorized as a publicly  traded  partnership  for
federal income tax purposes.

         The  Partnership  will acquire such  limited  partnership  units for an
amount  equal to 85% of the  "accrual  basis  capital  account"  relating to the
redeemed units.  The  Partnership  will retain the remaining 15% of the "accrual
basis capital account" relating to the redeemed units.  Redemptions  retained by
the  Partnership  were $13,000 and $22,000  during the years ended  December 31,
2002 and 2001,  respectively.  "Accrual  basis  capital  account" is computed in
accordance  with the books and records  regularly  maintained by the Partnership
for financial reporting purposes, utilizing the accrual method of accounting.


Note 2.       Summary of Significant Accounting Policies.
              ------------------------------------------

         Cash and Cash Equivalents.  Cash and cash equivalents includes deposits
at banks,  investments in money market funds and other highly liquid  short-term
investments  with  maturities  at the date of purchase of less than 90 days.  At
December  31, 2002 and 2001 and  periodically  throughout  the years then ended,
such investments were in excess of FDIC insurance limits.

         Credit  and  Collateral.   The   Partnership's   activities  have  been
concentrated  in  the  equipment  leasing  and  financing  industry.   A  credit
evaluation  is performed  by the General  Partner for all leases and loans made,
with  the  collateral  requirements  determined  on a  case-by-case  basis.  The
Partnership's  loans are generally  secured by the equipment or assets  financed
and, in some cases,  other collateral of the borrower.  In the event of default,
the  Partnership  has the right to foreclose upon the collateral  used to secure
such loans.

         Notes  Receivable.  Notes  receivable  generally  are  stated  at their
outstanding unpaid principal balances, which includes accrued interest. Interest
income is accrued on the unpaid principal balance.

         Impaired Notes Receivable.  Notes receivable are classified as impaired
and the accrual of interest on such notes is  discontinued  when the contractual
payment of principal and interest has become 90 days past due or management  has
serious doubts about further  collectibility of the contractual  payments,  even
though  the  loan  may  currently  be  performing.  When  a note  receivable  is
classified  as  impaired,  income  recognition  is  discontinued.  Any  payments
received  subsequent to the placement of the note  receivable on impaired status
will  generally  be  applied  towards  the  reduction  of the  outstanding  note
receivable  balance,  which may include  previously  accrued interest as well as
principal. Once the principal and accrued interest has been reduced to zero, the
remaining payments will be applied to interest income. Impaired notes receivable
are measured based on the present value of expected future cash flows discounted
at the note's original  effective  interest rate.  Alternatively,  impairment is
measured  based on the note's  observable  market price or the fair value of the
collateral if the note is collateral-dependent. When the measure of the impaired
note is less  than the  recorded  investment  in the  note,  the  impairment  is
recorded through a valuation  allowance,  which is included in the provision for
losses on leases and loans.

         Allowance for Lease Losses.  An allowance for losses on finance  leases
is established through provisions for losses charged against income. The loss is
measured  when it becomes  probable  that the  Company  will not recover its net
investment in the finance lease.  The loss is estimated as the net investment in
a finance lease that will not be recovered  through the remaining  payments from
the lease,  including the value of equipment on lease.  Finance leases deemed to
be  uncollectible  are  charged  against the  allowance  for lease  losses,  and
subsequent recoveries, if any, are credited to the allowance.

         Leasing  Operations.  The Partnership's  leasing  operations  currently
consist of financing and operating  leases.  The financing  method of accounting
for leases records as unearned income at the inception of the lease,  the excess
of net rentals  receivable and estimated  residual value at the end of the lease
term, over the cost of equipment  leased.  Unearned income is credited to income
monthly  over  the  term  of the  lease  on a  declining  basis  to  provide  an
approximate  level  rate of return on the  unrecovered  cost of the  investment.
Initial direct costs of consummating  new leases are capitalized and included in
the cost of equipment.  The Partnership  reviews its estimates of residual value
at least  annually.  If a decline  in value  has  occurred  which is other  than
temporary, a reduction in the investment is recognized currently.

         Under the  operating  method  of  accounting  for  leases,  the  leased
equipment  is recorded as an asset at cost and  depreciated  on a  straight-line
basis over the estimated useful lives,  ranging up to three years. Rental income
for the year is  determined  on the basis of rental  payments due for the period
under the terms of the lease.  Maintenance  and repairs of the leased  equipment
are charged to expense.

                                       17
<PAGE>

         The  Partnership  continually  evaluates  the carrying  value of rental
equipment in accordance with Statement of Financial Accounting Standards No. 144
(SFAS No.  144),  "Accounting  for the  Impairment  or  Disposal  of  Long-Lived
Assets".  Under SFAS No.  144,  rental  equipment  is  reviewed  for  impairment
whenever events or circumstances  have occurred that would indicate the carrying
amount may not be fully  recoverable.  An  impairment  loss is recognized if the
fair  value is less than the  carrying  amount of the  long-lived  assets  being
evaluated. The Partnership determines fair value based upon the condition of the
equipment  and the projected  net cash flows from its sale  considering  current
market  conditions.  The  Partnership  accounts for  impairment  losses  through
depreciation expense.

         Portfolio Valuation  Methodology.  The Partnership accounts for the net
realizable value of the Partnership's equipment on a portfolio basis.

         Investments. Investments in stock in public companies are classified as
available-for-sale.  Available-for-sale  securities  are  stated  at their  fair
market  value,   with  the  unrealized   gains  and  losses  reported  in  other
comprehensive income.

         Effective  January 1, 2001,  the  Partnership  adopted SFAS No. 133, as
amended by SFAS No. 138, which  establishes  accounting and reporting  standards
requiring that every  derivative  instrument be recorded in the balance sheet as
either an asset or as a liability  measured at its fair value.  During 2001, the
Partnership  had  warrants  to  purchase  marketable  equities  covered  by this
statement.  The Partnership  previously  carried these warrants at fair value on
the  balance  sheet and changes in fair value were  reported  as a component  of
other  comprehensive  income on the  Statement  of Partners'  Capital.  With the
adoption of SFAS No. 133, as amended by SFAS No. 138, these warrants are carried
at fair value on the  balance  sheet and  changes in fair value are  reported as
part of other income on the Statement of  Operations  and  Comprehensive  Income
(Loss). The effect of the change was not material.  As of December 31, 2002, the
Partnership does not have any warrants to purchase marketable equities.

         Reclassification.  Certain  2001  amounts  have  been  reclassified  to
conform  to the 2002  presentation.  These  reclassifications  had no  impact on
previously reported net income or partners' capital.

         Use of Estimates. The preparation of financial statements in conformity
with  accounting  principles  generally  accepted in the United States  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses during the reporting  period.  Such estimates include the determination
of the  allowance  for lease and loan losses.  Actual  results could differ from
those estimates.

         Comprehensive   Income.  For  the  Partnership,   comprehensive  income
includes net income  reported on the Statements of Operations and changes in the
fair value of its  available-for-sale  investments  reported as a  component  of
partners' capital.


Note 3.       Accounts Receivable.
              -------------------

         Accounts receivable consist of the following at December 31:

                                                                 2002
                                                                 ----
                                                         (Amounts in Thousands)

         Lease payments                                          $ 124
         Property tax                                               33
                                                                 -----
                                                                   157
         Less:  allowance for losses on accounts receivable        (84)
                                                                 -----

              Total                                              $  73
                                                                 =====



                                       18
<PAGE>

Note 4.       Notes Receivable.
              ----------------

         Notes receivable consist of the following at December 31:

                                                                   2002
                                                                   ----
                                                          (Amounts in Thousands)

         Notes receivable from emerging growth companies
           with stated interest ranging from 13% to 19% per
           annum, receivable in installments ranging from
           36 to 60 months, collateralized by the equipment
           financed.                                               $239

         Notes receivable from other businesses with stated
           interest ranging from 13% to 17% per annum,
           receivable in installments ranging from 57 to 84
           months, collateralized by the equipment financed.        221
                                                                   ----
                                                                    460
         Less:  allowance for losses on notes receivable            (26)
                                                                   ----

           Total                                                   $434
                                                                   ====

         Minimum payments to be received on non-cancelable  notes receivable for
the years ended December 31, are as follows:

                                                          (Amounts in Thousands)

         2003............................................          $342
         2004............................................           118
         2005............................................            19
         2006............................................           -
         2007 ...........................................           -
                                                                   ----

         Total minimum payments to be received...........           479
         Impaired notes receivable.......................            25
         Less:  unearned interest........................           (44)
         Less:  allowance for losses.....................           (26)
                                                                   ----

         Net investment in notes receivable..............          $434
                                                                   ====

         At  December  31,  2002,  the  recorded  investment  in notes  that are
considered to be impaired was $25,000,  net of specific write-downs of $244,000.
Additionally,  the allowance for losses on notes  receivable  includes  specific
reserves  of $4,000 and $0 for  impaired  loans at  December  31, 2002 and 2001,
respectively. The average recorded investment in impaired loans during the years
ended  December  31,  2002 and  2001 was  approximately  $48,000  and  $452,000,
respectively.  The  Partnership  recognized  $147,000  and  $294,000 of interest
income on impaired notes receivable during the years ended December 31, 2002 and
2001, respectively.

         The activity in the allowance for losses on notes receivable during the
years ended December 31, are as follows:

                                                    2002        2001
                                                    ----        ----
                                                 (Amounts in Thousands)

         Beginning balance                        $   125      $   141
              Provision for losses                    396        1,364
              Write downs                            (495)      (1,380)
                                                  -------      -------
         Ending balance                           $    26      $   125
                                                  =======      =======


                                       19
<PAGE>

Note 5.       Net  Investment  in  Financing  Leases and  Equipment on Operating
              ------------------------------------------------------------------
              Leases.
              ------

         Equipment on lease consists primarily of furniture,  fixtures, computer
hardware and other capital equipment.

         The  Partnership's  operating  leases are for  initial  lease  terms of
approximately 19 to 36 months.  During the remaining terms of existing operating
leases,  the  Partnership  will not  recover all of the  undepreciated  cost and
related expenses of its rental equipment,  and therefore must remarket a portion
of its equipment in future years.

         The  Partnership has entered into direct  financing lease  arrangements
with franchised businesses, companies engaged in the development of technologies
and other growth industry  businesses such as the semiconductor,  biotechnology,
medical  device,  software,  communications,  data  storage,  computer,  retail,
hospitality and others, located throughout the United States.  Generally,  it is
the responsibility of the lessee to provide maintenance on leased equipment. The
General Partner  administers the equipment  portfolio of leases acquired through
the direct leasing program. Administration includes the collection of rents from
the lessees and remarketing of the equipment.

         The net  investment  in financing  leases  consists of the following at
December 31:

                                                                 2002
                                                                 ----
                                                         (Amounts in Thousands)

         Minimum lease payments to be received                   $ 716
         Less: unearned income                                     (62)
               allowance for lease losses                          (33)
                                                                 -----

         Net investment in financing leases                      $ 621
                                                                 =====

         Minimum rentals to be received on noncancelable operating and financing
leases for the years ended December 31, are as follows:

                                                       Operating      Financing
                                                       ---------      ---------
                                                        (Amounts in Thousands)

         2003.......................................      $ 11           $696
         2004.......................................       -               20
         2005.......................................       -              -
         2006.......................................       -              -
         2007.......................................       -              -
                                                          ----           ----

              Total                                       $ 11           $716
                                                          ====           ====

         Equipment held for lease  generally  consists of financing  leases that
have been placed into default. As a result, the leases have been reclassified to
equipment,  are held at estimated net realizable  value, and will be depreciated
over their remaining  estimated  useful lives of up to three years.  The General
Partner is making every effort to pursue remedies that will maximize recovery of
the Partnership's  investment.  The net carrying value of the equipment held for
lease at December 31, 2002 was $0.


Note 6.       Accounts Payable and Accrued Expenses.
              -------------------------------------

         Accounts  payable  and accrued  expenses  consist of the  following  at
December 31:

                                                                   2002
                                                                   ----
                                                          (Amounts in Thousands)

         Equipment lease operations                                $ 76
         General Partner and Affiliates                              38
         Other                                                       33
         Security deposits                                            8
                                                                   ----

                 Total                                             $155
                                                                   ====


                                       20
<PAGE>

Note 7.       Short Term Borrowings.
              ---------------------

         The  Partnership  has a  $6,000,000  line of credit with a bank for the
purpose of financing  the  acquisition  of equipment  and the financing of notes
receivable.  The  line of  credit  expires  on July 3,  2003  and  there  was no
outstanding  balance at December 31, 2002.  The line of credit bears interest at
the bank's prime rate plus 2% (6.25% at December 31, 2002) and includes  certain
financial covenants. Borrowings are collateralized by leases and loans.


Note 8.       Income Taxes.
              ------------

         Federal  and state  income tax  regulations  provide  that taxes on the
income  or loss of the  Partnership  are  reportable  by the  partners  in their
individual income tax returns.  Accordingly, no provision for such taxes, except
for a $800  state  minimum  tax,  has been  made in the  accompanying  financial
statements.

         The net differences  between the tax basis and the reported  amounts of
the Partnership's assets and liabilities are as follows at December 31, 2002:

                              Reported Amounts    Tax Basis       Net Difference
                              ----------------    ---------       --------------
                                            (Amounts in Thousands)

         Assets                   $8,584            $9,013            $  429
         Liabilities                 155               146                 9

         The  following  is a  reconciliation  between net income for  financial
reporting  purposes and net income for federal income tax purposes for the years
ended December 31:

                                                              2002       2001
                                                              ----       ----
                                                          (Amounts in Thousands)

         Net income (loss) for financial reporting
           purposes                                         $   423   $  (735)

         Adjustments for tax purposes:
              Tax depreciation in excess of book               (593)     (812)
              Difference in rental income recognition           644     1,535
              Excess of book gain on sale of equipment
                over tax gain on sale of equipment           (1,103)     (137)
              Book valuation allowances not recognized
                for tax purposes                                396     2,139
              Bad debt expense                                 (496)   (1,415)
              Other                                             (12)      (22)
                                                            -------   -------

         Net income (loss) for federal income tax
           purposes                                         $  (741)  $   553
                                                            =======   =======


Note 9.       Related Entities.
              ----------------

         Affiliates  of the  General  Partner  serve in the  capacity of general
partners  in other  partnerships,  all of which  are  engaged  in the  equipment
leasing and financing business.


Note 10.      Net Income and Distributions per Limited Partnership Unit.
              ---------------------------------------------------------

         Net income (loss) and distributions  per limited  partnership unit were
based on the Limited  Partner's  share of net income and  distributions  and the
weighted average number of units  outstanding of 1,529,726 and 1,541,775 for the
years  ended  December  31,  2002 and 2001,  respectively.  For the  purposes of
allocating  income (loss) to each individual  Limited  Partner,  the Partnership
allocates net income  (loss) based upon each  respective  Limited  Partner's net
capital contributions.

                                       21
<PAGE>

Note 11.      Reimbursed Costs to the General Partner and Affiliates.
              ------------------------------------------------------

         The General Partner and affiliates incur certain  administrative  costs
such  as  data   processing,   investor   and   lessee   communications,   lease
administration,  accounting,  equipment storage and equipment  remarketing,  for
which it is  reimbursed  by the  Partnership.  These  expenses  incurred  by the
General  Partner and  affiliates are to be reimbursed at the lower of the actual
costs or an amount equal to 90% of the fair market value for such services.

         The reimbursed administrative costs to the General Partner were $55,000
and $68,000 for the years ended  December 31, 2002 and 2001,  respectively.  The
equipment  storage,  remarketing  and data  processing  costs  reimbursed to the
General  Partner  during the years ended December 31, 2002 and 2001 were $31,000
and $54,000, respectively.

         In  addition,  the General  Partner  receives a  management  fee and an
acquisition fee (see Note 1).


Note 12.      Fair Value of Financial Instruments.
              -----------------------------------

         The carrying  amounts  reported on the balance  sheet for cash and cash
equivalents and notes receivable approximate their fair values.


Note 13.      Subsequent Events.
              -----------------

         In January 2003, cash  distributions  of $38,000 and $432,000 were made
to the General and Limited Partners, respectively.


                                       22
<PAGE>

Item 8.       Disagreements on Accounting and Financial Disclosure Matters.
              ------------------------------------------------------------

         None.


                                    PART III

Item 9.       Directors and Executive Officers of the Registrant.
              --------------------------------------------------

         The  registrant  is  a  limited  partnership  and,  therefore,  has  no
executive  officers or  directors.  The  General  Partner of the  Registrant  is
Phoenix  Leasing  Associates  III L.P., a California  limited  partnership,  the
Corporate  General Partner of which is Phoenix  Leasing  Associates III, Inc., a
Nevada corporation and a wholly-owned subsidiary of Phoenix Leasing Incorporated
(PLI), a California corporation. The directors and executive officers of Phoenix
Leasing Associates III, Inc. (PLA) are as follows:

         GUS  CONSTANTIN,  age 65, is President,  and a Director of PLA III. Mr.
Constantin received a B.S. degree in Engineering from the University of Michigan
and a Master's Degree in Management Science from Columbia University.  From 1969
to 1972,  he  served  as  Director,  Computer  and  Technical  Equipment  of DCL
Incorporated  (formerly  Diebold Computer Leasing  Incorporated),  a corporation
formerly  listed on the  American  Stock  Exchange,  and as Vice  President  and
General  Manager of DCL Capital  Corporation,  a wholly-owned  subsidiary of DCL
Incorporated.  Mr.  Constantin  was actively  engaged in marketing  manufacturer
leasing  programs  to  computer  and  medical  equipment  manufacturers  and  in
directing DCL Incorporated's IBM System/370 marketing activities. Prior to 1969,
Mr.  Constantin was employed by IBM as a data  processing  systems  engineer for
four years.  Mr.  Constantin  is an  individual  general  partner in four active
partnerships and is an NASD registered principal.  Mr. Constantin is the founder
of PLI and the beneficial  owner of all of the common stock of Phoenix  American
Incorporated, the parent company of PLI.

         GARY W.  MARTINEZ,  age 52, is Senior Vice  President and a Director of
PLA III.  He has been  associated  with PLI since  1976.  He  manages  the Asset
Management  Department,  which is  responsible  for  lease  and  loan  portfolio
management.  This includes credit analysis,  contract terms,  documentation  and
funding;  remittance application,  change processing and maintenance of customer
accounts; customer service, invoicing,  collection,  settlements and litigation;
negotiating  lease  renewals,  extensions,  sales and  buyouts;  and  management
information  reporting.  From 1973 to 1976, Mr. Martinez was a Loan Officer with
Crocker National Bank, San Francisco. Prior to 1973, he was an Area Manager with
Pennsylvania  Life Insurance  Company.  Mr. Martinez is a graduate of California
State University, Chico.

         ANDREW N. GREGSON,  age 30, is Vice President,  Chief Financial Officer
and a Director  of PLA III.  He has been  associated  with PLI since  1998.  Mr.
Gregson oversees the Finance Department.  He is responsible for the structuring,
planning,  and monitoring of the  partnerships  sponsored by the General Partner
and its affiliates. In addition, Mr. Gregson oversees the maintenance of banking
relationships,  the  treasury  and  financial  reporting  functions  and various
support  services  for PLI.  Mr.  Gregson  graduated  with a B.A. in Physics and
Economics from Amherst College.

         Neither the General  Partner nor any  Executive  Officer of the General
Partner has any family relationship with the others.

         Phoenix  Leasing   Incorporated  and  subsidiaries  and  the  executive
officers of the General  Partner  serve in a similar  capacity to the  following
affiliated limited partnership:

         Phoenix Leasing Cash Distribution Fund V, L.P.

Disclosure Pursuant to Section 16, Item 405 of Regulation S-B:

         The General  Partner (and any corporate  general partner of the General
Partner) of the  Registrant,  and the executive  officers of the General Partner
(or any corporate  general  partner of the General  Partner) of the  Registrant,
file reports  pursuant to Section 16(a) of the Securities  Exchange Act of 1934,
as amended.  Based solely on the Registrant's review of the copies of such forms
received by the Registrant,  the Registrant believes that, during 2002, all such
required reports were filed on a timely basis.

                                       23
<PAGE>

Item 10.      Executive Compensation.
              ----------------------

         Set forth is the information  relating to all direct  remuneration paid
or accrued by the Registrant during the last year to the General Partner.

<TABLE>
<CAPTION>
      (A)                        (B)                                   (C)                                     (D)

                                                                  Cash and cash-                            Aggregate of
Name of Individual           Capacities in                        equivalent forms                        contingent forms
or persons in group          which served                         of remuneration                         of remuneration
-------------------          ------------       -----------------------------------------------------     ---------------
                                                           (C1)                        (C2)
                                                                              Securities or property
                                                Salaries, fees, directors'    insurance benefits or
                                                fees, commissions, and        reimbursement, personal
                                                bonuses                       benefits
                                                --------------------------    -----------------------
                                                               (Amounts in Thousands)
<S>                          <C>                         <C>                          <C>                      <C>
Phoenix Leasing
  Associates III L.P.        General Partner             $   56(1)                    $    0                   $    0
                                                          =====                        =====                    =====
<FN>
(1)  Consists of management fees.
</FN>
</TABLE>


Item 11.      Security Ownership of Certain Beneficial Owners and Management.
              --------------------------------------------------------------

         (a)  No person  owns of record,  or is known by the  Registrant  to own
              beneficially,  more  than  five  percent  of any  class of  voting
              securities of the Registrant.

         (b)  The General Partner or its affiliates  owns the equity  securities
              of the Registrant set forth in the following table:


              (1)                           (2)                        (3)
         Title of Class          Amount Beneficially Owned      Percent of Class
         --------------          -------------------------      ----------------

     General Partner Interest   Represents a 1% interest in the          100%
                                Registrant's profits, as defined,
                                and a 4% interest in distributions,
                                until the Limited Partners have
                                recovered  their capital contributions
                                plus a cumulative return of 11%
                                per annum, compounded quarterly,
                                on the unrecovered portion thereof.
                                Thereafter, the General Partner will
                                receive 15% interest in the
                                Registrant's profits and distributions.

     Limited Partner Interest   1300 units                               .08


Item 12.      Certain Relationships and Related Transactions.
              ----------------------------------------------

         None.



                                       24
<PAGE>

Item 13.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
              ----------------------------------------------------------------

                                                                        Page No.
                                                                        --------
(a)      1.   Financial Statements:

              Balance Sheet as of December 31, 2002                         12
              Statements of Operations and Comprehensive Income (Loss)
                for the years ended December 31, 2002 and 2001              13
              Statements of Partners' Capital for the years ended
                December 31, 2002 and 2001                                  14
              Statements of Cash Flows for the years ended December 31,
                2002 and 2001                                               15
              Notes to Financial Statements                              16 - 22

         All other schedules are omitted because they are not applicable, or not
required,  or because the  required  information  is  included in the  financial
statements or notes thereto.

(b)      Reports on Form 8-K:

         Filed  on  September  12,  2002  related  to  Changes  in  Registrants'
Certifying Accountant.

(c)      Exhibits

         21.      Consolidated Balance Sheets of Phoenix Leasing
                   Associates III, Inc.                               E21    1-4

                  Balance Sheets of Phoenix Leasing Associates
                  III L.P.                                            E21    5-8

         99.01    Certification pursuant to 18 U.S.C. Section 1350,
                  as adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

         99.02    Certification pursuant to 18 U.S.C. Section 1350,
                  as adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.


Item 14.      Controls and Procedures.
              -----------------------

         Based on their  evaluation of the  effectiveness  of the  Partnership's
disclosure controls and procedures as of a date within 90 days prior to the date
of the filing of this  report,  the  President  and Chief  Financial  Officer of
Phoenix  Leasing  Associates  II, Inc., the general  partner of Phoenix  Leasing
Associates II L.P., the Partnership's  general partner, have each concluded that
the  Partnership's   disclosure   controls  and  procedures  are  effective  and
sufficient to ensure that the Partnership record, process, summarize, and report
information  required to be disclosed in its  periodic  reports  filed under the
Securities  Exchange Act within the time periods specified by the Securities and
Exchange Commission's rules and forms.

         Subsequent  to the  date of such  evaluation,  there  have not been any
significant  changes in the Partnership's  internal controls or in other factors
that could significantly affect these controls,  including any corrective action
with regard to significant deficiencies and material weaknesses.


                                       25
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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.

                                   PHOENIX LEASING AMERICAN BUSINESS FUND, L.P.,
                                   a California limited partnership
                                               (Registrant)

                                   By: PHOENIX LEASING ASSOCIATES III L.P.,
                                       a California limited partnership,
                                       General Partner

                                   By: PHOENIX LEASING ASSOCIATES III, INC.,
                                       a Nevada corporation,
                                       General Partner



         Date: March 28, 2003      By: /S/  GUS CONSTANTIN
               --------------          -------------------------
                                       Gus Constantin, President


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

      Signature                Title                                  Date
      ---------                -----                                  ----


/S/ GUS CONSTANTIN      President and a Director                 March 28, 2003
---------------------   of Phoenix Leasing Associates III, Inc.  --------------
(Gus Constantin)


/S/ GARY W. MARTINEZ    Senior Vice President and a Director of  March 28, 2003
---------------------   Phoenix Leasing Associates III, Inc.     --------------
(Gary W. Martinez)


/S/ ANDREW N. GREGSON   Vice President, Chief Financial          March 28, 2003
---------------------   Officer and a Director of                --------------
(Andrew N. Gregson)     Phoenix Leasing Associates III, Inc.


                                       26
<PAGE>

                            CERTIFICATION PURSUANT TO
                            -------------------------
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Gus Constantin, certify that:

1.       I have reviewed  this annual  report on Form 10-KSB of Phoenix  Leasing
         American Business Fund, L.P.;

2.       Based on my  knowledge,  this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this annual report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included  in this  annual  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this annual report;

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:
              (a)  designed such  disclosure  controls and  procedures to ensure
                   that  material   information   relating  to  the  registrant,
                   including its consolidated subsidiaries,  is made known to us
                   by others  within  those  entities,  particularly  during the
                   period in which this annual report is being prepared;
              (b)  evaluated the  effectiveness of the  registrant's  disclosure
                   controls and  procedures as of a date within 90 days prior to
                   the  filing  date  of this  annual  report  (the  "Evaluation
                   Date"); and
              (c)  presented  in this annual  report our  conclusions  about the
                   effectiveness of the disclosure controls and procedures based
                   on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):
              (a)  all  significant  deficiencies  in the design or operation of
                   internal   controls   which   could   adversely   affect  the
                   registrant's ability to record, process, summarize and report
                   financial  data  and  have  identified  for the  registrant's
                   auditors any material weaknesses in internal controls; and
              (b)  any fraud, whether or not material,  that involves management
                   or  other  employees  who  have  a  significant  role  in the
                   registrant's internal controls and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.



/S/ GUS CONSTANTIN
-------------------
Gus Constantin
President
Date: March 28, 2003


<PAGE>

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Andrew Gregson, certify that:

1.       I have reviewed  this annual  report on Form 10-KSB of Phoenix  Leasing
         American Business Fund, L.P.;

2.       Based on my  knowledge,  this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this annual report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included  in this  annual  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this annual report;

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:
              (a)  designed such  disclosure  controls and  procedures to ensure
                   that  material   information   relating  to  the  registrant,
                   including its consolidated subsidiaries,  is made known to us
                   by others  within  those  entities,  particularly  during the
                   period in which this annual report is being prepared;
              (b)  evaluated the  effectiveness of the  registrant's  disclosure
                   controls and  procedures as of a date within 90 days prior to
                   the  filing  date  of this  annual  report  (the  "Evaluation
                   Date"); and
              (c)  presented  in this annual  report our  conclusions  about the
                   effectiveness of the disclosure controls and procedures based
                   on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee  of  registrant's   board  of  directors  (or  persons
         performing the equivalent function):
              (a)  all  significant  deficiencies  in the design or operation of
                   internal   controls   which   could   adversely   affect  the
                   registrant's ability to record, process, summarize and report
                   financial  data  and  have  identified  for the  registrant's
                   auditors any material weaknesses in internal controls; and
              (b)  any fraud, whether or not material,  that involves management
                   or  other  employees  who  have  a  significant  role  in the
                   registrant's internal controls and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.



/S/ ANDREW GREGSON
-------------------
Andrew Gregson
Chief Financial Officer
Date: March 28, 2003