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                                                                   EXHIBIT 10.12


                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT ("Agreement") made as of the 1st day of
April, 1998 (the "Effective Date"), by and between First Sierra Financial, Inc.,
a Delaware corporation, (the "Employer"), and Sandy B. Ho (the "Employee").
Employer and Employee may be referred to herein collectively as the "Parties"
and individually as a "Party".

                                    ARTICLE I

                                      TERM

         Employer hereby employs Employee and Employee hereby accepts employment
with Employer for a period beginning on the Effective Date and ending on the
third anniversary of the Effective Date (as extended pursuant to the following
provisions, the "Term"). As of the first day of any month following the
Effective Date, the Term shall be extended for an additional one (1) month
period unless either Employee or Employer gives the other party written notice
at least ninety (90) days prior to the first day of such month that this
Agreement shall terminate on the then scheduled expiration date of the Term. If
such notice is given, this Agreement shall automatically terminate on such
expiration date. If this Agreement is extended, the terms in effect under this
Agreement immediately preceding such extension shall apply during the extension
period. If Employee's employment hereunder is terminated by either Employer or
Employee at any time for any reason, the expiration date shall thereupon no
longer be automatically extended. This Agreement replaces all prior agreements
between the parties, oral or written regarding employment of Employee by
Employer and all such prior agreements are void upon the Effective Date of this
Agreement.

                                   ARTICLE II

                               DUTIES OF EMPLOYEE

         2.01 Duties. Employee is engaged to be the Executive Vice President and
Chief Financial Officer. Employee's duties and powers shall be determined from
time to time by the Chief Executive Officer of Employer. Employee shall perform
and discharge such duties in a businesslike manner, and faithfully as an officer
of Employer, and shall be subject to the supervision and direction of the Chief
Executive Officer of Employer and the Employer's Board of Directors.

         2.02 Full Time Employment. Subject to the provisions set forth below,
Employee shall devote her productive time, ability, and attention to the
business of Employer during the Term. Employee shall not, directly or
indirectly, during the Term render any services of a business, commercial or
professional nature to any other person, corporation, firm or organization,
whether for compensation or otherwise, without the prior written consent of the
Chief Executive Officer of Employer.

         Notwithstanding the foregoing, Employee may continue to engage in
personal and family investing; provided, however, unless prior approval is given
by Employer's

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Chief Executive Officer, such investments may not include
equipment leases or interests in non-publicly traded entities engaged in
equipment leasing.

                                   ARTICLE III

                            COMPENSATION AND BENEFITS

         3.01 Base Compensation. As compensation for services rendered and
Employee's covenants and agreements under this Agreement, Employee shall be
entitled to receive from Employer a base salary of one hundred eighty five
thousand and no/100ths dollars ($185,000) per year, payable in equal
semi-monthly installments from Employer's headquarters in Texas. The salary of
Employee may be increased from time to time at the sole discretion of Employer.

         3.02 Bonus. Employee may be entitled to an annual bonus paid by
Employer if and as determined in the sole discretion of the Board of Directors.

         3.03 Benefit Plans. During the Term, and thereafter, to the extent
provided in the applicable plan or under applicable law, Employer agrees to
include Employee in any retirement, insurance and health benefit plans adopted
by Employer for the benefit of the senior employees of Employer. Employer may
enter into and revise these plans in its sole discretion. Employee will have
three weeks paid vacation each year.

         3.04 Expenses. Employer, in accordance with the rules and regulations
Employer shall issue and may revise from time to time, shall reimburse Employee
for business expenses directly and reasonably incurred in the performance of her
duties. The Employer acknowledges that the Employee will require a travel and
entertainment budget and reimbursement for reasonable travel and entertainment
expenses. Any amounts advanced or reimbursed by Employer to Employee for travel
and entertainment expenses shall be in addition to any other amounts payable to
Employee hereunder.

                                   ARTICLE IV

                                   TERMINATION

         This Agreement shall terminate prior to the expiration of its Term upon
the occurrence of any one of the following events:

         4.01 Disability. In the event that Employee is unable fully to perform
her duties and responsibilities with reasonable accommodation hereunder to the
full extent required by Employer due to illness, injury or incapacity for ninety
(90) consecutive days (during

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such ninety (90) day period Employee shall continue to be compensated as
provided in Section 3.01 hereof), this Agreement may be terminated by Employer,
and Employer and Employee shall have no further liability or obligations
hereunder; provided, however, that Employer shall continue to pay Employee the
base compensation specified in Section 3.01 hereof for the duration of the Term
at the same times specified in Section 3.01 (as reduced by any payments received
by Employee under any Employer sponsored disability benefits plan in which
Employee was participating). In the event of any dispute under this Section
4.01, Employee shall submit to a physical examination by a licensed physician
selected by Employer, and acceptable to Employee. If the physician retained by
Employer is not acceptable to Employee, then physicians selected by the Employer
and the Employee shall jointly select a third physician to perform the
examination. All costs related to the physical examination of the Employee shall
be paid by the Employer.

         4.02 Death. In the event that Employee dies during the Term Employer
shall pay to Employee's executors, legal representatives or administrators the
base compensation specified in Section 3.01 hereof for the remainder of the Term
at the same time specified in Section 3.01 (as reduced by any payments received
by such executors, legal representatives and administrators under any Employer
sponsored death or disability benefits plan in which Employee was
participating).

         4.03 Cause. Nothing in this Agreement shall be construed to prevent the
termination of this Agreement by Employer at any time for "cause". For purposes
of this Agreement, "cause" shall mean the habitual neglect or willful breach by
Employee of her duties as the Executive Vice President and Chief Financial
Officer of Employer which results in a material loss or damage to Employer or
embezzlement by Employee of Employer funds. Upon termination for cause, Employer
shall pay to Employee all sums due to Employee through the date of such
termination. Following such a termination, Employer shall have no further duties
or obligations to Employee.

         4.04 Termination Without Cause by Employer. Employer, in its discretion
and for any reason, may terminate this Agreement at any time by delivering
written notice to Employee prior to such intended termination ("Termination
Date"). This Agreement shall terminate on the Termination Date and the Parties
shall have no further duties or obligations to each other, provided, however,
that (i) Employer shall continue to pay Employee the base compensation specified
in Section 3.01 hereof for a period of three years from the Termination Date at
the same times specified in Section 3.01 (ii) Employer shall pay Employee for
each pay period in the three year period following the Termination Date an
amount equal to one/twenty-fourth of the bonus received by Employee for the year
prior to the Termination Date, and (iii) Employer shall pay Employee at the end
of the Term a lump sum amount equal to the bonus received by Employee for the
year prior to the Termination Date multiplied by a fraction the numerator of
which is the number of days in the year prior to the Termination Date and the
denominator is 365.

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         4.05 Termination by Employee other than for Good Reason. Employee may
terminate this Agreement at any time by delivering written notice to Employer of
Employee's intent to terminate at least 30 days prior to such intended
termination ("Departure Date"). This Agreement shall terminate on the Departure
Date and the parties shall have no further duties or obligations to each other,
provided, however, that Employee shall remain subject to all of the provisions
of Article V and Employer shall pay to Employee all sums due to Employee through
the Departure Date.

         4.06 Termination by Employee For Good Reason. Employee may terminate
this Agreement at any time for Good Reason (as hereinafter defined) by
delivering written notice to Employer of Employee's intent to terminate for Good
Reason at least 30 days prior to such intended termination ("Good Reason
Departure Date"). This Agreement shall terminate on the Good Reason Departure
Date and the parties shall have no further duties or obligations to each other,
provided, however, that Employer shall pay Employee in one lump sum payment
within thirty (30) days of the Good Reason Termination Date an amount equal to
Employee's current base annual compensation specified in Section 3.01 hereof
plus the greater of (i) the amount of bonus received by Employee for the year
prior to Employee's termination of employment or (ii) the amount of bonus
received by Employee for the year prior to a Change in Control (as hereinafter
defined).

         "Good Reason" shall mean termination of employment by Employee within
one year after the occurrence of Change in Control (as hereinafter defined);

         "Change in Control" shall mean any of the following: (i) the Employer
shall not be the surviving entity in any merger, consolidation or other
reorganization (or survives only as a subsidiary of an entity other than a
previously wholly-owned subsidiary of the Employer), (ii) the Employer sells,
leases or exchanges all or substantially all of its assets to any other person
or entity (other than a wholly-owned subsidiary of the Employer), (iii) the
Employer is dissolved and liquidated, (iv) any person or entity, including a
"group" as contemplated by Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, other than any person, entity or group which owned shares of
Common Stock of the Company immediately prior to the initial public offering of
the Company's Common Stock, acquires or gains ownership or control (including,
without limitation, power to vote) of more than 50% of the outstanding shares of
the Employer's voting stock (based upon voting power), or (v) during any
consecutive two-year period, individuals who constituted the Board of Directors
of the Employer (together with any new directors whose election by the Board of
Directors or whose nomination for election by the shareholders of the Employer
was approved by a vote of at least three-quarters of the directors still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office.

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                                    ARTICLE V

                                 PROPERTY RIGHTS

         5.01 Non-Competition. If this Agreement is terminated other than
pursuant to Sections 4.04 or 4.06, Employee shall not for a period of one year
after such termination or expiration (the "One Year Period"), directly or 
indirectly, either as an employee, employer, consultant, agent, lender, 
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any business 
that is in competition in any manner whatsoever with the business engaged in by 
Employer in the continental United States at the time of such termination or 
resignation. The provisions of this Section 5.01 and those contained in Section
5.02 shall not apply to any termination occurring pursuant to Sections 4.04 
or 4.06.

         5.02 Solicitation. If this Agreement is terminated other than pursuant
to Sections 4.04 or 4.06 during the One Year Period, Employee agrees not to,
directly or indirectly, (i) call on or solicit, with respect to the activities
prohibited by Section 5.01 of this Agreement, any person, firm, corporation or
other entity who or which at the time of such termination, or within two years
prior thereto, was or had been a customer, referral source or distributor of
Employer or any of its affiliates or (ii) solicit, influence or recommend the
employment of any person who was employed by Employer on a full or part-time
basis at the time of Employee's termination of employment; provided, if
requested by any employee of Employer, Employee shall have the right to give a
reference with respect to such employee.

         5.03 Confidentiality. In return for Employee's promises under this
Article V, Employee shall receive and be entrusted with certain confidential
and/or secret information of a proprietary nature, including without limitation
names and addresses of customers of the Employer and its affiliates and business
plans of the Employer. Employee shall not directly or indirectly disclose or
use, during the term of this Agreement or at any time thereafter, any such
information which is not otherwise publicly available.

         5.04 Reasonableness of Restrictions. Employee agrees that (i) the
covenants contained in Sections 5.01, 5.02 and 5.03 hereof are necessary for the
protection of Employer's business goodwill, (ii) a portion of the compensation
paid to Employee under this Agreement is paid in consideration of the covenants
herein contained, the sufficiency of which consideration is hereby acknowledged,
(iii) Employee is not, and under this Agreement will not be, engaged in a common
calling, and (iv) if the scope of any restriction

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contained in Sections 5.01, 5.02 and 5.03 hereof is too broad to permit
enforcement of such restriction to its full extent, then such restriction shall
be enforced to the maximum permitted by law, and the parties hereto hereby
consent that such scope may be judicially modified accordingly in any proceeding
brought to enforce such restriction. The existence of any claim or cause of
action of Employee against Employer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Employer of
these covenants.

         5.05 Enforcement. If Employee's employment is terminated pursuant to 
Sections 4.03 or 4.05, Employer agrees to pay Employee her base compensation 
during the One Year Period plus for each pay period during the One Year Period 
Employer will pay Employee one/twenty -fourth of the amount of the bonus 
received by Employee for the year preceding Employees termination of employment.
If this Agreement is not renewed at the end of its Term Employer agrees to pay
Employee her salary during the One Year Period plus for each pay period during
the One Year Period Employer will pay Employee one/twenty-fourth of the amount 
of the bonus received by Employee for the year preceding Employee's termination
of employment. Employer reserves the right to waive the provisions of Sections 
5.01 and 5.02 if Employee terminates this Agreement pursuant to Sections4.03 or 
4.05 and such waiver will release Employer from any payment obligations under 
this Section 5.05. Employee acknowledges that the restrictions contained in 
Sections 5.01, 5.02 and 5.03 hereof are reasonable and necessary to protect the
legitimate interests of Employer and its affiliates, that Employer would not
have entered into this Agreement in the absence of such restrictions, and that
any violation of any provision of the covenants contained in Sections 5.01, 5.02
or 5.03 hereof will result in irreparable injury to Employer. Employee also
acknowledges that Employer shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual damages as well as an
equitable accounting of all earnings, profits and other benefits arising from
any such violation, which rights shall be cumulative and in addition to any
other rights or remedies to which Employer may be entitled.

         5.06 Copy of Covenants. Until the expiration of the applicable
restrictions, Employee will provide, and Employer similarly may provide, a copy
of the covenants contained in Sections 5.01, 5.02 and 5.03 of this Agreement to
any business or enterprise which Employee may (i) directly or indirectly own,
manage, operate, finance, join, control or participate in the ownership,
management, operation, financing, or control of, (ii) serve as an officer,
director, employee, partner, principal, agent, representative, consultant leader
or otherwise, or (iii) with which she may use or permit her name to be used.

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                                   ARTICLE VI

                               GENERAL PROVISIONS

         6.01 Arbitration. Employee and Employer agree that all disputes
concerning the terms of this Agreement or Employee's employment with Employer
will be subject solely to binding arbitration. The arbitrator selection and
conduct of the arbitration will be pursuant to the Commercial Arbitration Rules
of the American Arbitration Association. The place of the arbitration shall be
Houston, Texas and shall be governed by the laws of Texas.

         6.02 Notices. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested:

                  If to Employer:

                           First Sierra Financial, Inc.
                           Texas Commerce Tower
                           600 Travis, Suite 7050
                           Houston, TX  77002
                           Attention:  Chief Executive Officer

                  If to Employee:

                           Sandy B. Ho
                           245 Merrie Way
                           Houston, Texas  77024

Mailed notices shall be addressed to the parties at the addresses set forth
above, but each party may change his/her address by written notice in accordance
with this Section 6.02. Notices delivered personally shall be deemed
communicated as of actual receipt; mailed notices shall be deemed communicated
as of ten (10) days after mailing.

         6.03 Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to such employment in any manner
whatsoever.

         6.04     Certain  Acknowledgments.  Employee by her  execution and 
delivery of this  Agreement  represents to Employer as follows:

         (i)      Employee has been advised by Employer to have this Agreement
                  reviewed by an attorney representing Employee, and Employee
                  has either

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                  had this Agreement reviewed by such attorney or has chosen 
                  not to have this Agreement reviewed because Employee,
                  after reading the entire Agreement, fully and completely
                  understands each provision and has decided not to obtain the
                  services of an attorney.

         (ii)     Employee either on her own or with the assistance and advice
                  of her attorney has in particular reviewed Article V and
                  understands and accepts (a) the restrictions imposed by
                  Article V and Sections 5.01 and 5.02 and (b) the restrictions
                  imposed upon Employee pursuant to these sections are
                  reasonable and necessary for the protection of the property
                  rights of Employer and its affiliates.

         6.05 Headings. The headings or titles to Sections or Articles in this
Agreement are intended solely for convenience of the parties and no provision of
this Agreement is to be construed by reference to the heading or title of any
section.

         6.06 Amendment or Modification; Waiver. No provision of this Agreement
may be amended, modified or waived unless such amendment, modification or waiver
is authorized by the Employer and is agreed to in writing, signed by Employee
and by the Chief Executive Officer of Employer thereunto duly authorized. Except
as otherwise specifically provided in this Agreement, no waiver by any party
hereto of any breach by any other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time; nor shall the receipt or acceptance of Employee's employment be
deemed a waiver of any condition or provision hereof. Employee acknowledges that
from time to time, Employer may establish, maintain and distribute employee
manuals or handbooks or personnel policy manuals, and officers or other
representatives of Employer may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of any
nature by or on behalf of Employer (whether written or oral, and whether or not
contained in any employee manual or handbook or personnel policy manual), and no
acts or practices of any nature shall be construed to modify this Agreement or
to create express or implied obligations of Employer.

         6.07 Assignability. Employee shall not assign, pledge or encumber any
interest in this Agreement or any part thereof without the express written
consent of Employer, this Agreement being personal to Employee. This Agreement
shall, however, inure to the benefit of Employee's estate, dependents,
beneficiaries and legal representatives. This Agreement shall not be assignable
by Employer without the written consent of Employee.

         6.08 Governing Law. THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND
DELIVERED IN THE STATE OF TEXAS, AND SHALL IN ALL RESPECTS BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS.

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         6.09 Severability. Each provision of this Agreement constitutes a
separate and distinct undertaking, covenant and/or provision hereof. In the
event that any provision of this Agreement shall finally be determined to be
unlawful, such provision shall be deemed severed from this Agreement, but every
other provision of this Agreement shall remain in full force and effect, and in
substitution for any such provision held unlawful, there shall be substituted a
provision of similar import reflecting the original intent of the parties hereto
to the maximum extent permissible under law.

         6.10 No Duress. Employee acknowledges that no force, fear or threats or
duress of any kind have been used to obtain the agreements and covenants
contained in this Agreement.

         EXECUTED in Houston, Texas, on the day and year first above written.

                                   "EMPLOYER"
                                    First Sierra Financial, Inc.
  

                                    By:    /s/ Thomas J. Depping
                                          ----------------------
                                    Name:  Thomas J. Depping
                                    Title: Chief Executive Officer


                                   "EMPLOYEE"

                                    /s/ Sandy B. Ho
                                    ---------------   
                                    Sandy B. Ho