LEAF Equipment Finance Fund 4 10-Q 13 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Sep. 30, 2015shares
Document and Entity Information [Abstract]
Entity Registrant Name	LEAF Equipment Finance Fund 4, L.P.
Entity Central Index Key	1,426,850
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	0
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Cash	$ 66	$ 99
Restricted cash	150	589
Investments in leases and loans, net	2,046	9,440
Deferred financing costs, net	0	143
Other assets	17	27
Total assets	2,279	10,298
Liabilities:
Secured debt	0	6,725
Promissory notes payable	9,295	9,295
Accounts payable, accrued expenses, and other liabilities	1,311	753
Due to affiliates	2,830	2,622
Total liabilities	$ 13,436	$ 19,395
Commitments and contingencies (Note 9)
Partners' Deficit:
General partner	$ (1,209)	$ (1,189)
Limited partners	(9,840)	(7,836)
Total partners' deficit	(11,049)	(9,025)
Noncontrolling interest	(108)	(72)
Total deficit	(11,157)	(9,097)
Total liabilities and deficit	$ 2,279	$ 10,298

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues:
Interest on equipment financings	$ 113	$ 323	$ 565	$ 1,236
Rental income	0	12	8	75
(Losses) gains on sales of equipment and lease dispositions, net	(135)	(35)	(143)	138
Gain on extinguishment of debt	258	0	258	0
Other income	22	23	62	180
Revenues	258	323	750	1,629
Expenses:
Interest expense	277	543	1,119	2,811
Depreciation of operating leases	0	1	3	26
Provision for credit losses	176	728	655	2,798
General and administrative expenses	119	86	374	566
Administrative expenses reimbursed to affiliate	9	22	32	118
Expenses	581	1,380	2,183	6,319
Net loss	(323)	(1,057)	(1,433)	(4,690)
Less: Net loss attributable to the noncontrolling interest	(10)	(26)	(36)	(142)
Net loss attributable to LEAF 4 partners	(313)	(1,031)	(1,397)	(4,548)
Net loss allocated to LEAF 4's limited partners	$ (310)	$ (1,021)	$ (1,383)	$ (4,503)
Weighted average number of limited partnership units outstanding during the period (in units)	1,237,081	1,259,537	1,240,068	1,259,537
Net loss per limited partnership unit (in dollars per unit)	$ (0.25)	$ (0.81)	$ (1.12)	$ (3.58)

Consolidated Statement of Chang

Consolidated Statement of Changes in Partners' Deficit (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	General Partner Amount [Member]	Limited Partners [Member]	Total Partners' Deficit [Member]	Non-Controlling Interest [Member]	Total
Balance at Dec. 31, 2014	$ (1,189)	$ (7,836)	$ (9,025)	$ (72)	$ (9,097)
Balance (in units) at Dec. 31, 2014		1,243,761
Increase (Decrease) in Partners' Capital [Roll Forward]
Cancellation of limited partnership units	0	$ 0	0	0	0
Cancellation of limited partnership units (in units)		(6,680)
Cash distributions paid	(6)	$ (621)	(627)	0	(627)
Net loss	(14)	(1,383)	(1,397)	(36)	(1,433)
Balance at Sep. 30, 2015	$ (1,209)	$ (9,840)	$ (11,049)	$ (108)	$ (11,157)
Balance (in units) at Sep. 30, 2015		1,237,081

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (1,433)	$ (4,690)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation of operating leases	3	26
Amortization of deferred financing costs and other non-cash interest	130	734
Amortization of original issue discount on debt	139	884
Provision for credit losses	655	2,798
(Losses) gains on sales of equipment and lease dispositions, net	143	(138)
Gain on extinguishment of debt	(258)	0
Changes in operating assets and liabilities:
Other assets	10	41
Accounts payable, accrued expenses, and other liabilities	558	(396)
Due to affiliates	(452)	(3,573)
Net cash (used in) operating activities	(505)	(4,314)
Cash flows from investing activities:
Proceeds from leases and loans	6,792	18,176
Repurchases of leases and loans	0	(143)
Security deposits returned	(263)	(328)
Net cash provided by investing activities	6,529	17,705
Cash flows from financing activities:
Decrease in restricted cash	439	7,597
Repayment of debt	(6,529)	(18,780)
Cash distributions to partners	(627)	(2,227)
Advance from affiliate	660	0
Net cash (used in) financing activities	(6,057)	(13,410)
Decrease in cash	(33)	(19)
Cash, beginning of period	99	229
Cash, end of period	66	210
Cash paid for interest	$ 165	$ 1,215

ORGANIZATION AND NATURE OF BUSI

ORGANIZATION AND NATURE OF BUSINESS	9 Months Ended
	Sep. 30, 2015
ORGANIZATION AND NATURE OF BUSINESS [Abstract]
ORGANIZATION AND NATURE OF BUSINESS	NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS LEAF Equipment Finance Fund 4, L.P. (“LEAF 4” or the “Fund”) is a Delaware limited partnership formed on January 25, 2008 by its general partner, LEAF Asset Management, LLC (the “General Partner”), which manages the Fund. The General Partner is a Delaware limited liability company and a subsidiary of Resource America, Inc. (“RAI”). RAI is a publicly traded company (NASDAQ: REXI) that uses industry specific expertise to evaluate, originate, service and manage investment opportunities through its commercial finance, real estate and financial fund management segments. Through its offering termination date of October 30, 2009, the Fund raised $125.7 million by selling 1.3 million of its limited partnership units. It commenced operations in September 2008. The Fund is expected to have a nine-year life, consisting of an offering period of up to two years, a five-year reinvestment period, and a subsequent liquidation period of two years, during which time the Fund’s leases and secured loans will either mature or be sold. In the event the Fund is unable to sell its leases and loans during the liquidation period, the Fund will return capital to its partners as those leases and loans mature. All of the Fund’s leases and loans mature by December 2032. The Fund entered its liquidation period in October 2014, and accordingly, is prohibited from acquiring additional leases and loans under the Limited Partnership Agreement (the “Partnership Agreement”). Contractually, the Fund terminates on December 31, 2032, unless sooner dissolved or terminated as provided in the Partnership Agreement. The Fund acquired diversified portfolios of equipment leases and loans to finance to end users throughout the United States as well as Puerto Rico. The Fund also acquired existing portfolios from other equipment finance companies, primarily from LEAF Financial Corporation (“LEAF Financial”), an affiliate of its General Partner and a subsidiary of RAI. The primary objective of the Fund, if the cash flows and liquidity support it, is to generate regular cash distributions to its partners from its equipment finance portfolio over the life of the Fund. In addition to its 1% general partnership interest, the General Partner has also invested $1.0 million for a 0.87% limited partnership interest in the Fund.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements include the accounts of the Fund, LEAF Funding, LLC (“LEAF Funds JV1”), and LEAF Funds Joint Venture 2, LLC (“LEAF Funds JV2”) and its subsidiaries LEAF Commercial Finance Fund, LLC (“LCFF”) and LEAF Receivables Funding 6, LLC (“LRF6”). The Fund maintains a 96% and 98% ownership interest in LEAF Funds JV1 and LEAF Funds JV2, respectively. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited financial statements reflect all adjustments that are, in the opinion of management, of a normal and recurring nature and necessary for a fair statement of the Fund’s financial position as of September 30, 2015, and the results of its operations and cash flows for the periods presented. The results of operations for the three and nine month periods ended September 30, 2015 are not necessarily indicative of the Fund’s operating results for the entire fiscal year. The financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations. These interim financial statements should be read in conjunction with the Fund’s financial statements and notes thereto presented in the Fund’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on March 30, 2015. Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the allowance for credit losses and the unguaranteed residual values of leased equipment, among others. The Fund bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Investments in Leases and Loans The Fund’s investments in leases and loans consist of direct financing leases, operating leases, and loans. Direct Financing Leases. Unguaranteed residual value represents the estimated amount to be received at lease termination from lease extensions or ultimate disposition of the leased equipment. The estimates of residual values are based upon the Fund’s history with regard to the realization of residuals, available industry data, and the Fund’s experience with respect to comparable equipment. The estimated residual values are recorded as a component of the investment in leases. Residual values are reviewed periodically to determine if the current estimate of the equipment’s fair market value appears to be below its recorded estimate. If required, residual values are adjusted downward to reflect adjusted estimates of fair market values. Upward adjustments to residual values are not permitted Operating Leases. A review for impairment of operating leases is performed whenever events or changes in circumstances indicate that the carrying amount of the operating leases may not be recoverable. The Fund writes down its rental equipment to its estimated net realizable value when it is probable that its carrying amount exceeds its fair value and the excess can be reasonably estimated; gains are only recognized upon actual sale of the rental equipment. Loans. Allowance for Credit Losses. The Fund discontinues the recognition of revenue for leases and loans for which payments are more than 90 days past due. Generally, income recognition resumes when a lease or loan becomes less than 90 days delinquent. Fees from delinquent payments are recognized when received and are included in other income. Other Income Other income includes miscellaneous fees charged by the Fund such as late fee income, among others. The Fund recognizes fee income as fees are collected. Income Taxes Federal and state income tax laws provide that the income or losses of the Fund are reportable by the partners on their individual income tax returns. Accordingly, no provision for such taxes has been made in the accompanying financial statements. Recent Accounting Standards No Accounting Standards Updates (“ASUs”) issued during 2015 are expected to have a material impact on the Company’s consolidated financial statements.

INVESTMENTS IN LEASES AND LOANS

INVESTMENTS IN LEASES AND LOANS, NET	9 Months Ended
	Sep. 30, 2015
INVESTMENTS IN LEASES AND LOANS, NET [Abstract]
INVESTMENTS IN LEASES AND LOANS, NET	NOTE 3 – INVESTMENTS IN LEASES AND LOANS, NET During the nine months ended September 30, 2015, the Fund sold pools totaling 52 leases, in two separate sales, with a net investment of approximately $4.14 million to a third party for proceeds totaling approximately $4.09 million and recognized a loss on the sale of approximately $50,000. The proceeds from the sale were used to repay a portion of the Fund’s 2011-1 term securitization. Neither the Fund nor its affiliates continue to service the leases sold. The Fund’s investments in leases and loans, net, consist of the following (in thousands): September 30, December 31, 2015 2014 Direct financing leases (a) $ 393 $ 954 Loans (b) 2,083 9,013 Operating leases  3 2,476 9,970 Allowance for credit losses (430 ) (530 ) __________________________________________ $ 2,046 $ 9,440 (a) The Fund’s direct financing leases are for initial lease terms generally ranging from 36 to 180 months. (b) The interest rates on loans generally range from 3% to 13%. The components of direct financing leases and loans are as follows (in thousands): September 30, 2015 December 31, 2014 Leases Loans Leases Loans Total future minimum contractual payments $ 433 $ 2,385 $ 897 $ 10,059 Unearned income (76 ) (235 ) (85 ) (932 ) Residuals, net of unearned residual income (a) 60  175  Security deposits (24 ) (67 ) (33 ) (114 ) __________________________________________ $ 393 $ 2,083 $ 954 $ 9,013 (a) Unguaranteed residuals for direct financing leases represent the estimated amounts recoverable at lease termination from extensions or disposition of the equipment. The Fund’s investment in operating leases, net, consists of the following (in thousands) (zero at September 30, 2015): December 31, 2014 Equipment on operating leases $ 108 Accumulated depreciation (105 ) $ 3

ALLOWANCE FOR CREDIT LOSSES AND

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY	9 Months Ended
	Sep. 30, 2015
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY [Abstract]
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY	NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY The following table is an age analysis of the Fund’s receivables from its investments in leases and loans (presented gross of an allowance for credit losses of $430,000 and $530,000 as of September 30, 2015 and December 31, 2014, respectively (dollars in thousands): September 30, 2015 December 31, 2014 Age of receivable Investments in leases and loans % Investments in leases and loans % Current $ 1,368 55.2 % $ 8,264 82.9 % Delinquent: 31 to 90 days past due 202 8.2 % 925 9.3 % Greater than 90 days 906 36.6 % 781 7.8 % $ 2,476 100.0 % $ 9,970 100.0 % The credit quality of the Fund’s receivables from its investments in leases and loans as of September 30, 2015 and December 31, 2014 is as follows (in thousands): September 30, 2015 December 31, 2014 Performing $ 1,570 $ 9,189 Nonperforming 906 781 $ 2,476 $ 9,970 The Fund’s investments in leases and loans as of September 30, 2015 and 2014 was collectively evaluated for impairment. The following table summarizes the activity in the allowance for credit losses (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Allowance for credit losses, beginning of period $ 140 $ 390 $ 530 $ 8,050 Provision for credit losses 176 728 655 2,798 Charge-offs (2 ) (804 ) (1,357 ) (10,909 ) Recoveries 116 86 602 461 Allowance for credit losses, end of period $ 430 $ 400 $ 430 $ 400 Allowance for credit losses: Ending balance, collectively evaluated for impairment $ 430 $ 400 $ 430 $ 400 Investments in leases and loans: Ending balance, collectively evaluated for impairment $ 2,476 $ 12,180 $ 2,476 $ 12,180

SECURED DEBT

SECURED DEBT	9 Months Ended
	Sep. 30, 2015
SECURED DEBT [Abstract]
SECURED DEBT	NOTE 5 – SECURED DEBT 2011-1 Term Securitization In January 2011, LRF6, a subsidiary of LCFF, issued six classes of asset-backed notes (the “2011-1 Term Securitization”), one with a stated maturity date of December 2018 and five with a stated maturity date of December 2023. The notes totaled approximately $96.0 million, bore interest at fixed stated rates ranging from 1.70% to 5.50%, were issued at an original discount of approximately $6.2 million, and were collateralized by gross leases and loans and restricted cash. Recourse was limited to the amount of collateral pledged and principal and interest were due as payments were received on the underlying leases and loans pledged as collateral. At December 31, 2014, the $6.725 million net balance consisted of $7.189 million net of an unamortized original issue discount of $464,000. In August 2015, LEAF 4 purchased, from a third party noteholder, the remaining outstanding 2011-1 term securitization notes that were issued by LRF6. The outstanding notes of $1.366 million were purchased for $705,000, a discount of $661,000. This resulted in a gain on extinguishment of debt of $258,000 after taking into account the write-off of the remaining unamortized deferred financing and derivative costs and original issue discount on debt totaling approximately $403,000. The gain on extinguishment of debt for the nine months ended September 30, 2015 consists of the following (in thousands): Principal due prior to purchase $ 1,366 Purchase price (705 ) Gross gain 661 Write-off of unamortized deferred financing costs (78 ) Write-off of unamortized original issue discount on debt (325 ) Gain on extinguishment of debt $ 258 The cash used to purchase the remaining notes outstanding primarily was advanced from the General Partner and will be repaid as the remaining portfolio is collected. In October 2015, the trustee assigned its responsibilities as the initial trustee, custodian, and back-up servicer to an affiliate of the General Partner, who then waived its right to compensation for those services. Consequently, the $150,000 of restricted cash as of September 30, 2015 was made unrestricted and was remitted to the General Partner as partial repayment of the advance used to purchase the remaining notes outstanding.

PROMISSORY NOTES PAYABLE

PROMISSORY NOTES PAYABLE	9 Months Ended
	Sep. 30, 2015
PROMISSORY NOTES PAYABLE [Abstract]
PROMISSORY NOTES PAYABLE	NOTE 6 – PROMISSORY NOTES PAYABLE LCFF offered 8.25% secured recourse promissory notes (the “Notes”) to private investors in 2008. The offering closed in February 2009 and raised approximately $9.4 million, of which about $9.3 million was outstanding as of September 30, 2015. The Notes had a six-year term, required interest only payments until their maturity in February 2015, payable in March 2015, and are subordinated to LCFF’s secured debt. The Notes are recourse to LCFF only and are collateralized only by LCFF’s unencumbered net assets. LCFF failed to make the January 2015 and all future periodic interest payments to date and did not pay the principal balance when due in March 2015. As such, LCFF was notified of its default under the terms of the Notes and began accruing interest in January 2015 at a 10% default rate. However, no remedies or legal action against LCFF have been executed at this time as its leases and loans are collateral for outstanding debt.

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT	9 Months Ended
	Sep. 30, 2015
FAIR VALUE MEASUREMENT [Abstract]
FAIR VALUE MEASUREMENT	NOTE 7 – FAIR VALUE MEASUREMENT Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability at the measurement date (exit price). U.S. GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety. • Level 1 • Level 2 • Level 3 There were no assets or liabilities measured at fair value at September 30, 2015 or December 31, 2014. The Fund is also required to disclose the fair value of financial instruments not measured at fair value for which it is practicable to estimate that value. For cash, restricted cash, receivables, and payables, the carrying amounts approximate fair value because of the short term maturity of these instruments. The fair value of the promissory notes payable at September 30, 2015 and December 31, 2014 was determined to be zero as the notes are in default and as LCFF did not pay the principal balance when due in March 2015, and does not expect to repay the balance in the future.

CERTAIN RELATIONSHIPS AND TRANS

CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES	9 Months Ended
	Sep. 30, 2015
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES [Abstract]
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES	NOTE 8 – CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES The Fund relies on the General Partner and its affiliates to manage the Fund’s operations and pays the General Partner or its affiliates fees to manage the Fund in accordance with the Partnership Agreement. The following is a summary of fees and costs of services and materials charged by the General Partner or its affiliates (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Administrative expenses $ 9 $ 22 $ 32 $ 118 Administrative Expenses Management Fees. Due to Affiliates. Distributions.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2015
COMMITMENTS AND CONTINGENCIES [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 9 – COMMITMENTS AND CONTINGENCIES The Fund is party to various routine legal proceedings arising out of the ordinary course of its business. Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on the Fund’s financial condition or results of operations.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2015
SUBSEQUENT EVENTS [Abstract]
SUBSEQUENT EVENTS	NOTE 10 – SUBSEQUENT EVENTS The Fund has evaluated its September 30, 2015 financial statements for subsequent events through the date the financial statements were issued. The Fund is not aware of any subsequent events, other than the one disclosed in Note 5, which would require recognition or disclosure in the financial statements.

SUMMARY OF SIGNIFICANT ACCOUN16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation	Basis of Presentation The consolidated financial statements include the accounts of the Fund, LEAF Funding, LLC (“LEAF Funds JV1”), and LEAF Funds Joint Venture 2, LLC (“LEAF Funds JV2”) and its subsidiaries LEAF Commercial Finance Fund, LLC (“LCFF”) and LEAF Receivables Funding 6, LLC (“LRF6”). The Fund maintains a 96% and 98% ownership interest in LEAF Funds JV1 and LEAF Funds JV2, respectively. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited financial statements reflect all adjustments that are, in the opinion of management, of a normal and recurring nature and necessary for a fair statement of the Fund’s financial position as of September 30, 2015, and the results of its operations and cash flows for the periods presented. The results of operations for the three and nine month periods ended September 30, 2015 are not necessarily indicative of the Fund’s operating results for the entire fiscal year. The financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations. These interim financial statements should be read in conjunction with the Fund’s financial statements and notes thereto presented in the Fund’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on March 30, 2015.
Use of Estimates	Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the allowance for credit losses and the unguaranteed residual values of leased equipment, among others. The Fund bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Investments in Leases and Loans	Investments in Leases and Loans The Fund’s investments in leases and loans consist of direct financing leases, operating leases, and loans. Direct Financing Leases. Unguaranteed residual value represents the estimated amount to be received at lease termination from lease extensions or ultimate disposition of the leased equipment. The estimates of residual values are based upon the Fund’s history with regard to the realization of residuals, available industry data, and the Fund’s experience with respect to comparable equipment. The estimated residual values are recorded as a component of the investment in leases. Residual values are reviewed periodically to determine if the current estimate of the equipment’s fair market value appears to be below its recorded estimate. If required, residual values are adjusted downward to reflect adjusted estimates of fair market values. Upward adjustments to residual values are not permitted Operating Leases. A review for impairment of operating leases is performed whenever events or changes in circumstances indicate that the carrying amount of the operating leases may not be recoverable. The Fund writes down its rental equipment to its estimated net realizable value when it is probable that its carrying amount exceeds its fair value and the excess can be reasonably estimated; gains are only recognized upon actual sale of the rental equipment. Loans. Allowance for Credit Losses. The Fund discontinues the recognition of revenue for leases and loans for which payments are more than 90 days past due. Generally, income recognition resumes when a lease or loan becomes less than 90 days delinquent. Fees from delinquent payments are recognized when received and are included in other income.
Other Income	Other Income Other income includes miscellaneous fees charged by the Fund such as late fee income, among others. The Fund recognizes fee income as fees are collected.
Income Taxes	Income Taxes Federal and state income tax laws provide that the income or losses of the Fund are reportable by the partners on their individual income tax returns. Accordingly, no provision for such taxes has been made in the accompanying financial statements.
Recent Accounting Standards	Recent Accounting Standards No Accounting Standards Updates (“ASUs”) issued during 2015 are expected to have a material impact on the Company’s consolidated financial statements.

INVESTMENTS IN LEASES AND LOA17

INVESTMENTS IN LEASES AND LOANS, NET (Tables)	9 Months Ended
	Sep. 30, 2015
INVESTMENTS IN LEASES AND LOANS, NET [Abstract]
Net leases and loan investments	The Fund’s investments in leases and loans, net, consist of the following (in thousands): September 30, December 31, 2015 2014 Direct financing leases (a) $ 393 $ 954 Loans (b) 2,083 9,013 Operating leases  3 2,476 9,970 Allowance for credit losses (430 ) (530 ) __________________________________________ $ 2,046 $ 9,440 (a) The Fund’s direct financing leases are for initial lease terms generally ranging from 36 to 180 months. (b) The interest rates on loans generally range from 3% to 13%.
Components of direct financing leases and loans	The components of direct financing leases and loans are as follows (in thousands): September 30, 2015 December 31, 2014 Leases Loans Leases Loans Total future minimum contractual payments $ 433 $ 2,385 $ 897 $ 10,059 Unearned income (76 ) (235 ) (85 ) (932 ) Residuals, net of unearned residual income (a) 60  175  Security deposits (24 ) (67 ) (33 ) (114 ) __________________________________________ $ 393 $ 2,083 $ 954 $ 9,013 (a) Unguaranteed residuals for direct financing leases represent the estimated amounts recoverable at lease termination from extensions or disposition of the equipment.
Net operating leases	The Fund’s investment in operating leases, net, consists of the following (in thousands) (zero at September 30, 2015): December 31, 2014 Equipment on operating leases $ 108 Accumulated depreciation (105 ) $ 3

ALLOWANCE FOR CREDIT LOSSES A18

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (Tables)	9 Months Ended
	Sep. 30, 2015
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY [Abstract]
Age analysis	The following table is an age analysis of the Fund’s receivables from its investments in leases and loans (presented gross of an allowance for credit losses of $430,000 and $530,000 as of September 30, 2015 and December 31, 2014, respectively (dollars in thousands): September 30, 2015 December 31, 2014 Age of receivable Investments in leases and loans % Investments in leases and loans % Current $ 1,368 55.2 % $ 8,264 82.9 % Delinquent: 31 to 90 days past due 202 8.2 % 925 9.3 % Greater than 90 days 906 36.6 % 781 7.8 % $ 2,476 100.0 % $ 9,970 100.0 %
Credit quality indicators	The credit quality of the Fund’s receivables from its investments in leases and loans as of September 30, 2015 and December 31, 2014 is as follows (in thousands): September 30, 2015 December 31, 2014 Performing $ 1,570 $ 9,189 Nonperforming 906 781 $ 2,476 $ 9,970
Allowance for credit losses activity	The Fund’s investments in leases and loans as of September 30, 2015 and 2014 was collectively evaluated for impairment. The following table summarizes the activity in the allowance for credit losses (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Allowance for credit losses, beginning of period $ 140 $ 390 $ 530 $ 8,050 Provision for credit losses 176 728 655 2,798 Charge-offs (2 ) (804 ) (1,357 ) (10,909 ) Recoveries 116 86 602 461 Allowance for credit losses, end of period $ 430 $ 400 $ 430 $ 400 Allowance for credit losses: Ending balance, collectively evaluated for impairment $ 430 $ 400 $ 430 $ 400 Investments in leases and loans: Ending balance, collectively evaluated for impairment $ 2,476 $ 12,180 $ 2,476 $ 12,180

SECURED DEBT (Tables)

SECURED DEBT (Tables)	9 Months Ended
	Sep. 30, 2015
SECURED DEBT [Abstract]
Gain on Extinguishment of Debt	The gain on extinguishment of debt for the nine months ended September 30, 2015 consists of the following (in thousands): Principal due prior to purchase $ 1,366 Purchase price (705 ) Gross gain 661 Write-off of unamortized deferred financing costs (78 ) Write-off of unamortized original issue discount on debt (325 ) Gain on extinguishment of debt $ 258

CERTAIN RELATIONSHIPS AND TRA20

CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES (Tables)	9 Months Ended
	Sep. 30, 2015
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES [Abstract]
Summary of related party fees	The following is a summary of fees and costs of services and materials charged by the General Partner or its affiliates (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Administrative expenses $ 9 $ 22 $ 32 $ 118

ORGANIZATION AND NATURE OF BU21

ORGANIZATION AND NATURE OF BUSINESS (Details) shares in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2015USD ($)shares
ORGANIZATION AND NATURE OF BUSINESS [Abstract]
Funds raised during offering termination date	$ 125.7
Units sold during offering termination date (in units) | shares	1.3
Total expected life of the fund	9 years
Expected offering period	2 years
Expected reinvestment period	5 years
Expected subsequent liquidation period	2 years
Leases and loans maturity date	Dec. 31, 2032
Ownership interest	1.00%
General Partner's investment in limited partnership interest	$ 1
General Partner's limited partnership interest	0.87%

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	9 Months Ended
	Sep. 30, 2015
Schedule of Equity Method Investments [Line Items]
Operating lease equipment useful life	7 years
Past due accounts provided with full reserve on allowance for credit losses	180 days
Past due period for the discontinuation of revenue recognition, Minimum	90 days
Income recognition on leases or loans, maximum period delinquent	90 days
LEAF Funds JV2 [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest	96.00%
LEAF Funds JV1 [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest	98.00%

INVESTMENTS IN LEASES AND LOA23

INVESTMENTS IN LEASES AND LOANS, NET (Details)		9 Months Ended
		Sep. 30, 2015USD ($)LeaseSales	Dec. 31, 2014USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Investment in leases and loans, gross		$ 2,476,000	$ 9,970,000
Allowance for credit losses		(430,000)	(530,000)
Investment in leases and loans, net		$ 2,046,000	9,440,000
Number of lease pools sold | Lease		52
Number of sales | Sales		2
Net investment to a third party		$ 4,140,000
Sales proceeds		4,090,000
Recognized loss on sale		(50,000)
Direct Financing Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Investment in leases and loans, gross	[1]	393,000	954,000
Total future minimum contractual payments		433,000	897,000
Unearned income		(76,000)	(85,000)
Residuals, net of unearned residual income	[2]	60,000	175,000
Security deposits		$ (24,000)	(33,000)
Direct Financing Leases [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Direct financing initial lease term		36 months
Direct Financing Leases [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Direct financing initial lease term		180 months
Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Investment in leases and loans, gross	[3]	$ 2,083,000	9,013,000
Total future minimum contractual payments		2,385,000	10,059,000
Unearned income		(235,000)	(932,000)
Residuals, net of unearned residual income	[2]	0	0
Security deposits		$ (67,000)	(114,000)
Loans [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan interest rate		3.00%
Loans [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan interest rate		13.00%
Operating Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Investment in leases and loans, gross		$ 0	3,000
Investment in operating leases, net [Abstract]
Equipment on operating leases		0	108,000
Accumulated depreciation		$ 0	$ (105,000)
[1]	The Fund's direct financing leases are for initial lease terms generally ranging from 36 to 180 months.
[2]	Unguaranteed residuals for direct financing leases represent the estimated amounts recoverable at lease termination from extensions or disposition of the equipment.
[3]	The interest rates on loans generally range from 3% to 13%.

ALLOWANCE FOR CREDIT LOSSES A24

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Aging of investment in leases and loans [Abstract]
Current	$ 1,368		$ 1,368		$ 8,264
Current, percentage of all aged receivables (in hundredths)	55.20%		55.20%		82.90%
Delinquent [Abstract]
31 to 90 days past due	$ 202		$ 202		$ 925
31 to 90 days past due, percentage of all aged receivables	8.20%		8.20%		9.30%
Greater than 90 days	$ 906		$ 906		$ 781
Greater than 90 days, percentage of all aged receivables	36.60%		36.60%		7.80%
Total aged investment in leases and loans	$ 2,476		$ 2,476		$ 9,970
Percentage of all aged receivables	100.00%		100.00%		100.00%
Financing Receivable, Recorded Investment [Line Items]
Investment in leases and loans	$ 2,476		$ 2,476		$ 9,970
Allowance for credit losses activity [Abstract]
Allowance for credit losses, beginning of period	140	$ 390	530	$ 8,050
Provisions for credit losses	176	728	655	2,798
Charge-offs	(2)	(804)	(1,357)	(10,909)
Recoveries	116	86	602	461
Allowance for credit losses, end of period	430	400	430	400
Allowance for credit losses [Abstract]
Ending balance, collectively evaluated for impairment	430	400	430	400
Investments in leases and loans [Abstract]
Ending balance collectively evaluated for impairment	2,476	$ 12,180	2,476	$ 12,180
Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Investment in leases and loans	1,570		1,570		9,189
Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Investment in leases and loans	$ 906		$ 906		$ 781

SECURED DEBT (Details)

SECURED DEBT (Details)	Aug. 31, 2015USD ($)	Jan. 31, 2011USD ($)Class	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Debt Instrument [Line Items]
Asset-backed notes face amount			$ 9,400,000		$ 9,400,000
Debt net balance			0		0		$ 6,725,000
Partial repayment of advance to purchase notes			150,000		150,000		589,000
Gains on Extinguishment of Debt [Abstract]
Purchase price					6,529,000	$ 18,780,000
Gross gain	$ 660,000
Gain on extinguishment of debt			258,000	$ 0	$ 258,000	$ 0
Asset-backed Securities [Member] | 2011-1 Term Securitization [Member]
Debt Instrument [Line Items]
Number of classes of asset-backed notes | Class		6
Number of classes of asset-backed notes, lower range | Class		1
Number of classes of asset-backed notes, upper range | Class		5
Maturity date, lower range					Dec. 31, 2018
Maturity date, upper range					Dec. 31, 2023
Asset-backed notes face amount		$ 96,000,000
Interest rate, minimum		1.70%
Interest rate, maximum		5.50%
Net unamortized original issue discount		$ 6,200,000
Debt net balance							6,725,000
Long-term Debt, Gross							7,189,000
Unamortized original issue discount							$ 464,000
Write-off of unamortized deferred financing costs and original issue discount on debt					$ (403)
Partial repayment of advance to purchase notes			$ 150,000		150,000
Gains on Extinguishment of Debt [Abstract]
Principal due prior to purchase					1,366,000
Purchase price					(705,000)
Gross gain					661,000
Write-off of unamortized deferred financing costs					(78,000)
Write-off of unamortized original issue discount on debt					(325,000)
Gain on extinguishment of debt					$ 258,000

PROMISSORY NOTES PAYABLE (Detai

PROMISSORY NOTES PAYABLE (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
PROMISSORY NOTES PAYABLE [Abstract]
Interest rate on promissory notes	8.25%
Subordinated notes, total raised	$ 9,400
Subordinated notes payable	$ 9,295	$ 9,295
Maturity period of secured promissory notes	6 years
Promissory notes payable default rate	10.00%

FAIR VALUE MEASUREMENT (Details

FAIR VALUE MEASUREMENT (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair value of financial instruments for which it is practicable to estimate that value [Abstract]
Promissory notes payable	$ 9,295	$ 9,295
Fair Value [Member]
Fair value of financial instruments for which it is practicable to estimate that value [Abstract]
Promissory notes payable	$ 0	$ 0

CERTAIN RELATIONSHIPS AND TRA28

CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES (Details) - USD ($)	Aug. 31, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES [Abstract]
Administrative expenses		$ 9,000	$ 22,000	$ 32,000	$ 118,000
General partner management fee waived		12,000		$ 65,000		$ 7,900,000
Balance received to settle term securitization	$ 660,000
Ownership interest				1.00%
Percentage of cumulative annual return on the limited partners capital contributions				0.87%
General partners cash distributions paid		6,000	23,000	$ 6,000	23,000
Limited partners cash distributions paid		$ 5,000	$ 19,000	$ 5,000	$ 19,000