LEAF Equipment Finance Fund 4 10-K 30 Mar 16 2015 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2015
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 Public Float		$ 0
Entity Common Stock, Shares Outstanding	0
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
ASSETS
Cash	$ 41	$ 99
Restricted cash	0	589
Investment in leases and loans, net	1,459	9,440
Deferred financing costs, net	0	143
Other assets	2	27
Total assets	1,502	10,298
Liabilities:
Secured debt	0	6,725
Promissory notes payable	0	9,295
Accounts payable, accrued expenses, and other liabilities	460	753
Due to affiliates	2,173	2,622
Total liabilities	$ 2,633	$ 19,395
Commitments and contingencies (Note 9)
Partners' Deficit:
General partner	$ (1,112)	$ (1,189)
Limited partners	(180)	(7,836)
Total partners' deficit	(1,292)	(9,025)
Noncontrolling interest	161	(72)
Total deficit	(1,131)	(9,097)
Total liabilities and deficit	$ 1,502	$ 10,298

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Revenues:
Interest on equipment financings	$ 699	$ 1,539
Rental income	8	83
Losses on sales of equipment and lease dispositions, net	(107)	(21)
Gain on extinguishment of secured debt	258	0
Gain on deconsolidation	10,416	0
Other income	81	206
Revenues	11,355	1,807
Expenses:
Interest expense	1,351	3,315
Depreciation of operating leases	3	30
Provision for credit losses	880	3,241
General and administrative expenses	496	681
Administrative expenses reimbursed to affiliate	32	137
Expenses	2,762	7,404
Net income (loss)	8,593	(5,597)
Less: Net (loss) attributable to the noncontrolling interest	(46)	(159)
Net income (loss) attributable to LEAF 4 partners	8,639	(5,438)
Net income (loss) allocated to LEAF 4's limited partners	$ 8,553	$ (5,384)
Weighted average number of limited partner units outstanding during the period (in units)	1,239,313	1,259,493
Net income (loss) per limited partnership unit (in dollars per unit)	$ 6.90	$ (4.27)

Consolidated Statements of Chan

Consolidated Statements of Changes in Partners' Deficit - USD ($) $ in Thousands	General Partner Amount [Member]	Limited Partners [Member]	Total Partners' Deficit [Member]	Non-Controlling Interest [Member]	Total
Balance at Dec. 31, 2013	$ (1,110)	$ 67	$ (1,043)	$ 87	$ (956)
Balance (in units) at Dec. 31, 2013		1,259,537
Increase (Decrease) in Partners' Capital [Roll Forward]
Cancellation of limited partnership units	0	$ 0	0	0	0
Cancellation of limited partnership units (in units)		(15,776)
Cash distributions paid	(25)	$ (2,519)	(2,544)	0	(2,544)
Net income (loss)	(54)	(5,384)	(5,438)	(159)	(5,597)
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)		(7,380)
Cash distributions paid	(6)	$ (621)	(627)	0	(627)
Elimination of noncontrolling interest through deconsolidation	(3)	(276)	(279)	279	0
Net income (loss)	86	8,553	8,639	(46)	8,593
Balance at Dec. 31, 2015	$ (1,112)	$ (180)	$ (1,292)	$ 161	$ (1,131)
Balance (in units) at Dec. 31, 2015		1,236,381

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net income (loss)	$ 8,593	$ (5,597)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of operating leases	3	30
Amortization of deferred financing costs and other non-cash interest	130	850
Amortization of original issue discount on debt	139	981
Provision for credit losses	880	3,241
Losses on sales of equipment and lease dispositions, net	107	21
Gain on extinguishment of secured debt	(258)	0
Gain on deconsolidation	(10,416)	0
Changes in operating assets and liabilities:
Other assets	25	23
Accounts payable, accrued expenses, and other liabilities	828	(299)
Due to affiliates	(449)	(3,662)
Net cash used in operating activities	(418)	(4,412)
Cash flows from investing activities:
Proceeds from leases and loans	7,213	19,743
Security deposits returned	(286)	(349)
Net cash provided by investing activities	6,927	19,394
Cash flows from financing activities:
Decrease in restricted cash	589	7,558
Repayment of debt	(6,529)	(20,126)
Cash distributions to partners	(627)	(2,544)
Net cash used in financing activities	(6,567)	(15,112)
Decrease in cash	(58)	(130)
Cash, beginning of period	99	229
Cash, end of period	41	99
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 165	$ 1,514

ORGANIZATION AND NATURE OF BUSI

ORGANIZATION AND NATURE OF BUSINESS	12 Months Ended
	Dec. 31, 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. At inception the Fund was 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 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	12 Months Ended
	Dec. 31, 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 Fund reflects the participation of an affiliate of the General Partner in the net assets and in the income or losses of LEAF Funds JV1 and LEAF Funds JV2 as noncontrolling interest in the consolidated balance sheets and statements of operations. Noncontrolling interest adjusts the Fund’s consolidated operating results to reflect only the Fund’s share of the earnings or losses of LEAF Funds JV1 and LEAF Funds JV2. LCFF Deconsolidation As of December 31, 2015, LCFF sold, assigned, and transferred its membership interests in LRF6 (including assets of approximately $40,000) to LEAF 4. After the transfer occurred, LCFF had no assets remaining to repay the investors in its promissory notes or to satisfy its other obligations. This resulted in the dissolution of LCFF, the write-off of its outstanding obligations, and a gain on deconsolidation of approximately $10.4 million recognized by LEAF 4. 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. Concentration of Credit Risk The following concentrations of credit risk (greater than 10%) existed as of December 31, 2015: 29%, 16%, 12%, and 12% of the Fund’s leases and loans were in California, Georgia, Ohio, and Virginia, respectively. Also, 30%, 25%, and 14% of the Fund’s leases and loans were comprised of building systems, restaurant equipment, and medical equipment, respectively. In addition, 42%, 27%, and 12% of the Fund’s leases and loans were related to services, retail trade, and finance/insurance/real estate, respectively. Furthermore, four lessees each accounted for 19%, 15%, 12%, and 11% of the Fund’s lease and loan portfolio. No other states, types of assets, types of businesses, or individual end users accounted for more than 10% of the Fund’s portfolio of 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 evaluates the adequacy of the allowance for credit losses (including investments in leases and loans) based upon management’s historical experience on the portfolios it manages, an analysis of contractual delinquencies, economic conditions and trends, and equipment finance portfolio characteristics, adjusted for expected recoveries, among others. In evaluating historic performance, the Fund performs a migration analysis, which estimates the likelihood that an account will progress through delinquency stages to ultimate charge-off. The Fund’s policy is to charge off to the allowance those financings which are in default where management has determined the probability of collection to be remote. Generally, past due accounts are referred to our internal recovery group consisting of credit specialists and collectors. The group uses several resources in an attempt to maximize recoveries on past due accounts including: 1) initiating litigation against the end user customer and any personal guarantor, 2) referring the account to an outside law firm or collection agency and/or 3) repossessing and remarketing the equipment through third parties. 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 Accounting Standards Issued But Not Yet Effective Lease Accounting. Transfers of Financial Assets In connection with establishing its debt facilities with its banks, the Fund has formed bankruptcy remote special-purpose entities (“SPEs”) through which the financings are arranged. The Fund’s asset transfers to these special purpose entities do not qualify for sales accounting treatment due to certain call provisions that the Fund maintains. Accordingly, assets and related debt of the SPEs are included in the Fund’s consolidated balance sheets. The Fund’s leases and restricted cash are assigned as collateral for these borrowings and there is no further recourse to the general credit of the Fund. Collateral in excess of these borrowings represents the Fund’s maximum loss exposure. During the year ended December 31, 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 or have any ongoing involvement, obligations, or interestst in the transferred leases. Allocation of Partnership Income (Loss), Cash Distributions, and Net Income (Loss) Per Limited Partnership Unit The Fund allocates net income (loss) and cash distributions as follows: 99% to the limited partners and 1% to the general partner. Net income (loss) per limited partnership unit is computed by dividing net income (loss) allocated to limited partners by the weighted average number of limited partnership units outstanding during the period. The weighted average number of limited partnership units outstanding during the period is computed based on the number of limited partnership units issued during the period weighted for the days outstanding during the period.

INVESTMENT IN LEASES AND LOANS,

INVESTMENT IN LEASES AND LOANS, NET	12 Months Ended
	Dec. 31, 2015
INVESTMENT IN LEASES AND LOANS, NET [Abstract]
INVESTMENT IN LEASES AND LOANS	NOTE 3 – INVESTMENT IN LEASES AND LOANS, NET The Fund’s investment in leases and loans, net, consists of the following (in thousands): December 31, 2015 2014 Direct financing leases (1) $ 360 $ 954 Loans (2) 1,179 9,013 Operating leases – 3 1,539 9,970 Allowance for credit losses (80 ) (530 ) $ 1,459 $ 9,440 (1) The Fund’s direct financing leases are for initial lease terms generally ranging from 36 to 192 months. (2) The interest rates on loans generally range from 3% to 12%. The components of direct financing leases and loans are as follows (in thousands): December 31, 2015 2014 Leases Loans Leases Loans Total future minimum contractual payments $ 400 $ 1,377 $ 897 $ 10,059 Unearned income (54 ) (108 ) (85 ) (932 ) Residuals, net of unearned residual income (1) 15 - 175 - Security deposits (1 ) (90 ) (33 ) (114 ) $ 360 $ 1,179 $ 954 $ 9,013 (1) 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 December 31, 2015): December 31, Equipment on operating leases $ 108 Accumulated depreciation (105 ) $ 3 At December 31, 2015, the future payments scheduled to be received on non-cancellable investments in leases and loans for each of the five succeeding annual periods ending December 31, and thereafter, are as follows (in thousands): Direct Financing Loans Total 2016 $ 145 $ 761 $ 906 2017 114 331 445 2018 112 115 227 2019 24 64 88 2020 5 28 33 Thereafter – 78 78 $ 400 $ 1,377 $ 1,777

ALLOWANCE FOR CREDIT LOSSES AND

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY	12 Months Ended
	Dec. 31, 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 $80,000 and $530,000 as of December 31, 2015 and 2014, respectively (dollars in thousands): December 31, 2015 2014 Age of receivable Investment in leases and loans % Investment in leases and loans % Current $ 1,208 78.5 % $ 8,264 82.9 % Delinquent: 31 to 90 days past due 272 17.7 % 925 9.3 % Greater than 90 days past due 59 3.8 % 781 7.8 % $ 1,539 100.0 % $ 9,970 100.0 % The credit quality of the Fund’s receivables from its investment in leases and loans as of December 31, 2015 and 2014 is as follows (in thousands): December 31, 2015 2014 Performing $ 1,480 $ 9,189 Nonperforming (non-accrual status) 59 781 $ 1,539 $ 9,970 The Fund’s investments in leases and loans as of December 31, 2015 and 2014 was collectively evaluated for impairment. The following table summarizes the activity in the allowance for credit losses (in thousands): Years Ended December 31, 2015 2014 Allowance for credit losses, beginning of year $ 530 $ 8,050 Provision for credit losses 880 3,241 Charge-offs (2,024 ) (11,317 ) Recoveries 694 556 Allowance for credit losses, end of year $ 80 $ 530 Allowance for credit losses: Ending balance, collectively evaluated for impairment $ 80 $ 530 Investments in leases and loans: Ending balance, collectively evaluated for impairment $ 1,539 $ 9,970

SECURED DEBT

SECURED DEBT	12 Months Ended
	Dec. 31, 2015
SECURED DEBT [Abstract]
SECURED DEBT	NOTE 5 – SECURED DEBT 2011-1 Term Securitization In January 2011, LEAF Receivables Funding 6, LLC (“LRF6”), a subsidiary of LEAF Commercial Finance Fund, LLC (“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. During the year ended December 31, 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 or have any ongoing involvement, obligations, or interestst in the transferred leases. 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 at that time 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 costs and original issue discount on debt totaling approximately $403,000. As a result of this transaction, LEAF 4 was the only noteholder of the then outstanding 2011-1 term securitization notes. As of December 31, 2015, LCFF sold, assigned, and transferred its membership interests in LRF6 (including assets of approximately $40,000) to LEAF 4. The gain on extinguishment of secured debt for the year ended December 31, 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 secured debt $ 258 The cash used to purchase the remaining notes outstanding primarily was advanced from LEAF Financial Corporation (“LEAF Financial”), an affiliate of the General Partner and a subsidiary of RAI, and will be repaid as the remaining portfolio is collected. In order to eliminate fees paid to third parties, in October 2015, LEAF Financial agreed to assume the roles of successor trustee, paying agent, custodian, and back-up servicer and then immediately agreed to waive its rights to receive any compensation in its fulfillment of such roles. Consequently, the $150,000 of previously-restricted cash was made unrestricted and was remitted to LEAF Financial as partial repayment of the advance used to purchase the remaining notes outstanding.

PROMISSORY NOTES PAYABLE

PROMISSORY NOTES PAYABLE	12 Months Ended
	Dec. 31, 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 approximately $9.3 million was outstanding as of December 31, 2014. The Notes had a six-year term, required interest-only payments until their maturity in February 2015, payable in March 2015, and were subordinated to LCFF’s secured debt. The Notes were recourse to LCFF only (non-recourse to LEAF 4) and were collateralized only by LCFF’s unencumbered net assets. As higher than expected lease and loan defaults reduced its liquidity, LCFF failed to make the January 2015 and all future periodic interest payments 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 has been executed through the date of this filing. Gain on Deconsolidation As of December 31, 2015, after it had transferred its membership interests in LRF6 to LEAF 4, LCFF had no assets remaining to repay the investors in its promissory notes or to satisfy its other obligations. This resulted in the dissolution of LCFF, the write-off of its outstanding obligations, and a gain on deconsolidation of approximately $10.4 million recognized by LEAF 4.

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT	12 Months Ended
	Dec. 31, 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 within the fair value hierarchy 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 December 31, 2015 or 2014. The fair value of financial instruments not measured at fair value for which it is practicable to estimate that value is as follows: for cash, restricted cash, receivables, and payables, the carrying amounts approximate fair value because of the short term maturity of these instruments.

CERTAIN RELATIONSHIPS AND TRANS

CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES	12 Months Ended
	Dec. 31, 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): Years Ended December 31, 2015 2014 Administrative expenses $ 32 $ 137 Administrative Expenses Management Fees. Due to Affiliates. These amounts were advanced with the expectation of repayment. Distributions.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 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	12 Months Ended
	Dec. 31, 2015
SUBSEQUENT EVENTS [Abstract]
SUBSEQUENT EVENTS	NOTE 10 – SUBSEQUENT EVENTS The Fund has evaluated its December 31, 2015 financial statements for subsequent events through the date the financial statements were issued. The Fund is not aware of any subsequent events which would require recognition or disclosure in the financial statements.

SUMMARY OF SIGNIFICANT ACCOUN16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 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 Fund reflects the participation of an affiliate of the General Partner in the net assets and in the income or losses of LEAF Funds JV1 and LEAF Funds JV2 as noncontrolling interest in the consolidated balance sheets and statements of operations. Noncontrolling interest adjusts the Fund’s consolidated operating results to reflect only the Fund’s share of the earnings or losses of LEAF Funds JV1 and LEAF Funds JV2.
LCFF Deconsolidation	LCFF Deconsolidation As of December 31, 2015, LCFF sold, assigned, and transferred its membership interests in LRF6 (including assets of approximately $40,000) to LEAF 4. After the transfer occurred, LCFF had no assets remaining to repay the investors in its promissory notes or to satisfy its other obligations. This resulted in the dissolution of LCFF, the write-off of its outstanding obligations, and a gain on deconsolidation of approximately $10.4 million recognized by LEAF 4.
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.
Concentration of Credit Risk	Concentration of Credit Risk The following concentrations of credit risk (greater than 10%) existed as of December 31, 2015: 29%, 16%, 12%, and 12% of the Fund’s leases and loans were in California, Georgia, Ohio, and Virginia, respectively. Also, 30%, 25%, and 14% of the Fund’s leases and loans were comprised of building systems, restaurant equipment, and medical equipment, respectively. In addition, 42%, 27%, and 12% of the Fund’s leases and loans were related to services, retail trade, and finance/insurance/real estate, respectively. Furthermore, four lessees each accounted for 19%, 15%, 12%, and 11% of the Fund’s lease and loan portfolio. No other states, types of assets, types of businesses, or individual end users accounted for more than 10% of the Fund’s portfolio of leases and loans.
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 evaluates the adequacy of the allowance for credit losses (including investments in leases and loans) based upon management’s historical experience on the portfolios it manages, an analysis of contractual delinquencies, economic conditions and trends, and equipment finance portfolio characteristics, adjusted for expected recoveries, among others. In evaluating historic performance, the Fund performs a migration analysis, which estimates the likelihood that an account will progress through delinquency stages to ultimate charge-off. The Fund’s policy is to charge off to the allowance those financings which are in default where management has determined the probability of collection to be remote. Generally, past due accounts are referred to our internal recovery group consisting of credit specialists and collectors. The group uses several resources in an attempt to maximize recoveries on past due accounts including: 1) initiating litigation against the end user customer and any personal guarantor, 2) referring the account to an outside law firm or collection agency and/or 3) repossessing and remarketing the equipment through third parties. 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 Accounting Standards Issued But Not Yet Effective Lease Accounting.
Transfers of Financial Assets	Transfers of Financial Assets In connection with establishing its debt facilities with its banks, the Fund has formed bankruptcy remote special-purpose entities (“SPEs”) through which the financings are arranged. The Fund’s asset transfers to these special purpose entities do not qualify for sales accounting treatment due to certain call provisions that the Fund maintains. Accordingly, assets and related debt of the SPEs are included in the Fund’s consolidated balance sheets. The Fund’s leases and restricted cash are assigned as collateral for these borrowings and there is no further recourse to the general credit of the Fund. Collateral in excess of these borrowings represents the Fund’s maximum loss exposure. During the year ended December 31, 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 or have any ongoing involvement, obligations, or interestst in the transferred leases.
Allocation of Partnership Income, Loss, Cash Distributions and Net Loss Per Limited Partner Unit	Allocation of Partnership Income (Loss), Cash Distributions, and Net Income (Loss) Per Limited Partnership Unit The Fund allocates net income (loss) and cash distributions as follows: 99% to the limited partners and 1% to the general partner. Net income (loss) per limited partnership unit is computed by dividing net income (loss) allocated to limited partners by the weighted average number of limited partnership units outstanding during the period. The weighted average number of limited partnership units outstanding during the period is computed based on the number of limited partnership units issued during the period weighted for the days outstanding during the period.

INVESTMENT IN LEASES AND LOAN17

INVESTMENT IN LEASES AND LOANS, NET (Tables)	12 Months Ended
	Dec. 31, 2015
INVESTMENT IN LEASES AND LOANS, NET [Abstract]
Net leases and loan investments	The Fund’s investment in leases and loans, net, consists of the following (in thousands): December 31, 2015 2014 Direct financing leases (1) $ 360 $ 954 Loans (2) 1,179 9,013 Operating leases – 3 1,539 9,970 Allowance for credit losses (80 ) (530 ) $ 1,459 $ 9,440 (1) The Fund’s direct financing leases are for initial lease terms generally ranging from 36 to 192 months. (2) The interest rates on loans generally range from 3% to 12%.
Components of direct financing leases and loans	The components of direct financing leases and loans are as follows (in thousands): December 31, 2015 2014 Leases Loans Leases Loans Total future minimum contractual payments $ 400 $ 1,377 $ 897 $ 10,059 Unearned income (54 ) (108 ) (85 ) (932 ) Residuals, net of unearned residual income (1) 15 - 175 - Security deposits (1 ) (90 ) (33 ) (114 ) $ 360 $ 1,179 $ 954 $ 9,013 (1) 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 December 31, 2015): December 31, Equipment on operating leases $ 108 Accumulated depreciation (105 ) $ 3
Schedule of future minimum direct financing lease, loans and operating leases	At December 31, 2015, the future payments scheduled to be received on non-cancellable investments in leases and loans for each of the five succeeding annual periods ending December 31, and thereafter, are as follows (in thousands): Direct Financing Loans Total 2016 $ 145 $ 761 $ 906 2017 114 331 445 2018 112 115 227 2019 24 64 88 2020 5 28 33 Thereafter – 78 78 $ 400 $ 1,377 $ 1,777

ALLOWANCE FOR CREDIT LOSSES A18

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (Tables)	12 Months Ended
	Dec. 31, 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 $80,000 and $530,000 as of December 31, 2015 and 2014, respectively (dollars in thousands): December 31, 2015 2014 Age of receivable Investment in leases and loans % Investment in leases and loans % Current $ 1,208 78.5 % $ 8,264 82.9 % Delinquent: 31 to 90 days past due 272 17.7 % 925 9.3 % Greater than 90 days past due 59 3.8 % 781 7.8 % $ 1,539 100.0 % $ 9,970 100.0 %
Credit quality indicators	The credit quality of the Fund’s receivables from its investment in leases and loans as of December 31, 2015 and 2014 is as follows (in thousands): December 31, 2015 2014 Performing $ 1,480 $ 9,189 Nonperforming (non-accrual status) 59 781 $ 1,539 $ 9,970
Allowance for credit losses activity	The following table summarizes the activity in the allowance for credit losses (in thousands): Years Ended December 31, 2015 2014 Allowance for credit losses, beginning of year $ 530 $ 8,050 Provision for credit losses 880 3,241 Charge-offs (2,024 ) (11,317 ) Recoveries 694 556 Allowance for credit losses, end of year $ 80 $ 530 Allowance for credit losses: Ending balance, collectively evaluated for impairment $ 80 $ 530 Investments in leases and loans: Ending balance, collectively evaluated for impairment $ 1,539 $ 9,970

SECURED DEBT (Tables)

SECURED DEBT (Tables)	12 Months Ended
	Dec. 31, 2015
SECURED DEBT [Abstract]
Gain on extinguishment of secured debt	The gain on extinguishment of secured debt for the year ended December 31, 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 secured debt $ 258

CERTAIN RELATIONSHIPS AND TRA20

CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES (Tables)	12 Months Ended
	Dec. 31, 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): Years Ended December 31, 2015 2014 Administrative expenses $ 32 $ 137

ORGANIZATION AND NATURE OF BU21

ORGANIZATION AND NATURE OF BUSINESS (Details) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2015USD ($)shares
ORGANIZATION AND NATURE OF BUSINESS [Abstract]
Funds raised during offering termination date	$ 125.7
Units sold during offering termination date | 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
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)	12 Months Ended
	Dec. 31, 2015USD ($)LeaseSales	Dec. 31, 2014USD ($)
LCFF Deconsolidation [Abstract]
Membership interests transferred including assets	$ 40,000
Remaining assets	0
Gain on deconsolidation	$ 10,416,000	$ 0
Inestments in Leases and Loans [Abstract]
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
Limited Partners [Member]
Allocation of Partnership Income (Loss) [Abstract]
Allocation of income loss and cash distribution to partners	99.00%
General Partner [Member]
Allocation of Partnership Income (Loss) [Abstract]
Allocation of income loss and cash distribution to partners	1.00%
LEAF Funds JV1 [Member]
Schedule of Consolidated Investments [Line Items]
Ownership interest	96.00%
LEAF Funds JV2 [Member]
Schedule of Consolidated Investments [Line Items]
Ownership interest	98.00%
2011-1 Term Securitization [Member]
LCFF Deconsolidation [Abstract]
Membership interests transferred including assets	$ 40,000
Transfers of Financial Assets [Abstract]
Number of lease pools sold | Lease	52
Number of sales | Sales	2
Net investment to a third party	$ 4,140,000
Proceeds from sale	4,090,000
Recognized loss on sale of investment	$ (50,000)
Leases and Loans [Member]
Concentration Risk [Line Items]
Number of leases accounted for fund portfolio | Lease	4
Leases and Loans [Member] | Lessee One [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	19.00%
Leases and Loans [Member] | Lessee Two [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	15.00%
Leases and Loans [Member] | Lessee Three [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	12.00%
Leases and Loans [Member] | Lessee Four [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	11.00%
Leases and Loans [Member] | California
Concentration Risk [Line Items]
Percentage of fund leases and loans	29.00%
Leases and Loans [Member] | Georgia
Concentration Risk [Line Items]
Percentage of fund leases and loans	16.00%
Leases and Loans [Member] | Ohio
Concentration Risk [Line Items]
Percentage of fund leases and loans	12.00%
Leases and Loans [Member] | Virginia
Concentration Risk [Line Items]
Percentage of fund leases and loans	12.00%
Leases and Loans [Member] | Building Systems [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	30.00%
Leases and Loans [Member] | Restaurant Equipment [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	25.00%
Leases and Loans [Member] | Medical Equipment [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	14.00%
Leases and Loans [Member] | Services [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	42.00%
Leases and Loans [Member] | Retail Trade [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	27.00%
Leases and Loans [Member] | Finance/Insurance/Real Estate [Member]
Concentration Risk [Line Items]
Percentage of fund leases and loans	12.00%

INVESTMENT IN LEASES AND LOAN23

INVESTMENT IN LEASES AND LOANS, NET (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Investment in leases and loans, gross		$ 1,539	$ 9,970
Allowance for credit losses		(80)	(530)
Investment in leases and loans, net		1,459	9,440
Total future minimum lease payments		1,777
Future payments scheduled to be received on non-cancelable commercial finance assets [Abstract]
2,016		906
2,017		445
2,018		227
2,019		88
2,020		33
Thereafter		78
Direct Financing Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Investment in leases and loans, gross	[1]	360	954
Total future minimum lease payments		400	897
Total future minimum lease payments		400
Unearned income		(54)	(85)
Residuals, net of unearned residual income	[2]	15	175
Security deposits		(1)	(33)
Future payments scheduled to be received on non-cancelable commercial finance assets [Abstract]
2,016		145
2,017		114
2,018		112
2,019		24
2,020		5
Thereafter		$ 0
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		192 months
Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Investment in leases and loans, gross	[3]	$ 1,179	9,013
Total future minimum lease payments		1,377	10,059
Total future minimum lease payments		1,377
Unearned income		(108)	(932)
Residuals, net of unearned residual income	[2]	0	0
Security deposits		(90)	(114)
Future payments scheduled to be received on non-cancelable commercial finance assets [Abstract]
2,016		761
2,017		331
2,018		115
2,019		64
2,020		28
Thereafter		$ 78
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		12.00%
Operating Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Investment in leases and loans, gross		$ 0	3
Investment in operating leases, net [Abstract]
Equipment on operating leases		0	108
Accumulated depreciation		$ 0	$ (105)
[1]	The Fund's direct financing leases are for initial lease terms generally ranging from 36 to 192 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 12%.

ALLOWANCE FOR CREDIT LOSSES A24

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Aging of investment in leases and loans [Abstract]
Current	$ 1,208	$ 8,264
Current, percentage of all aged receivables	78.50%	82.90%
Delinquent [Abstract]
Total aged investment in leases and loans	$ 1,539	$ 9,970
Percentage of all aged receivables	100.00%	100.00%
Financing Receivable, Recorded Investment [Line Items]
Investment in leases and loans	$ 1,539	$ 9,970
Allowance for credit losses activity [Abstract]
Allowance for credit losses, beginning of year	530	8,050
Provisions for credit losses	880	3,241
Charge-offs	(2,024)	(11,317)
Recoveries	694	556
Allowance for credit losses end of year	80	530
Allowance for credit loss [Abstract]
Ending balance, collectively evaluated for impairment	80	530
Investments in leases and loans [Abstract]
Ending balance collectively evaluated for impairment	1,539	9,970
Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Investment in leases and loans	1,480	9,189
Nonperforming (non-accrual status) [Member]
Financing Receivable, Recorded Investment [Line Items]
Investment in leases and loans	59	781
31 to 90 Days Past Due [Member]
Delinquent [Abstract]
Past due	$ 272	$ 925
Percent past due	17.70%	9.30%
Greater than 90 Days [Member]
Delinquent [Abstract]
Past due	$ 59	$ 781
Percent past due	3.80%	7.80%

SECURED DEBT (Details)

SECURED DEBT (Details)	12 Months Ended
	Dec. 31, 2015USD ($)LeaseSalesClass	Dec. 31, 2014USD ($)
Debt Instrument [Line Items]
Membership interests transferred including assets	$ 40,000
Partial repayment of advance to purchase notes	0	$ 589,000
Gains on Extinguishment of Debt [Abstract]
Purchase price	6,529,000	20,126,000
Gain on extinguishment of secured debt	$ 258,000	$ 0
2011-1 Term Securitization [Member]
Debt Instrument [Line Items]
Number of classes of asset-backed notes | Class	6
Maturity date, lower range	Dec. 31, 2018
Maturity date, upper range	Dec. 31, 2023
Number of classes of asset-backed notes, lower range | Class	1
Number of classes of asset-backed notes, upper range | Class	5
Number of lease pools sold | Lease	52
Number of Sales | Sales	2
Net investment to a third party	$ 4,140,000
Proceeds from sale	4,090,000
Recognized loss on sale of investment	(50,000)
Write-off of unamortized deferred financing costs and original issue discount on debt	403,000
Membership interests transferred including assets	40,000
Partial repayment of advance to purchase notes	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 secured debt	$ 258,000

PROMISSORY NOTES PAYABLE (Detai

PROMISSORY NOTES PAYABLE (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
PROMISSORY NOTES PAYABLE [Abstract]
Interest rate on promissory notes	8.25%
Subordinated notes, total raised	$ 9,400,000
Subordinated notes payable	$ 0	$ 9,295,000
Maturity period of secured promissory notes	6 years
Promissory notes payable default rate	10.00%
Remaining assets	$ 0
Gain on deconsolidation	$ 10,416,000	$ 0

CERTAIN RELATIONSHIPS AND TRA27

CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES (Details) - USD ($)	12 Months Ended		65 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH AFFILIATES [Abstract]
Administrative expenses	$ 32,000	$ 137,000
General partner management fee waived	$ 77,000	438,000	$ 7,900,000
Ownership interest	1.00%
Percentage of cumulative annual return on the limited partners capital contributions	0.87%
General partners cumulative cash distributions	$ 6,000	25,000	6,000
Limited partners cumulative cash distributions	$ 5,000	$ 22,000	$ 5,000