SECURITIES AND EXCHANGE COMMISSION
                           Washington, D. C.   20549

                                   Form 10-Q

(Mark One)*
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended December 31, 1994 or [ ] Transition
                                           -----------------
report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 
for the transition period from _________ to _________

Commission file number     0-20405
                        ------------------------------------------

                          ALCO CAPITAL RESOURCE, INC.
- --------------------------------------------------------------------------------
         (Exact name of registrant as specified in its charter)

          DELAWARE                                              23-2493042
- -------------------------------                        -------------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

                     1738 Bass Road, Macon, Georgia 31210
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                   (Address of principal executive offices)
                                  (Zip Code)

                                (912) 471-2300
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             (Registrant's telephone number, including area code)

                                     NONE
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  X  No 
    ---    ---

* Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Yes ___ No ___

* Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of January 31, 1995.

Common Stock, $.01 par value per share                            1,000  shares

The registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is, therefore, filing with the reduced
disclosure format contemplated thereby.

 
                                     INDEX

                          ALCO CAPITAL RESOURCE, INC.


PART I.  FINANCIAL INFORMATION
- ------------------------------


     Item 1.   Financial Statements (Unaudited)                
                                                               
               Balance Sheets--December 31, 1994 and           
               September 30, 1994                              
                                                               
               Statements of Income--Three months ended        
               December 31, 1994 and December 31, 1993         
                                                               
               Statements of Cash Flows--Three months ended    
               December 31, 1994 and December 31, 1993         
                                                               
               Notes to Financial Statements--December 31, 1994
                                                               
                                                               
     Item 2.   Management's Discussion and Analysis of         
               Financial Condition and Results of Operations    

PART II.  OTHER INFORMATION
- ---------------------------

     Item 6.   Exhibits and Reports on Form 8-K



SIGNATURES
- ----------

 
                        PART I.  FINANCIAL INFORMATION


Item 1: Financial Statements
- ----------------------------

                          ALCO CAPITAL RESOURCE, INC.
                                BALANCE SHEETS
                                (in thousands)
 
 
                                                                     December 31              September 30
                                                                        1994                     1994
                                                                     -----------              ------------
                                                                                         
Assets                                              
Investments in leases:                              
   Direct financing leases                                           $  555,117               $  508,365
   Less:  Unearned income                                               (84,758)                 (76,689)
                                                                      ----------               ---------- 
                                                                        470,359                  431,676
   Funded leases, net                                                   117,470                  103,797
                                                                      ----------               ---------- 
                                                                        587,829                  535,473
                                                    
Accounts receivable                                                      21,064                   17,700
Prepaid expenses and other assets                                         5,265                    5,037
Leased equipment at cost, less accumulated          
   depreciation of: 12/94 -$457                                           7,834
Property and equipment at cost, less accumulated    
   depreciation of: 12/94 - $2,088; 9/94 - $1,939                         4,864                    3,418
                                                                      ----------               ---------- 
Total assets                                                         $  626,856               $  561,628
                                                                      ==========               ==========  
                                                    
Liabilities and shareholder's equity                
Liabilities:                                        
   Accounts payable and accrued expenses                             $    7,280               $    6,438
   Accrued interest                                                       5,218                    5,342
   Due to Alco Standard Corporation                                       6,269                   11,419
   Income taxes payable                                                   2,310                      353
   Notes payable to Banks                                               295,000                  330,000
   Medium Term Notes                                                    203,000                  105,000
   Deferred income taxes                                                 20,538                   20,048
                                                                      ----------               ---------- 
Total liabilities                                                       539,615                  478,600
                                                    
Shareholder's equity:                               
   Common Stock - $.01 par value, 1,000 shares      
     authorized, issued, and outstanding            
   Contributed capital                                                   53,415                   53,415
   Retained earnings                                                     33,826                   29,613
                                                                      ----------               ---------- 
Total shareholder's equity                                               87,241                   83,028
                                                                      ----------               ---------- 
Total liabilities and shareholder's equity                           $  626,856               $  561,628
                                                                      ==========               ========== 
 
See notes to financial statements.

 
                          ALCO CAPITAL RESOURCE, INC.
                             STATEMENTS OF INCOME
                                (in thousands)

 
 
                                                            Three Months Ended
                                                               December 31
                                                         -----------------------
                                                            1994         1993
                                                         ---------    ----------
                                                                 
Revenues:                                                          
   Lease finance income                                 $  15,868     $  13,668
   Rental income                                              567  
   Interest on Alco income tax deferrals                    1,296           801
   Other income                                               940           642
                                                         ---------     --------- 
                                                           18,671        15,111
                                                                   
Expenses:                                                          
   Interest                                                 7,051         5,994
   General and administrative                               5,286         4,344
                                                         ---------     --------- 
                                                           12,337        10,338
                                                                   
Gain on sale of lease receivables                             573  
                                                         ---------     --------- 
Income before income taxes and cumulative                          
   effect of change in accounting principle                 6,907         4,773
Provision for income taxes                                  2,694         1,861
                                                         ---------     ---------
Income before cumulative effect of change                          
   in accounting principle                                  4,213         2,912
Cumulative effect of change in accounting                          
   for income taxes                                                         140
                                                         ---------     --------- 
Net income                                              $   4,213     $   3,052
                                                         =========     ========= 
 

See notes to financial statements.

 
                          ALCO CAPITAL RESOURCE, INC.
                           STATEMENTS OF CASH FLOWS
                                (in thousands)
 
 
                                                                    Three Months Ended
                                                                       December 31
                                                               --------------------------
                                                                   1994           1993
                                                               -----------     ---------- 
                                                                         
Operating activities                                                      
 Net income                                                   $     4,213     $    3,052
 Adjustments to reconcile net income to net cash                          
  provided by operating activities:                                       
   Depreciation and amortization                                      606             71
   Cumulative effect of change in accounting                              
    principle                                                                       (140)
   Provision for deferred taxes                                       490          1,526
   Gain on sale of lease receivables                                 (573)
   Changes in operating assets and liabilities:                           
    Accounts receivable                                            (3,364)        (2,743)
    Income taxes                                                    1,957            189
    Prepaid expenses and other assets                                 345            128
    Accounts payable and accrued expenses                             842          1,089
    Accrued interest                                                 (124)          (964)
                                                               -----------     ---------- 
                          Net cash provided                         4,392          2,208
                                                                          
Investing activities                                                      
 Purchases of equipment for rental, net                            (8,291)
 Purchases of property and equipment, net                          (1,595)           (98)
 Direct financing leases:                                                 
   Additions                                                     (117,657)       (78,496)
   Cancellations                                                   17,739         11,769
   Collections                                                     42,400         35,205
   Proceeds from sale                                              18,835 
 Funded leases:                                                           
   Additions                                                      (29,415)       (13,852)
   Cancellations                                                    4,435          2,077
   Collections                                                     11,307         11,429
                                                               -----------     ---------- 
                          Net cash used                           (62,242)       (31,966)
                                                                          
Financing activities                                                      
 Proceeds from bank borrowings                                                    33,000
 Payments on bank borrowings                                      (35,000)
 Proceeds from issuance of medium term notes                       98,000 
 Contributed capital                                                               2,500
                                                               -----------     ---------- 
                          Net cash provided                        63,000         35,500
                                                               -----------     ---------- 
Decrease in amounts due to Alco                                     5,150          5,742
Due (to) from Alco at beginning of period                         (11,419)           552
                                                               -----------     ---------- 
Due (to) from Alco at end of period                           $    (6,269)    $    6,294
                                                               ===========     ========== 
 

See notes to financial statements.

 
                          Alco Capital Resource, Inc.
                         Notes to Financial Statements
                               December 31, 1994


Note 1:  Medium Term Note Program
         ------------------------

     Effective July 1994, the Company began offering to the public from time to
time medium term notes having an aggregate initial offering price not exceeding
$500 million or the equivalent thereof in foreign currency.  These notes are
offered at varying maturities of nine months or more from their dates of issue
and may be subject to redemption at the option of the Company or repayment at
the option of the holder, in whole or in part, prior to the maturity date in
conjunction with meeting specified provisions.  Interest rates are determined
based on market conditions at the time of issuance.  As of December 31, 1994,
$203 million of medium term notes were outstanding with a weighted average
interest rate of 7.4%.

Note 2:  Asset Securitization
         --------------------

     Under an asset securitization agreement entered into in September, 1994 the
Company sold an undivided ownership interest in $125 million of eligible direct
financing lease receivables.  The agreement, which expires in September 1995,
was structured as a revolving securitization so that as collections reduce
previously sold interests, new leases can be sold up to $125 million.  During
the first quarter of fiscal 1995, collections reduced previously sold interests
by $18.8 million.  The Company sold an additional $18.8 million in net eligible
direct financing leases and recognized a $573,000 gain on the sale ($349,500,
net of tax).

Note 3:  Supplemental Information to Statements of Cash Flows
         ----------------------------------------------------

     Interest paid for the three months ended December 31, 1994 and 1993 was
$8.2 million and $7 million, respectively.  Cash paid for income taxes was
$247,000 and $101,000 for the three months ended December 31, 1994 and 1993,
respectively.

 
Item 2.  Management's Discussion and Analysis of Financial Condition
         -----------------------------------------------------------
         and Results of Operations
         -------------------------

Pursuant to General Instruction H(2)(a) of Form 10-Q, the following analysis of
the results of operations is presented in lieu of Management's Discussion and
Analysis of Financial Condition and Results of Operations.

            Three Months Ended December 31, 1994 Compared with the
                     Three Months Ended December 31, 1993
            -------------------------------------------------------

Comparative summarized results of operations for the three months ended December
31, 1994 and 1993 are set forth in the table below.  This table also shows the
increase in the dollar amounts of major revenue and expense items between
periods, as well as the percentage increase.



 
(dollars in thousands)               Three Months
                                   Ended December 31       Increase
                                   -----------------       ---------
                                     1994       1993    Amount    Percent  
                                     ----       ----    ------    -------
                                                            
Revenues                                                                   
  Lease finance income              $15,868    $13,668  $2,200       16.1% 
  Rental income                         567                567             
  Interest on Alco income tax                                              
    deferral                          1,296        801     495       61.8  
  Other income                          940        642     298       46.4  
                                     ------     ------   -----             
                                     18,671     15,111   3,560       23.6  
Expenses                                                                   
  Interest                            7,051      5,994   1,057       17.6  
  General & administrative            5,286      4,344     942       21.7  
                                     ------     ------   -----             
                                     12,337     10,338   1,999       19.3  
                                                                           
Gain on sale of lease receivables       573                573             
                                     ------     ------   -----             
                                                                           
Income before income taxes and                                             
  cumulative effect of change                                              
  in accounting principle             6,907      4,773   2,134       44.7  
Income taxes                          2,694      1,861     833       44.8  
                                     ------     ------   -----             
Income before cumulative effect                                            
  of change in accounting                                                  
  principle                           4,213      2,912   1,301       44.7  
Cumulative effect of change                                                
  in accounting for                                                        
  income taxes                                     140    (140)            
                                     ------     ------   -----
Net income                          $ 4,213    $ 3,052  $1,161       38.0% 
                                     ======     ======   =====              


Revenues
- --------

Total revenues increased $3.6 million or 23.6% from the three month period ended
December 31, 1993 to the three month period ended December 31, 1994.
Approximately 62% of this increase in revenues was due to increased lease
finance income resulting from additional leases in the portfolio, which
continues to experience growth. During the twelve month period from December
1993 to December 1994, the portfolio grew at a 16.7% rate, net of lease
receivables that were sold in asset securitization transactions. For the same
period, the total portfolio, including securitized assets, grew by 41.5%.

 
At the start of the first quarter of fiscal year 1995, the Company began
offering a new operating lease product to the Alco Office Products dealer
network, whereby office equipment rented to customers could be funded through
the Company.  At the end of the first quarter, operating leases with equipment
totalling $7.8 million in value, net of accumulated depreciation, were
outstanding.  This new product contributed rental income totalling $567,000 to
total revenues during the first quarter of fiscal 1995.  Management expects the
use of operating leases to grow steadily over time.

For the first quarter of both fiscal 1995 and 1994, the Company charged Alco
Standard interest at a rate of 6% on the benefit that Alco receives for income
tax deferrals associated with the Company's leasing transactions.  Due to an
increase in the deferred tax base upon which these payments are calculated,
interest earned on deferred taxes rose $495,000 or 61.8% when comparing the
first quarter of fiscal 1994 to the first quarter of fiscal 1995.  At December
31, 1993, the cumulative deferred tax base amounted to $59.6 million and grew to
$84.3 million by December 31, 1994.

Other income, which consists primarily of late payment charges and various
billing fees also increased because of the larger lease portfolio upon which
these fees are based.  Overall, fee income from these sources grew by $298,000
or 46.4%.

Expenses
- --------

Debt to fund the lease portfolio in the form of loans from major banks and the
issuance of medium term notes in the public markets rose by 16.4%, from a total
of $428 million outstanding at December 31, 1993 to $498 million at December 31,
1994.  Interest expense grew by $1.1 million or 17.6% from the first quarter of
fiscal 1994 to the first quarter of fiscal 1995, as a result of the increased
borrowings and an increase in interest rates.  At December 31, 1994, the debt to
equity ratio, including amounts due to Alco Standard Corporation, was at 5.8:1.

Included in the general and administrative expense category is the dealer lease
bonus program which represents special bonus subsidy payments to Alco Office
Products companies based on their new lease volume.  For the three months ended
December 31, 1994, the lease bonus payments were 2% higher or $1,661,000, as
compared to $1,624,000 for the three months ended December 31, 1993. At the
start of fiscal 1995, the Company reduced the bonus subsidy payout to
approximately two-thirds of the fiscal 1994 level, in the anticipation of higher
borrowing costs to fund the portfolio.

Excluding the effect of the lease bonus program, remaining general and
administrative expenses grew $905,000 or 33.3% when comparing the first quarter
of fiscal 1994 to the first quarter of fiscal 1995.  The increase in general and
administrative expenses is indicative of the continued growth of the lease
portfolio and the related rise in the portfolio servicing costs of the Company.

 
Gain on Sale of Lease Receivables
- ---------------------------------

     Under an asset securitization agreement entered into in September, 1994 the
Company sold an undivided ownership interest in $125 million of eligible direct
financing lease receivables.  The agreement, which expires in September 1995,
was structured as a revolving securitization so that as collections reduce
previously sold interests, new leases can be sold up to $125 million.  During
the first quarter of fiscal 1995, collections reduced previously sold interests
by $18.8 million. The Company sold an additional $18.8 million in net eligible
direct financing leases and recognized a $573,000 gain on the sale ($349,500,
net of tax).

Income Before Taxes
- -------------------

Income before taxes grew by $2.1 million or 44.7%, when comparing pre-tax
earnings for the first quarters of fiscal 1995 and fiscal 1994.  This increase
in income before taxes was essentially the net effect of higher earnings on a
larger lease portfolio, that was supplemented by strong growth in other income
and a slower growth rate in general and administrative expenses than was
experienced in fiscal 1994.

Taxes on Income
- ---------------

The $833,000 or 44.8% increase in income taxes from the three month period ended
December 31, 1993 to the three month period ending December 31, 1994 is directly
attributable to the higher income before income taxes in the first quarter of
fiscal 1995 as compared to the first quarter of fiscal 1994.  The effective tax
rate was 39% for each period.

 
                          PART II.  OTHER INFORMATION
                          ---------------------------



  Item 6.  Exhibits and Reports on Form 8-K
  -----------------------------------------

      (a) The following Exhibits are furnished pursuant to
          Item 601 of Regulation S-K:

          Exhibit No. (27) Financial Data Schedule

 
                             BASIS OF PRESENTATION
                             ---------------------


The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. For further information, refer to the financial statements and
footnotes thereto included in the Company's report on Form 10-K for the year
ended September 30, 1994.



Date    February 14, 1995                   /s/Robert M. Kearns II           
     ---------------------                  ----------------------------------
                                            Robert M. Kearns II              
                                            Vice President                    
 


                                  SIGNATURES
                                  ----------


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.  This report has also been signed by the
undersigned in his capacity as the chief accounting officer of the Registrant.


                                            ALCO CAPITAL RESOURCE, INC.       
                                                                              
                                                                              
                                                                              
Date    February 14, 1995                   /s/Robert M. Kearns II            
     ---------------------                  -----------------------------------
                                            Robert M. Kearns II               
                                            Vice President                    
                                            (Chief Accounting Officer)         
                                            

 
                               Index to Exhibits
                               -----------------



Exhibit Number
- --------------

     (27)       Financial Data Schedule