UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 12B-25

                           NOTIFICATION OF LATE FILING


                             SEC FILE NUMBER 0-25880

                                    FORM 10Q

                      FOR QUARTER ENDED: February 28, 1997

                            ILM II LEASE CORPORATION
             (Exact name of registrant as specified in its charter)

1285  Avenue of the  Americas,  19th  Floor,  New  York,  NY 10019
 (Address  of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 713-4449

PART II - RULES 12B-25(b) AND (c)

If the subject report could not be filed without  unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed. (Check box if appropriate)

____       (a) The reasons  described in  reasonable  detail in Part III of this
           form could not be eliminated without unreasonable effort or expense;

  X        (b) The subject annual report,  semi-annual report, transition report
____       on Form 10-K, Form 20-F, 11-K, Form N-SAR, or portion  thereof,  will
           be filed on or  before  the  fifteenth  calendar  day  following  the
           prescribed  due date; or the subject  quarterly  report of transition
           report on Form 10-Q,  or portion  thereof  will be filed on or before
           the fifth calendar day following the prescribed due date; and

____       (c) The  accountant's  statement  or other  exhibit  required by Rule
           12b-25(c) has been attached if applicable.

PART III - NARRATIVE

State below in  reasonable  detail the reasons  why the Form 10-K,  11-K,  10-Q,
N-SAR, or the transition  report or portion  thereof,  could not be filed within
the prescribed time period.

The Quarterly Report on Form 10-Q of ILM II Lease Corporation (the "Registrant")
will not be  completed by April 14,  1997,  the last day for a timely  filing of
such Quarterly Report for the quarter ended February 28, 1997.

Additional time is required in order to enable the Registrant to file a complete
and accurate report. The Form 10-Q will be filed on or before April 21, 1997, in
accordance with Rule 12b-25(b).





PART IV - OTHER INFORMATION

(1)  Name and telephone number of person to contact in regard to this
     notification:

     Thomas W. Boland     (617)  439-8138

(2)  Have all  other  periodic  reports  under  Section  13 or 15(e) of the
     Securities  Exchange  Act of  1934  or  Section  30 of the  Investment
     Company  Act of 1940  during  the  preceding  12  months  (or for such
     shorter) period that the registrant was required to file such reports)
     been filed? If answer is no, identify report(s).     X Yes     No
                                                       -----

(3)  Is it anticipated that any significant change in results of operations
     from  the  corresponding  period  for the  last  fiscal  year  will be
     reflected  by the  earnings  statements  to be included in the subject
     report or portion thereof?                        Yes       X   No
                                                                ----

     If so, attach an explanation of the anticipated  change,  both  narratively
     and quantitatively, and, if appropriate, state the reasons why a reasonable
     estimate of the results cannot be made.

                            ILM II LEASE CORPORATION
                (Name of registrant as specified in its charter)

has caused this notification to be signed on its behalf by the undersigned
     hereunto duly authorized.


Date: 4/14/97                             By:  /s/ Timothy J. Medlock
                                              -----------------------
                                               Timothy J. Medlock
                                               Treasurer