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<SEC-DOCUMENT>0000000000-06-004072.txt : 20060927
<SEC-HEADER>0000000000-06-004072.hdr.sgml : 20060927
<ACCEPTANCE-DATETIME>20060125092513
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000000000-06-004072
CONFORMED SUBMISSION TYPE:	UPLOAD
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060125

FILED FOR:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NICHOLAS FINANCIAL INC
		CENTRAL INDEX KEY:			0001000045
		STANDARD INDUSTRIAL CLASSIFICATION:	SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153]
		IRS NUMBER:				593019317
		STATE OF INCORPORATION:			FL
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		UPLOAD

	BUSINESS ADDRESS:	
		STREET 1:		2454 MCMILLEN BOOTH RD
		STREET 2:		BLDG C 501 B
		CITY:			CLEARWATER
		STATE:			FL
		ZIP:			33759
		BUSINESS PHONE:		8137260763

	MAIL ADDRESS:	
		STREET 1:		2454 MCMULLEN BOOTH RD
		STREET 2:		BLDG C SUITE 501B
		CITY:			CLEARWATER
		STATE:			FL
		ZIP:			33759
</SEC-HEADER>
<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>







Mail Stop 4561

									January 25, 2006


Mr. Peter L. Vosotas
Chief Executive Officer
Nicholas Financial, Inc.
2454 McMullen Booth Road
Building C
Clearwater, Florida 33759

      RE:	Nicholas Financial Inc.
      Form 10-KSB for year ended March 31, 2005
      File No. 0-26680

Dear Mr. Vosotas:

      We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents.  Please provide a written response to
our
comments.  Please be as detailed as necessary in your explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.











Form 10-KSB for the year ended March 31, 2005

Notes to Consolidated Financial Statements

Note 7 - Derivatives and Hedging, page 47

1. We note that you use interest rate swaps to hedge the
variability
of interest payments on your floating rate line of credit and that
you have entered into various interest rate option agreements.  We
also note that there has historically been no ineffectiveness
associated with your hedges.  Please provide us with the following
additional information:

* if you use the shortcut method to assess the effectiveness of
hedges of your floating rate line of credit, tell us how you
determined that these hedges met each of the conditions in
paragraph
68 of SFAS 133 to qualify for shortcut treatment; and

* tell us how you use interest rate option agreements.  For
example,
tell us whether the option agreements are used in conjunction with
the interest rate swaps hedging your floating rate line of credit
or
if they are used in a separate hedging strategy.  If applicable,
describe the separate hedging strategy, tell us if you use the
shortcut method to assess the effectiveness of the hedges and tell
us
how you determined that the hedges met each of the conditions in
paragraph 68 of SFAS 133 to qualify for shortcut treatment.

      Please respond to these comments within 10 business days or
tell us when you will provide us with a response.  Please furnish
a
letter that keys your responses to our comments and provides any
requested information.  Detailed cover letters greatly facilitate
our
review.  Please understand that we may have additional comments
after
reviewing your responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings include all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.







      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Sharon Blume, Staff Accountant, at (202)
551-
3474 or me at (202) 551-3490 if you have questions.


								Sincerely,



						Donald Walker
									Senior Assistant
Chief
Accountant
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??

??

??

Mr. Peter L. Vosotas
Nicholas Financial, Inc.
January 25, 2006
Page 1



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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