UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC  20549
                             FORM 10-KSB
                              
                              
   X  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                             ACT OF 1934
                              
             For the fiscal year ended March 31, 1998
                              
                              
          TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

       For the transition period from ________ to _________.
                              
                 Commission file number: 0-26680
                              
                              
                       NICHOLAS FINANCIAL, INC.
         (Name of Small Business Issuer in its Charter)

       British Columbia, Canada                   8736-3354
   (State or Other Jurisdiction of             (I.R.S. Employer
    Incorporation or Organization)            Identification No.)
    
 2454 McMullen Booth Road, Building C
        Clearwater, Florida                          33759
(Address of Principal Executive Offices)          (Zip Code)


  Issuer's Telephone Number, Including Area Code: (813)726-0763
  Securities registered under Section 12(b) of the Exchange Act:
    
                                          Name of Each Exchange
     Title of Each Class                   on Which Registered
    ---------------------                -----------------------
            None
     __________________                     __________________
     __________________                     __________________

Securities registered under Section 12(g) of the Exchange Act:

                  COMMON STOCK, No par value
                      (Title of Class)
                             
Check  whether  the  issuer: (1) filed all  reports required to be
filed  by  Section  13  or  15(d)  of the Exchange  Act during the
past  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 [ ]


Check if disclosure of delinquent filers pursuant to Item  405  of
regulation  S-B is not contained in this form, and  no  disclosure
will  be  contained, to the best of the registrant's knowledge, in
definitive  proxy   or   information  statements  incorporated  by
reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB.  [   ]

The  issuer's  revenues  for  its  most recent  fiscal  year  were
$7,937,022  As   of  May  31 ,  1998,   2,357,013  shares  of  the
Registrant's  common  stock  were  outstanding, and  the aggregate
market   value   of   the   shares   held  by  non-affiliates  was
approximately $8,249,546

DOCUMENTS INCORPORATED BY REFERENCE:
     Proxy Statement, dated July 01, 1998.
     Form 10-KSB Reference: Part III, Items 9 and 10

Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]

<PAGE> 1

                   NICHOLAS FINANCIAL, INC.
                  FORM 10-KSB ANNUAL REPORT
                     TABLE OF CONTENTS

PART I
Page No.
     Item 1.      Description of Business........................2
     Item 2.      Description of Properties.....................10
     Item 3.      Legal Proceedings.............................10
     Item 4.      Submission of Matters to a Vote of
                   Security Holders.............................10

PART II

     Item 5.      Market for Common Equity and Related
                   Stockholder Matters..........................11
     Item 6.      Management's Discussion and Analysis of
                   Financial Condition and Results 
                   of Operations................................12
     Item 7.      Financial Statements..........................18
     Item 8.      Changes In and Disagreements With
                   Accountants on Accounting
                   and Financial Disclosure.....................18
PART III
     Item 9.      Directors, Executive Officers, Promoters
                   and Control Persons; Compliance with 
                   Section 16 (a) of the Exchange Act.......... 19
     Item 10.     Executive Compensation........................19
     Item 11.     Security Ownership of Certain Beneficial
                   Owners and Management........................20
     Item 12.     Certain Relationships and Related
                   Transactions.................................20
     Item 13.     Exhibits and Reports on Form 8-K..............21



Forward-Looking Information

       This 10-K  contains various  forward-looking statements and
information that are based on management's beliefs and assumptions,
as  well  as  information currently available to management.  When
used   in  this   document,  the  words  "anticipate," "estimate,"
"expect,"  and similar  expressions   are   intended  to  identify
forward-looking statements.   Although  the  Company believes that
the  expectations reflected in such forward-looking statements are
reasonable, it  can give no  assurance that such expectations will
prove to  be  correct.  Such  statements  are  subject  to certain
risks, uncertainties  and assumptions. Should one or more of these
risks   or  uncertainties   materialize,   or   should  underlying
assumptions prove incorrect, actual results  may  vary  materially
from  those  anticipated,  estimated  or  expected.  Among the key
factors that may have a direct bearing on the Company's  operating
results are fluctuations  in  the  economy,  the degree and nature
of  competition, demand  for  consumer  financing  in  the markets
served  by  the  Company, the  Company's  products  and  services,
increases in the default rates experienced on  Contracts,  adverse
regulatory  changes in the Company's existing  and future markets,
the  Company's  ability  to  expand  its  business, including  its
ability  to complete acquisitions  and  integrate  the  operations
of acquired businesses, to recruit and retain qualified employees,
to expand into new  markets  and to maintain profit margins in the
face of increased pricing competition.

<PAGE> 2
                               PART I

Item 1.     Description of Business

General

      Nicholas  Financial,  Inc. ("Nicholas  Financial-Canada") is
a Canadian holding company incorporated under the laws of  British
Columbia. The business activities of Nicholas Financial-Canada are
conducted through its wholly-owned subsidiaries formed pursuant to
the  laws  of  the  State  of  Florida,  Nicholas  Financial, Inc.
("Nicholas Financial") and Nicholas Data Services,  Inc., ("NDS").
Nicholas Financial  is  a  specialized  consumer  finance  company
engaged  primarily  in  acquiring  and servicing installment sales
contracts ("Contracts") for purchases of new  and used automobiles
and  light  trucks.  To  a  lesser extent, the Company also  makes
direct consumer loans and sells consumer-finance related  products
("Insurance Products"). NDS  is engaged  in designing, developing,
marketing and support of  industry  specific  computer application
software for small businesses located primarily in  the  Southeast
United States. Nicholas Financial's financing activities accounted
for  approximately  94.4%  of consolidated revenues for the fiscal
year  ended  March  31, 1998  and  NDS's activities accounted  for
approximately 5.6% of such revenues during the same period.

       Nicholas Financial-Canada, Nicholas Financial and  NDS  are
hereafter  collectively  referred  to  as  the  "Company".  Unless
otherwise  specified,     all   financial  information  herein  is
designated in United States currency.

       The Company's  principal  executive  offices are located at
2454 McMullen  Booth  Road, Building C, Clearwater  Florida 33759,
and its telephone number is (813) 726-0763.


Automobile Finance Business

      The  Company  is  engaged  in  the   business  of  providing
financing  programs,  primarily on behalf of purchasers of new and
used cars and light trucks who meet the Company's credit standards,
but who do  not meet the  credit standards of traditional lenders,
such  as  banks  and credit  unions, because  of  the  age of  the
vehicle being financed, the customer's  job  instability or credit
history.  Unlike  traditional lenders  which look primarily to the
credit history of  the borrower in  making  lending  decisions and
typically  finance  new automobiles,  the Company  is  willing  to
purchase  installment  sales  contracts   for  purchases  made  by
borrowers  who  do  not  have a good credit history  and for older
model and high mileage automobiles. In  making decisions regarding
the  purchase  of  a  particular  installment  sales  contract the
Company  considers  the following factors related to the borrower:
place and length  of  residence, current  and  prior  job  status,
history  in making installment  payments  for automobiles, current
income and credit history.  In addition, the Company  examines its
prior experience  with Contracts purchased  from the  dealer  from
which  the  Company is purchasing   the Contract, and the value of
the automobile in  relation to the purchase  price and the term of
the installment sales contract.

     The  Company's  automobile  finance  programs  are  currently
conducted  in  Florida  and Georgia  only  under the name Nicholas
Financial,  Inc.  The  Company  currently  operates  eleven branch
offices  in  Florida  and  three  branch offices in Georgia. As of
March 31, 1998  the  Company  had  non-exclusive  agreements  with
approximately 500 dealers  for  the purchase of retail installment
sales  contracts   (the "Contracts")   that  meet   the  Company's
financing criteria.  The  dealer agreements require the dealer  to
originate Contracts in accordance with the Company's guidelines.

      From  July  1990  through  March  31,  1998, the Company had
purchased  14,714  Contracts   with  an initial  principal  amount
aggregating   approximately   $98,959,342.   The  average  initial
principal amount  of Contracts purchased by the Company was $6,726
and  the  contracts had an average initial term of 34 months.  The
Contracts  were  purchased  from automobile  dealers at an average
discount of approximately 11% from their initial principal amount.

<PAGE> 3

     The  obligors  under  the   Contracts   typically  make  down
payments, in the form of cash or trade-in, ranging  from 5% to 20%
of  the  sale price of  the  vehicle financed.  The balance of the
purchase  price  of  the vehicle  plus taxes,  title  fees and, if
applicable,  premiums  for extended  service  contracts,  accident
and  health insurance  and/or credit life insurance, are generally
financed over a period of  12  to 60  months. Accident and  health
insurance coverage enables  the borrower to make required payments
under  the  Contract  in the event the borrower  becomes unable to
work because of illness or accident and credit life insurance pays
the  borrower's  obligations  under  the  Contract upon his or her
death.

      The  annual  percentage  rate ("APR")  is the actual cost of
borrowing  money,  expressed  in  form of the annual interest rate
payable by the borrower.  The APR for Contracts purchased  by  the
Company range from  18% to 30%. As of March  31, 1998, the average
APR on  Contracts purchased  and  currently outstanding is 24% and
the average discount from the initial principal amount is 10%.

      The  Company  purchases Contracts from the automobile dealer
at  a  negotiated  price  that is less than the original principal
amount being financed  by  the  purchaser  of  the automobile. The
amount of the discount depends  upon factors such as the  age  and
value  of   the  automobile   and   the  credit  worthiness of the
purchaser. In certain markets, competition determines the discount
that the company can charge. Historically, the Contracts purchased
by the Company have been purchased at discounts that range from 5%
to 30% of  the  original  principal  amount  of the  Contract.  In
addition to  the  discount,  the  Company  charges   the  dealer a
processing  fee  of  $75 per  Contract  purchased.  Virtually  all
Contracts purchased by the Company since April  1, 1992  have been
purchased from dealers without recourse, meaning that the Company,
not the dealer, bears  the  risk  of  nonpayment by  the  borrower
under the Contract. Prior to  April  1,  1992  some Contracts were
acquired  with  full recourse against  the  dealer  for nonpayment
by the borrower.  As of March 31, 1998, substantially  all of  the
Company's  loan  portfolio  consisted  of   Contracts  that   were
purchased   without   recourse    against  the  dealer.   Although
substantially all the  Contracts in  the Company's loan  portfolio
were acquired without recourse, the dealer remains  liable to  the
Company  for liabilities  arising from certain representations and
warranties  made  by   the  dealer with respect to compliance with
applicable federal  and state laws and valid title to the vehicle.

      The  Company  purchases  a  Contract  only  after the Dealer
(seller) and  the  Company  arrive  at  a negotiated price for the
Contract  and  the  dealer   has   provided  the  Company with the
requisite  proof  that  the vehicle  is  properly titled, that the
Company has  a  perfected  first  priority  lien  on  the financed
vehicle, that  the customer has obtained  the  required  collision
insurance naming the Company as  loss  payee, that the installment
sales  contract  has  been  fully  and  accurately  completed  and
validly executed. Once the Company  has received and approved  all
required  documents,   it  pays  the dealer  for the  Contract and
commences  servicing  the  Contract through maturity. 


      The   Company  requires  the  owner of the vehicle to obtain
and  maintain  collision  insurance, naming the  Company as a loss
payee, with a deductible of not more than $500.  The Company  does
not  offer collision  insurance. Both the  Company and its Dealers
offer purchasers of vehicles  certain  other  "add  on  products".
These  products  are  offered  by  the  Dealer  on  behalf  of the
Company  or  by  the automobile Dealer of behalf of the Dealership
at the time of sale. They consist  of a roadside assistance  plan,
extended  warranty  protection,  credit  life  insurance,   credit
accident and health insurance and credit  property  insurance.  If
the  purchaser  so  desires, the  cost  of  these  products may be
included in the  amount financed under  the Contract.  As of March
31, 1998, approximately 25%  of  the  borrowers   under  Contracts
in  the  Company's loan portfolio had elected to purchase "add  on
products". 

<PAGE> 4

Direct Consumer Loans 

      Although  the  Company  is  licensed  to  make  small direct
consumer loans up to $25,000, the average loan made to date by the
Company  had an  initial  principal balance of $2,259. The Company
does not  expect the average  loan  size to increase significantly
within  the  foreseeable  future  and does not presently intend to
make loans  at  the maximum size permitted  under its license. The
Company  offers loans  primarily  to borrowers under the Contracts
previously purchased by the Company. In deciding whether or not to
make a  loan,   the  Company  considers  the  individual's  credit
history, job stability and income and  impressions created  during
a  personal interview with a Company  loan  officer. Additionally,
because approximately 90%  of  the  direct consumer loans made  to
date  have  been  made  to  borrowers  under  Contracts previously
purchased  by  the  Company,  the  payment history of the borrower
under  the  Contract  is  a  significant factor in making the loan
decision.  The  direct  consumer  loan  program was implemented in
April 1995 and is  not currently  a  significant source of revenue
for the Company. As of March 31, 1998 loans  made  by  the Company
pursuant  to   its   direct   consumer  loan  program  constituted
approximately   2%  of  the   aggregate  principal  amount  of the
Company's  loan portfolio.   As  of  March 31, 1998,  the  average
APR for direct consumer  loans  made by the  Company was 26%, with
a range of 18 to 30%.

      In  connection  with  its  direct  consumer loan program the
Company  also  offers  health  and accident insurance coverage and
credit life insurance to borrowers. Borrowers in approximately 66%
of  the  530 loan  transactions  outstanding  as of March 31, 1998
had elected to purchase insurance coverage offered by the Company.
The cost of  this insurance  is included in the amount financed by
the borrower. 

      As of March 31,  1998,  approximately  98% of  the aggregate
outstanding  principal  balance  of  loans  in  the Company's loan
portfolio  was  comprised  of  Contracts purchased from automobile
dealers  and  2% consisted of loans made pursuant to the Company's
direct  loan  program. The  Company  currently typically purchases
between 250 and 400  indirect  contracts each month and originates
between 50 and 100 direct consumer loans each month.


Financing Sources

      The  Company finances the acquisition of Contracts with  its
retained earnings,  cash flow  from the  operations,  loans   from
investors,   insiders   and  a  line  of  credit  with  a  lending
institution. In  July  of 1997  the  Company  expanded its line of
credit  capacity   to  $ 30   million and is currently negotiating
another increase  in  the  size of the  line, an extended maturity
date,  and   other   various   components  of  its  contract  with
BankAmerica. No assurance can be given that the size  of such line
will be increased or that the maturity date will  be extended.

     As of March 31, 1998,  The   Company  owed approximately $1.6
million  to 7 investors who purchased notes issued by the Company.
These notes bear interest at rates  from 10.5%  to  12%.  In  most
cases,  the Company's obligation to repay the note is subordinated
to  payment  of its payment obligations under the BankAmerica line
of credit.

      The  BankAmerica  line  of  credit  is  secured  by  finance
receivables and  other  assets  of the Company.  The interest rate
payable  by  the Company  on  funds  drawn  down under the line of
credit decreases as the amount drawn down increases. For the first
$10 million drawn down the interest  rate  is  1.75% over the base
prime  rate  as  announced  and  published  from  time  to time by
BankAmerica. After the  amount  drawn  down  exceeds  $10 million,
the interest rate on  the  entire  amount decreases to  1.25% over
the base  prime  rate  until  the  amount  drawn down  exceeds $15
million, at which time the rate decreases to 0.50% over  such base
prime rate.  In  addition  to  interest,  the Company also pays  a
monthly fee to BankAmerica  equal  to .25% of the amount available
under the line of credit that has not been drawn down. As of March
31,  1998,  the Company had drawn down approximately $23.4 million
under  the  line  of  credit.  As  of  that date the interest rate
payable  by  the Company  under the line of  credit  was 9.0%. The
revolving line expires in June 2000.

<PAGE> 5

Underwriting Guidelines

      The  Company's  typical  customer  is  30  years  old, has a
monthly gross income of $1,500 and a  credit history that fails to
meet the lending  standards  of most banks and most credit unions.
Among  the credit  problems experienced by the Company's customers
that  resulted in a  poor credit  history  are:  unpaid  revolving
credit card obligations;  unpaid  medical  bills;  unpaid  student
loans; prior bankruptcy; and  evictions  for nonpayment  of  rent.
The  Company believes that its customer profile is similar to that
of its direct competitors.

      Prior to  its  approval  of  the purchase of a Contract, the
Company  is   provided  with  a  standardized  credit  application
completed  by  the  consumer which  contains information  relating
to  the  consumer's  background,  employment,  and credit history.
The Company also  obtains  a credit  reports from Equifax, TRW and
TransUnion which  are independent reporting  services. The Company
verifies the consumer's  employment history, income and residence.
In most cases consumers are interviewed  by telephone by a Company
application processor.

      The  Company utilizes internally prepared  buying guidelines
used by  its  Branch  Managers  and  underwriters  when purchasing
Contracts. Any  contract that does not  meet these guidelines must
be approved  by the  senior management of the Company. The Company
currently  has  three regional managers whose responsibility it is
to manage the specific branches  in  a defined geographic area. In
addition  to  a  variety  of  administrative  duties, the Regional
Mangers are  responsible  to  monitor  their  assigned branches in
compliance with the Company's underwriting standards.

       The Company  continues to  utilize  the  Special Operations
Department, ("SOD") to perform on-site audits of branch compliance
with Company buying guidelines. SOD will audit Company branches on
a schedule  that  is variable depending on the size of the branch,
length of time  a  branch has been open, current tenure of  branch
manager, previous  branch audit score,  historical   and   current
branch  profitability.  SOD  is  an  independent  department  that
reports  to  the  Accounting  and Administrative Management of the
Company. The Company believes that an independent review and audit
of  its  branches that  is not  tied  to the sales function of the
Company  is  imperative  as  it  results  in  information  that is
impartial.

      The Company uses essentially the  same criteria in analyzing
the  purchase  of  a  Contract  as  it  does in analyzing a direct
consumer loan. Lending  decisions  regarding direct consumer loans
are made based upon a review of  the  customer's loan application,
credit history,  job stability,  income, in-person interviews with
a Company  loan officer and the value of the collateral offered by
the borrower to secure the loan. To  date, since approximately 90%
of the Company's direct loans  have been made to individuals whose
automobiles have been  financed  by the  Company,  the  customer's
payment history under the automobile installment sale agreement is
a significant factor in the lending decision. The decision process
with respect  to  the purchase of Contracts  is  similar, however,
the  customer's prior payment  history  with  automobile loans  is
weighted  more  heavily  in  the  decision  making process and the
collateral value of the automobile being financed is considered.

      After  reviewing   the  information  included  in  the  loan
application and  taking  the  other  factors into account, Company
representatives categorize  the  borrower using traditional credit
classifications   of  "A",  indicating  high    credit-worthiness,
through "D", indicating lower credit-worthiness.

      In the absence of other factors, such as a favorable payment
history on a Contract held  by  the Company, the Company generally
makes  direct  consumer   loans   only  to  individuals  rated  in
categories "B" or higher.   Contracts are financed for individuals
who  fall  within  all four acceptable rating categories utilized,
"A" through "D". Usually borrowers who fall within the two highest
categories are purchasing a two to four year old, low mileage used
automobile from  the inventory of  a  new  car (franchise dealer),
while borrowers  in  the two  lowest categories  are purchasing an
older,    high  mileage  automobile   from   an  independent  used
automobile dealer. Approximately 5% of  the loans financed  by the
Company  are  with  customers  rated  in the "A" category, 15% are
rated "B",  70% are rated "C" and 10% are rated "D".  

<PAGE> 6

      Upon credit approval and the receipt  of  all required title
and insurance documentation, the Company  pays  the dealer for the
Contract. The  Company  typically purchases  the  Contract  for  a
price  that  approximates  the  wholesale  value of the automobile
being  financed. The amount the Company is willing to pay a dealer
for  a particular  Contract  depends upon the credit rating of the
customer.  The  Company will  pay more (e.g. purchase the Contract
at a smaller discount  from  the  original  principal  amount) for
Contracts  as  the  credit  risk  of  the  customer  improves. The
discounts from the initial principal amount of Contracts purchased
by  the Company range  from  5%  to  30%.   The Company's  current
established guidelines for discounts are  5%  for borrowers  rated
in the "A" category, 7.5% for those in the "B",  10% for  those in
the "C" categories and 15% or more for those in the  "D" category.
Purchases of Contracts  at  discounts  that do not fall within the
guidelines  require  the  prior approval of  the Company's  senior
management.


Servicing and Monitoring of Contracts

      The Company  requires all customers to  obtain and  maintain
collision  insurance   covering damage  to the  vehicle.   Failure
to maintain insurance constitutes a default under the Contract and
the  Company  may  at  its  discretion,  repossess the vehicle. To
reduce potential  loss due to insurance lapse, the Company has the
legal  and contractual  right  to  force  place its own collateral
protection  insurance  policy  which  covers  loss due to physical
damage to  vehicles not covered by collision insurance.

      The  Company's  Management  Information  Services  personnel
maintain a  number  of  reports to monitor compliance by borrowers
with  their obligations  under Contracts and direct loans made  by
the  Company. These reports  may  be accessed on a real-time basis
throughout  the Company  by management personnel, including branch
office managers  and staff,  at computer  terminals located in the
main  office  and  each  branch  office.    The  reports  include:
delinquency   aging   reports,  insurance   due  reports, customer
promises reports, vehicle information reports,  purchase  reports,
dealer  analysis  reports, static  pool  reports, and repossession
reports.

      The  delinquency  report  is  an  aging report that provides
basic information regarding each account and reports accounts that
are  past due. The report includes information such as the account
number, address  of the  borrower, home  and work phone numbers of
the borrower, original term of the Contract, number  of  remaining
payments, outstanding  balance, due  dates, date  of last payment,
number  of days past due, scheduled payment amount, amount of last
payment, total  past  due,  and  special  payment  arrangements or
agreements.

     Accounts that are less than 120 days matured are reported one
day past due after their due date.  After  an account  has matured
more than 120 days, it does not show up  on the delinquency report
until  it  is 11  days  past due,  at  which time a late charge is
assessed. Once an account becomes 30 days past  due,  repossession
proceedings   are implemented  unless  the  borrower provides  the
Company with an acceptable   explanation  for  the delinquency and
displays a willingness and  ability to make the payment, and there
is an agreed upon plan  to return the  account  to current status.
When  an  account  is  60  days  past  due ,  the  Company  ceases
amortization  of  the  Contract  and  repossession proceedings are
initiated.  At  120  days  delinquent, if the vehicle has not  yet
been repossessed, the account is written  off.  Once a vehicle has
been repossessed, it no  longer appears on the delinquency report.
It then appears on the Company's repossession report and is  sold,
either at auction or to an automobile dealer.

      When an account becomes delinquent, the  Company immediately
contacts the borrower to determine the  reason for the delinquency
and to  determine if arrangements for payment can appropriately be
made. Once  payment  arrangements  acceptable to  the Company have
been made, the information is entered in its data base and is used
to  generate  a  "Promises  Report",   which   is  utilized by the
collection staff for account follow up.

<PAGE> 7

      The  Company  generates  an   insurance  report  to  monitor
compliance with  the insurance obligations imposed upon borrowers.
This  report includes  the account  number,  name and  address  of
the  borrower,   information   regarding  the  insurance  carrier,
summarizes the  insurance coverage, identifies the expiration date
of the policy, and  provides  basic  information regarding payment
dates and term of  the  Contract. This report helps the Company in
identifying borrowers whose insurance policy  is  up  for  renewal
or  in  jeopardy  of  being  canceled. The Company  sends  written
notices  to , and  makes  direct  contact  with,  borrowers  whose
insurance  policies  are  about  to  lapse or be canceled. If  the
borrower  fails  to  provide  proof of coverage within 30 days  of
notice, the Company  has  the  option  of purchasing insurance and
adding the  cost  and  applicable  finance charges to  the balance
of  the Contract.

       The Company prepares a  repossession  report that  provides
information  regarding repossessed vehicles and aids  the  Company
in disposing of  repossessed vehicles.  In addition to information
regarding  the  borrower,   this   report   provides   information
regarding  the  date  of  repossession, date the vehicle was sold,
number of days it was held  in  inventory  prior to sale, year and
make  and  model  of  the vehicle, mileage,  payoff  amount on the
Contract,  NADA   book  value, Black  Book  value,  suggested sale
price, location of the  vehicle, original  dealer, and notes other
information  that  may  be   helpful   to  the Company such as the
condition of the vehicle.

      The Company  also  prepares  a  dealer  analysis report that
provides information regarding each dealer from which it purchases
Contracts. This  report allows the Company  to  analyze the volume
of  business  done  with  each  dealer  and  the terms on which it
purchased Contracts from the dealer.

      The  Company's  policy  is   to  aggressively  pursue  legal
remedies  to  collect  deficiencies  from  customers.  Delinquency
notices are sent  to customers and verbal requests for payment are
made beginning  when  an account becomes 11 days delinquent.  When
an account becomes 30 days delinquent and  the   borrower  has not
made payment  arrangements acceptable to the Company or has failed
to respond  to  the requests for payment,  a  repossession request
form is prepared  by the  responsible branch  office  employee for
approval  by  the branch  manager  for  the vicinity  in which the
borrower lives. Once the repossession  request has been  approved,
first by the Branch Manager and secondly by  his Regional Manager,
it must then be approved  by  a corporate officer. The repossessor
delivers the vehicle to a secure location specified by the Company
where it is held. The Company maintains relationships with several
licensed repossession firms which repossess vehicles for fees that
range  from  $100  to  $300  for  each  vehicle  repossessed.   As
required  by  Florida and  Georgia law, the customer  is  notified
by certified letter that the vehicle has been repossessed and that
to retain  the  vehicle  he must make arrangements satisfactory to
the Company and pay the amount owed under the Contract within  ten
days  after  delivery  of the letter.  The minimum requirement for
return of the vehicle is payment of all past due amounts under the
Contract  and  all  expenses   associated  with  the  repossession
incurred by the Company. If  satisfactory  arrangements for return
of  the  vehicle  are  not  made within  the statutory period, the
Company  then   sends  title  to  the vehicle  to  the state title
transfer department which then   registers the vehicle in the name
of the Company. The  Company  then  either  sells the vehicle to a
dealer or  has  it  transported to an automobile auction for sale.
On average, approximately  30  days  lapse between  the   time the
Company takes possession of a vehicle and the time it is sold by a
dealer  or  at  auction.  During  its  most  recent  fiscal  year,
repossessed  vehicles  have  been  sold  at  prices  that  average
approximately $1,000 to $1,500 less  than  the price  paid  by the
Company for  the  Contract. When the Company determines that there
is  a  reasonable  likelihood   of  recovering  part or all of any
deficiency  against the  borrower  under the  Contract, it pursues
legal  remedies  available  to  it  including law suits, judgement
liens   and   wage   garnishments.  Historically, the Company  has
recovered approximately 15% of deficiencies  from  such borrowers.

<PAGE> 8

Marketing and Advertising

       The  Company's  Contract marketing efforts are directed  at
automobile  dealers. The Company attempts to meet  dealers'  needs
by   offering     highly-responsive,    cost-competitive       and
service-oriented  financing  programs.  The  Company relies on its
Regional  and  Branch  Managers  to  solicit  agreements  for  the
purchase of  Contracts  with automobile  dealers  located within a
25 mile radius of each  branch office. The Branch manager provides
dealers  with  information  regarding the  Company and the general
terms  upon  which  the Company is willing to purchase  Contracts.
The Company presently has no  plans to  implement any  other forms
of  advertising  for  the  purchase of Contracts such  as radio or
newspaper advertisements.

      Currently, the primary method  utilized  by  the Company  in
soliciting  borrowers  under  its  direct consumer loan program is
through direct mailings followed by telephone calls to individuals
who have  a good  credit  history  with the Company with Contracts
purchased  by  the  Company.  The  Company  intends  to expand its
solicitation of such loans when  management believes  its staff is
adequately  trained  to evaluate credit risks associated with such
loans.


The  Industry

      The non-prime automobile finance market is highly fragmented
and  historically  has   been  serviced by a variety of  financial
entities, including   captive   finance   subsidiaries   of  major
automobile manufactures, banks, independent finance companies, and
small  loan companies.  Many  of  these  financial entities do not
consistently  provide  financing  to  this  market. Although prime
borrowers represent a large segment   of  the automobile financing
market,  there  are many potential purchasers  of  automobiles who
do  not qualify   as   prime borrowers.  Purchasers  considered by
the  Company  to be  non-prime borrowers  are  generally unable to
obtain  credit  from  traditional sources of automobile financing.
The  Company  believes  that,  because these potential  purchasers
represent a substantial market, there is  a demand  by  automobile
dealers with respect to financing for non-prime borrowers that has
not been  effectively  served by traditional automobile  financing
sources. The Company  is  unaware  of any authoritative  estimates
of  the  non-prime  portion  of  this   market , however there are
unsubstantiated estimates of between $80 billion and $150  billion
in non or sub-prime auto and light truck annual financing.

      In the past three years the  Company has seen several of its
most aggressive competitors report unexpected losses due  to,  but
not limited to, inadequate reserves and accounting irregularities.
The  Company  believes  the  circumstances  causing  the  industry
turmoil are  the  result  of  poor  reserve analysis, overall lack
of  responsible  financial  management  and  insufficient internal
controls. The  Company  believes  that  its  static  pool  reserve
analysis, internal controls  and experienced management  team will
continue its history of accurate and reliable financial reporting,
although no assurances can be given  in this regard.


Computerized Information System

      The Company's operations utilize integrated computer systems
developed by NDS to enhance  its  ability  to  respond to customer
inquiries, to monitor the  performance of its investment portfolio
and the performance of individual borrowers under Contracts.   All
personnel   are   provided  with  instant,  simultaneous access to
information from a single shared database. The Company has created
specialized  programs  to  automate  the  tracking  of  loans from
inception. The  capacity   of  the  networking system includes the
Company's  branch  office  locations.  See  the  discussion  under
Servicing  and  Monitoring  of  Contracts  for  a  summary  of the
different reports prepared by the Company.

<PAGE> 9

Strategy

      The  Company's  business  strategy is to continue its growth
and to increase  its  profitability through greater penetration in
its  current markets, controlled  geographic  expansion  into  new
markets  and  selective  portfolio acquisitions. As of the date of
this  report,  the  Company  has  no  commitments or agreements in
principle  with  respect  to  any  expansion  into  new geographic
markets or any portfolio acquisitions. The Company also intends to
continue  its  expansion through   the  increased  origination  of
additional  direct  consumer  loans.  The  Company  believes  that
opportunity for growth continues to exist in the  State of Florida
as well  as  Georgia  and  for  the  foreseeable future intends to
concentrate its expansion activities there.

Competition

       The   consumer  finance  industry  is fragmented and highly
competitive.   There are numerous financial service companies that
provide  consumer  credit  in  the  markets  served by the Company
including  banks,  other  consumer  finance companies, and captive
finance companies owned by automobile manufacturers and retailers.
Many of these companies  have significantly greater resources than
the  Company.    The  Company  does  not  believe  that  increased
competition for the  purchase of  Contracts will cause a reduction
in the interest rate  payable  by the purchaser of the automobile.
However, increased competition for the  purchase of Contracts will
enable  automobile  dealers  to  shop  for the best price, thereby
giving rise  to  an  erosion  in  the  discount  from  the initial
principal amount at which the Company would be willing to purchase
Contracts.

     The  Company's  target  market  consists  of  persons who are
generally unable to obtain traditional used car financing  because
of their credit history, the vehicle's mileage or age. The Company
has  been  able  to  expand its automobile finance business in the
non-prime credit market by offering to purchase Contracts on terms
that are competitive with those of  other companies which purchase
automobile  receivables  in  that  market  segment. Because of the
daily  contact  that  many  of  its employees have with automobile
dealers  located  throughout  the  market  areas served by it, the
Company is generally aware of the terms upon which its competitors
are  offering   to  purchase Contracts. The  Company's  policy  is
to  modify its terms  if  necessary  to   remain competitive.  The
Company has no intention and will  not  sacrifice credit  quality,
its purchasing criteria or prudent business practices in  order to
meet   the   competition  or  be  driven  by  unrealizable  growth
expectations. The Company will always analyze new lending programs
and marketing methods which may be implemented with the  objective
of increasing  profits  and  or  its  market  share, including the
possibility  of  offering  to  purchase   portfolios  of  seasoned
Contracts   from  dealers  in  bulk   transactions from $50,000 to
$5,000,000.

     The Company's  ability  to  compete  effectively  with  other
companies  offering  similar  financing  arrangements depends upon
maintaining close business  relationships with dealers of new  and
used  vehicles. No  single  dealer  out  of  the approximately 500
dealers  that  the  Company  has   contractual  relationships with
accounted  for  over  5%  of its business volume in the past year.


Regulation

      The Company's financing and insurance operations are subject
to  regulation, supervision  and  licensing under various Federal,
State  and  local  statutes  and  ordinances.  Additionally ,  the
procedures that must be followed by the Company in connection with
the  repossession  of vehicles securing Contracts are regulated by
the State  of  Florida   and the  State  of Georgia.  To date, the
Company's operations have been conducted exclusively in the States
of  Florida   and   Georgia. Accordingly, the laws of the State of
Florida and Georgia as well as applicable federal laws, govern the
Company's   operations.   Compliance   with   existing   laws  and
regulations  applicable  to  the  Company  has not had  a material
adverse  effect  on  the Company's operations. Management believes
that it  maintains  all requisite licenses and permits  and  is in
material  compliance  with all applicable Local, State and Federal
regulations.


<PAGE> 10

     The Company  has  been  issued  a Retail Installment Seller's
License and  a  Sales  Finance  Company  License  by  the  Florida
Department  of Banking  and  Finance  and the Georgia Secretary of
State (Business Services  &  Regulation).  Pursuant to regulations
of the State of Florida governing the Company's financing business
activities,  the Department of Banking and Finance  conducts an on
site audit of each of the Company's branches annually, to  monitor
compliance  with  the  applicable  regulations .  The  regulations
govern, among other matters, licensure requirements,  requirements
for  maintenance  of   proper records, payment of required fees to
the State of  Florida  and the State of  Georgia, maximum interest
rates that may be  charged  on loans to finance used vehicles, and
proper disclosure to customers regarding financing terms.


Employees

      The  Company's  executive  management  and  various  support
functions are centralized at the Company's Corporate  Headquarters
in Clearwater, Florida.  As of March 31, 1998 the Company employed
a  total  of 63 persons,  five of whom work for NDS and 58 of whom
work for  Nicholas Financial.  The Company provides paid holidays,
vacation,  sick  time ,  jury  time ,  health  and life insurance,
long-term  disability  insurance,  dental  insurance, and a 401(k)
plan  for  all  employees.    No  employees  are   covered   by  a
collective bargaining agreement  and  the  Company believes it has
good relations with its employees.

Item 2. Description of Properties

     The  Company  leases  its   Headquarters  and  branch  office
facilities. Its Headquarters, located at 2454 McMullen Booth Road,
Building C in Clearwater, Florida, consists of approximately 4,500
square feet.  The  Company  occupies the space pursuant to a lease
that commenced on  July 1, 1995 and  expires on June 30, 1999. The
current  monthly  rent  is  $4,251,   with   annual  increases  of
approximately  2.25%   in   each  subsequent  year  of  the lease.
Management  believes  this  office  space is  adequate to meet its
needs for the foreseeable future.

       Each  of  the  Company's  14  branch  offices  consists  of
approximately 1,000  square feet. These  offices  are  located  in
office parks,  shopping  centers  or  strip malls and are occupied
pursuant  to leases with an initial term of from two to five years
at annual  rates ranging from $6 to $15 per square foot.


Item 3. Legal Proceedings

      The  Company is not a party to any  material  pending  legal
proceedings  other  than ordinary routine litigation incidental to
its  business  none  of  which, in the opinion of management, will
have  a  material  effect  on  the  Company's business,  financial
position or results of operations.


Item 4. Submission of Matters to a Vote of Security Holders

         None


<PAGE> 11

                          PART II
                             
                             
Item 5. Market for Common Equity and Related Stockholder Matters

      The  Company's  common  stock has been listed for trading on
the Vancouver Stock Exchange since 1987 under the symbol  "NFC.U".
On August  21,  1997, the Board of Directors passed  a  resolution
to implement a one-for-three reverse split of the Company's common
stock. Effective September 5, 1997, the  Company's shareholders of
record   own  one  share of common stock for every three shares of
common stock owned prior  to September 5, 1997. The purpose of the
reverse  split  was   to  qualify   for  the  minimum share  price
required by the National Association of Security Dealers, ("NASD")
for  inclusion  under  the  SmallCap   system.  In September 1997,
the Company applied to  the  NASD for  approval to list its common
stock on  the  NASDAQ  SmallCap  System.  On December 23, 1997 the
Company's NASDAQ  application  was  approved  and  trading  of the
Company's  common  stock  commenced December  29,  1997, under the
symbol " NICKF ".  On  February  17 , 1998, the Board of Directors
passed  a  Resolution  removing  the  Company's  common stock from
listing on the Vancouver Stock Exchange. Effective March 11, 1998,
the Company's common stock listing was removed from the  Vancouver
Stock Exchange.

      Holders of Common Stock are entitled to receive dividends if
and when  declared  by the Board of Directors out of funds legally
available therefor.   It  has  been the Company's policy to retain
earnings  to finance the growth of its business.  Accordingly, the
Company has  not issued  a cash dividend and has no plans to do so
in the near future. As of March 31, 1998, there were approximately
500 stockholders of record of the Company's Common Stock.

The  following table reflects the high and low sale prices for the
Company's common  stock on the Vancouver Stock Exchange for all of
fiscal 1997, and  for  the period April 1, 1997, through March 11,
1998.

<TABLE>
<CAPTION>

Price Range of Common Stock

Year ended March 31, 1998                      High          Low

   <S>                                       <C>           <C>
     First Quarter ...........                $4.86         $3.60
     Second Quarter...........                $5.10         $3.70
     Third Quarter............                $4.50         $4.00
     Fourth Quarter.(through March 11, 1998)  $4.50         $2.75

Year ended March 31, 1997                      High          Low

     First Quarter ...........                $7.77         $5.19
     Second Quarter...........                $8.85         $6.60
     Third Quarter............                $7.20         $3.75
     Fourth Quarter...........                $6.15         $3.90

</TABLE>

The  following table reflects the high and low sale prices for the
Company's  common  stock  on  the  NASDAQ  SmallCap  system  which
commenced trading on December 29, 1997.

<TABLE>
<CAPTION>

Year ended March 31, 1998                   High           Low

    <S>                                    <C>           <C>
     Third  Quarter.........                $4.20         $4.20
     Fourth Quarter...........              $4.50         $2.75

</TABLE>

<PAGE> 12

Item 6. Management's Discussion and Analysis


Overview

     Consolidated  net  income  increased in the fiscal year ended
March 31, 1998 to $913,690 or  $0.39  per  share  from $792,254 or
$0.36  per  share  in  the  fiscal  year  ended  March  31 , 1997.
Earnings  for  the  year  were favorably impacted by a significant
increase in the outstanding loan portfolio coupled with a marginal
improvement in the cost of funds.

The following table sets forth certain financial data:

<TABLE>
<CAPTION>
_________________________________________________________________________
                                              Years Ended March 31 
                                            1998                1997
_________________________________________________________________________

<S>                                     <C>                 <C>
Average Net Finance Receivables (1)      $34,024,030         $24,932,075

Average Indebtedness (2)                  21,898,605          16,566,604

Interest Income                            7,493,630           5,749,410

Interest Expense                           2,080,337           1,656,402

Net Interest Income                        5,413,293           4,093,008
_________________________________________________________________________

Gross Portfolio Yield (3)                      22.02%              23.06%

Average Cost of Borrowed Funds (2)              9.50%              10.00%

Net Interest Spread (4)                        12.52%              13.06%
_________________________________________________________________________
Net Portfolio Yield (3)                        15.91%              16.42%
_________________________________________________________________________
<FOOTNOTE>


(1) Average net finance receivables represent the average of net finance
    receivables  throughout the year. Net finance receivables represents
    gross finance receivables less any unearned finance  charges related
    to those receivables.
  
(2) Average  Indebtedness represents the average  outstanding borrowings
    under its senior credit line with BankAmerica, subordinated debt and
    notes payable.  Average  cost  of borrowed funds represents interest
    expense as percentage of average indebtedness.
  
(3) Gross portfolio yield represents interest income  as a percentage of
    average  finance  receivables.  Net portfolio yield  represents  net
    interest income as a percentage of average finance receivables.
  
(4)  Net interest  spread  represents the gross portfolio yield less the
     average cost of borrowed funds.

</TABLE>
<PAGE> 13
  
Fiscal 1998 compared to Fiscal 1997


Interest Income and Loan Portfolio

     Interest  income  on   finance  receivables, predominantly  finance
charge income, increased  30% to $7.5 million  in fiscal 1998 from  $5.7
million  in  fiscal 1997.  The  net  finance receivable balance  totaled
$32.4 million  at  March 31, 1998, an  increase  of  25% from  the $25.9
million  at  March  31,  1997.   The  gross  finance receivable  balance
increased 30% to $50.1 million at  March 31,  1998 from $38.7 million at
March 31, 1997. The primary  reason  interest revenue increased was  the
increase  in  the outstanding loan portfolio offset in part by a 1 point
decrease  in  the  gross portfolio yield. The primary reason  the  gross
portfolio  yield  decreased  is  the result of a lower  effective  "APR"
amortizing  to interest  income  on  finance  receivables.  The  primary
reason  net  finance  receivables  increased  was the opening  of  three
additional branch offices. 


Computer Software Business

       In fiscal 1998, the  revenues  of NDS were $443,392 compared with
fiscal  1997  revenues of $459,719, a decrease of 4%.  This decrease was
primarily  due  to  a  decrease  in  new computer  installations  during
fiscal  1998.  Operating  income  for  fiscal 1998 was $18,118  compared
with an operating loss of $11,665 for fiscal 1997. The  Company  expects
both operating revenues and income of NDS to remain stable.

Operating Expenses

     Operating  expenses  excluding  provision  for  credit  losses  and
interest  expense  increased  to $3.5 million in fiscal 1998 from   $2.8
million in  fiscal 1997. This increase of 24% was primarily attributable
to the opening  of  three  new  branch offices which included additional
staffing costs, equipment  costs  and related expenses.  The Company has
increased its work force from 52 employees at the end  of fiscal 1997 to
63 employees at the end of fiscal 1998.

Interest Expense

     Interest  expense  increased to  $2.1  million  in fiscal  1998  as
compared  to  $1.7  million  in fiscal 1997. This was due to an increase
in  average  outstanding borrowings from $16.6 million to $21.9 million.
The effect of  this  increase  was  offset in part by a decrease in  the
Company's  effective  average  cost of borrowing from 10.00%  for fiscal
1997 to 9.50% for fiscal 1998.

Analysis of Credit Losses

    Because of  the nature of the borrowers under the Contracts  and its
direct consumer loan program, the Company considers the establishment of
adequate  reserves  for  credit  losses  to  be imperative.  The Company
segregates  its  Contracts  into  pools  for  purposes  of  establishing
reserves  for losses.  Each such pool consists of the loans purchased by
a  Company branch  office during a three month period.  The average pool
consists  of  65  Contracts  with an aggregate  initial principal amount
of approximately $478,000.  As  of March 31, 1998, the  Company had  154
active  pools. The Company  analyzes loan pools  monthly  and recomputes
the effective return for each pool based upon changes during the month.

<PAGE> 14

     The  Company  pools  contracts according to branch location because
the  branches  purchase  contracts  in  different markets located in the
State  of  Florida  and  Georgia. All contracts purchased  by  a  branch
during  a  fiscal  quarter comprise  a pool. This  method of  pooling by
branch and quarter allows the Company to evaluate the  different markets
where the branches operate. The pools also allow the Company to evaluate
the different levels  of customer income, stability, credit history, and
the types of vehicles purchased in each market.

     A  pool  retains an amount  equal  to 100% of the discount  into  a
reserve  for  credit  losses.   In  situations  where  the  discount  is
determined to be insufficient to absorb all potential  losses associated
with the pool, a portion of future unearned  income associated with that
specific pool will be added to  the  reserves  for  credit  losses until
total reserves  have  reached the appropriate level. If  the reserve for
credit losses  is  exhausted for a pool which  is not fully  liquidated,
then  a charge to income is  used to reestablish adequate reserves. If a
pool is fully  liquidated  and  has  any  remaining reserves, the excess
reserves are recognized as income.

     In analyzing a pool, the Company considers the performance of prior
pools  originated  by  the  branch  office,  the  performance  of  prior
Contracts  purchased from the  dealers  whose  Contracts are included in
the current pool, the credit rating of the borrowers under the Contracts
in  the  pool, and current  market  and  economic conditions. Each  pool
is analyzed monthly to determine if the loss reserves  are adequate  and
adjustments  are made if  they  are determined  to  be necessary.  As of
March 31, 1998,  the Company  had  established  reserves  for  losses on
Contracts  of  $6,137,140,  or  12.27% of  gross outstanding receivables
under the Contracts.

<PAGE> 15

   The  following  tables  present  certain  information  regarding  the
delinquency  rates  experienced by the Company with respect to Contracts
and under its direct consumer loan program:

<TABLE>
<CAPTION>  
                                   Year Ended                   Year Ended
                                 March 31, 1998               March  31, 1997
                               -------------------           --------------------

Contracts
Gross Balance Outstanding         $48,960,601                   $37,813,944

<S>                         <C>          <C>              <C>        <C>
                             Dollar                        Dollar
Delinquencies                Amount     Percent*           Amount     Percent*
                            ---------------------         ---------------------
30 to 59 days               $1,785,309     3.65%          $1,398,101     3.70%
60 to 89 days                  331,027     0.68%             251,663     0.67%
90 + days                       84,751     0.17%             118,680     0.31%
                            -----------   ------          -----------   ------
Total Delinquencies         $2,201,087                    $1,768,444
*Total Delinquencies as a
 percent of outstanding balance            4.50%                         4.68%


Direct Loans
Net Balance Outstanding              $870,237                      $736,115

Delinquencies
30 to 59 days                    3,950     0.45%               5,555     0.75%
60 to 89 days                    6,168     0.71%               2,549     0.35%
90 + days                        9,440     1.08%               4,029     0.55%
                            -----------   ------          -----------   ------
Total Delinquencies            $19,558                       $12,133
Total Delinquencies as a
% of outstanding Balance                   2.24%                         1.65%

</TABLE>

The provision for credit losses was $848,641 in fiscal 1998  as compared
to $438,510 in fiscal 1997. This  was  due  to the  following: the  size
of the portfolio increased 30% from last year; the Company increased the
amount of reserves associated with the bulk purchase  of receivables  it
acquired in January of 1997; and  the Company also increased  the amount
of reserves  from  various branch pools originated in  fiscal  1997. The
Company  increased  its  total  reserve  percentage from 11.45% of gross
finance  receivables  for  fiscal year ended March 31,  1997  to  12.25%
for  the  fiscal year  ended March  31,  1998. Management  believes that
the reserve adjustments made during fiscal 1998 are consistent with  its
conservative reserve methodology.

<PAGE> 16

Income Taxes

   The  provision  for  income  taxes  in fiscal 1998 increased  17%  to
$583,957  from  $497,276 in  fiscal 1997 as  a result of  higher  pretax
income.   The Company's  effective  tax  rate increased from  38.56%  in
fiscal 1997 to 38.99% in fiscal 1998.


Net Income

    As  a  result  of  the  above  factors , Net income  increased  from
$792,254 in fiscal 1997 to $913,690 in fiscal 1998.


Liquidity and Capital Resources

The  Company's  cash  flows for fiscal 1998 and 1997  are summarized  as
follows:

<TABLE>
<CAPTION>
                                            Fiscal            Fiscal
                                             1998              1997
                                          ----------------------------
<S>                                     <C>                <C>
Cash provided by (used in):
  Operations                             $2,057,317         $1,668,044
  Investing Activities -
   (primarily purchase of 
    installment contracts)               (7,473,864)        (8,119,637)
                             
  Financing activities                    5,612,359          6,068,950
  Net increase (decrease) in cash           195,812           (382,643)

</TABLE>

      The  Company's  primary  use of working capital during fiscal year
1998 was the funding  of  the purchase of Contracts.  The Contracts were
financed  substantially  through borrowings on the Company's $30 million
line  of credit.  The  line  of  credit,  which expires in June 2000, is
secured primarily  by Contracts, and available borrowings are based on a
percentage of qualifying Contracts. As of March 31, 1998 the Company had
approximately $6.6 million  available  under the  line of  credit. Since
inception, the Company  has also funded a portion of its working capital
needs from cash flows from operating activities.

      Net  cash  provided  by operating activities totaled  $2.1 million
and $1.7 million during fiscal 1998 and 1997, respectively.

      The  self-liquidating  nature  of installment Contracts and  other
loans  enables  the Company to assume a higher debt-to-equity ratio than
in most businesses. The  amount  of debt the Company incurs from time to
time under these financing mechanisms depends on  the Company's need for
cash  and it's ability to borrow under the terms of its line  of credit.
The Company believes that borrowings available under the  line of credit
as well as cash flow from operations and, if necessary, the issuance  of
additional subordinated debt and or additional securities in the capital
markets, will be sufficient to meet its short term funding needs.

<PAGE> 17

Impact of Inflation

      The  Company  is  affected  by  inflation  primarily by  increased
operating costs and expenses. Inflationary pressures on  operating costs
and  expenses have  been  offset  by  the  Company's  continued emphasis
on  tight  operating  and cost controls and to a lesser extent by modest
increases in support rates  from its  software subsidiary, Nicholas Data
Services.  Management  believes  that the  Company's balance  sheet  has
enabled it to  negotiate  favorable interest  rates  which minimized the
impact of prime interest rate increases.

      The Company believes that a downturn in the economy would increase
the number of purchasers of automobiles financed with Contracts.  During
a  modest  downturn  in economic activity more  people will experience a
reduction in income because of downsizing, fewer and smaller  raises and
the necessity of accepting lower paying jobs.   In addition,  it  may be
difficult  for  individuals  who have over-extended themselves  to  meet
their debt obligations  and  they  may  find  it necessary  to  purchase
used rather  than  new automobiles.  Although  the  number of  potential
customers can be expected to  increase  during periods  of slow economic
activity, the  number  of  defaults  in  payment obligations can also be
expected  to  increase  with  a  resulting  increase in repossessions of
vehicles securing Contracts. The Company is  not able to predict whether
or  not  the  net  effect  of  such  a  downturn  would  be favorable or
unfavorable  to  the  operating  results  of the  Company, although  the
Company  believes that a severe  downturn in  economic activities  would
have an adverse effect on its  business, financial condition and results
of operations.

Future Expansion

      The Company intends to continue its expansion through the purchase
of  additional  Contracts and the expansion of its direct consumer  loan
program.   In order  to  increase the size  of  its investment portfolio
of  Contracts, it will be necessary  for  the Company to open additional
branch  offices  and  increase the size of its revolving line  of credit
arrangement, either with  Bank  of  America  Business  Credit or another
lender. The Company, from time to time, has  and  will meet with private
investors and financial institutions that  specialize  in  investing  in
subordinated  debt. The Company believes that  the addition of more debt
that is subordinate  to  the line  of  credit will  make it possible for
the Company to continue  to meet  or exceed its covenants under the loan
agreement , increase  the amount  of  funds drawn down under its line of
credit, and draw down funds under the line at a faster rate. The Company
also  intends  to continue its  policy of not paying dividends and using
earnings  from operations  to purchase Contracts or make direct consumer
loans.  The Company  believes  that  opportunity for growth continues to
exist in the State  of  Florida  and  the  State of Georgia and for  the
foreseeable  future  intends  to  concentrate  its  expansion activities
there.

Year 2000

      Some of  the  Company's older computer programs were written using
two digits rather than four to define the applicable  year. As a result,
those  computer programs have time-sensitive  software that recognize  a
date using "00" as the year 1900 rather than the year 2000.  This  could
cause  a  system  failure  or  miscalculations  causing  disruptions  of
operations,  including, among  other  things, a  temporary  inability to
process  transactions, send  invoices,   or  engage  in  similar  normal
business activities.

      The Company has completed an assessment and will have to modify or
replace  portions  of  its  software  so  that its computer systems will
function   properly  with  respect   to  dates  in  the  year  2000  and
thereafter. The  total  Year  2000  project  cost  is  estimated  to  be
immaterial  and  will be expensed. The Company's NDS software subsidiary
and  its  in-house programmers have designed, implemented and maintained
all in-house computer systems. To date, the Company has not incurred any
material  expenses related to the Year 2000 Issue and does not expect to
incur any material costs.

<PAGE> 18

      The project  is  estimated to be completed not later than December
31,  1998,  which  is  prior to any anticipated impact on its  operating
systems.  The Company   believes  that with  modifications  to  existing
software and conversions to new software, the Year 2000 Issue  will  not
pose significant operational problems for its computer systems. However,
if  such  modifications  and  conversations  are  not  made, or  are not
completed  timely, the  Year  2000 Issue could have a material impact on
the operations of the Company.

      The costs  of  the  project  and  the  date  on  which the Company
believes  it  will  complete  the  Year  2000 modifications are based on
management's  best  estimates, which  were  derived  utilizing  numerous
assumptions of future events, including  the  continued availability  of
certain resources and other factors. However, there can  be no guarantee
that  these estimates will be achieved and  actual  results could differ
materially  from  those  anticipated. Specific factors  that might cause
such  material  differences  include ,  but  are  not  limited  to,  the
availability  and cost of personnel trained  in  this area,  the ability
to  locate  and  correct  all  relevant  computer  codes,  and   similar
uncertainties.

Item 7. Financial Statements

The following  financial  statements  are  filed as part of this  report
(see pages 25-42)

  Report of Independent Auditors..............................25

  Audited Consolidated Financial Statements

  Consolidated Balance Sheets.................................26
  Consolidated Statements of Income and Retained Earnings.....27
  Consolidated Statements of Cash Flows.......................28
  Notes to the Consolidated Financial Statements..............29




Item  8.  Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure

     None.

<PAGE> 19

                         PART III
                             
Item 9. Directors, Executive Officers, Promoters and
Control Persons

      The  information  set forth under the caption "Proposals 1 and  2:
Number and Election of Directors" in the Proxy Statement and Information
Statement, dated on or about July 1,1998, for the Annual General Meeting
of Members of Nicholas Financial - Canada to be held August 5, 1998 (the
"Proxy  Statement"),  the  information   set  forth  under  the  caption
"Executive  Officers  and  Compensation" in the Proxy Statement, and the
information  set  forth  under  the  caption "Section 16 (a)  Beneficial
Ownership Reporting Compliance" are  incorporated  by reference.

Additional information regarding the directors and officers is set forth
below.

      Peter  L.  Vosotas  is  the  founder  of  the Company and majority
stockholder  of Nicholas Financial-Canada. He has served as  Chairman of
the   Board,   Chief   Executive  Officer  and   President  of  Nicholas
Financial-Canada and each of  its subsidiaries since formation. Prior to
forming  the  Company, Mr. Vosotas held a variety of Sales and Marketing
positions with Ford Motor Company, GTE  and  AT&T  Paradyne Corporation.
Mr Vosotas  attended  the  United  States  Naval  Academy  and  earned a
Bachelor of Science Degree in Electrical Engineering from the University
of New Hampshire.

      Raymond  Cottrell has  served as a Director of Nicholas Financial-
Canada  since  November 1990.  Since 1987,  he  has been a  Director and
President  of  Grey  Point  Capital, Inc.,  ERI  Ventures  Inc. and  ICM
Ventures,  Inc.,   all  located  in  Vancouver,  British  Columbia.  Mr.
Cottrell  has  been  Executive  Vice President of Biocoll Medical  Corp.
since  September, 1994. He  is  a member of the Board  of  Directors  of
Golden Knight Resources, Inc., and Annex Ventures Inc.

      Joseph G. Bowes  has  served  as a director of Nicholas Financial-
Canada  since  June  1991.   He   has  been  a  self-employed  Financial
Consultant   in Vancouver,  British  Columbia   since  1990.   Prior  to
starting  his  consulting  firm,  Mr. Bowes was Vice President,  Finance
and  Administration  and Director of Achievers International, Vancouver,
B.C. Mr.  Bowes is  a Chartered Public Accountant and received a Masters
Degree n Business Administration from the University of Western Ontario.

      As of March 31, 1998  there  was one executive officer who was not
also  a director of Nicholas Financial-Canada. Ralph T. Finkenbrink, age
37, has served as Vice-President-Finance  of  Nicholas Financial  Canada
since July 1997. He joined the Company in 1988 and  served as Controller
of Nicholas Financial and NDS until 1992. Prior  to joining the Company,
he was a staff accountant for MBI, Inc. from January 1984 to  March 1985
and Inventory Control Manager for The Dress Barn,  Inc. from March  1985
to  December 1987.  Mr.  Finkenbrink received  his Bachelor  of  Science
Degree  in Accounting from  Mount  St.  Mary's University in Emmitsburg,
Maryland.


Item 10. Executive Compensation

      The  information set  forth under  the caption "Executive Officers
and  Compensation"  in  the  Proxy Statement is incorporated  herein  by
reference.

<PAGE> 20


Item  11. Security Ownership of Certain Beneficial Owners and Management

      The   information  set  forth under the caption "Voting Shares and
Ownership  of  Management and Principal Holder's" in the Proxy Statement
is incorporated herein by reference.

Item 12.  Certain Relationships and Related Transactions

      In  January  1998, Dr. Ellis Hyman, a Director of  NDS, agreed  to
subordinate  $200,000 of debt at 12%  interest  with quarterly  interest
payments only. The entire principal balance plus accrued interest is due
on April 20, 2000.  Dr. Hyman has the option of converting the note into
common shares of the Company at a price of $5.00 per share.

      In  February  1998, Stephen Bragin, a Director of  NDS, agreed  to
subordinate  $150,000  of  debt  at 12% interest with quarterly interest
payments only. The entire principal balance plus accrued interest is due
on February 28, 2000.  Mr. Bragin  has the option of converting the note
into common shares of the Company at a price of $5.00 per share.

<PAGE> 21

Item 13. Exhibits and Reports on Form 8-K


       (a)  Exhibits


3.1      Articles of Incorporation and By-Laws

         Incorporated by reference to the Company's 
           Form 10-SB.File No. 0-26680

4.1      Stock Certificate

         Incorporated by reference to the Company's Form 10-SB.
           File No. 026680

10.1.1   Loan  and Security Agreement dated March 31, 1993 between BA
           Business Credit, Inc.  and  Nicholas  Financial,  Inc. 
           
         Incorporated by reference to the Company's Form 10-SB.
           File No. 026680

10.1.2   Loan Modification Agreement dated January 14, 1994

         Incorporated by reference to the Company's Form 10-SB.
           File No. 026680

10.1.3   Temporary Line Increase Agreement dated Mach 28,  1994

         Incorporated by reference to the Company's Form 10-SB.
           File No. 026680

10.1.4   Second Loan Modification Agreement dated June 3,1994

         Incorporated by reference to the Company's Form 10-SB.
           File No. 026680

10.1.5   Amendment No. 3 to Loan Agreement dated July 5,1994

         Incorporated by reference to the Company's Form 10-SB.
           File No. 026680

10.1.6   Amendment No. 4 to Loan Agreement and Security Agreement

         Incorporated by reference to the Company's Form 10-SB.
           File No. 026680

10.1.7   Fifth Loan Modification Agreement dated July 13,1995

         Incorporated by reference to the Company's Form 10-KSB

10.1.8   Sixth Loan Modification Agreement dated May 13, 1996
 
         Incorporated by reference to the Company's Form 10-QSB

10.1.9   Amendment No.7 to Loan and Security Agreement dated
           July  5, 1997

<PAGE> 22

16.1     Letter on Change in Certifying Accountants

         Incorporated by reference to the Company's Form 10-SB.
           File No. 026680
    
27       Financial Data Schedule


        (b)  Reports on Form 8-K A  current  Report on Form 8-K, dated
             March 11, 1998,  was filed  on  March 17, 1998, reporting
             that, Effective  March  11, 1998   the  Common  shares of
             Nicholas Financial - Canada  were no longer listed on the
             Vancouver Stock Exchange.

<PAGE> 23

                        SIGNATURES
                             
                             
     In accordance with  Section  13 or 15(d) 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.

                                   NICHOLAS FINANCIAL,INC.


Dated: June 29, 1998
                                   By:/s/Peter L Vosotas
                                   ------------------------- 
                                     Peter L. Vosotas
                                     Chairman, Chief
                                     Executive Officer and
                                     President
                                     
      In  accordance  with  the  Securities Exchange Act  of 1934,  this
Report has  been  signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature                Title                            Date
                         Chairman of the Board, Chief
                         Executive Officer, President
/s/ Peter L Vosotas      and Director                     June 29, 1998
-----------------------
Peter L. Vosotas



/s/ Ralph T Finkenbrink  Vice President - Finance         June 29, 1998
------------------------
Ralph T. Finkenbrink



/s/ Raymond Cottrell     Director                         June 29, 1998
------------------------
Raymond Cottrell



/s/ Joseph G Bowes       Director                         June 29, 1998
------------------------
Joseph G. Bowes

<PAGE> 25

                    Report of Independent Auditors

To the Board of Directors of
Nicholas Financial, Inc.

We have audited the accompanying consolidated balance sheets of Nicholas
Financial,  Inc.  as  of  March  31, 1998   and  1997, and  the  related
consolidated  statements  of income and retained earnings and cash flows
for  the   years   then  ended.   These  financial  statements  are  the
responsibility  of  the Company's management. Our  responsibility  is to
express an opinion on these financial statements based on our audits.

We conducted  our  audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain  reasonable  assurance about whether the financial statements are
free of material misstatement. An  audit  includes  examining, on a test
basis, evidence  supporting the amounts and disclosures in the financial
statements. An audit also includes assessing  the  accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide  a  reasonable  basis  for  our  opinion. In  our  opinion , the
financial  statements  referred to above present fairly, in all material
respects, the  consolidated  financial  position  of Nicholas Financial,
Inc. at March 31, 1998  and  1997 ,  and the consolidated results of its
operations  and  its  cash  flows for the years then ended in conformity
with generally accepted accounting principles.

                                                     Earnst & Young, LLP

May 12, 1998
Tampa, Florida

<PAGE> 26

<TABLE>
<CAPTION>
                        Nicholas Financial, Inc.
                           
                      Consolidated Balance Sheets
                           
                           

                                                        March 31
                                                   1998            1997
                                               -----------------------------
<S>                                           <C>             <C>
Assets
Cash                                           $   303,960     $   108,148
Finance receivables, net                        32,424,411      25,923,091
Accounts receivable                                 23,405          32,224
Prepaid expenses and other assets                  246,845         363,571
Property and equipment, net                        182,341         223,486
Deferred income taxes                              950,778         411,367
                                               ----------------------------
Total assets                                   $34,172,885     $27,020,742
                                               ============================

Liabilities
Line of credit                                 $23,430,594     $17,680,594
Notes payable-related party                      1,591,595       1,756,095
Accounts payable                                 1,742,458       1,274,024
Income taxes payable                               169,882          72,927
Deferred revenues                                  241,129         174,014
Other liabilities                                   21,400          27,810
                                               ----------------------------
                                                27,197,058      20,985,464

Shareholders' equity
Preferred stock, no par: 5,000,000 shares
authorized; none issued and outstanding                  -               -

Common stock, no par: 50,000,000 shares
authorized; 2,357,013 and 2,330,182 shares
issued and outstanding, respectively             3,740,069       3,713,210

Retained earnings                                3,235,758       2,322,068
                                               ----------------------------
                                                 6,975,827       6,035,278
                                               ----------------------------
Total liabilities and shareholders' equity     $34,172,885     $27,020,742
                                               ============================


See accompanying notes.


</TABLE>
<PAGE> 27

<TABLE>
<CAPTION>
                        Nicholas Financial, Inc.
 
           Consolidated Statements of Income and Retained Earnings
                           
                           
                                                   Year ended March 31
                                                   1998           1997
                                               --------------------------
<S>                                           <C>            <C>
Revenue:
 Interest income on finance receivables        $7,493,630     $5,749,410
 Sales                                            443,392        459,719
                                               --------------------------
                                                7,937,022      6,209,129
Expenses:
 Cost of sales                                    105,924         98,833
 Marketing                                        319,757        248,482
 Administrative                                 3,001,958      2,391,945
 Provision for credit losses                      848,641        438,510
 Depreciation and amortization                     82,758         85,427
 Interest expense                               2,080,337      1,656,402
                                               --------------------------
                                                6,439,375      4,919,599
                                               --------------------------
Operating income before income taxes            1,497,647      1,289,530

Income tax expense (benefit):
 Current                                        1,123,368        422,845
 Deferred                                        (539,411)        74,431
                                               --------------------------
                                                  583,957        497,276
                                               --------------------------
Net income                                        913,690        792,254

Retained earnings, beginning of year            2,322,068      1,529,814
                                               --------------------------
Retained earnings, end of year                 $3,235,758     $2,322,068
                                               ==========================
Earnings per share:
     Basic                                           $.39           $.37
                                               ==========================
     Diluted                                         $.39           $.36
                                               ==========================
Weighted average  shares - basic                2,343,898      2,134,921
                                               ==========================
Weighted average  shares - diluted              2,417,868      2,218,390
                                               ==========================


See accompanying notes.

</TABLE>
<PAGE> 28

<TABLE>
<CAPTION>

                       Nicholas Financial, Inc.
                           
                 Consolidated Statements of Cash Flows
                           
                           
                                                 Year ended March 31
                                                 1998           1997
                                              --------------------------
<S>                                            <C>            <C>
Cash flows from operating activities
Net income                                      $913,690       $792,254
Adjustments to reconcile net income to net
cash flows provided by operating activities:
  Depreciation of property and equipment          82,758         82,897
  Provision for credit losses                    848,641        438,510
  Amortization of intangible assets and                
    deferred loan costs                                -         22,157
  Deferred income taxes                         (539,411)        74,431
  Changes in operating assets and
    liabilities:
   Accounts receivable                             8,819         (7,070)
   Prepaid expenses and other assets             116,726        (92,871)
   Deferred revenues                              67,115        (14,880)
   Accounts payable                              468,434        422,765
   Other liabilities                              (6,410)          (994)
   Income taxes payable                           96,955        (49,155)
                                              --------------------------- 
Net cash provided by operating activities      2,057,317      1,668,044

Investing activities
Increase in finance receivables, net of       
principal collected                           (7,349,961)    (8,034,817)
Purchase of property and equipment              (123,903)       (84,820)
                                              ---------------------------
Net cash used by investing activities         (7,473,864)    (8,119,637)

Financing activities
Repayment of notes payable-related party        (164,500)      (470,438)
Net proceeds from line of credit               5,750,000      4,550,229
Proceeds from sale of the Company's 
common stock                                      26,859      1,989,159
                                              ---------------------------
Net cash provided by financing activities      5,612,359      6,068,950
                                              ---------------------------
Net increase (decrease) in cash                  195,812       (382,643)
Cash, beginning of year                          108,148        490,791
                                              ---------------------------
Cash, end of year                               $303,960       $108,148
                                              ===========================

See accompanying notes.
</TABLE>
<PAGE> 29


                       Nicholas Financial, Inc.
                           
            Notes to the Consolidated Financial Statements
                           
                          March 31, 1998
                           
                           
1. Organization

Nicholas Financial, Inc. (NFI, Canada)  is  a  Canadian  holding company
incorporated  under  the  laws of British Columbia with two wholly-owned
United  States  subsidiaries,  Nicholas  Data  Services, Inc. (NDSI) and
Nicholas  Financial,  Inc.  (NFI).  NDSI  is  engaged principally in the
development, marketing and support of computer application software. NFI
is engaged  principally  in  providing installment sales financing. Both
NDSI and NFI are based in Florida, U.S.A.

2. Accounting Policies

Consolidation

The consolidated  financial  statements  include  the  accounts  of NFI,
Canada  and  its  wholly-owned  subsidiaries, NDSI and NFI, collectively
referred  to  as the Company. All intercompany transactions and balances
have been eliminated.

Property and Equipment

Property and  equipment  are  recorded at cost. Expenditures for repairs
and  maintenance  are  charged  to  expense as incurred. Depreciation of
property and  equipment  is computed using the straight-line method over
the estimated useful lives of the assets as follows:

          Automotive                            3years
          Equipment                             5years
          Furniture and fixtures                7years
          Leasehold improvements            Lease term

<PAGE> 30

                      Nicholas Financial, Inc.

            Notes to the Consolidated Financial Statements

                           (continued)
                          
                          
2. Accounting Policies (continued)

Allowance for Loan Losses

The allowance for loan  losses  is increased by charges against earnings
and decreased by charge-offs (net of recoveries).  In  addition  to  the
allowance for  loan  losses, a  nonrefundable  dealer  reserve  has been
established  using  unearned  interest  and  dealer  discounts to absorb
future credit losses. To  the  extent  actual credit losses exceed these
reserves, a  bad  debt  provision  is  recorded and to the extent credit
losses are less than the reserve, the reserve is accreted into income as
an adjustment  to  the  interest  yield  over the term of the underlying
finance receivables.

Management's  periodic  evaluation  of  the adequacy of the allowance is
based on the Company's past loan experience, known and inherent risks in
the portfolio, adverse situations that may affect the borrower's ability
to repay, the estimated value of  any underlying collateral, and current
economic conditions.

Deferred Loan Costs

The Company defers costs  related  to obtaining its  own financing. Such
costs  are  charged  to  operations as an adjustment of interest expense
over the life of the related financing.

Income Taxes

Income taxes  are  accounted  for  under the asset and liability method.
Deferred tax  assets  and  liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carryforwards.  Deferred tax
assets and liabilities are measured using enacted tax  rates expected to
apply  to  taxable  income  in  the   years  in  which  those  temporary
differences  are expected  to  be  recovered  or  settled. The effect on
deferred  tax  assets  and  liabilities  of  a  change  in  tax  rate is
recognized in income in the period that includes the enactment date.

<PAGE> 31

                        Nicholas Financial, Inc.
                          
            Notes to the Consolidated Financial Statements

                              (continued)
                          
                          
2. Accounting Policies (continued)

Revenue Recognition

Revenues resulting from the sale of hardware and software are recognized
upon   delivery   of  the  products.   Revenues  from  software  support
maintenance and lease agreements are  recognized pro  rata over the life
of the agreements. The  unamortized  amounts are included in the caption
"deferred revenues."

Interest income on finance receivables  is recognized using the interest
(actuarial) method. Accrual of interest income on finance receivables is
suspended when a loan is contractually delinquent for 60 days or more or
the collateral is repossessed, whichever is earlier.

Earnings Per Share

In 1997, the  Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards  No. 128, Earnings per Share. Statement
128 replaced the previously reported primary and  fully diluted earnings
per  share  with  basic  and  diluted earnings per share. Unlike primary
earnings  per  share, basic  earnings  per  share  excludes any dilutive
effects  of  common  stock  equivalents  such  as options, warrants, and
convertible securities. Diluted  earnings  per  share is very similar to
the  previously  reported  fully  diluted  earnings per share. Effective
December 31, 1997  the  Company adopted the provisions of Statement 128.
All  earnings  per  share  amounts  for  all periods presented have been
restated, where necessary, to conform to the Statement 128 requirements.

Effective September 5, 1997  the  Company consolidated its common shares
through a  one for three reverse stock  split. All information contained
in this report has been restated to reflect the share consolidation

<PAGE> 32
<TABLE>
<CAPTION>

                        Nicholas Financial, Inc.
                          
            Notes to the Consolidated Financial Statements

                              (continued)
                          
                          
2. Accounting Policies (continued)

Schedule for Computation of Basic and Diluted Earnings Per Share:

                                                Year ended March 31
                                               1998             1997
                                            --------------------------
<S>                                         <C>             <C>
Numerator:
   Numerator  for  basic  earnings  per
    share - Net income available 
     to common stockholders                  $913,690        $792,254
  
 Effect of dilutive securities:
     convertible debt                         $24,909               -

 Numerator  for dilutive  earnings
  per share - income available
  to common stockholders after              --------------------------
  conversions assumed                       $ 938,599       $ 792,254
                                            ==========================
Denominator:
  Denominator for basic earnings per
   share - weighted average shares          2,343,898       2,134,921
  
  Effect of dilutive securities: (A)
    Employee stock options                     13,326          83,469
    Convertible debt                           60,644               -
                                            --------------------------
  Dilutive potential common shares             73,970          83,469
   
   Denominator for diluted earnings
    per share- adjusted weighted-average
    shares and assumed conversions          2,417,868       2,218,390
                                            ==========================

Earnings per share - basic                    $0.39             $0.37
                                            ==========================
Earnings per share - diluted                  $0.39             $0.36
                                            ==========================
<FOOTNOTE>

Footnote A:
    Options                                  87,293             4,833
    Warrants                                333,333           333,333

    The options and warrants above were outstanding but not
included  in   the  computation  of  diluted  earnings  per
share  because  the exercise price  was  greater  than  the
average market price  of  the common shares and, therefore,
the effect would be antidilutive.

</TABLE>
<PAGE> 33

                       Nicholas Financial, Inc.
                          
           Notes to the Consolidated Financial Statements

                            (continued)
                          
                          
2. Accounting Policies (continued)

Stock Option Accounting

The Company  has  elected  to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock  Issued to Employees" (APB 25) and related
interpretations in accounting for its stock option grants and to present
the disclosure requirements relating  to  stock-based compensation plans
required  by  Financial  Accounting  Standards  No. 123, "Accounting for
Stock-Based Compensation" (FAS 123).

Financial Instruments

The  Company's  financial  instruments  consist  of finance receivables,
accounts  receivable, line  of  credit, notes  payable-related party and
accounts payable. For each of  these financial instruments, the carrying
value approximates its fair value.

The Company's  financial  instruments that are exposed to concentrations
of credit risk are primarily finance receivables, which are concentrated
in the States of Florida and Georgia. The Company provides credit during
the normal course of business and performs ongoing credit evaluations of
it customers. The  Company  maintains  allowances  for  potential credit
losses which, when realized, have been within the range  of management's
expectations. The Company perfects  a  primary  security interest in all
vehicles financed as a form of collateral.

Use of Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and  accompanying  notes.    Actual  results  could  differ  from  those
estimates.

Statement of Cash Flows

Cash  paid  for income taxes for the years ended March 31, 1998 and 1997
was $1,026,413 and $472,000, respectively. Cash  paid  for  interest for
the years ended March 31, 1998  and  1997 was $2,052,742 and $1,641,060,
respectively.

<PAGE> 34


                        Nicholas Financial, Inc.
                          
         Notes to the Consolidated Financial Statements

                              (continued)
                          
                          
3. Finance Receivables

Finance receivables  consist  of consumer automobile finance installment
contracts and are detailed as follows:

<TABLE>
<CAPTION>

                                              1998          1997
                                       -----------------------------
<S>                                    <C>           <C>
 Finance receivables, gross contract    $50,110,571   $38,687,652
     Less:
     Unearned interest                  (11,549,020)   (8,335,330)
                                        --------------------------
                                         38,561,551    30,352,322

     Nonrefundable dealer reserve        (4,525,034)   (3,253,513)
     Allowance for credit losses         (1,612,106)   (1,175,718)
                                        --------------------------
     Finance receivables, net           $32,424,411   $25,923,091
                                        ==========================

</TABLE>


The terms of  the   receivables  range  from  6  to 60 months and bear a
weighted  average  effective  interest rate of  24% and 25% for 1998 and
1997, respectively.

The  following  table  sets  forth  a  reconciliation  of the changes in
nonrefundable dealer reserves for the years ended March 31.

<TABLE>
<CAPTION> 
                                                1998            1997
                                           ----------------------------
<S>                                        <C>             <C>
Balance at beginning of year                $3,253,513      $2,229,571
Discounts acquired on new volume             4,408,114       4,128,946
Recoveries                                     224,553         165,523
Accreted to income                            (505,665)       (522,103)
Losses absorbed                             (2,855,481)     (2,748,424)
                                           ----------------------------
Balance at end of year                      $4,525,034      $3,253,513
                                           ============================
Reserve as a percent of gross
finance receivables                              9.05%           8.41%
                                           ============================

</TABLE>
<PAGE> 35

                       Nicholas Financial, Inc.
                          
             Notes to the Consolidated Financial Statements

                            (continued)
                          
                          
3. Finance Receivables (continued)

The following  table  sets  forth a reconciliation of the changes in the
allowance for doubtful accounts for the years ended March 31.

<TABLE>
<CAPTION>
                                            1998           1997
                                       ----------------------------
<S>                                   <C>              <C> 
Balance at beginning of year            $1,175,718       $845,289
Current year provision                     848,641        438,510
Losses absorbed                           (412,253)      (108,081)
                                       ----------------------------
Balance at end of year                  $1,612,106     $1,175,718
                                       ============================
Reserve as a percent of gross
finance receivables                          3.22%          3.04%
                                       ============================
</TABLE>

4. Property and Equipment

<TABLE>
<CAPTION>

                                      Accumulated     Net Book
                               Cost  Depreciation        Value
                           ------------------------------------
    <S>                    <C>           <C>          <C>
     1998
     Automotive            $114,912       $79,403      $35,509
     Equipment              323,346       195,054      128,292
     Furniture and          
     fixtures               108,023        61,296       46,727
     Leasehold             
     improvements            70,002        57,044       12,958
                           ------------------------------------
                           $616,283      $392,797     $223,486
                           ====================================

     1997
     Automotive            $119,159       $90,515      $28,644
     Equipment              255,079       151,710      103,369
     Furniture and        
     fixtures                87,290        51,386       35,904
     Leasehold             
     improvements            59,392        44,968       14,424
                           ------------------------------------
                           $520,920      $338,579     $182,341
                           ====================================

</TABLE>
<PAGE> 36

                        Nicholas Financial, Inc.

            Notes to the Consolidated Financial Statements

                             (continued)


5. Line of Credit

The Company has a $30,000,000 line of credit facility (the Line) with BA
Business Credit, Inc.  which  expires on June 30, 2000. Borrowings under
the Line bear  interest at the Bank of America prime rate plus 1.25% and
 .50%, when the outstanding  balance exceeds $10,000,000 and $15,000,000,
respectively (9.00% at March 31, 1998). Pledged  as  collateral for this
credit facility are all of the assets of Nicholas Financial Inc. and its
subsidiaries.

6. Notes Payable-Related Party

Notes payable to shareholders, directors and individuals related thereto
at March 31:

<TABLE>
<CAPTION>

                                                       1998           1997
                                                   --------------------------
   <S>                                             <C>             <C>
     Notes payable, unsecured, with interest
     at varying rates up to 12%,   quarterly
     and  semiannual  interest  payments due
     through January 2002, at which time the
     entire  principal  balance  and  unpaid
     interest  is  due,  subordinated to the
     Line. The notes are  convertible at the
     option  of  the  holder,  into   common
     shares at prices from  $5.00  to  $6.00
     per share.                                     $1,150,000     $1,300,000

     Notes  payable,  unsecured  interest at
     12%,  quarterly  interest  due  through
     April  2000,  at  which time the entire
     balance  and  unpaid  interest  is due,
     subordinated to the Line. The note   is
     convertible    at  the  option  of  the
     holder,  into  common  shares  at $8.25
     per share.                                        200,000        200,000

     Note payable,  unsecured,  interest  at
     12%,   principal   and   interest   due
     through March 1999.                               218,841        233,341
     
     Note payable,  unsecured ,  interest at
     12%,  quarterly  interest  due  through
     August  1998 , at which time the entire   
     principal balance is due.                          22,754         22,754
                                                   ---------------------------
                                                    $1,591,595     $1,756,095

</TABLE>
<PAGE> 37
                                             
                      Nicholas Financial, Inc.

          Notes to the Consolidated Financial Statements

                           (continued)

6. Notes Payable-Related Party (continued)

Maturities of notes payable are summarized as follows:

<TABLE>
<CAPTION>

     Year ending March 31
     ---------------------
           <S>                          <C>
            1999                         $441,595
            2000                          500,000
            2001                                -
            2002                          650,000
                                       -----------
                                       $1,591,595
                                       ===========
</TABLE>


The company incurred interest expense on the above notes of $210,784 and
$250,859 for the years ended March 31, 1998 and 1997, respectively.


7. Income Taxes

The provision for  income  taxes  reflects  an  effective tax rate which
differs from the corporate tax rate for the following reasons:

<TABLE>
<CAPTION>

                                                  1998            1997
<S>                                           <C>               <C>
 Combined basic Canadian federal and           --------------------------
  provincial income tax rate                     45.34%          45.34%
                                               ==========================
  Income before income taxes                   $1,497,647      $1,289,530
                                               ==========================

  Provision for income taxes based 
   on above rate                               $  679,033      $  584,673
  Increase (decrease) resulting from:
      NDSI's income taxed at 
      lower (U.S.) rates                         (107,264)        (94,431)
      Other                                        12,188           7,034
                                               ---------------------------
                                               $  583,957      $  497,276
                                               ===========================

</TABLE>
<PAGE> 38

                       Nicholas Financial, Inc.
                          
           Notes to the Consolidated Financial Statements

                            (continued)
                          
                          
7. Income Taxes (continued)

The Company's deferred tax assets consist of the following as of:

<TABLE>
<CAPTION>

                                                     March   31
                                                 1998          1997
                                              --------------------------
  <S>                                         <C>            <C>
   Allowance for credit losses not
    deductible for tax purposes                $760,307       $227,000
   Deferred compensation related to stock
    options and warrants                        157,000        157,000
   Other items                                   33,471         27,367
                                              --------------------------
                                               $950,778       $411,367
                                              ==========================
</TABLE>


NFI, Canada has  income  tax loss carryforward balances of approximately
Cdn$256,000 (1997-Cdn$242,000) which  are  available  to  reduce  future
taxable income and which expire as follows:

     1999                    Cdn$32,000
     2000                        82,000
     2001                        51,000
     2002                        21,000
     2003                        13,000
     2004                        19,000
     2005                        38,000
                            ------------
                            Cdn$256,000
                            ============

For  the  years  ended  March 31,  1998 and 1997, the Company would have
recorded  deferred  tax  assets  of  approximately  $82,000 and $66,000,
respectively,   due   primarily   to  these  Canadian  income  tax  loss
carryforwards. The assets, however,  are  offset entirely by a valuation
allowance due to the relative uncertainty surrounding the realization of
the assets.

<PAGE> 39

                      Nicholas Financial, Inc.

           Notes to the Consolidated Financial Statements
        
                           (continued)
                          
                          
8. Shareholders' Equity

Changes in the outstanding common stock during the
years are as follows:

<TABLE>
<CAPTION>

                                              Number Of        Common
                                               Shares           Stock
                                             --------------------------
  <S>                                       <C>            <C>

   Balance at March 31, 1996                 1,946,113      $1,724,051

   Changes in 1997:
     Issued for cash upon exercise of        
     options                                    16,666          19,639
     Issued in connection with secondary    
     offering                                  367,403       1,969,520
                                             --------------------------
   Balance at March 31, 1997                 2,330,182      $3,713,210

   Changes in 1998:
     Issued for cash upon exercise of        
     options                                    26,831          59,343
                                             --------------------------
                                             2,357,013       3,772,553
                                             ==========================

   Less account receivable from 
     shareholders related To exercise 
     of options                                      -         (32,484)
                                             --------------------------
   Balance at March 31, 1998                 2,357,013      $3,740,069
                                             ==========================
</TABLE>

The Company has a  warrant  outstanding entitling a director to purchase
333,333  common  shares  at  $5.38  U.S until June 3, 1999. At March 31,
1998, the warrant was fully exercisable.

The Company has an employee stock incentive plan (the SIP) for officers,
directors and key employees under  which  134,787 shares of common stock
were  reserved  for  issuance  as  of  March 31, 1998. Options currently
granted by the Company generally vest over a five year period.

<PAGE> 40

                         Nicholas Financial, Inc.
                          
             Notes to the Consolidated Financial Statements

                              (continued)
                          
                          
8. Shareholders' Equity (continued)

The Company has elected to follow APB 25, and related Interpretations in
accounting  for  its employee stock options because, as discussed below,
the alternative  fair  value  accounting  provided  for  under  FAS 123,
requires use of option valuation models  that were not developed for use
in valuing employee stock options. Under  APB  25, if the exercise price
of the Company's employee stock options  equals  the market price of the
underlying stock  on  the  date  of  grant, no  compensation  expense is
recognized.

Pro  forma  information  regarding  net income and earnings per share as
required by FAS 123 has been determined  as if the Company has accounted
for  its  employee  stock options and  warrants  granted  subsequent  to
December 31, 1994 under the  fair  value  method  of that Statement. The
fair value for these options  and  warrants was estimated at the date of
grant using a  Black - Scholes  option pricing  model with the following
weighted-average assumptions for 1998 and 1997;


                                  1998      1997
                               -------------------
Risk free rate of return         5.75%     6.63%
Volatility factor                0.400     0.443
Expected life                  5 years   5 years
Expected dividends                None      None

The Black-Scholes  option  valuation  model  was  developed  for  use in
estimating the  fair  value  of  traded  options  which  have no vesting
restrictions and are fully transferable. In addition,  option valuations
models require the input of highly subjective  assumptions including the
expected  stock  price  volatility. Because the Company's employee stock
options and warrants have  characteristics significantly  different from
those  of traded options and  warrants ,  and  because  changes  in  the
subjective  input  assumptions  can  materially  effect  the  fair value
estimate,   in   management's  opinion,   the  existing  models  do  not
necessarily provide a reliable single measure of the  fair  value of its
employee stock options and warrants.

<PAGE> 41

                       Nicholas Financial, Inc.
                         
           Notes to the Consolidated Financial Statements

                             (continued)
                         
                         
8. Shareholders' Equity (continued)

For  purposes  of pro forma disclosures, the estimated fair value of the
options  and  warrants  is  amortized  to  expense  over  the option and
warrant's vesting period. The Company's pro forma information follows:

                              1998       1997
                          ----------------------
Pro forma net income        $878,092   $777,288
Pro forma earnings
per share:
  Basic                         $.38       $.37
  Diluted                       $.37       $.35
  


The following  table  reflects  activity  within  the  SIP for the years
noted:

<TABLE>
<CAPTION>

                                       1998                        1997
                               Options       Weighted       Options      Weighted
                                  &           Average         &           Average
                              Warrants    Exercise Price   Warrants   Exercise Price
                             --------------------------------------------------------
<S>                            <C>            <C>           <C>           <C>
Outstanding-beginning
of year                         480,667        $5.13         479,357       $5.04
Granted                         102,294        $4.38          48,000       $5.79
Exercised                       (26,831)       $2.21         (16,667)      $1.68
Canceled/expired                (88,010)       $4.87         (30,023)      $5.73
                               ---------                    ----------
Outstanding- end of year        468,120        $5.00         480,667       $5.13
                               =========                    ==========

Exercisable at end
of year                         391,994        $5.15         414,000       $5.16

Weighted-average
fair value of
options granted                    
during the year                                $1.73                       $2.67


</TABLE>
<PAGE> 42


                       Nicholas Financial, Inc.
                           
            Notes to the Consolidated Financial Statements

                              (continued)
                           
                           
8. Shareholders' Equity (continued)

<TABLE>
<CAPTION>
                                        Weighted    Currently Exercisable 
                           Weighted      Average                 Weighted
                           Average      Remaining                Average
                           Exercise    Contractual               Exercise
                Shares      Price         Life       Shares       Price
           ---------------------------------------------------------------

<S>            <C>         <C>         <C>          <C>          <C>

$2.95 to 3.99   47,494      $3.50      1.74years     41,129       $3.51
 4.00 to 4.99   85,961      $4.34      4.27years     16,866       $4.59
 5.00 to 5.38  334,665      $5.38      1.17years    333,999       $5.38
               -----------------------------------------------------------
       Total   468,120      $5.00      1.80years    391,994       $5.15

</TABLE>

9. Commitments

The  Company  leases  its  corporate  office  and  sales  offices  under
operating  lease  agreements  expiring  prior  to  March  31, 2001 which
provide for annual minimum rental payments as follows:

     Year ending March 31
     --------------------
           1999                        $179,728
           2000                          92,518
           2001                          32,338
                                      -----------
                                       $304,584

Rent  expense  for  the years ended March 31, 1998 and 1997 was $174,526
and $131,934, respectively.

<PAGE> 43

                           
 Exhibit 10.1.9

    AMENDMENT NO.7 TO LOAN AND SECURITY AGREEMENT


      THIS AMENDMENT NO. 7 TO LOAN AND SECURITY  AGREEMENT ("Amendment")
is dated  as  of  July 1, 1997  and  is  entered  into  by  and  between
BankAmerica  Business Credit, Inc.  ("Lender") and  Nicholas  Financial,
Inc. ("Borrower").  All capitalized terms used  herein but not otherwise
defined shall have the meanings  ascribed  to them in the Agreement  (as
hereinafter defined).

                    WITNESSETH
                         
     WHEREAS, the  Borrower  and  the  Lender, successor in interest  to
BA Business Credit, Inc.,  have  entered  into   that certain  Loan  and
Security  Agreement  dated  as   of  March   31, 1993,  as  amended  and
supplemented (the "Agreement")  and the  Borrower  has executed in favor
of Lender a Secured Promissory  Note  dated  as of March 31, 1993 in the
original principal sum of $4,000,000 ("Note"). (The Agreement, the Note,
and  all other documents documenting the loan evidenced  thereby and the
security  therefor  are  hereinafter  referred to collectively  as "Loan
Documents".);and

     WHEREAS, the Borrower desires to amend the Agreement  and Note  and
the Lender  is  willing  to  do so,  subject to the terms and conditions
stated herein;

     NOW,  THEREFORE, in consideration of the premises  herein contained
and  other  good  and valuable  consideration, the receipt  and adequacy
of which are hereby  acknowledged,  the Borrower and Lender hereby agree
as follows:

       Section 1.    Amendment to the Agreement. The Lender and Borrower
                     agree that the  Agreement and Note shall be amended
                     as follows:

           A.  Amendment to Section 1.  Section  1  of  the Agreement is
     amended to add the following definitions:



                1.55   Advance  Rate  means  eighty-five  percent (85%);
          provided, however, that the Advance  Rate shall be (a) eighty-
          four  percent (84%)  when  the  Collateral  Adjustment Percent
          ending on  the  date   of  determination  is equal to eighteen
          percent (18%), but less than nineteen percent (19%),(b) eighty
          three  percent (83%) when  the  Collateral  Adjustment Percent
          ending on  the  date  of  determination  is equal to  nineteen
          percent (19%), but less than twenty percent (20%); (c) eighty-
          two percent(82%) when  the  Collateral  Adjustment  Percent is
          equal to twenty percent (20%) but less than twenty-one percent
          (21 %)  and  (d)  eighty-one  percent  when  the    Collateral
          Adjustment Percent is equal  to  or  greater  than  twenty-one
          percent (21 %); and,  provided, further  that  the  applicable
          Advance  Rate  shall be reduced by the Repossession Adjustment
          Percent.

<PAGE> 44
           
                1.56     Applicable   Margin  means  (i)with  respect to
           Reference  Rate  Revolving  Loans, one-half percent (1/2 %) and
           (ii) with respect  to  LIBOR  Rate Revolving Loans, three and
           one-quarter percent (3 1/4 %).
           
                1.57     Bank of America means Bank of America  National
           Trust and Savings Association, a national banking association,
           or any successor entity thereto.
          
                1.58    Business  Day  means (a)  any  day that is not a
           Saturday, Sunday, or a day on which banks  in San  Francisco,
           California,  are  required or permitted to be closed, and (b)
           with  respect  to  all  notices, determinations, fundings and
           payments  in  connection  with  the  LIBOR Rate or LIBOR Rate
           Loans, any day that is a Business Day pursuant to  clause (a)
           above and that is also a day on which trading is  carried  on
           by and between banks in the  London interbank market.
           
                1.59   Collateral  Adjustment Percent  means, calculated
           as of the first day of each month,  the  sum  (rounded to the
           lowest   whole   percent )  of  the  Past  Due  Percent,  the
           Repossession Percent and the Net Charge-Off Percent.
           
                1.60 Default Rate means a fluctuating per annum interest
           rate  at  all  times  equal to the  sum of  (a) the otherwise
           applicable  interest  rate  plus  (b)  two percent (2%). Each
           Default Rate  shall  be  adjusted   simultaneously  with  any
           change in the applicable interest rate.
           
                1.61    Governmental  Authority  means  any   nation  or
           government,  any   state   or  other   political  subdivision
           thereof, any central bank (or similar monetary  or regulatory
           authority)   thereof,   any   entity   exercising  executive,
           legislative, judicial, regulatory or administrative functions
           of or pertaining to government, and any corporation  or other
           entity  owned  or   controlled,  through  stock   or  capital
           ownership or otherwise, by any of the foregoing.
           
                1.62     Gross Contract Payments means, as  of the  date
          of determination, (i)  with  respect  to  an interest  bearing
          Contract  the  outstanding  principal  balance   owing  by the
          Contract  Debtor  and  (ii)  with  respect  to  a  precomputed
          Contract  the   outstanding  balance   thereof   including all
          unearned  interest,  fees,  and  charges owing by the Contract
          Debtor.
          
                1.63   Interest Period means, as to any LIBOR Rate Loan,
          the on the funding date of such Loan or on the
     
<PAGE> 45
     
          Conversion/Continuation  Date on which the  Loan  is converted
          into or continued as a LIBOR Rate Loan, and ending on the date
          one, three, or  six  months  thereafter  as  selected  by  the
          Borrower in its Notice of  Borrowing  or Notice of Conversion/
          Continuation; provided that:


                (a) if any Interest Period would  otherwise end on a day
          that is not  a  Business  Day,  that Interest Period shall  be
          extended to the following  Business  Day  unless the result of
          such  extension would be to carry such  Interest  Period  into
          another calendar month,  in which  event  such Interest Period
          shall end on the preceding Business Day;

                (b)  any Interest Period pertaining to a LIBOR Rate Loan
          that begins on the last Business Day of  a calendar  month (or
          on a day for which there  is  no numerically corresponding day
          in the calendar  month  at  the  end  of such Interest Period)
          shall end on the last  Business  Day  of the calendar month at
          the  end of such Interest Period; and
          
                (c)  no  Interest  Period   for any Revolving Loan shall
           extend beyond the Stated Termination Date.
           
                1.64    LIBOR  Rate  means, for any Interest Period with
           respect to a LIBOR Rate Revolving  Loan, the rate of interest
           per annum (rounded  upward  to  the  next  1/1000th  of 1.0%)
           determined by the Lender  as follows: 


            LIBOR Rate = LIBOR/(1.00-Eurodollar Reserve Percentage)

          Where,



                'Eurodollar Reserve Percentage'  means for  any day  for
           any   Interest   Period   the   maximum   reserve  percentage
           (expressed as a decimal, rounded  upward to  the next 1/100th
           of 1.0%) in effect on such day (whether  or not applicable to
           any  Lender)  under  regulations  issued from time to time by
           the Board of Governors of the Federal Reserve for determining
           the  maximum reserve  requirement  (including  any emergency,
           supplemental  or  other  marginal  reserve  requirement) with
           respect  to  Eurocurrency   funding (currently referred to as
           "Eurocurrency liabilities"); and

                'LIBOR'  means  the rate of interest per  annum (rounded
          upward to the next 1/16th of 1.0%)  notified to the  Lender by
          Bank  of  America  as  the  rate   of interest at which dollar
          deposits in the approximate amount of the  Loan  to be made or
          continued  as, or converted into, a LIBOR Rate

<PAGE> 46

          Revolving  Loan  and  having  a  maturity  comparable  to such
          Interest  Period would be offered  by the applicable office of
          Bank of America to major banks in  the London interbank market
          at their request at approximately 11:00 a.m. (London time) two
          Business  Days  prior  to  the  commencement  of such Interest
          Period.
          
                1.65    LIBOR  Rate  Revolving Loan  means  a  Revolving
           Loan during any  period  in  which  it  bears interest at the
           LIBOR Rate.

                1.66 Net Balance means, as of the date of determination,
          the Gross  Contract  Payments  of a Contract less all unearned
          interest, fees, charges, and insurance premiums  owing  by the
          Contract Debtor.

                1.67 Net Charge-Offs for any period means the  aggregate
          amount of all  unpaid  payments due under Contracts which have
          been  charged  off  by  the  Borrower during  such period,  as
          reduced  by  the amount  of all cash recoveries  with  respect
          to  Contracts which  had  been  charged  off  during  previous
          periods or during such period. In computing the amount of  the
          charge-offs, all charges  made to the dealer reserve or to the
          dealer's discount shall  be included.

                1.68       Net  Charge-Off  Percent  means  the percent,
          calculated  as of the first   day of each month, equal to  (a)
          the  aggregate amount of all Net Charge-Offs  during  each  of
          the  twelve   (12) months  immediately  preceding  the date of
          calculation , divided  by  (b) the amount  of  the Net Balance
          owing  under  all Contracts outstanding as of  the last day of
          each  of   the  previous 12  months  divided  by  twelve.  For
          example,  if the Borrower charged off $10,000  each month  for
          12  months  and if  the  aggregate  Net Balance outstanding at
          the  end of the previous 12 months was $1,000,000 for 6 months
          and  $1,200,000 for 6 months, the Net Charge-Off Percent would
          be 10.91%($120,000/$1,100,000).

                1.69     Past Due Percent means the  percent, calculated
          as of the first day of each month,  equal to  (a) the    Gross
          Contract  Payments  owing  under  all  Contracts    (excluding
          Contracts  charged-off)    as  to  which  any  portion  of  an
          installment due thereunder is  30  days   or  more past due as
          determined  on  a contractual basis as of the last day of each
          of   the  six  months   immediately  preceding   the   date of
          calculation,  divided  ~  (b)  the   Gross   Contract Payments
          owing  under all  Contracts  (excluding Contracts charged-off)
          as of the  last  day  of  each of the  six  months immediately
          preceding the  date of calculation. For example, if, as of the
          last day  of  the  previous  six  months  the  Gross  Contract
          Payments were  $1,500,000 and on the  same date the amount  of
          Gross Contract Payments that were more than 30  days past  due
          was $100,000 and $150,000 for three months each, the
          
          
<PAGE> 47


          Past Due Percent would be 8 1/3%($750,000/$9,000,000).

                 1.70 Reference Rate means the rate of interest publicly
          announced from  time  to  time   by   Bank   of America as its
          reference rate. It is a rate set by Bank   of   America  based
          upon  various factors including  Bank of America's  costs  and
          desired return, general economic conditions, and other factors,
          and  is  used as a  reference  point  for  pricing some loans.
          However, Bank of America may price  loans  at, above, or below
          such  announced rate.  Any changes in the Reference Rate shall
          take effect on the day specified in the  public   announcement
          of such change.
      
                  1.71  Reference Rate Revolving Loans means a Revolving
          Loan during any period in which it bears interest based on the
          Reference Rate.

                  1.72  Requirement  of Law  means,  as  to  any Person,
          any law (statutory or common), treaty, rule  or  regulation or
          determination of an arbitrator or of a Governmental Authority,
          in each case applicable  to or  binding upon the Person or any
          of its Property or to which the Person or any of its  Property
          is subject.
      
                  1.73       Repossession  Percent  means  the  percent,
          calculated as of the first day of each month, equal to (a) the
          repossession  value  of  all  Vehicles which  the Borrower has
          repossessed and which, as of  the   last  day of the preceding
          month, was  reflected  as  an  asset  on  the Borrower's books
          divided  by  (b) the  Net  Balance  owing  under  all  Vehicle
          Contracts (excluding Vehicle Contracts charged-off)outstanding
          as of  the  last  day  of  each  of  those twelve  (12) months
          divided by twelve. For  example, if 10 Vehicles having a total
          repossession  value  of  $50,000  had   at   any   time   been
          repossessed by  Borrower  and  were reflected as assets on the
          books of  Borrower  at  the  end  of  a  month  and   the  Net
          Balance   was  $1,000,000  for  four  (4)   months, $1,500,000
          for four (4) months and $2,000,000  for four (4) months at the
          end of the preceding 12 months, the Repossession Percent would
          be  3  1/3%($50,000/$1,500,000).
      
                  1.74  Stated Termination Date means  June  30, 2000.
      
                  1.75  Termination Date means the earliest to occur  of
          (i) the  Stated  Termination  Date  and  (ii)  the  date  this
          Agreement is terminated for any reason whatsoever."
      
     B.  Amendment to Section 1. Section 1.3 of the Agreement is amended
 in its entirety to read as follows:

                  1.3   Adjusted Tangible Net Worth  means the remainder
          of (a) net

<PAGE> 48
          book value (after deducting related depreciation, obsolescence,
          amortization, valuation, and  other  proper reserves) at which
          the  Adjusted Tangible Assets of Borrower would  be  shown  on
          a balance  sheet  at  such  date,  but  excluding  any amounts
          arising from write-ups of assets, minus  (b)(i)  the amount at
          which its liabilities (other than  capital stock, surplus, and
          retained earnings) would be shown  on  such balance sheet, and
          including  as   liabilities all reserves for contingencies and
          other  potential    liabilities    and    (ii)   the   General
          Adjustment Reserve."
          
     C.     Amendment  to  Section  1.  Section 1.13 of the Agreement is
amended by deleting subsection 1.13(l)(iii).

     D.     Amendment to Section 1.  Section  1.13  of  the Agreement is
amended by adding a new subsection (n) to read as follows:

       n.   The Vehicle Contract has a scheduled maturity date
            sixty (60) months or less from the date of
             execution."
          
     E.     Amendment to  Section 1.  Section  1.28  of the Agreement is
hereby amended in its entirety to read as follows:

                  1.28    Availability   means ,   as  of  the  date  of
          determination the amount determined by multiplying the Advance
          Rate by  the  Net  Contract  Payments payable under all of the
          Borrower's  Eligible  Contracts  then  outstanding , provided,
          however, the Older Vehicle Contract    Borrowing Base included
          in  calculating  Availability  shall  not, at any time, exceed
          thirty percent (30%)."
          
     F. Amendment to Section 1. Section 1.29 of the Agreement  is hereby
amended in its entirety to read as follows:


                  "1.29 Total Credit Facility  shall mean Thirty Million
          Dollars ($30,000,000)."

     G.     Amendment to Section  1.  Section 1.35 of the  Agreement is
amended by deleting the words "ninety-five percent (95%)" and inserting
in lieu thereof the words "one hundred percent (100%)".
     
     H.     Amendment to Section 1.  Section  1. 50 of the Agreement is
hereby amended in its entirety to read as follows:

                  "1.50 Older Vehicle Contract Borrowing Base means,  as
          of  any  date of calculation, the amount  of  the  Net Balance
          payable under Eligible Vehicle Contracts  which are secured by
          a lien on a Vehicle which is eight or

<PAGE> 49
                               
          nine  model years old at the time such Contract was originated
          (excluding the model year in  effect  at the time the Contract
          was originated)."

     I.   Amendment to Section 1. Section 1 of the   Agreement is hereby
amended by deleting subsections 1.31,1.33,1.34,1.37,1.40,1.41,1.51,1.52,
and 1.53.
     
     J.  Amendment  to  Section 2. Section 2 of the Agreement is amended
in its entirety to read as follows:


                "A.      Revolving  Loans.  Subject  to  the  terms  and
          conditions  of  this Agreement, the  Lender  agrees,  upon the
          request of the Borrower, made from time  to   time  until  the
          Termination Date to make  revolving loans ("Revolving  Loans")
          to  the  Borrower in an amount not to exceed the lesser of the
          Total Credit  Facility or the Availability; provided, however,
          no Revolving  Loans will be made to the Borrower  if a Default
          or an  Event  of  Default  exists  and  provided, further, the
          maximum  amount  of   Revolving  Loans  based  on  Direct Loan
          Eligible Contracts shall not exceed $4,000,000 at any one time.
          The Lender, in its sole and absolute  discretion, may elect to
          make Revolving Loans  in  excess  of  the Availability or  the
          Total  Credit  Facility  on  one or more occasions, but, if it
          does  so, the  Lender  shall  not  be  deemed  thereby to have
          changed  the  limits  of  the  Total  Credit Facility  or  the
          Availability.  Immediately  upon  demand  by  the  Lender  for
          repayment of such excess, the Borrower shall make such payment.
          If  the  sum  of   the outstanding Revolving Loans exceeds the
          Availability  or  the  Total  Credit  Facility, the Lender may
          refuse to make or otherwise restrict the making of   Revolving
          Loans as  the  Lender  determines  until  such excess has been
          eliminated.  The  Borrower  may request Revolving Loans either
          telephonically  or  in  writing.  Each  oral  request  for   a
          Revolving  Loan  shall  be conclusively  presumed to  be  made
          by  a   person  authorized  by  the  Borrower  to  do  so  and
          the crediting  of  a Revolving Loan to the Borrower's  deposit
          account, or transmittal to such  Person  as the Borrower shall
          direct,  shall  conclusively  establish  the obligation of the
          Borrower to repay such Revolving Loan as provided herein.
          
                B.    (a) Borrowing Procedure. (i)  Each  Revolving Loan
          shall be made upon the Borrower's   irrevocable written notice
          ("Notice  of Borrowing") delivered to the  Lender which notice
          must  be  received  by  the Lender  not  later  than  (1)11:00
          a.m.(Cherry [1 ill, New Jersey time) three Business Days prior
          to the requested Funding Date in the case of  LIBOR Rate Loans
          and (2) 11:00  a.m., (Cherry  11111,  New Jersey time) on  the
          requested Funding  Date in the case of Reference  Rate  Loans,
          specifying:

<PAGE> 50

                          (A) the amount of the Borrowing;

                          (B)   the  requested funding date, which shall
          be a Business Day;

                          (C)  whether  tile  Revolving  Loans requested
          are  to  be  Reference  Rate  Revolving  Loans   or LIBOR Rate
          Revolving Loans; and

                          (D)  the  duration of  the  Interest Period if
          the requested Revolving Loans are to be LIBOR  Rate  Revolving
          Loans.  If  the  Notice   of Borrowing  fails  to  specify the
          duration  of  the  Interest Period for any borrowing comprised
          of LIBOR  Rate Revolving Loans, such Interest Period shall  be
          one month.

                (ii)      there  may  not be  more  than  four different
          Interest Periods in effect at any one time.
          
                (iii)   With respect to  any  request for Reference Rate
          Revolving Loans, in  lieu  of  delivering  the above-described
          Notice  of  Borrowing,    the  Borrower  may  give  the Lender
          telephonic notice of such  request  by the required time, with
          such  telephonic  notice  to  be  confirmed  in writing within
          twenty-four (24) hours of the giving of such notice but Lender
          shall be  entitled  to rely on the telephonic notice in making
          such Revolving Loans.
          
               (b)   No  Liability.  The  Lender  shall  not  incur  any
          liability  to  the  Borrower  as  a  result of acting upon any
          notice, which notice the Lender believes in good faith to have
          been given by an  officer duly authorized by  the  Borrower to
          request Revolving Loans on its behalf  or for otherwise acting
          in  good  faith,  and the crediting of Revolving Loans to  the
          Borrower's deposit account, or transmittal to such Person   as
          the   Borrower  shall  direct,   shall conclusively  establish
          the obligation of the Borrower to repay such Revolving Loans.
                               
               (c)    Notice  Irrevocable.  Any  Notice of Borrowing (or
          telephonic  notice  in  lieu  thereof)  made  pursuant to this
          Section 2 shall be irrevocable and the Borrower shall be bound
          to borrow the funds requested therein in accordance therewith.
          
               (d)   Upon Lender's request, each time  Borrower requests
          an  Advance, Borrower shall deliver to Lender a Collateral and
          Loan Status Report  and  Monthly Report of Delinquent Accounts
          in forms provided by          
          
<PAGE> 51
                               
          Lender  (or in such other form approved by  Lender), in  which
          Borrower has  computed  its Availability, the  amount  of  the
          requested  Advance,  and  has  provided  the other information
          requested therein."
          
     K.   Amendment to Section 2. Section 2 of  the Agreement is amended
by adding new subsections  2.4,2.5 and 2.6 to read as follows:

                 "2.4.  INTEREST AND OTHER CHARGES.

                 2.4(A)   Interest.   (a)  All  outstanding  Obligations
          shall  bear  interest  on the unpaid principal  amount thereof
          (including,  to  the  extent  permitted  by  law,  on interest
          thereon not paid  when due)  from  the date made until paid in
          full  in  cash  at  a  rate  determined  by  reference  to the
          Reference Rate  or the LIBOR Rate and Section 2.4(A)(a)(i)  or
          (ii),  as applicable.  Subject  to  the provisions  of Section
          2.4(B), any of  the  Revolving Loans  may  be converted  into,
          or  continued as, Reference Rate Revolving Loans or LIBOR Rate
          Revolving  Loans  in the manner provided in Section 2.4(B). If
          at any time Revolving Loans are outstanding  with  respect  to
          which  notice  has  not  been  delivered   to  the  Lender  in
          accordance   with the terms of  this Agreement specifying  the
          basis for determining  the  interest rate  applicable thereto,
          then those Revolving Leans shall  be  Reference Rate Revolving
          Loans  and  shall  bear  interest  at  a  rate  determined  by
          reference to the Reference Rate until notice  to  the contrary 
          has  been  given  to  the  Lender  and  such notice has become
          effective.   Except   as  otherwise   provided  herein ,   the
          outstanding Obligations shall bear interest as follows:

                (i) For  all  Reference  Rate  Revolving Loans and other
          Obligations,  which  are  not   LIBOR   Rate Revolving  Loans,
          then at a fluctuating  per  annum  rate equal to the Reference
          Rate plus the Applicable Margin; and
          
                (ii) For all LIBOR Rate Revolving Loans,  then  at a per
          annum rate  equal to the LIBOR Rate plus the Applicable Margin
          determined for the applicable Interest Period.



          Each  change  in  the Reference Rate shall be reflected in the
          interest rate described in (i) above  as of the effective date
          of such change.  All interest charges shall be computed on the
          basis of  a  year  of  360 days and actual days elapsed (which
          results in  more  interest  being paid than if computed on the
          basis  of a 365-day year). Interest accrued  on  all Revolving
          Loans will be payable in arrears  on  the fifteenth (15th) day
          of each month hereafter.
          
<PAGE> 52
                               
                (b)    If any Default or Event of Default occurs and  is
          continuing and the  Lender in  its discretion so elects, then,
          until such  Default  or  Event  of  Default  has  been  cured,
          all of the Obligations shall bear interest at the Default Rate
          applicable thereto.

                2.4(B)  Conversion  and  Continuation  Elections (a) The
          Borrower may, upon irrevocable written notice to the Lender in
          accordance with Subsection 2.4(B):

                (i) elect, as  of  any  Business  Day ,  in  the case of
          Reference  Rate Revolving Loans to convert any such  Revolving
          Loans (or  any  part  thereof  in  an  amount  not  less  than
          $5,000,000, or  that  is in an integral multiple of $1,000,000
          in excess thereof) into LIBOR Rate Revolving Loans; or

                (ii)      elect,  as of the last  day of  the applicable
          Interest Period, to continue  any  LIBOR Rate Revolving  Loans
          having  Interest  Periods  expiring  on  such day (or any part
          thereof  in  an  amount  not less than  $5,000,000, or that is
          in an  integral  multiple  of  $1,000,000  in excess thereof);

          Provided,  that if at any time the aggregate  amount of  LIBOR
          Rate  Revolving  Loans  is  reduced,  by payment,  prepayment,
          or conversion of part  thereof to  be  less  than  $1,000,000,
          such  LIBOR  Rate  Revolving Loans shall automatically convert
          into Reference  Rate  Revolving  Loans,  and on and after such
          date  the  right  of  the  Borrower to continue such Revolving
          Loans as, and  convert  such  Revolving Loans into, LIBOR Rate
          Revolving Loans, as the  case  may be, shall terminate.

              (b)   The Borrower shall  deliver  a notice of conversion/
          continuation  ("Notice  of  Conversion/Continuation")  to   be
          received by the Lender not later than 11:00 a.m. (Cherry Hill,
          New Jersey time) at least 3  Business  Days  in advance of the
          Conversion/Continuation Date, if the Revolving Loans are to be
          converted into or continued as LIBOR  Rate Revolving Loans and
          specifying:
          
                (i) the proposed Conversion/Continuation Date;

                (ii)      the  aggregate amount of Revolving Loans to be
          converted or renewed; and
          
                (iii)   the type  of  Revolving Loans resulting from the
          proposed conversion or continuation.
          
<PAGE> 53
          
                (c)   If   upon  the  expiration  of any Interest Period
          applicable  to  LIBOR  Rate  Revolving  Loans,   the  Borrower
          has failed  to  select  timely a new Interest   Period  to  be
          applicable to LIBOR  Rate Revolving Loans  or  if  any Default
          or Event of Default then exists,  the Borrower shall be deemed
          to have elected to  convert  such  LIBOR Rate Revolving  Loans
          into  Reference  Rate  Revolving  Loans  effective as  of  the
          expiration date of such lnterest period.
          
                (d)   During  the  existence  of  a Default  or Event of
          Default,  the Borrower may not elect to have a Revolving  Loan
          converted into or  continued  as  a LIBOR Rate Revolving Loan.

                (e)   After   giving   effect   to   any   conversion or
          continuation of Revolving Loans, there  may  not  be more than
          four different Interest Periods in effect.

                2.5 YIELD PROTECTION AND ILLEGALITY.

                2.5(A) Illegality

               (i)    If   the  Lender determines that  the introduction
          of any Requirement of Law, or any change in any Requirement of
          Law,  or  in   the   interpretation  or  administration of any
          Requirement of Law, has made it unlawful, or that any  central
          bank  or  other Governmental Authority has asserted that it is
          unlawful,  for  the Lender or its applicable lending office to
          make LIBOR Rate Revolving Loans,  then, on notice  thereof  by
          the Lender to the Borrower, any obligation of that  Lender  to
          make LIBOR Rate Revolving Loans shall be suspended  until  the
          Lender notifies  the  Borrower that  the circumstances  giving
          rise to such determination no longer exist.
          
               (ii) If  the  Lender  determines  that  it is unlawful to
          maintain  any  LIBOR  Rate Revolving Loan, the Borrower shall,
          upon  its  receipt  of notice of such fact and demand from the
          Lender, prepay in full such LIBOR Rate Revolving Loans of that
          Lender  then  outstanding,   together  with  interest  accrued
          thereon and  amounts  required under Section 5 4 either on the
          last day  of  the   Interest Period thereof, if the Lender may
          lawfully continue to maintain such LIBOR  Rate Revolving Loans
          to such day, or immediately, if  the  Lender  may not lawfully
          continue  to  maintain such LIBOR Rate Revolving Loan.  If the
          Borrower is required  to   so  prepay any LIBOR Rate Revolving
          Loan, then  concurrently  with  such  prepayment, the Borrower
          shall borrow from the Lender, in the amount of such repayment,
          a Reference Rate Revolving Loan.
          
          
<PAGE> 54          
                               
                2.5(B)  Funding  Losses.  The  Borrower  shall reimburse
          the  Lender and hold the Lender  harmless  from  any  loss  or
          expense which the Lender may sustain or incur as a consequence
          of:
          
               (i)  the  failure  of  the  Borrower  to make on a timely
          basis  any  payment  of  principal of any LIBOR Rate Revolving
          Loan;
          
               (ii) the  failure  of the Borrower to borrow, continue or
          convert a  Loan  after the Borrower has given (or is deemed to
          have given) a  Notice  of Borrowing or a Notice of Conversion/
          Continuation;
          
               (iii)  the  prepayment  or other payment (including after
          acceleration thereof)of an LIBOR Rate  Revolving Loan on a day
          that  is  not  the  last  day of the relevant Interest Period;
          including   any   such   loss  or  expense  arising  from  the
          liquidation  or  reemployment  of  funds  obtained  by  it  to
          maintain its   LIBOR Rate Revolving Loans or from fees payable
          to terminate the deposits from which such funds were obtained.

                2.5(C)  Inability  to  Determine  Rates .  If the Lender
          determines that for any reason adequate  and reasonable  means
          do not exist for determining the LIBOR Rate  for any requested
          Interest  Period  with   respect  to  a  proposed  LIBOR  Rate
          Revolving Loan,  or that  the  LIBOR  Rate  for any  requested
          Interest  Period  with  respect   to  a  proposed  LIBOR  Rate
          Revolving  Loan  does  not  adequately and  fairly reflect the
          cost to  the  Lender  of  funding  such  Loan, the Lender will
          promptly so notify  the  Borrower.  Thereafter, the obligation
          of the Lender to make  or  maintain LIBOR Rate Revolving Loans
          hereunder  shall  be  suspended  until the Lender revokes such
          notice  in  writing. Upon receipt of such notice, the Borrower
          may revoke  any  Notice of Borrowing or Notice of  Conversion/
          Continuation  then  submitted  by it. If the Borrower does not
          revoke such Notice, the Lender shall make, convert or continue
          the Revolving Loans, as  proposed  by  the  Borrower,  in  the
          amount specified  in  the  applicable  notice submitted by the
          Borrower, but such Revolving Loans shall be made, converted or
          continued as Reference Rate Revolving Loans  instead  of LIBOR
          Rate Revolving Loans."

                2.6  Unused Line Fee. During the term of this Agreement,
          Borrower  shall  pay  to  Lender  a  fee ('Unused  Line  Fee')
          in an  amount  equal  to  .25 percent per annum, multiplied by
          the amount  by  which  the  Total  Credit Facility exceeds the
          average  closing  daily  balance of the Loan during the month.
          Such a fee, if any, shall be calculated on the basis of a year
          of 360 days and actual days elapsed,  and shall  be payable to
          Lender on the fifteenth day  of each month with respect to the
          prior month."
          
          
<PAGE> 55          
                               
     L.    Amendment to Section 3.  Section 3 of the Agreement is hereby
amended in its entirety to read as follows:

                "3.   Term. This  Agreement shall have a term commencing
          on March 31, 1993, and  ending on the Stated Termination Date.
          On the  Stated  Termination   Date  the  Loan shall be due and
          payable  in full without notice or demand. Notwithstanding the
          foregoing,  upon the  occurrence  of an Event  of Default, the
          Lender may immediately terminate this  Agreement."
          
     M.   Amendment  to Section  8.   Section  8.  6 of the Agreement is
amended by deleting the ratio "1.5:1" and  inserting in lieu thereof the
ratio "1.25:1".

     N.   Amendment  to  Section 8.  Section  8.8  of  the  Agreement is
amended in its entirety to read as follows:

                "8.8  Charge-Off Policy.   Borrower shall  establish and
          implement,  all  in  a manner satisfactory to Lender, a policy
          for charging off the unpaid   balance of any Contract upon the
          occurrence  of  any  default  under the terms thereof. Without
          limiting  the  generality of the foregoing, Borrower shall, on
          the last business day of each month, charge off (i) the unpaid
          balance of any Contract with respect to which  any payment due
          thereunder  is  120  days  or more past due as determined on a
          contractual basis and (ii) the  unpaid balance of any Contract
          with respect to which  the Contract Debtor is the subject of a
          bankruptcy  or  solvency  proceeding. In  addition, the policy
          shall provide that Borrower shall  immediately  charge off all
          Contracts with  a  deficiency balance and shall charge off all
          the value of any Vehicles which have been repossessed for more
          than 120 days."
     0.    Amendment  to  Section  8.  Section  8.22 of the Agreement is
amended in its entirety to read as follows:

                 "8.22 Limitation on Bulk Purchases. Borrower shall not,
          without  Lender's  prior  written  consent  (which  Lender may
          withhold  in  its sole and absolute discretion), acquire for a
          purchase  price greater than $500,000 any Contracts as part of
          a  Bulk  Purchase  Transaction .  The  phrase  'Bulk  Purchase
          Transaction shall mean the purchase, on a group or   aggregate
          basis, of Contracts originated by third  parties, in  one or a
          series of related transactions, from  a  seller  or affiliated
          sellers, where  Borrower's  decision to purchase the Contracts
          is based primarily on criteria other than the creditworthiness
          of  the  individual  Contract  Debtors  who  are  the Contract
          obligors. Borrower may, without the consent of Lender, acquire
          for a purchase price of $500,000 or  less Contracts as part of
          a Bulk Purchase Transaction   provided the Borrower has Excess
          Availability  sufficient  to  consummate  the   Bulk  Purchase
          Transaction prior to, and without giving   effect to, the Bulk
          Purchase Transaction."

<PAGE> 56
     P.     Amendment  to  Section 9.  Section  9 .1 of the Agreement is
amended by adding  at  the  end of the Section a new sentence to read as
follows:
               "All   of   the  foregoing reports shall be delivered (i)
          twice  monthly  on  the  first   and fifteenth  of  each month
          in the event  the  Advance Rate is  reduced as a result of the
          Collateral Adjustment Percent and (ii) at such times as Lender
          requests upon the occurrence and continuation of  an  Event of
          Default."

     Q.   Amendment   to  Section  10. Section 10(p) of the Agreement is
amended in its entirety to read as follows:

                "p.   The Borrower's Collateral Adjustment Percent is at
          anytime equal to or greater than twenty-two percent (22%)."
          
     R.   Amendment  to  Section  10.  Section  10  of the Agreement  is
amended by adding a new subsection "r" to read as follows:

                "(r)  Peter L. Vosotas at any time fails to own at least
          twenty-five percent (25%)  of  the  voting  stock  of Nicholas
          Financial, Inc. ("Parent") or that Parent at any time fails to
          own  all  of  the issued and outstanding stock of Borrower, or
          that Peter L. Vosotas  at  any  time  fails   to  control  the
          Borrower."
          
     S.    Amendment to Note. The Note shall be amended and  restated in
its entirety as set forth in Exhibit A ("Amended Note").

  Section  2.    Conditions.  The  effectiveness  of  this Amendment  is
subject to the satisfaction  of  the  following conditions precedent:

     A.    Amendment. Fully  executed  copies of this Amendment  and the
Amended  Note  signed  by  the Borrower and ratification's signed by the
Guarantors shall be delivered to Lender.

     B.    Resolution.  A  certificate  executed  by  the  Secretary  or
Assistant Secretary of Borrower certifying that the  Borrower's Board of
Directors  has  adopted  resolutions authorizing the execution, delivery
and  performance  by  Borrower  of  the  Amendment shall be delivered to
Lender.

     C.    Other  Documents.  Borrower shall have executed and delivered
to Lender such other documents and instruments as Lender may require.

  Section 3.  Termination of Guaranty. The Guaranty executed by Peter L.
Vosotas  dated  March 31,  1993  guaranteeing  the Obligations is hereby
terminated and shall no longer have any force or effect.


<PAGE> 57
                               
  Section  4.    Effective Date. This Amendment shall be effective as of
July 1, 1997. 

  Section 5.   Miscellaneous.


     A.  Survival of Representations and Warranties. All representations
and warranties made in the Agreement or any other  document or documents
relating  thereto , including ,  without limitation, any Loan   Document
furnished in connection with this Amendment, shall survive the execution
and delivery  of  this  Amendment  and  the other Loan Documents, and no
investigation by Lender or any closing shall affect the  representations
and warranties or the right of Lender to rely thereon.

     B.   Additional  Representation  and  Warranty.  In order to induce
Lender to enter into this  Amendment,  Borrower  represents and warrants
to  Lender  that the audited  financial statements of the  Borrower  for
the fiscal  year  ending March 31, 1997 shall be  consistent   with, and
contain  no  material  adverse changes from,  the preliminary  financial
statements   for   the   period delivered  to  the  Lender prior  to the
date  hereof.  Borrower  agrees that this representation and warranty is
material  to  the  Lender and that a breach thereof  shall constitute an
Event of Default under the Agreement.

    C.   Reference  to  Agreement.  The  Agreement ,  each  of  the Loan
Documents, and any  and  all  other agreements, documents or instruments
now or hereafter  executed  and delivered  pursuant to the terms hereof,
or pursuant to the terms of the Agreement as  amended hereby, are hereby
amended so that any  reference therein to the  Agreement  shall  mean  a
reference  to  the Agreement as amended hereby.

    D.   Agreement  Remains  in  Effect.  The  Agreement  and   the Loan
Documents remain in full force and effect and the Borrower  ratifies and
confirms its agreements  and  covenants contained  therein. The Borrower
hereby  confirms  that,  after  giving   effect   to  this Amendment, no
Event  of  Default  or Default exists as of such date.

    E.   Severability.  Any provision of this Amendment held by a  court
of  competent  jurisdiction  to  be  invalid  or unenforceable shall not
impair  or  invalidate  the  remainder  of this Amendment and the effect
thereof  shall  be  confined  to  the provision so held to be invalid or
unenforceable.

    F.   APPLICABLE LAW.  THIS  AMENDMENT  AND  ALL OTHER LOAN DOCUMENTS
EXECUTED  PURSUANT  HERETO  SHALL  BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE  IN  THE  STATE  OF  NEW JERSEY AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY.
     
    G.   Successors and Assigns. This  Amendment  is  binding  upon  and
shall inure to the benefit  of  Lender and Borrower and their respective


<PAGE> 58

successors  and assigns; provided, however, that Borrower may not assign
or transfer any of its rights or obligations hereunder without the prior
written consent of Lender.
     
    H.   Counterparts.  This Amendment may  be  executed in one  or more
counterparts, each of  which  when  so executed shall be deemed to be an
original, but  all of which when taken together shall constitute one and
the same instrument.
      
    I.   Headings.  The headings, captions and arrangements used in this
Amendment   are   for   convenience  only   and  shall  not  affect  the
interpretation of this Amendment.

    J.   NO  ORAL  AGREEMENTS.  THIS  AMENDMENT ,TOGETHER WITH THE OTHER
LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AGREEMENT BETWEEN LENDER
AND  BORROWER  AND  MAY  NOT  BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS OR  SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO  UNWRITTEN  ORAL  AGREEMENTS BETWEEN LENDER AND BORROWER. 


IN  WITNESS WHEREOF,  the parties  have  executed  this Amendment  under
seal on the date first written above.


                              NICHOLAS FINANCIAL, INC.


                              By:/s/Peter L Vosotas
                              -----------------------
                              Name: Peter L Vosotas
                              Title: President, CEO

                              BANKAMERICA BUSINESS CREDIT,INC.
                              

                              By:/s/ Joseph La Cognata
                              -------------------------
                              Name: Joseph La Cognata
                              Title: Exec VP


<PAGE> 59


                  CONSENTS AND REAFIRMATIONS
                               
     The undersigned hereby consent to the  terms and conditions of that
Amendment  No.7  to  Loan  and  Security Agreement dated as of  July  1,
1997, between Nicholas Financial, Inc. and BankAmerica Business  Credit,
Inc. ("Creditor1t) and reaffirm their obligations under Guarantees  made
by the undersigned in favor of  the Creditor and acknowledge  and  agree
that the Guarantees remains in full force and effect.

     Dated as of July 1, 1997

                              "GUARANTORS"

                              Nicholas Data Services, Inc.

                              By: /s/Peter L Vosotas
                              -------------------------
                              Peter L Vosotas, President

                              By: /S/Keith A Bertholf
                              -------------------------
                              Keith A Bertholf, Secretary


                              Nicholas Financial, Inc.

                              By: /s/Peter L Vosotas
                              ------------------------
                              Peter L Vosotas, President

                              By: /s/Keith A Bertholf
                              -----------------------
                              Keith A. Bertholf, Secretary


<PAGE> 60 
                         
                                 Exhibit A

              AMENDED AND RESTATED SECURED PROMISSORY NOTE

                               

                               

      Total Credit Facility                         July 1, 1997




     FOR  VALUE RECEIVED, the  undersigned , Nicholas  Financial,  Inc.,
a  Florida  corporation , ("Borrower")  hereby promises  to pay  to  the
order of BankAmerica Business  Credit,  Inc.,  a  Delaware  corporation,
("Lender") at  the  office  of  Lender located   at 200 Lake Drive East,
Suite 201, Cherry  Hill,  New Jersey   08002, or at such other  place as
Lender may  designate in  writing  from time to time, the  Total  Credit
Facility ('Principal Sum') or  so much thereof as shall have  been  from
time to time advanced and re-advanced to Borrower pursuant  to a certain
Loan  and  Security  Agreement  dated March 31, 1993, as amended  ('Loan
Agreement') together with interest on so  much thereof  as is, from time
to time, outstanding and unpaid at the rate of interest set forth in the
Loan Agreement.

     Interest  shall  be  computed at the end of each day by multiplying
the outstanding Principal Sum hereunder at the close of business on that
day by  a  daily  interest  factor, which daily interest factor shall be
calculated by dividing the aforesaid Interest Rate in effect on that day
by 360 (which results  in  more  interest being charged than if 365 were
used). Interest  so  computed  shall  accrue for each and every day (365
days  per  year,  366  days  per  leap  year)  on  which any part of the
Principal  Sum remains outstanding hereunder, including the day on which
any Advance  is  made regardless of the time of day the Advance is made,
and  including  the  day  on  which funds are repaid unless repayment is
credited by  Lender  to the Loan prior to the close of Lender's business
on  the  day  of  receipt. The  Interest Rate shall be adjusted and such
adjustments shall become effective as described in the Loan Agreement.

     All  payments  shall  be  applied  first to the payment of any sums
owing  by  Borrower  to  Lender  under  the  Loan  Agreement (other than
principal or interest), second to all  accrued  and unpaid interest, and
third to  the  payment  of the Principal Sum. Lender may, at its option,
add  Lender's  Expenses  owing  by  Borrower  to  Lender  to  the unpaid
Principal Sum, which  amounts  shall  thereupon  accrue  interest at the
Interest Rate from time to time in effect.

     Interest shall be calculated, in the manner indicated above, on the
last calendar day of such month ("Calculation Date") (the amount of such
monthly interest being hereinafter  referred to as the "Monthly Interest
Charge"). On the fifteenth day  of  each  month  immediately following a
Calculation Date ( hereinafter "Interest Payment Due Date"), the Monthly
Interest Charge  shall  be  due  and payable in full by wire transfer of
immediately  available  funds.   In  the  event  the  fifteenth day of a
particular  month  is  not  a business day during which Bank is open for
business, then the Interest Payment Due Date shall be the first business
day immediately preceding the fifteenth day of a month on which Batik is
open for business.  Failure  to  pay  a  Monthly  Interest  Charge on an


<PAGE> 61

Interest Payment Due Date shall constitute an Event of Default under the
Loan Agreement.
    
     On the  Stated  Termination Date or the date of earlier termination
of  the  Loan  Agreement,  the  entire  Principal Sum, together with all
accrued and unpaid interest, shall become immediately due and payable in
full without notice or demand by Lender and shall be repaid to Lender by
a wire transfer of immediately available funds.

    Should any  payment  required to be made under this Note not be paid
on the date the same becomes due and payable, Borrower  recognizes  that
Lender will incur extra expenses for handling  delinquent  payments, the
exact amount of such extra expenses  being economically impracticable to
ascertain,  but  that  a  charge  of  six  percent  of the amount of the
delinquent  payment  would  be  a  fair  approximation of the expense so
incurred by Lender.  Therefore,  Borrower  shall, in such event, without
further notice and without prejudice to any rights of  Lender, including
without limitation, the  right  to collect any other amounts provided to
be  paid  hereunder  or  under  any  instrument securing this Note or to
declare  a  default  hereunder, pay  to  Lender  to  cover such expenses
incurred in  handling  such  delinquent payments, a "late charge" of six
percent of the amount of such delinquent payment.

     Notwithstanding any provision of the Loan Agreement or this Note to
the contrary, Borrower  may terminate the Loan Agreement and Note at any
time if (a) Borrower gives Lender at least ten (10) days prior notice of
its intent to terminate; (b) Borrower  pays and performs all Obligations
in  full  on  or prior to  the  effective  date  of termination; and (c)
Borrower pays  to  Lender  an early termination fee equal to one percent
(1%) of the  Total Credit Facility  in the event that the effective date
of termination occurs on or before June 30,1998, one-half of one percent
(0.50%) of  the  Total  Credit  Facility in the event that the effective
date  of  termination  occurs  after  June  30,  1998 but on or prior to
December 31, 1998, and one-quarter  of  one percent (0.25%) of the Total
Credit  Facility  in  the  event  that the effective date of termination
occurs  after  December 31, 1998  but  on  or prior to June 30, 1999. No
early  termination  fee  shall  be  payable  if  the  Loan  Agreement is
terminated after June 30, 1999.

     Should an Event of Default occur under  the Loan Agreement then the
entire Principal Sum and  any  other  sums advanced  by Lender under the
Loan Agreement, together with all unpaid interest accrued thereon, shall
at the option of Lender and  without  notice to Borrower, at once become
due and payable and may be collected forthwith, regardless of the Stated
Termination Date specified in the Loan Agreement. Upon the occurrence of
an Event of Default, Borrower  shall  pay, upon  notice from the Lender,
interest on the Principal Sum at the Default Rate.

     Time is of the essence of this Note. In  the event this Note or any
obligation  hereunder  is  collected  by  or through an attorney-at-law,
Borrower  agrees  to  pay  all  costs of  collection, including but  not
limited  to, reasonable  attorney's  and  paralegal fees, whether or not
suit is filed, and all costs incurred on appeal.


<PAGE> 62

                               
     Except as expressly provided in the Loan Agreement, presentment for
payment, demand, protest, notice of demand, protest  and  nonpayment and
all  other  notices   are   hereby  waived  by  Borrower.  No failure to
accelerate the  debt  evidenced hereby by reason of an Event of Default,
acceptance of a past due installment, or indulgence granted from time to
time  shall  be  construed (I)  as  a  novation  of  the Note  or  as  a
reinstatement  of  the  indebtedness evidenced hereby  or  as  a  waiver
of such  right  of  acceleration or of the right of Lender thereafter to
insist upon  strict  compliance  with the terms of this Note, or (ii) to
prevent  the exercise of  such right of acceleration  or any other right
granted  hereunder  or under applicable state law;  and  Borrower hereby
expressly waives the benefit of any statute or rule of law or equity now
provided, or  which  may  hereafter  be provided, which  would produce a
result contrary to  or  in  conflict with the foregoing. No extension of
time for the payment of this Note or any installment due hereunder, made
by  agreement with any person now or hereafter liable for the payment of
this Note shall operate to release, discharge, modify, change or  affect
the original  liability of Borrower under this Note, either in whole  or
in part, unless Lender agrees otherwise in writing. This Note may not be
changed orally, but only  by an agreement in writing signed by the party
against  whom  enforcement  of  any  waiver,  change,  modification , or
discharge is sought.

     Lender  shall have the right to sell, assign, or otherwise transfer
this Note and the Loan Agreement or any  interest therein to one or more
institutional investors  or their affiliates without Borrower's consent.
This Note, the  Loan Agreement, and all of the covenants and  agreements
contained therein shall be binding upon and inure to the benefit of  the
respective legal and personal representatives, successors, and   assigns
of Lender and Borrower.
   
     If, from any circumstances whatsoever, fulfillment of any provision
of  this Note or of the Loan Agreement, at the time performance  of such
provision shall  be  due,  shall  involve   transcending  the  limit  of
validity  presently prescribed  by any applicable usury statute  or  any
other applicable  law, with regard to obligations  of like character and
amount, then,  ipso  facto, the obligation  to  be  fulfilled  shall  be
reduced to the limit of such validity, so  that  in no event  shall  any
exaction  be possible  under this Note or under the Loan Agreement  that
is  in  excess   of  the  current  limit  of  such  validity,  but  such
obligation shall be fulfilled  to the  limit  of  such validity.  In the
event a court determines that Lender  has received  interest  and  other
charges  in  excess   of   the  highest  rate  applicable hereto, Lender
shall  apply  such excess  to  the  Principal Sum of this Note as of the
date of such determination.

     As used herein, the terms  "Lender"  and "Borrower" shall be deemed
to  include  their  respective   successors,  legal, representatives and
assigns,  whether by voluntary action of the  parties or by operation of
law. In  the  event  that  more  than  one  person, firm, or entity is a
Borrower hereunder, then  all  references to  "Borrower" shall be deemed
to refer  equally  to  each  of said persons, firms, or entities, all of
whom  shall be jointly and severally liable for all  of  the obligations
of Borrower hereunder.

     This Note has  been  issued  pursuant to the Loan Agreement and all
the  terms,  covenants , and conditions of the  Loan Agreement  and  all
other  instruments evidencing and/or securing the indebtedness hereunder
are hereby made a  part of this  Note and are deemed incorporated herein
in full. The occurrence of any Event of Default under the Loan Agreement
or any other  instruments  securing  and/or evidencing this indebtedness

<PAGE> 63

shall  constitute  a  default  under this Note. Unless otherwise defined
herein , all  capitalized  terms  shall  have  the  same  definition  as
contained in the Loan Agreement.
 
     This Note and  all  transactions hereunder and/or evidenced  herein
shall be governed by, construed, and enforced  in  accordance  with  the
laws of the state of New Jersey,   without reference  to its conflict of
law rules.
 
     This Note  amends  and restates the Secured  Promissory Note  dated
March 31, 1993, as amended, and the obligations represented by such note
shall  not  be  deemed  repaid or  discharged as of the date hereof, but
shall continue and remain in full force and effect.
 
 IN WITNESS WHEREOF, Borrower has executed this Note on the day and year
first above written.

                               "BORROWER"

                               Nicholas Financial, Inc.,
                               a Florida Corporation

 
                               By: /s/Peter L Vosotas
                               ------------------------
                               Peter L. Vosotas, President