May 17, 2017

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

Mail Stop 4720

Washington, D.C. 20549

Dear Mr. Kim and Ms. Miller:

By letter dated February 7, 2017 (the “Letter”), the staff of the Securities and Exchange Commission (the “Commission”) provided comments on the above-referenced filings made with the Commission by Nicholas Financial, Inc. (the “Company,” “we,” “us,” or “our”). On March 7, 2017, we responded to such Letter (the “March 7 Response”). We are submitting this letter to you to supplement the March 7 Response with respect to comment numbers 2, 3 and 4 in the Letter.

The original questions are as follows:

Supplemental Response:

As set forth in our March 7 Response, the Company updates its static pools on a monthly basis. We analyze each consolidated (and individual branch) static pool at specific points in time. We maintain historical write-off information with respect to every consolidated static pool and segregate each static pool by liquidation and in effect create snapshots of a pool’s write-off-to liquidation ratio at five different points in such pool’s liquidation cycle. These snapshots help us in determining the appropriate provision for credit losses and subsequent allowance for credit losses. The five snapshots are taken when the liquidation levels are at 20%, 40%, 60%, 80% and 100%.

We also update our historical portfolio performance, by tracking and comparing static pool loss data. Each month, static pools are updated and cumulative losses are stated as a percentage of the principal amount for all loans acquired in each respective static pool. This information allows us to compare current open static pools to historical static pools at the same point in their liquidation cycle.

Each static pool is initially assigned an overall expected charge-off percentage. In regard to ASC 310 (FAS 114), we do not consider the contracts to be impaired at the time of acquisition. The one common characteristic of subprime borrowers is their credit history, not a specific impairment at the time of acquisition. As static pools begin the liquidation process, the difference between actual losses and projected losses is recognized by increasing or decreasing actual cash flows through the provision for credit losses. We utilize historical charge-off percentages to help guide us in determining what estimated charge-off percentages we will assign to all static pools that haven’t been 100% liquidated. Actual losses by static pool do not occur evenly over their respective lives, and our loss model accounts for this fact. We also contemplate current economic conditions, competition, employment, gas prices, auction proceeds, and other factors in determining our estimated charge-off percentages for each respective static pool. As of December 31, 2016, the Company increased loan loss projections for specific static pools; however, the loss estimates were still lower than the actual losses incurred and resulted in additional provision expense to be recorded for such static pools. As of March 31, 2017, the Company determined it was necessary to further increase estimated loss projections as a result of actual losses incurred.

The Company’s delinquency percentages remain elevated. The increase in delinquency is attributed primarily to the Company changing its accounting policy, with respect to charging-off accounts. Prior to September 1, 2016, accounts that were 120 days contractually delinquent were charged-off. Beginning in September 2016, accounts that are 180 days contractually delinquent are charged-off to the extent the charge-off has not previously occurred. As set forth in the March 7 Response, the main driver for this decision was the increase in the average term of loans purchased and a desire to align our practices with that of the industry. The Company also attempted to centralize collections effective October 1, 2016, but elected to abandon this strategy as a result of further increases in charge-off’s and delinquencies. As of March 31, 2017, we have modified our loss model to include in our allowance for loan losses an additional reserve, which represents 50% of the principal balance, with respect to accounts whose contractual delinquency falls into the range of 120-180 days past due. This loss model modification drives additional provision for credit losses that are probable and reasonably possible under ASC 450, which equates to the allowance for loan losses increasing by $1.5M as of March 31, 2017.

As of March 31, 2017, the Company believes that the allowance is reasonable, adequate, and directionally consistent.

The Company has included a trend analysis below, which illustrates a significant increase in the allowance for credit losses as of March 31, 2017, reflecting the increase in expected losses and the additional reserve for accounts where contractual delinquency falls into the range of 120-180 days past due.

Please do not hesitate to contact Katie MacGillivary at (727) 726-0763 x2011 with any questions.