UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                   FORM 8-K


               CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

        Date of report (Date of earliest event reported): August 24, 1999

                       Commission File Number: 0-19822


                       LITCHFIELD FINANCIAL CORPORATION
            (Exact name of registrant as specified in its charter)



          MASSACHUSETTS                              04-3023928
 State or other jurisdiction             (I.R.S. Employer Identification No.)
  of incorporation or organization)


 430 MAIN STREET, WILLIAMSTOWN, MA               01267
(Address of principal executive offices)      (Zip Code)


      Registrant's telephone number, including area code: (413) 458-1000


             (Former name, former address and former fiscal year,
                         if changed since last report)


Item 5: Other Events:

Attached is the press release issued by the company on August 24, 1999


WILLIAMSTOWN,   Massachusetts   (August  24,  1999)  -   Litchfield   Financial
Corporation  (NASDAQ/LTCH)  announced  today  that it has  acquired  53% of the
outstanding   shares  of  privately  held  American  Growth  Finance,   Inc,  a
factoring  company  headquartered  in Dallas,  Texas with offices in Nashville,
Tennessee  and Orlando and Tampa,  Florida.  AGF provides  accounts  receivable
factoring   services  to  small   businesses   serving   mostly   Fortune  1000
companies.  Terms of the transaction were not disclosed.

Randy Stratton,  President and CEO of Litchfield commented,  "Our investment in
AGF  reflects  our  business  strategy  of  identifying  and  lending  money to
smaller  finance  companies in niche markets that best fit our business  model,
as we have done in the past.  In  particular,  we are  looking to lend to small
and  medium-sized  businesses  in  niche  markets  that  fit  nicely  with  our
existing  land,  timeshare and tax lien  businesses.  Factoring will help us to
further  diversify  our $545 million  serviced  portfolio.  In  addition,  this
business will provide us with an asset type that is counter-cyclical."

John Stieber,  Sr. will  continue to serve in his present  position as Chairman
of AGF.  Mr.  Stieber has over 20 years of  experience  in accounts  receivable
factoring.  Previously,  he was  professor  of  finance  and  economics  at the
School of Business, Southern Methodist University.

Mr.  Stratton  noted,  "According to the Small Business  Administration,  small
businesses  account  for  over  50% of the  gross  domestic  product.  As  they
continue to spur the  economy,  we intend to have an active  role in  providing
financing  for their  growth.  By  providing  working  capital  financing,  AGF
helps  growing  companies  meet their  entrepreneurial  goals.  Since banks are
not likely to make loans  secured by  accounts  receivable,  the value of these
services has gone up in the eyes of small business owners."

Mr.  Stratton  added,  "As with our recent  successful  acquisition  of Ironwood
Acceptance  Company - which  purchases,  services and  liquidates tax liens - we
view  transactions  of this  nature as an  opportunity  to  further  reduce  the
portion of our revenues  derived  from the gain on sale of loans.  So while this
transaction  would be accretive in the year 2000,  we'll take the opportunity to
further reduce our gain on sale as a percentage of our revenues, instead."

Litchfield has rights to acquire additional shares of AGF through 2003.

Mr.  Stratton  commented,  "We  continue to pursue our  strategy  of  providing
liquidity  to  under-served  but  growing  markets.  In these  markets,  we can
obtain better margins and create more secure loan  structures,  giving us solid
credit  performance.  For Litchfield's  own liquidity,  we continue to grow our
diversified  money sources,  primarily  with term  facilities at fixed spreads.
We are  continually  evaluating  our interest rate  sensitivity,  looking for a
neutral or near neutral matching on an aggregate basis."

Litchfield  is  a  diversified  finance  company  that  provides  financing  to
creditworthy  borrowers  for  assets  not  typically  financed  by  banks.  The
Company  provides  such  financing by purchasing  consumer  loans and by making
loans to businesses secured by consumer receivables or other assets.

Litchfield  Financial  Corporation  is  traded  on the  Nasdaq  Stock  Market's
National  Market system under the ticker symbol  "LTCH".  For more  information
about Litchfield, visit the company's website at www.ltchfld.com.

                                      ***

Except for the historical  information  contained or  incorporated by reference
in this press  release,  the matters  discussed  or  incorporated  by reference
herein  are  forward-looking   statements.   Such  forward-looking   statements
involve  known and unknown  risks,  uncertainties  and other  factors  that may
cause the actual  results,  performance  or  achievements  of the  Company,  or
industry  results,  to  be  materially   different  from  any  future  results,
performance  or  achievements  expressed  or  implied  by such  forward-looking
statements.  Such factors  include,  among  others,  the risk factors set forth
under  "Risk  Factors",  as listed in the 1998 Annual  Report on Form 10-K,  as
well as the  following:  general  economic  and business  conditions;  industry
trends;  changes in business  strategy or development  plans;  availability and
quality of  management;  and  availability,  terms and  deployment  of capital.
Special   attention   should  be  paid  to  such   forward-looking   statements
including,  but not  limited  to,  statements  relating  to (i)  the  Company's
ability to execute its growth  strategies and to realize its growth  objectives
and (ii) the Company's  ability to obtain  sufficient  resources to finance its
working capital needs and provide for its known obligations.

              Contact: Ronald E. Rabidou, Chief Financial Officer
            Telephone: 413-458-1000 x 160 Fax: 413-458-1020 E-Mail
                             rrabidou@ltchfld.com