Filed Pursuant to Rule 424(b)(3) and (c)

                                            Registration Nos.  333-76285
                                                               333-76285-01
                                                               333-76285-02

                       Supplement No. 2 Dated May 18, 1999
                   To Prospectus Supplement Dated May 13, 1999
                                   Relating to
                2,500,000 10% Series A Trust Preferred Securities
                                       of
                           Litchfield Capital Trust I
                                  guaranteed by
                        Litchfield Financial Corporation


All  capitalized  terms used but not  defined  herein  shall  have the  meanings
ascribed to them in the Prospectus  dated May 13, 1999, as  supplemented  by the
Prospectus  Supplement  dated May 13, 1999,  forming a part of the  Registration
Statement on Form S-3, File Nos. 333-76285, 333-762850-1 and 333-76285-02.

The purpose of this  Supplement No. 2 is to revise and supersede the information
regarding  the net  proceeds  to  Litchfield  Capital  Trust I, as set  forth in
tabular form on the cover of the Prospectus Supplement, as follows:

                               Per trust preferred security          Total  
Public Offering Price.......                   $    10.00        $ 25,000,000
Proceeds to the trust.......                   $    10.00        $ 25,000,000

Litchfield Financial Corporation will pay underwriting discounts and commissions
equal to $.40 per trust preferred security,  for an aggregate of $1,000,000,  on
behalf of Litchfield Capital Trust I.