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  <TITLE> Smart Online, Inc. (Form: 8-K) </TITLE>
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  		UNITED STATES<BR>
  	SECURITIES AND EXCHANGE COMMISSION
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  	WASHINGTON, D.C. 20549
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  	FORM 8-K
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  	CURRENT REPORT
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  	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
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  	Date of Report (Date of Earliest Event Reported):
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  	&nbsp;
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  	March 6, 2006
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  	Smart Online, Inc.
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  <BR>__________________________________________<BR>
  	(Exact name of registrant as specified in its charter)
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  	Delaware
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  	001-32634
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  	95-4439334
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  _____________________<BR>
  	(State or other jurisdiction
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  _____________<BR>
  	(Commission
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  ______________<BR>
  	(I.R.S. Employer
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  	of incorporation)
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  	File Number)
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  	Identification No.)
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  	&nbsp;&nbsp;
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  	2530 Meridian Parkway, 2nd Floor, Durham, North Carolina
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  	27713
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  _________________________________<BR>
  	(Address of principal executive offices)
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  ___________<BR>
  	(Zip Code)
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  	Registrant&#146;s telephone number, including area code:
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  	919-765-5000
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  	Not Applicable
  <BR>______________________________________________<BR>
  	Former name or former address, if changed since last report
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  	&nbsp;
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  <!-- CoverPageRegistrant END --><P><FONT SIZE="2">
  Check the appropriate box below if the Form 8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any
  of the following provisions:</FONT>
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  <P><FONT SIZE="2">
  [&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
  [&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
  [&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
  [&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
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  	Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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  On March 6, 2006, Smart CRM, Inc., a wholly-owned subsidiary of Smart Online, Inc., assigned a 70% interest in eight separate service contracts and a 50% interest in one service contract with total payables from customers over the lives of the contracts of $654,588 to a factor in exchange for $328,925.  As a result of this arrangement, Smart CRM, Inc., will record a debt payable to the factor in the amount of $384,211, which will become due in monthly installments over a period of 44 months.  The factoring agreement provides for a security interest in the equipment provided to customers, if such equipment is provided under the contracts.  This debt will appear on Smart Online, Inc.'s consolidated balance sheet and will reduce the amount of future revenue Smart CRM, Inc. derives from these nine customer contracts.  Approximately $42,900 of the proceeds will be used to pay off existing factor payables which will result in a corresponding decrease in debt payable.  The remaining cash acquired from the factor will be used to fund current operations of Smart CRM, Inc. and Smart Online, Inc.  Should any customer fail to make their scheduled payments, Smart CRM, Inc. will be liable to the factor for the full amount of the interest assigned to the factor.
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  	SIGNATURES
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  	Pursuant to the requirements of the Securities Exchange Act of 1934, the
  	registrant has duly caused this report to be signed on its behalf by the
  	undersigned hereunto duly authorized.
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  	Smart Online, Inc.
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  <I>
  	March 9, 2006
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  	By:
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  <I>
  	/s/ Michael Nouri
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  	&nbsp;
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  <I>
  	Name: Michael Nouri
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  <I>
  	Title: President and Chief Executive Officer
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metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "htm_10829.htm", "description": "LIVE FILING", "secsgml_size_bytes": 9566}]
metadata_filer: {"company-data": {"conformed-name": "SMART ONLINE INC", "cik": "0001113513", "assigned-sic": "7372", "irs-number": "954439334"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-32634", "film-number": "06675506"}, "business-address": {"street1": "2530 MERIDIAN PARKWAY", "city": "DURHAM", "state": "NC", "zip": "27713", "phone": "919-806-4521"}, "mail-address": {"street1": "P.O. BOX 12794", "city": "RESEARCH TRIANGLE PARK", "state": "NC", "zip": "27709"}}
text: Smart Online, Inc. (Form: 8-K)
  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):
  March 6, 2006
  Smart Online, Inc.
  __________________________________________
  (Exact name of registrant as specified in its charter)
  Delaware
  001-32634
  95-4439334
  _____________________
  (State or other jurisdiction
  _____________
  (Commission
  ______________
  (I.R.S. Employer
  of incorporation)
  File Number)
  Identification No.)
  2530 Meridian Parkway, 2nd Floor, Durham, North Carolina
  27713
  _________________________________
  (Address of principal executive offices)
  ___________
  (Zip Code)
  Registrant's telephone number, including area code:
  919-765-5000
  Not Applicable
  ______________________________________________
  Former name or former address, if changed since last report
  Check the appropriate box below if the Form 8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any
  of the following provisions:
  [  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  [  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  [  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  [  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
  Top of the Form
  Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
  On March 6, 2006, Smart CRM, Inc., a wholly-owned subsidiary of Smart Online, Inc., assigned a 70% interest in eight separate service contracts and a 50% interest in one service contract with total payables from customers over the lives of the contracts of $654,588 to a factor in exchange for $328,925.  As a result of this arrangement, Smart CRM, Inc., will record a debt payable to the factor in the amount of $384,211, which will become due in monthly installments over a period of 44 months.  The factoring agreement provides for a security interest in the equipment provided to customers, if such equipment is provided under the contracts.  This debt will appear on Smart Online, Inc.'s consolidated balance sheet and will reduce the amount of future revenue Smart CRM, Inc. derives from these nine customer contracts.  Approximately $42,900 of the proceeds will be used to pay off existing factor payables which will result in a corresponding decrease in debt payable.  The remaining cash acquired from the factor will be used to fund current operations of Smart CRM, Inc. and Smart Online, Inc.  Should any customer fail to make their scheduled payments, Smart CRM, Inc. will be liable to the factor for the full amount of the interest assigned to the factor.
  Top of the Form
  SIGNATURES
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  	registrant has duly caused this report to be signed on its behalf by the
  	undersigned hereunto duly authorized.
  Smart Online, Inc.
  March 9, 2006
  By:
  /s/ Michael Nouri
  Name: Michael Nouri
  Title: President and Chief Executive Officer