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      8-K</font></div>
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      REPORT</strong></font></div>
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      31, 2006</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      of
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      BUSINESS SERVICES, INC.</strong></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">462
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      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below): </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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            <td width="5%"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></td>
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            <td width="5%"><font face="Wingdings">o</font></td>
            <td width="95%"><font size="2">Pre-commencement communications pursuant
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
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      Inc. (NASDAQ:NKBS) </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">www.newtekbusinessservices.com</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">),
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      (&#8220;CrystalTech&#8221;), has made a substantial voluntary prepayment of principal on its
      $8 million loan entered into in March 2005 from Technology Investment Capital
      Corp. (&#8220;TICC&#8221;). The loan was to mature in 2010 but CrystalTech determined to
      repay half or $4 million this year, as well as to make an additional interest
      payment of approximately $127,000 in cash instead of securities as has been
      originally agreed. Other minor modifications were made to the loan agreement
      including providing for two remaining payments of principal in 2008 and 2009.
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      CrystalTech, Registrant and TICC is attached as an exhibit.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      9.01. Financial Statements and Exhibits</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)
      Exhibits</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
      Agreement dated March 30, 2006 between Newtek Business Services, Inc.,
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CrystalTech
      Web Hosting, Inc. and Technology Investment Capital Corp.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      accordance with the requirements of the Securities Exchange Act of 1934, the
      registrant has caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;

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          <tr valign="top" bgcolor="#ffffff">
            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>NEWTEK
              BUSINESS SERVICES, INC.</strong></font></td>
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          <tr valign="top" bgcolor="#ffffff">
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:&#160;March
              31, 2006</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;Barry
              Sloane</font></td>
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              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Chairman
                of the
                Board, Chief Executive Officer,</font></div>
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                  Secretary</font></div>
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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
March
      31, 2006
Date
      of
      Report (date of Earliest Event Reported)
NEWTEK
      BUSINESS SERVICES, INC.
(Exact
      Name of Company as Specified in its Charter)
NEW
                YORK
001-16123
11-3504638
(State
                or Other Jurisdiction of
Incorporation or
                Organization)
(Commission
                File No.)
(I.R.S.
                Employer Identification No.)
462
      Seventh Avenue, 14
th
floor,
      New York, NY 10018
(Address
      of principal executive offices and zip code)
(212)
      356-9500
(Company's
      telephone number, including area code)
NEWTEK
      CAPITAL, INC.
(Former
      name or former address, if changed from 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 (see General Instruction A.2. below):
o
Written communications pursuant to Rule
              425
              under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
              14a-12
              under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
              to
              Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement communications pursuant
              to
              Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM
      8.01
Other
      Events.
On
      March
      31, 2006 Newtek Business
Services,
      Inc. (NASDAQ:NKBS)
(
www.newtekbusinessservices.com
),
      announced that its wholly-owned subsidiary, CrystalTech Web Hosting, Inc.
      ("CrystalTech"), has made a substantial voluntary prepayment of principal on its
      $8 million loan entered into in March 2005 from Technology Investment Capital
      Corp. ("TICC"). The loan was to mature in 2010 but CrystalTech determined to
      repay half or $4 million this year, as well as to make an additional interest
      payment of approximately $127,000 in cash instead of securities as has been
      originally agreed. Other minor modifications were made to the loan agreement
      including providing for two remaining payments of principal in 2008 and 2009.
      A
      copy of the letter agreement modifying the terms of the agreement between
      CrystalTech, Registrant and TICC is attached as an exhibit.
ITEM
      9.01. Financial Statements and Exhibits
(c)
      Exhibits
10.1
Letter
      Agreement dated March 30, 2006 between Newtek Business Services, Inc.,
CrystalTech
      Web Hosting, Inc. and Technology Investment Capital Corp.
SIGNATURES
In
      accordance with the requirements of the Securities Exchange Act of 1934, the
      registrant has caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.
NEWTEK
              BUSINESS SERVICES, INC.
Date: March
              31, 2006
By:
/s/ Barry
              Sloane
Barry
              Sloane
Chairman
                of the
                Board, Chief Executive Officer,
and
                  Secretary