UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 SCHEDULE 13G/A
                               (Amendment No. 2)*

                    Under the Securities Exchange Act of 1934

                           MicroFinancial Incorporated
                                (Name of Issuer)

                          Common Stock, $0.01 par value
                         (Title of Class of Securities)

                                    595072109
                                 (CUSIP Number)

                                  March 7, 2006
             (Date of Event Which Requires Filing of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule
is filed:

         [ ]      Rule 13d-1(b)

         [x]      Rule 13d-1(c)

         [ ]      Rule 13d-1(d)

*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).

CUSIP No. 595072109
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1        NAMES OF REPORTING PERSONS
         I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

         Karen Fleiss
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2        CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                  (a) [__]
                                                                  (b) [__]
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3        SEC USE ONLY

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4        CITIZENSHIP OR PLACE OF ORGANIZATION

         United States of America
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                             5       SOLE VOTING POWER
                                     8,000
                                     -------------------------------------------
     NUMBER OF               6       SHARED VOTING POWER
       SHARES
     BENEFICIALLY                    647,600
       OWNED BY                      -------------------------------------------
         EACH                7       SOLE DISPOSITIVE POWER
     REPORTING
        PERSON                       8,000
         WITH                        -------------------------------------------
                             8       SHARED DISPOSITIVE POWER

                                     647,600
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9       AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

           655,600
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10      CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
        CERTAIN SHARES*                                                [__]
--------------------------------------------------------------------------------

11      PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

        4.76%(1)
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12      TYPE OF REPORTING PERSON*

        IN
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                      *SEE INSTRUCTIONS BEFORE FILLING OUT!



ITEM 1(a).        NAME OF ISSUER:

                  MicroFinancial Incorporated

ITEM 1(b).        ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICE:

                  10 M Commerce Way
                  Woburn, MA 01801


ITEM 2(a).        NAME OF PERSON FILING:

                  Karen Fleiss


ITEM 2(b).        ADDRESS OF PRINCIPAL BUSINESS OFFICE OR, IF NONE, RESIDENCE:

                  1030 Fifth Avenue
                  New York, NY 10028

ITEM 2(c).        CITIZENSHIP:

                  United States of America

ITEM 2(d).        TITLE OF CLASS OF SECURITIES:

-----------------------

(1) Based on 13,785,273 shares of MicroFinancial Incorporated's Common Stock
outstanding as of the report filed on Form 10-K on March 1, 2006.



                  Common Stock, $0.01 par value

 ITEM 2(e).       CUSIP NUMBER:

                  595072109

ITEM 3. IF THIS STATEMENT IS FILED PURSUANT TO RULE 13d-1(b), OR 13d-2(b) OR
13d-2(c), CHECK WHETHER THE PERSON FILING IS A:

            This statement is not filed pursuant to Rule 13d-1(b), or 13d-2(b),
or 13d-2(c).

ITEM 4.           OWNERSHIP:

                  (a) AMOUNT BENEFICIALLY OWNED:

                           655,600

                  (b) PERCENT OF CLASS:

                           4.76%(2)

                  (c) NUMBER OF SHARES AS TO WHICH SUCH PERSON HAS:

                           (i) Sole power to vote or to direct the vote:

                                    8,000

                           (ii) Shared power to vote or to direct the vote:

                                    647,600

                           (iii) Sole power to dispose or to direct the
disposition of:

                                    8,000

                           (iv) Shared power to dispose or to direct the
disposition of:

                                    647,600


 ITEM 5.          OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS:

                  If this statement is being filed to report the fact that as of
                  the date hereof the reporting person has ceased to be the
                  beneficial owner of more than 5 percent of the class of
                  securities, check the following [X]

 ITEM 6.          OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER
                  PERSON:

                  Not Applicable.

 ITEM 7.          IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH
                  ACQUIRED THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING
                  COMPANY:

                  Not Applicable.


 ITEM 8.          IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP:

                  Not Applicable

 ITEM 9.          NOTICE OF DISSOLUTION OF THE GROUP:

-----------------------
(2) Based on 13,785,273 shares of MicroFinancial Incorporated's Common Stock
outstanding as of the report filed on Form 10-K on March 1, 2006.



                  Not Applicable

 ITEM 10.         CERTIFICATION:

                  By signing below I certify that, to the best of my knowledge
                  and belief, the securities referred to above were acquired and
                  are held in the ordinary course of business and were not
                  acquired and are not held for the purpose of or with the
                  effect of changing or influencing the control of the issuer of
                  the securities and were not acquired and are not held in
                  connection with or as a participant in any transaction having
                  that purpose or effect.


                                    SIGNATURE

         After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

                          By:   /s/ Karen Fleiss
                                ---------------------------------------------
                                Name: Karen Fleiss