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                               [Litchfield LOGO]

                                                              September 29, 1999

To Our Stockholders:

     On behalf of the Board of Directors of Litchfield Financial Corporation
(the "Company"), we are pleased to inform you that, on September 22, 1999, the
Company entered into an Agreement and Plan of Merger (the "Merger Agreement")
with Textron Financial Corporation and its wholly-owned subsidiary, Lighthouse
Acquisition Corp., pursuant to which Lighthouse Acquisition Corp. has today
commenced a cash tender offer (the "Offer") to purchase all of the outstanding
shares (the "Shares") of the Company's Common Stock at $24.50 per Share. Under
the Merger Agreement, the Offer will be followed by a merger (the "Merger") in
which any remaining Shares will be converted into the right to receive $24.50
per Share in cash, without interest thereon.

     YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS, HAS
APPROVED THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.

     In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors described in the attached Schedule 14D-9
that is being filed today with the Securities and Exchange Commission,
including, among other things, the terms and conditions of the Merger Agreement
and the fairness opinion of CIBC World Markets Corp. ("CIBC World Markets"), the
Company's financial advisor, to the effect that, as of the date of such opinion
and based upon the assumptions and other matters set forth therein, the
consideration to be received by holders of Shares in the Offer and the Merger is
fair to such holders from a financial point of view. The full text of the
opinion is attached as an exhibit to the Schedule 14D-9. Stockholders are urged
to read the opinion carefully and in its entirety.

     In addition to the attached Schedule 14D-9 relating to the Offer, also
enclosed is the Offer to Purchase, dated September 29, 1999, of Lighthouse
Acquisition Corp., together with related materials, including a Letter of
Transmittal, to be used for tendering your Shares. These documents set forth the
terms and conditions of the Offer and the Merger and provide instructions as to
how to tender your Shares. We urge you to read the enclosed materials carefully
in making your decision with respect to tendering your Shares pursuant to the
Offer.

                                          On behalf of the Board of Directors,

                                          /s/ Richard A. Stratton
                                          --------------------------------------
                                          Richard A. Stratton
                                          President, Chief Executive Officer and
                                          Director