In this paper we analyze the effect of nonlinear gain on laser modulation characteristics applying a small-signal analysis to the rate equation which includes a nonlinear gain term. Also we analyze the resonance frequency and the damping factor which determine laser modulation characteristics, define K factor which is the proportionality factor between resonance frequency and damping factor, and conclude that the decrease in K factor is due to increases in differential gain and no correlation between K factor and nonlinear gain is identified.