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Commercial Loans Receivables and Allowance for Loan Loss | 12 Months Ended
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Apr. 03, 2021
Receivables [Abstract] |
Commercial Loans Receivable and Allowance for Loan Loss | Commercial Loans Receivable and Allowance for Loan Losses The commercial loans receivable balance consists of direct financing arrangements for the home product needs of our independent distributors, community owners and developers and amounts loaned by us under participation finan cing programs. Under the terms of our commercial lending programs, we provide funds for financed home purchases by distributors, community owners and developers. The notes are secured by the homes as collateral and, in some instances, other security. Other terms of direct arrangements vary, depending on the needs of the borrower and the opportunity for the Company. We also provide loans to independent floor plan lenders that then lend to distributors to finance their inventory purchases. Commercial loans receivable, net consisted of the following, by class of financing notes receivable (in thousands):
| April 3, 2021 |  | March 28, 2020
Loans receivable | $ | 45,377 |  |  | $ | 47,202 |
Allowance for loan losses | (816) |  |  | (393) |
Deferred financing fees, net | (247) |  |  | (244) |
| 44,314 |  |  | 46,565 |
Less current portion of commercial loans receivable (including from affiliates), net | (19,232) |  |  | (15,423) |
| $ | 25,082 |  |  | $ | 31,142 |
The commercial loans receivable balance had the following characteristics:
| April 3, 2021 |  | March 28, 2020
Weighted average contractual interest rate | 6.4 | % |  | 5.7 | %
Weighted average months to maturity | 11 |  | 10
The risk of loss is spread over numerous borrowers. Borrower activity is monitored on a regular basis and contractual arrangements are in place to provide adequate loss mitigation in the event of a default. Historically, we have been able to sell repossessed homes, thereby mitigating loss exposure. If a default occurs and collateral is lost, we are exposed to loss of the full value of the home loan. We evaluate the potential for loss from the commercial loan programs based on the borrower's risk rating, overall financial stability, historical experience and estimates of other economic factors. We have included considerations related to the COVID-19 pandemic when assessing our risk of loan loss and setting reserve amounts for the commercial finance portfolio as of April 3, 2021. The following table represents changes in the e stimated allowance for loan losses, including related additions and deductions to the allowance for loan losses (in thousands):
| April 3, 2021 |  | March 28, 2020
Balance at beginning of period | $ | 393 |  |  | $ | 180 |
Impact of adoption of ASU 2016-13 | 435 |  |  | — |
Change in estimated loan losses, net | (12) |  |  | 213 |
Loans charged off, net of recoveries | — |  |  | — |
Balance at end of period | $ | 816 |  |  | $ | 393 |
Loans are subject to regular review and are given management's attention whenever a problem situation appears to be developing. Loans with indicators of potential performance problems are placed on watch list status and are subject to additional monitoring and scrutiny. Nonperforming status includes loans accounted for on a non-accrual basis and accruing loans with principal payments 90 days or more past due. Our policy is to place loans on nonaccrual status when interest is past due and remains unpaid 90 days or more or when there is a clear indication that the borrower is unable or unwilling to make payments as they become due. We will resume accrual of interest once these factors have been remedied. Payments received on non-accrual loans are recorded on a cash basis, first to interest and then to principal, and charge-offs occur when it becomes probable that outstanding amounts will not be recovered. At April 3, 2021, there were no commercial loans 90 days or more past due that were still accruing interest, and we were not aware of any potential problem loans that would have a material effect on the commercial loans receivable balance. The following table disaggregates our commercial loans receivable by credit quality indicator and fiscal year of origination (in thousands):
|  | April 3, 2021 |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Total |  | March 28, 2020 |  |  |  |
Risk profile based on payment activity: |  |  |  |
Performing |  | $ | 30,627 |  |  | $ | 8,677 |  |  | $ | 3,206 |  |  | $ | 1,864 |  |  | $ | 1,003 |  |  | $ | 45,377 |  |  | $ | 47,016 |  |  |  |  |
Watch list |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 186 |  |  |  |  |
Nonperforming |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
|  | $ | 30,627 |  |  | $ | 8,677 |  |  | $ | 3,206 |  |  | $ | 1,864 |  |  | $ | 1,003 |  |  | $ | 45,377 |  |  | $ | 47,202 |  |  |  |  |
As of April 3, 2021, 13% of our outstanding commercial loans receivable principal balance was concentrated in Arizona. As of March 28, 2020, 11% of the outstanding commercial loans receivable principal balance was concentrated in California. No other state had concentrations in excess of 10% of the principal balance of the consumer loans receivable as of April 3, 2021 or March 28, 2020. We had concentrations with one independent third-party and its affiliates that equaled 18% and 21% of the net commercial loans receivables principal balance outstanding, all of which was secured, as of April 3, 2021 and March 28, 2020, respectively. The risks created by these concentrations have been considered in the determination of the adequacy of the allowance for loan losses.

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