NOTE 4 - INVENTORY FINANCE NOTES RECEIVABLE AND ALLOWANCE FOR LOAN LOSS

The Company offers inventory-secured financing for its products to a limited number of qualified retail dealers and developers. Administrative services for inventory-secured financing are provided by Triad Financial Services, Inc. of Jacksonville, Florida. Finance contracts require periodic installments of principal and interest over periods of up to 24 months. These notes are secured by the inventory collateral and other security depending on borrower circumstances.

Inventory finance notes receivable, net, consisted of the following:


	December 28, 2013			December 31, 2012

Inventory finance notes receivable	$	6,097,188		$	8,274,431
Allowance for loan loss		(201,960	)		(329,500	)

	$	5,895,228		$	7,944,931
Current portion of inventory finance notes receivable		(2,607,456	)		(3,537,638	)

Inventory finance notes receivable, net	$	3,287,772		$	4,407,293

With respect to our inventory finance notes receivable, the risk of loss is spread over numerous borrowers. In addition to historical experience, borrower inventory levels and activity are monitored in conjunction with a third-party provider to estimate the potential for loss. The Company anticipates it will be able to resell any repossessed homes, thereby mitigating loss experience. If a default occurs and collateral is lost, the Company is exposed to loss of the full value of the note receivable. The Company recorded a (benefit)/provision for credit losses of $(127,540) and $128,560 for years ending December 28, 2013 and December 31, 2012, respectively. The following table represents changes in the estimated allowance for loan losses:


	December 28, 2013			December 31, 2012

Balance at beginning of period	$	329,500		$	200,940
(Benefit)/Provision for credit losses		(127,540	)		128,560

Balance at end of period	$	201,960		$	329,500