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. 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:


	June 28, 2014			December 28, 2013
	(unaudited)
Total Inventory finance notes receivable	$	4,366,352		$	6,097,188
Allowance for loan loss		(131,210	)		(201,960	)

		4,235,142			5,895,228
Current portion of inventory finance notes receivable		(1,819,855	)		(2,607,456	)

Inventory finance notes receivable, net	$	2,415,287		$	3,287,772

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 provision/(benefit) for credit losses of $(70,750) and $(87,990) for six month periods ending June 28 2014, and June 29, 2013, respectively. The following table represents changes in the estimated allowance for loan losses:


	June 28, 2014			June 29, 2013
	(unaudited)			(unaudited)
Balance at beginning of period	$	201,960		$	329,500
Provision/(Benefit) for credit losses		(70,750	)		(87,990	)

Balance at end of period	$	131,210		$	241,510