Sunlight recognizes receivables primarily related to (a) advances that Sunlight remits to contractors on a short-term basis to facilitate the installation of residential solar and home improvement equipment and (b) loans and loan participations. Loans and loan participations primarily include Sunlight’s undivided 5.0% participation and Indirect Channel Loans purchased from its Bank Partner. The following tables summarize Sunlight’s financing receivables and changes thereto:

a. Represents short-term, advance payments made by Sunlight to certain contractors in anticipation of a project’s substantial completion.

b. Represents (i) Sunlight’s 5.0% participation interest in a pool of residential solar loans with an aggregate UPB of $5.3 million and $6.0 million at June 30, 2021 and December 31, 2020, respectively, and (ii) Indirect Channel Loans purchased by Sunlight with an aggregate UPB of $0.3 million and $0.4 million at June 30, 2021 and December 31, 2020, respectively. No loans or loan participations were individually evaluated for impairment at June 30, 2021 or December 31, 2020.


		For the Three Months Ended June 30,			For the Six Months Ended June 30,
	2021		2020		2021		2020
Allowance for Credit Losses — Advances
Beginning Balance	$	101	$	79	$	121	$	215
Provision for credit losses		110		60		90		(76)
Ending Balance	$	211	$	139	$	211	$	139

Allowance for Credit Losses — Loans and Loan Participations
Beginning Balance	$	114	$	65	$	125	$	96
Provision for credit losses		326		294		1,082		554
Realized losses		(329)		(276)		(1,096)		(567)
Ending Balance	$	111	$	83	$	111	$	83

Changes in Carrying Value — Loans and Loan Participations
Beginning Balance	$	5,065	$	5,577	$	5,333	$	5,130
Purchases, net(a)		328		568		1,170		1,487
Proceeds from principal repayments, net		(413)		(351)		(832)		(625)
Accretion of loan discount		53		44		118		106
Provision for credit losses		(326)		(294)		(1,082)		(554)
Ending Balance	$	4,707	$	5,544	$	4,707	$	5,544

a. During the three and six months ended June 30, 2020, Sunlight purchased (i) 5.0% participation interests in 229 and 665 loans with an aggregate UPB of $0.3 million and $1.0 million as well as (ii) 10 and 24 Indirect Channel Loans with an aggregate UPB of $0.2 million and $0.5 million, respectively. During the three and six months ended June 30, 2021, Sunlight purchased (i) 5.0% participation interests in 0 and 54 loans with an aggregate UPB of $0.0 million and $0.1 million as well as (ii) 17 and 51 Indirect Channel Loans with an aggregate UPB of $0.3 million and $1.1 million, respectively.

Advances — The following section presents certain characteristics of Sunlight’s advances.

Risk Ratings — As further described in Note 2, management evaluates Sunlight’s advances for impairment using risk ratings assigned on a scale of “1” (low risk) through “5” (higher risk). The following table allocates the advance amount outstanding based on Sunlight’s internal risk ratings:


	Total
		Amount		% of Amount
Risk Tier^(a)	Contractors	Outstanding		Outstanding
June 30, 2021
1 Low risk	74	$	23,783	58.0	%
2 Low-to-medium risk	55		17,013	41.5
3 Medium risk	4		157	0.4
4 Medium-to-high risk	—		—	—
5 Higher risk	2		26	0.1
	135	$	40,979	100.0	%
December 31, 2020
1 Low risk	78	$	18,072	51.0	%
2 Low-to-medium risk	56		16,700	47.2
3 Medium risk	4		604	1.7
4 Medium-to-high risk	—		—	—
5 Higher risk	3		25	0.1
	141	$	35,401	100.0	%

a. At June 30, 2021 and December 31, 2020, the average risk rating of Sunlight’s advances was 1.4 (“low risk”) and 1.5 (“low-to-medium risk”), weighted by total advance amounts outstanding.

Delinquencies — The following table presents the payment status of advances held by Sunlight:


	Amount		% of Amount
Payment Delinquency	Outstanding		Outstanding
June 30, 2021
Current	$	39,418	96.2	%
Less than 30 days		833	2.0
30 days		90	0.2
60 days		128	0.3
90+ days^(a)		510	1.3
	$	40,979	100.0	%
December 31, 2020
Current	$	29,132	82.3	%
Less than 30 days		3,137	8.9
30 days		1,424	4.0
60 days		672	1.9
90+ days^(a)		1,036	2.9
	$	35,401	100.0	%

a. As further discussed in Note 2, Sunlight generally evaluates amounts delinquent for 90 days or more for impairment. Advances to contractors may remain outstanding as a result of operational and various other factors that are unrelated to the contractor’s creditworthiness. Sunlight assessed advances 90 days or more, along with other factors that included the contractor’s risk tier and historical loss experience, and established loss allowances of $0.2 million and $0.1 million at June 30, 2021 and December 31, 2020, respectively.

Concentrations — The following table presents the concentration of advances, by counterparty:


	June 30, 2021				December 31, 2020
	Amount				Amount
Contractor	Outstanding		% of Total		Outstanding		% of Total
1	$	11,059	27.0	%	$	10,429	29.5	%
2		5,642	13.8			6,425	18.1
3		4,998	12.2			295	0.8
4		2,989	7.3			141	0.4
5		2,934	7.2			—	—
6		1,690	4.1			437	1.2
7		1,501	3.7			1,812	5.1
8		500	1.2			257	0.7
9		481	1.2			36	0.1
10		445	1.1			—	—
Other^(a)		8,740	21.2			15,569	44.1
	$	40,979	100.0	%	$	35,401	100.0	%

a. At June 30, 2021 and December 31, 2020, Sunlight recorded advances receivable from 125 and 131 counterparties not individually listed in the table above with average balances of $0.1 million and $0.1 million, respectively. At December 31, 2020, Sunlight recorded advances receivable from individual counterparties of $2.6 million, $0.7 million, $0.6 million, $0.6 million, and $0.5 million that represent the largest advance concentrations included in “Other,” based on the amount outstanding.

Loans and Loan Participations — The following section presents certain characteristics of Sunlight’s investments in loans and loan participations. Unless otherwise indicated, loan participation amounts are shown at Sunlight’s 5% interest in the underlying loan pool.

Delinquencies — The following table presents the payment status of loans and loan participations held by Sunlight:


	Loan Participations			Bank Partner Loans			Total
Payment Delinquency^(a)	Loans	UPB		Loans	UPB		Loans	UPB		% of UPB
June 30, 2021
Current	4,086	$	5,041	18	$	347	4,104	$	5,388	96.2	%
Less than 30 days	124		177	—		—	124		177	3.2
30 days	11		14	—		—	11		14	0.3
60 days	5		10	—		—	5		10	0.2
90+ days	9		10	—		—	9		10	0.1
	4,235	$	5,252	18	$	347	4,253	$	5,599	100.0	%
December 31, 2020
Current	4,409	$	5,760	16	$	319	4,425	$	6,079	95.7	%
Less than 30 days	116		174	—		—	116		174	2.7
30 days	22		38	1		23	23		61	1.0
60 days	7		11	—		—	7		11	0.2
90+ days	10		14	1		12	11		26	0.4
	4,564	$	5,997	18	$	354	4,582	$	6,351	100.0	%

a. As further described in Note 2, Sunlight places loans delinquent greater than 90 days on nonaccrual status. Such Loans had carrying values of $0.0 million and $0.0 million at June 30, 2021 and December 31, 2020, respectively. Sunlight does not consider the average carrying values and interest income recognized (including interest income recognized using a cash-basis method) material for the three and six months ended June 30, 2021 and 2020.

Loan Collateral Concentrations — The following table presents the UPB of Balance Sheet Loans, including Sunlight’s relevant participation percentage of the Indirect Channel Loans underlying the participation interests held by Sunlight, based upon the state in which the borrower lived at the time of loan origination:


	June 30, 2021				December 31, 2020
State	UPB		% of Total		UPB		% of Total
Texas	$	1,055	18.8	%	$	1,203	18.9	%
California		985	17.6			1,111	17.5
Florida		489	8.7			555	8.7
New York		365	6.5			403	6.3
New Jersey		339	6.1			376	5.9
Arizona		259	4.6			312	4.9
Pennsylvania		236	4.2			274	4.3
Massachusetts		212	3.8			223	3.5
Missouri		207	3.7			228	3.6
South Carolina		203	3.6			234	3.7
Other^(a)		1,249	22.4			1,432	22.7
	$	5,599	100.0	%	$	6,351	100.0	%

a. Sunlight only participates in residential solar loans originated within the United States, including 31 and 31 states not individually listed in the table above, none of which individually amount to more than 2.6% and 2.7% of the UPB at June 30, 2021 and December 31, 2020, respectively.