Sunlight recognizes receivables primarily related to (a) advances that Sunlight remits to contractors 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 in certain Indirect Channel Loans and Indirect Channel Loans purchased from its Bank Partner. The following tables summarize Sunlight’s financing receivables and changes thereto:


	Advances(a)		Loans and Loan Participations(b)		Total

March 31, 2023
Amounts outstanding	$	20,349	$	3,707	$	24,056
Unamortized discount	—		(287)		(287)
Allowance for credit losses	(2,319)		(151)		(2,470)
Carrying value	$	18,030	$	3,269	$	21,299
December 31, 2022
Amounts outstanding	$	52,129	$	3,944	$	56,073
Unamortized discount	—		(310)		(310)
Allowance for credit losses	(6,736)		(102)		(6,838)
Carrying value	$	45,393	$	3,532	$	48,925

a.Represents advance payments made by Sunlight to certain contractors, generally on a short-term basis, in anticipation of a project’s substantial completion, including advances of $1.5 million and $1.5 million, net of allowances of $0.1 million and $0.1 million, to Sunlight contractors not associated with specific installation projects at March 31, 2023 and December 31, 2022, respectively.

b.Represents (i) Sunlight’s 5.0% participation interest in a pool of residential solar loans with an aggregate UPB of $3.4 million and $3.6 million at March 31, 2023 and December 31, 2022, respectively, and (ii) Indirect Channel Loans purchased by Sunlight with an aggregate UPB of $0.3 million and $0.3 million at March 31, 2023 and December 31, 2022, respectively. No loans or loan participations were individually evaluated for impairment at March 31, 2023 or December 31, 2022.





	For the Three Months Ended March 31,

	2023		2022
Allowance for Credit Losses — Advances
Beginning Balance	$	6,736	$	238
Provision for credit losses(a)	(499)		267
Realized losses(b)	(3,918)		—
Ending Balance	$	2,319	$	505

Allowance for Credit Losses — Loans and Loan Participations
Beginning Balance	$	102	$	148
Provision for credit losses	2,209		371
Realized losses	(2,160)		(446)
Ending Balance	$	151	$	73

Changes in Carrying Value — Loans and Loan Participations
Beginning Balance	$	3,532	$	4,313
Purchases, net(c)	2,161		448
Proceeds from principal repayments, net	(237)		(307)
Accretion of loan discount	22		43
Provision for credit losses	(2,209)		(371)
Ending Balance	$	3,269	$	4,126

a.Includes an adjustment of $0.5 million to provision for credit losses during the three months ended March 31, 2023 upon adoption of ASC 326.

b.Sunlight charged-off advances totaling $3.9 million for the three months ended March 31, 2023, mostly attributable to one of Sunlight’s contractors.

c.During the three months ended March 31, 2023 and 2022, Sunlight purchased 80 and 24 Indirect Channel Loans with an aggregate UPB of $2.5 million and $0.5 million, respectively.

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
Risk Tier(a)		Contractors	Amount Outstanding		% of Amount Outstanding
March 31, 2023
1	Low risk	77	$	5,833	28.7	%
2	Low-to-medium risk	101	8,962		44.0
3	Medium risk	43	1,282		6.3
4	Medium-to-high risk	24	4,072		20.0
5	Higher risk	8	200		1.0
		253	$	20,349	100.0	%
December 31, 2022
1	Low risk	130	$	14,585	28.0	%
2	Low-to-medium risk	152	23,686		45.4
3	Medium risk	70	3,868		7.4
4	Medium-to-high risk	28	9,793		18.8
5	Higher risk	8	197		0.4
		388	$	52,129	100.0	%

a.At March 31, 2023 and December 31, 2022, the average risk rating of Sunlight’s advances was 2.2 (“low-to-medium risk”) and 2.2 (“low-to-medium risk”), weighted by total advance amounts outstanding, respectively.


Payment Delinquency	Amount Outstanding(a)		% of Amount Outstanding
March 31, 2023
Current	$	8,933	47.4	%
Less than 30 days	912		4.8
30 days	1,163		6.2
60 days	1,336		7.1
90+ days(b)	6,505		34.5
	$	18,849	100.0	%
December 31, 2022
Current	$	27,257	53.8	%
Less than 30 days	7,456		14.7
30 days	5,197		10.3
60 days	3,099		6.1
90+ days(b)	7,620		15.1
	$	50,629	100.0	%

a.Excludes advances of $1.5 million and $1.5 million to Sunlight contractors not associated with specific installation projects and was not delinquent at March 31, 2023 and December 31, 2022, respectively.

b.As further discussed in Note 2, Sunlight generally evaluates amounts delinquent for 90 days or more for impairment. 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 $2.0 million and $2.0 million at March 31, 2023 and December 31, 2022, respectively.



	March 31, 2023				December 31, 2022
Contractor	Amount Outstanding		% of Total		Amount Outstanding		% of Total
1	$	3,412	16.8	%	$	4,326	8.3	%
2	2,804		13.8		7,348		14.1
3	2,054		10.1		4,098		7.9
4	565		2.8		554		1.1
5	504		2.5		1,004		1.9
6	504		2.5		2,711		5.2
7	372		1.8		992		1.9
8	271		1.3		83		0.2
9	253		1.2		416		0.8
10	243		1.2		511		1.0
Other(a)	9,367		46.0		30,086		57.6
	$	20,349	100.0	%	$	52,129	100.0	%

a.At March 31, 2023 and December 31, 2022, Sunlight recorded advances receivable from 243 and 378 counterparties not individually listed in the table above with average balances of $0.0 million and $0.1 million, respectively. At December 31, 2022, Sunlight recorded advances receivable from individual counterparties of $3.9 million, $1.4 million, $0.9 million and $0.8 million that represent the largest advance concentrations included in “Other,” based on the amount outstanding.

Vintage — The following table presents the amortized cost basis by year of origination and credit quality indicators of advances held by Sunlight at March 31, 2023:


		Year of Origination(a)
		2023		2022		2021		Prior		Total

Risk Tier
1	Low risk	$	4,028	$	1,279	$	26	$	—	$	5,333
2	Low-to-medium risk	6,985		1,935		42		—		8,962
3	Medium risk	775		507		—		—		1,282
4	Medium-to-high risk	74		2,775		77		146		3,072
5	Higher risk	19		181		—		—		200
		$	11,881	$	6,677	$	145	$	146	$	18,849




Payment Delinquency
Current		$	8,933	$	—	$	—	$	—	$	8,933
Less than 30 days		847		65		—		—		912
30 days		1,011		152		—		—		1,163
60 days		1,090		247		—		—		1,337
90+ days(b)		—		6,213		145		146		6,504
		$	11,881	$	6,677	$	145	$	146	$	18,849

Current-period gross write-offs(c)		$	373	$	3,890	$	—	$	182	$	4,445

b.As discussed in Note 2, Sunlight generally evaluates amounts 90 days or more past due for impairment. Sunlight assessed advances 90 days or more past due, along with other factors that included the contractor’s risk tier and historical loss experience, and established loss allowances of $2.0 million and $2.0 million at March 31, 2023 and December 31, 2022, respectively.

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 5.0% interest in the underlying loan pool.


Payment Delinquency(a)	Loan Participations			Bank Partner Loans			Total
	Loans	UPB		Loans	UPB		Loans	UPB		% of UPB
March 31, 2023
Current	3,226	$	3,320	15	$	238	3,241	$	3,558	96.0	%
Less than 30 days	73	82		1	32		74	114		3.1
30 days	18	19		—	—		18	19		0.5
60 days	4	6		—	—		4	6		0.2
90+ days	6	10		—	—		6	10		0.2
	3,327	$	3,437	16	$	270	3,343	$	3,707	100.0	%
December 31, 2022
Current	3,302	$	3,502	14	$	240	3,316	$	3,742	94.9	%
Less than 30 days	89	101		3	69		92	170		4.3
30 days	15	17		—	—		15	17		0.4
60 days	6	9		—	—		6	9		0.2
90+ days	6	6		—	—		6	6		0.2
	3,418	$	3,635	17	$	309	3,435	$	3,944	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 March 31, 2023 and December 31, 2022, respectively. Sunlight does not consider the average carrying values and interest income recognized (including interest income recognized using a cash-basis method) material.

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:



	March 31, 2023				December 31, 2022
State	UPB		% of Total		UPB		% of Total
Texas	$	696	18.8	%	$	732	18.6	%
California	662		17.9		698		17.7
Florida	315		8.5		371		9.4
New York	255		6.9		269		6.8
New Jersey	245		6.6		256		6.5
Arizona	172		4.6		178		4.5
Massachusetts	170		4.6		174		4.4
Pennsylvania	147		4.0		159		4.0
South Carolina	130		3.5		137		3.5
Missouri	105		2.8		111		2.8
Other(a)	810		21.8		859		21.8
	$	3,707	100.0	%	$	3,944	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 2.7% and 2.6% of the UPB at March 31, 2023 and December 31, 2022, respectively.

Vintage — The following table presents the amortized cost basis by year of origination and credit quality indicators of Loans and Loan Participations held by Sunlight at March 31, 2023:


	Year of Origination
	2023		2022		2021		Prior		Total

FICO
780 and greater	$	—	$	—	$	14	$	899	$	913
720-779	—		—		3		1,293		1,296
660-719(a)	—		—		6		1,133		1,139
600-659	—		—		—		72		72
Less than 600	—		—		—		—		—
	$	—	$	—	$	23	$	3,397	$	3,420

Current-period gross write-offs(b)	$	—	$	1,883	$	224	$	53	$	2,160

b.Includes gross write-offs of $0.0 million related to Sunlight’s 5.0% participation interest in a pool of residential solar loans and $2.1 million related to Indirect Channel Loans during the three months ended March 31, 2023.