Sunlight Financial Announces Updated Credit Loss Rates

– Demonstrates consistently superior solar credit quality relative to peers –

Sunlight Financial Holdings Inc. (“Sunlight Financial”, "Sunlight" or the “Company”) (NYSE: SUNL), a premier, technology-enabled point-of-sale financing company, today announced updated credit loss rates for solar loans originated by Sunlight Financial between 2018 and 2020.

Solar loans that Sunlight originated in 2018, 2019 and 2020 had an average loss rate of 1.61%, 1.24% and 0.39%, respectively, considerably outperforming loans of similar size and term financed by solar loan peers in the ABS markets during the same time periods. While Sunlight does not hold loans on its own balance sheet, it tracks the performance of loans originated through its proprietary point-of-sale platform Orange^® in order to ensure high-quality credit performance for its capital providers.

"We are very proud of our continued best-in-class credit performance, as managing risk prudently and maintaining industry-leading credit quality has always been a core pillar of Sunlight’s success,” said Matt Potere, Chief Executive Officer at Sunlight. “Credit quality is a true differentiator, particularly in a rising rate environment, as meeting our capital partners’ return thresholds drives continued demand for Sunlight’s loans, enabling sufficient funding supply at attractive pricing for Sunlight’s contractor network.”

Sunlight’s Industry-Leading Credit Loss Rates

Credit Risk Management is a Core Pillar of Success

Superior credit risk management has always been at the heart of Sunlight’s business model. The Company’s management team has significant consumer credit experience across a wide variety of asset classes and multiple credit cycles, which drives a deep understanding of the importance of credit quality to maintain sufficient access to low-cost capital.

In March 2022, Sunlight announced the rollout of Credit 5.0, the latest iteration of the Company’s proprietary risk assessment methodology built into its point-of-sale platform. By performing a unique analysis of data gathered over the last seven years, Sunlight refined its determination of which credit factors best predict loan performance, enabling the Company to increase solar approval rates by over 8% without increasing expected loss rates. This update demonstrates Sunlight’s commitment to credit quality alongside its efforts to continually drive increased value for contractors and homeowners.

About Sunlight Financial

Sunlight (NYSE: SUNL) is a premier, technology-enabled point-of-sale finance company. Sunlight partners with contractors nationwide to provide homeowners with financing for the installation of residential solar systems and other home improvements. Sunlight’s best-in-class technology and deep credit expertise simplify and streamline consumer finance, ensuring a fast and frictionless process for both contractors and homeowners. For more information, visit www.sunlightfinancial.com.

Forward-Looking Statements

The information included herein and in any oral statements made in connection herewith may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. Forward-looking statements may generally be identified by the use of words such as “could,” “should,” “would,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “plan,” “continue,” or the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, Sunlight disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. Sunlight cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Sunlight. Such risks and uncertainties include, among others: risks relating to the uncertainty of the projected operating and financial information with respect to Sunlight; risks related to Sunlight’s business and the timing of expected business milestones or results; global supply chain shortages, competition for skilled labor, and permitting delays; the effects of competition and regulatory risks, and the impacts of changes in legislation or regulations on Sunlight’s future business; the expiration, renewal, modification or replacement of the federal solar investment tax credit, rebates and other incentives; the effects of the COVID-19 pandemic on Sunlight’s business or future results; Sunlight’s ability to sustain profitability and to attract and retain its relationships with third parties, including Sunlight’s capital providers and solar contractors; changes in the retail prices of traditional utility generated electricity; the availability of solar panels, batteries and other components and raw materials; and such other risks and uncertainties discussed in the “Risk Factors” section of Sunlight’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 29, 2022, and Form 10-Q as filed with the SEC on May 16, 2022, and other documents of Sunlight filed, or to be filed, with the SEC. Should one or more of the risks or uncertainties described herein occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Sunlight’s SEC filings are available publicly on the SEC’s website at www.sec.gov.

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