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