GreenSky Credit is one of the most astonishing success stories to have come out of the fintech space over the last few years. The company is only 13 years old. But in that brief existence, it has gone from a self-financed startup and onto become one of the most prominent companies in the world of fintech.
When everyone wins, business is good
The enormous success of GreenSky is attributable to its founder, David Zalik, and his level-headed yet totally innovative vision for how to create tremendous value through the use of loans. In the early 2000s, Zalik was working with a number of home improvement companies throughout the United States. He quickly realized that many of these companies were losing a tremendous amount of business due to retail home improvement customers simply not having the necessary funds to follow through on their desired projects. Zalik watched as homeowner after homeowner was rebuffed by the steep costs involved in completing their home renovation projects. The problem was that most of these customers simply didn’t have a feel for how much the total cost of a home renovation would actually turn out to be.
Zalik saw a golden opportunity. With his knowledge of the lending industry, real estate and banking, he saw that there was a huge opening for anyone who could create instant point-of-sale bridge financing for retail customers. He also realized that because the majority of the people coming into these home remodeling companies seeking to do renovations were very well off that they were likely to all be in the prime borrower category. Zalik knew that it would not be a hard sell to get banks to line up in order to extend these borrowers loans through GreenSky.
And the final piece of the GreenSky success puzzle was the fact that, at the end of the day, the loan principal amount would almost invariably be going towards a value-creating transaction. That’s because for high-end homeowners, almost all of the renovations that they were carrying out would end up adding more to their home’s value than the final cost of the projects.