Lauren Gensler’s recent article, “Handyman’s Helper: How GreenSky’s David Zalik Skipped High School on his Way to Becoming a Billionaire”, was published in Forbes. The article discusses the recent meteoric rise of the fintech lending company.
The financial technology company, GreenSky Credit, is a technological middleman between the banks and merchants to make loans to clients who need loans for home improvement, healthcare, or even solar.
GreenSky Credit has partnered with a variety of secured banks like SunTrust Banks and Regions Financial Corps. The financing is provided through institutions that are federally and state-chartered and federally insured. They have more than fourteen different partner banks since 2016.
The loans are made online or through the company’s app to a variety of customers. They have a network of nearly 12,000 merchants and retailers like The Home Depot, Inc. and individual contractors. They add the merchants who sell home improvement products like roofing, window replacement, furniture and aluminum siding. They are even expanding their network base to include medical procedures. They also have more than 1.7 million customers who have been satisfied with their services. Through their technology, they have loaned more than 12 billion dollars.
The intelligence of co-founder and CEO, David Zalik, reveal that the magic in the company takes place behind the scenes. Because the company has bank partners, they aren’t responsible for defaults on the loans. However, they are able to make a profit on both sides of the trade. Not only do the contractors pay GreenSky Credit an average of 6% of the loan amount, but the banks also pay a fee to use their services as well. The bank partners will pay nearly 1% of the balance each year.
In the same way that Airbnb has become the middleman of travel, GreenSky Credit has become the technological middleman of home improvement lending. Yet, they are beginning to expand into lending for medical treatments like plastic surgery or even braces.
The company is based in Atlanta, Georgia and has been valued at $3.6 billion. GreenSky Credit has raised more than $50 million in funding, placing the CEO and co-founder Zalik well within billionaire status.