In 2006, GreenSky, Inc. was created by David Zalik. The fintech company is still alive and well, lending a total of $5 billion to nearly one million customers from 2012 to 2016 while maintaining its Atlanta, Georgia headquarters as its home base of operations.
Over the years, GreenSky has lent upwards of $13 billion to about 2 million customers since the company was founded. More than 13,000 lending merchants partner with GreenSky to offer loans to customers.
What makes GreenSky Credit so special?
First, we should consider the question, how do most lenders operate?
Predicting things with absolute certainty is impossible. As such, it’s impossible for lenders to determine whether a given debtor will cough up however much money they’re indebted to creditors. In order to have a chance at profiting from lending money to potential debtors, financial institutions have to perform tried-and-true, thorough background checks to help assess the creditworthiness of prospective borrowers.
Failing to check the backgrounds of potential customers – or failing to assess these backgrounds well enough – often results in such lenders incurring major financial losses.
In order to profit, lenders spread their money across tens or hundreds of debtors to leverage risk. If they set their interest rates high enough, they’re likely to both make money and lure customers in close enough to become repeat customers.
Here’s why GreenSky Credit is so successful
GreenSky Credit is unique as a lender because it doesn’t actually own any of the money it lends to customers; the company doesn’t take on substantial loans ranging in the tens or hundreds of millions of dollars in the name of lending money to consumers. Rather, GreenSky Credit links roughly 1,000 applicants every day to lenders whose credit programs are backed by state and federal charters and insured by the United States federal government.
The company takes a percentage fee from all loans its customers are approved for from both the financial institution and their customers themselves. That’s how GreenSky earned upwards of $85 million in its most recent financial reporting period.