GreenSky, created by serial entrepreneur David Zalik in 2006 in Atlanta, Georgia, is a financial services business that brings together lending financial institutions with applicants who need financing. Instead of directly providing loans to its customers, GreenSky connects applicants to roughly 13,000 financial institutions across the United States that are all prepared to provide funding to potential customers.
How does GreenSky provide funding to consumers?
In business, especially corporate business, corporations like GreenSky – any corporation, for that matter, regularly takes on millions or billions of financing to ramp up its operations. Even though consumer debt is generally frowned upon, corporate debt is actually good for businesses to take on.
While lenders generally pile on debt so they can later chunk out such debt in smaller portions at higher interest rates in hopes of turning profits. GreenSky doesn’t utilize this strategy through GreenSky Credit; instead, GreenSky Credit is simply a platform to connect applicants who are willing to become debtors with financial institutions that are ready to make loans to applicants who fit such lenders’ bills of prime candidates to receive financing.
How does GreenSky Credit generate income, then?
The total dollar value of money that passes through GreenSky’s hands is in the billions of dollars; and not just one or two billion, but hundreds of billions of dollars.
GreenSky Credit generates income by assessing two fees – one from the consumer and another from the lender. Thanks to GreenSky’s strategy, it can double-dip on the amount of money it makes from its services.
Further, GreenSky is a technology company. It provides customers with innovative means of financing that wouldn’t otherwise be available if customers were to reach out to the financial institutions that actually offer customers financing; one of GreenSky’s unique programs is called the GreenSky Program Loan.
Builders are the most popular users of these Program Loans, which allow construction companies, builders, and people who simply want to make home improvements to their places of living to take out a line of credit that’s open for six months; at the end of that period, customers begin to pay back loans in full.