GreenSky has become something of an outlier in the financial tech space. While other fintech companies, like Lending Club and OnDeck, have focused on creating disruptive models that are aimed at bringing down the traditional banking industry, GreenSky instead chose to embrace the banking establishment. This has proven to be a windfall-producing bet. While Lending Club and OnDeck have fared extremely poorly, with both of their stocks in the toilet, GreenSky has skyrocketed in value. The latest estimates are that the company is worth well over $4.5 billion, a number that reflects the company’s phenomenal growth.
David Zalik, the CEO and founder of GreenSky, has said that the company’s secret has been simplicity, not going against the grain and dealing with trustworthy people. This last element is a crucial distinguishing factor between GreenSky and other companies in the fintech space. Whereas Lending Club, OnDeck and others have focused on a peer-to-peer lending model, which often involves both lenders and borrowers who wouldn’t pass muster within established lending channels, GreenSky has focused on matching prime borrowers with some of the nation’s top lending institutions. The model has thus far proven to be pure gold.
GreenSky began life focusing on providing bridge loans for point-of-sale bidding in home remodeling situations. Too often, contractors and potential customers ended up wildly far apart on cost expectations and what the actual bids came to. This was a primary cause of contractors losing sales. GreenSky was able to develop a lending technology that can give customers in the prime borrower category truly instant loan approval on projects well into the 6-figure range. No one else had anything that even came close to the frictionless approval process offered by GreenSky. Once a contractor tells a customer that promotional financing is available, it may take as little as 30 seconds for a big-money loan to be approved.
This is great for the customer, the contractor and the bank alike. GreenSky customers have an average FICO score of 760. This means that they often get among the best loan terms, typically zero money down, no payments and no interest for the first year.