We’ve all seen the ads for easy finance, often attached to big-ticket items like electronics, diamond rings, splashy holidays. However, if you’ve ever ventured down into the world of consumer finance and personal loans, it becomes quickly apparent that those ‘easy’ solutions aren’t quite as simple as they appear. Lengthy and intrusive application processes, unforeseen waiting periods, conditional approval, hidden fees – the world of personal loans and consumer finance is designed to get maximum results from each loan, and as a result, it’s not ever much of an enjoyable process for the end user.
Enter GreenSky Credit. Founded in 2006 by college-dropout-turned-CEO David Zalik, GreenSky has looked to simplify and streamline the process of consumer finance from the very beginning.
By partnering with stable finance providers in the forms of reputable banks, GreenSky has been able to empower contractors across America to offer consumer finance to their customers right at the point of sale. No strings attached, and no catches – customers apply for finance from their smartphones, and receive approval within seconds. There’s no paperwork, and answers are instantaneous. For industries such as home improvement, cosmetic procedures, elective healthcare and retail, this is a game-changer.
GreenSky has positioned themselves with minimal risk and maximum potential. The risk of each loan itself is transferred to the finance provider, with loans sitting on the bank’s balance book, and not GreenSky’s. Banks then pay GreenSky 1% of the loan annually as a commission. On the other side, GreenSky Credit has empowered an army of contractors running at 17,000 strong to pitch their product for them – reducing employee overheads and sales investment whilst ensuring their leads are constantly generated. Contractors can pitch loans at up to $65,000, and GreenSky Credit receives a 6% commission from the contractor themselves based on the value of the written loan. Contractors are also responsible for confirming a loan payment schedule with clients. GreenSky then delivers funds directly to the contractor, who can then utilise them with their client’s permission to undertake work. Rates offered to customers include a generous promotional period: if the loan is paid in full within 12 months, not a single dollar of interest will be charged to the account. Once this promotional period has been completed, rates revert to a 17.99% interest rate on the remaining balance. For customers who’d prefer a lengthier amount of repayment time at a lower interest rate, they have the choice of a lower fixed rate around approximately 6% for the course of the loan beginning immediately.
Every way you slice it, GreenSky have placed themselves in a prime position, and have capacity to continue to grow in profitability.
Business owners laud the ability GreenSky gives them to close sales on the spot. Rather than losing valuable decision-making time as potential consumers look around at the finance options available to them on the market, GreenSky Credit gives businesses of all kinds the ability to close deals then and there. By simplifying the process, profitability for small business owners, contractors and service providers of many kinds is on the increase. With very high loan approval rates , the risk of a decline is minimal. Simply put, everyone’s happy.
Speaking of profitability, GreenSky stands out from a large range of struggling finance providers – as well as tech start-ups. Much of this is thanks to the shrewd business logic of CEO David Zalik. Moving from Israel to Alabama at the age of 4, Zalik was an early high achiever. After enrolling in university at the tender age of 14, he dropped out to focus on a computer company he had begun. This company, MicroTech, would go on to make him a millionaire when he sold the company in 1996 – Zalik was only 22. On the back of this early success, Zalik moved to Atlanta and began to invest in real estate, an early decision that would provide the funds he would need to cover the first eight years of GreenSky’s growth without any outside investment or debt. Although this risk would place Zalik under pressure in the early years of GreenSky’s growth, it’s a decision that has paid off significantly. GreenSky now has over 650 employees and achieved a $250 million profit in 2017 alone. Zalik’s early business endeavours provided a strong foundation for this ambitious undertaking, and investors evaluating the company are also looking at the man who’s built it from the ground up.
You wouldn’t be alone in not knowing Zalik’s name, however – unlike many other start-up entrepreneurs, Zalik is not a fan of the spotlight. He’s been finding it harder to avoid as GreenSky’s success has caught so much attention on the back of recent earning results, placing the company in the same sphere as Stripe and SoFi, which continue to take the tech world by storm. With many expansions into new areas of finance on the horizon, GreenSky Credit will soon be a household name.
Whilst other tech start-ups continued to choose to go public early in order to raise much-needed funds, Zalik and GreenSky Credit have managed to fly under the radar as they strengthened their business proposition and continued to test the strength of their model. The GreenSky world is about to change with an IPO application announced in May 2018, with an initial goal of raising US $100 million. With a $5 billion evaluation, GreenSky’s goals look more than achievable.
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