One of the more innovative companies to have emerged in the fintech sector over the last decade has been GreenSky Credit. The company was founded in 2006 by entrepreneur David Zalik. Since then, it has shown that it has what it takes to sustain phenomenal levels of growth. By 2018, GreenSky was worth an estimated $5 billion, with some analysts opining that the company’s rumored IPO could put its publicly traded value at close to $10 billion.
Best loans in the business
The secret behind GreenSky Credit’s success has been the company’s ability to create value through making frictionless loans at the retail level a reality for millions. GreenSky loans are markedly different from the products of any other fintech company currently in operation.
For starters, the company extends loans for big-ticket purchases. These can be elective medical procedures, the complete residing of a home or a large kitchen renovation with an estimated cost in the six figures. Previously, these types of purchases would have required a traditional bank loan, typically a personal or home-equity line of credit. And even those credit facilities often fell short of covering the entire cost of truly expensive goods and services.
By going after a niche that was severely underserved, GreenSky was able to create, overnight, an entire market that had not existed previously. And it was able to sustain and grow this market by offering loan terms that are truly astounding for their type and amount. The typical GreenSky loan involves zero interest and zero payment for the first full year. After that period, higher rates in the low teens kick in. But even these higher rates, which virtually none of the firm’s customers are ever hit with, are drastically better than the typical terms of a credit card.
These excellent loan terms are made possible by the fact that the vast majority of the company’s customers are in the prime borrower category, with FICO scores exceeding 800. The company’s lending partners trip over each other to get these high-performing loans on their books. And the majority of the company’s customers pay off their loans, in full, on short time horizons.