GreenSky Credit has become one of the fastest-growing and successful companies within the world of fintech. Founded in 2006 by prodigious entrepreneur David Zalik, GreenSky has grown into what is perhaps the largest retail lender for instant point-of-sale loans. The company has expanded to more than 17,000 retail partners, with everyone from contractors to dentists’ offices pitching its loans. And this has translated into a company that now underwrites more than $5 billion in new loans each year.
Keeping it simple and profitable
As an entrepreneur who has been in business for himself since the age of 14, David Zalik was never one to be drawn into the whirlwind of Silicon Valley trends and shibboleths. The founder of GreenSky has famously quipped that the best reason to never give a tech startup $30 million is so that it doesn’t have $30 million to waste. True to his word, Zalik has eschewed almost all of the trappings of trendy Silicon Valley startup culture. In the GreenSky corporate headquarters, you won’t find beanbag chairs, foosball tables or beer dispensers. But you will find one of the most serious retail credit operations in the country.
And this avoidance of techy pretension isn’t just skin deep at GreenSky. From the beginning, Zalik did almost the opposite of what every other fintech startup was doing. He immediately made the decision to go only for the strongest borrowers, unlike competitors OnDeck and Lending Club, who attempted to make gold out of the dross of NINJA applicants. Zalik was keen enough to know that by going with the highest-end borrowers, pitching the company’s business model to some of the nation’s top lenders would be all but a lock. He understood that once lenders saw that they could easily pad their books with hundreds of millions of dollars in additional prime loans each year, they would jump at the opportunity to partner with GreenSky.
And this is exactly how the company has found so much success. The company is able to make 6 percent of the principal amount from its retail partners while also getting a 1 percent carrying fee from its lending partners. And when everyone is making so much money, there aren’t many complaints.