GreenSky Credit and David Zalik Provide Loans for Home Improvement Projects

Lauren Gensler’s article “Handyman’s Helper: How GreenSky’s David Zalik Skipped High School on his Way to Becoming a Billionaire” was recently published on Forbes to reveal how the financial technology CEO launched his company into success.

Though David Zalik began GreenSky Credit by borrowing money, now the CEO is worth billions. Zalik still owns the majority of the company even after it has gone public. He said he didn’t want to give up the equity when beginning the company and would prefer not to raise funding. GreenSky Credit has since grown to nearly 900 employees and is estimated to be worth $3.6 million.

The business model behind the financial technology company is simple. It has become the technological middleman between the merchant and the banks. For example, saw a man needs a loan to finance several home improvement projects. GreenSky Credit allows the contractor to simply scan the bar code on the driver’s license and if the potential client has a high enough FICO score, he is immediately approved for a loan. They have more than 17,000 contractors around the country and they have partnered with more than 14 federally and state chartered banks, including SunTrust Banks and Regions Financial Corp.

The company itself is able to gain a profit by charging both the contractors and the banks a fee for their technological services. The contractors pay an average of 6% of the overall loan amount while the banks pay an average of 1% of the balance generated each year. Though GreenSky Credit owns the transactions, they won’t necessarily have to deal with any of the responsibilities. For example, the company would not be responsible for default payments.

The company has had a quick and quiet rise to the top of the financial tech market. CB Services ranked the company behind SoFi and Stripe and labeled GreenSky Credit as one of the “fintech unicorns”. The benefit of a company like GreenSky Credit is its ability to scale. Following behind the footsteps of other companies like PayPal Credit and Klarna, the company also seeks to expand from home improvement loans into health loans and has begun to partner with dentists and doctors to offer financing for the more expensive procedures.