Fintech Lending Unicorn: How GreenSky Credit Options Actually Work

GreenSky Fintech Unicorn

In the competitive market today, builders and contractors attract customers in innovative ways.

This includes accessing various mobile solutions to help them find ways to boost their businesses. GreenSky credit company offers one such option, providing customers with instant funding for construction projects.

How does this all work? GreenSky itself doesn’t make loans. Instead, it signs up merchants who offer big-ticket items such as furniture and home improvement projects, including window replacement, aluminum siding, and roofing. And it recently expanded to offer funding for elective medical procedures. After that, it matches the merchant with a bank willing to extend loans to qualified consumers. GreenSky doesn’t work with overextended borrowers; most of its customers borrow money out of convenience rather than necessity.

How GreenSky Credit Options Works

GreenSky Credit Options

GreenSky provides up to $55,000 to businesses of all sizes. This gives businesses a fast, simple, and paperless way to offer credit to customers. To take advantage of this offer, customers apply by phone, online through the GreenSky website, or using the mobile app.

Once a customer has applied, the company reviews the information and, within seconds, contacts the customer with a credit decision. If approved, the client will receive a GreenSky account number.

To receive funding, the customer uses the account number like he would a regular credit card, and within 48 hours the payment is processed.

How to Get Started

To get started, the builder or contractor needs to register as a GreenSky dealer. Once enrolled, he’ll receive a unique dealer number, which will allow him to start advertising the financing options he wants to offer to his customers. The program bills the builder each month for any transactions from the previous month. Every transaction has a fee, but GreenSky doesn’t provide that fee on its website. Once a customer has agreed to use these credit services, GreenSky utilizes its standing bank partnerships to match the client with a financial institution. Many contractors who’ve used GreenSky’s credit services have seen a significant expansion of their customer base.

GreenSky Applies Fintech to Lending

GreenSky is a leading fintech company in the consumer finance marketplace specializing in home improvement, retail, unsecured loan options, and patient credit. They have built relationships with dealers, retailers, and banking institutions in all 50 states. They maintain their portfolios through an exceptional, SSAE 16 Type II compliant loan servicing organization. GreenSky’s corporate headquarters are in Atlanta, Georgia with a second operational facility in Covington, Kentucky.

Since 2006, GreenSky has established itself as a positive disruptive force in the American market. The company transforms small business and consumer credit, thereby enabling more affordable and pervasive access to financing. The company’s people, process, and technology solutions improve customers’ lives.

GreenSky credit services are aimed towards a broad range of customers and consumers nationwide. And the company has gained recognition for its customized credit solutions that enhance sales. GreenSky acts as a middleman to connect consumer borrowers with banks. It relies on merchants (primarily home improvement and medical professionals) to bring in loan volume by pitching financing at the point of sale.

Picture a homeowner who’s interested in installing new windows, but doesn’t have access to $6,000 upfront. The homeowner can hire a contractor who’s registered with GreenSky and apply for a loan through the company, which can offer a 12-month, no-interest financing deal to break the purchase into bite-sized payments. The contractor visits and inspects the property and scans the homeowner’s ID card on a mobile phone or tablet, which provides most of the necessary information for the credit application. The homeowner then enters his Social Security number and annual income, and verifies other information before submitting the application.

GreenSky receives the data and runs a database search of partner banks and lenders to match prospective borrowers with one of its bank partners. Once the company finds a good match, it can approve the contractor for a credit limit of up to $8,000 instantaneously. The contractor informs the homeowner of the available GreenSky credit, which is more than enough to finance the $6,000 project. Now, the contractor has the opportunity to upsell additional work the client may have otherwise deferred if not for the generous credit approval.

The media has compared GreenSky’s credit options to those offered by competitor LendingTree. Rather than lend its own money, GreenSky provides the technology to connect borrowers with lenders under terms that are convenient for both parties. The expanding network of partner banks and lenders shows strong confidence in GreenSky’s model. Capital One Financial co-founder Nigel Morris was the first institutional investor to buy into GreenSky. Its unique approach allows everyone involved in the borrowing process—merchants, consumers, and banks—to benefit from its existence.

Read up on what the Wall Street Journal had to say about the financial technology firm back in January.



Please enter your comment!
Please enter your name here