When David Zalik was operating his own internet consulting firm, he was able to get an inside look at some of the biggest names in the American home-improvement industry. This gave him valuable insights into some of the biggest vulnerabilities that these companies faced. One of those problems was the fact that so many of the top home-improvement companies were losing business over and over on a certain type of deal.
Zalik saw that on a shockingly high number of deals, customers who wanted to carry out big-ticket home renovation projects would end up backing out of the deal at the last minute. This was primarily due to the fact that they had no contracting experience and would consistently underestimate the true cost of projects by tens of thousands of dollars. It wasn’t that these customers no longer wanted to complete their renovations even at the much higher price. The problem was that many of these customers simply didn’t have the cash on hand to do so. And this isn’t surprising. After all, many of these home renovation projects were running in the high-five-figure to low-six-figure range.
It immediately occurred to Zalik that this was a huge opportunity for someone who could figure out how to provide instant bridge financing for these home renovation projects. Large real estate developers always have access to bridge financing mechanisms that allow them to complete high-cost projects when they run short on cash. But these facilities are rarely available to average consumers who are looking to carry out similar projects on their homes. This was the idea that would launch GreenSky Credit.
GreenSky Credit was able to sign on some of the largest lenders in the country, including Fifth Third, Sun Trust and Regions Bank. GreenSky Credit focused only on prime borrowers, allowing GreenSky Credit to make instant loan offers, on site, for up to six-figure amounts. On the deals facilitated by GreenSky Credit, everyone walks away a winner. The banks get high-performing loans to pad out their books. The customers get to complete renovations that instantly add tens of thousands of dollars in value to their homes. And GreenSky Credit gets its fee.