GreenSky is a fintech that offers technology that links borrowers to lenders. They do not offer any money themselves but just the technology needed to process this information. This fintech is now one of the best we have in the world. They are offering a business model that is unique and one that is highly successful. Some people have compared it to an offline version of the Lending Tree. Investors see it as the best big thing in this industry. The rate of growth is tremendous, and now that they are a publicly traded company, better results will be seen. In the past one year, there have successfully processed over $3.8 billion in loan volumes. The amount has been increasing every year. In 2017 alone, they recorded a 30 percent.
GreenSky works as a link between the borrower and the bank. The loans are however offered at the point-of-sale. The merchant offering services apply for the loan on behalf of the borrower. This service is mainly meant for the people who want to be offered certain services but have no money to pay in cash. The merchant will assist the consumer to apply for the loan through GreenSky. The loan application is sent to the fintech who link the borrower to one of the partnering banks for instant loan processing.
How does GreenSky make money?
The profits for this company come from fee-charged for transactions. Each transaction is charged 7.4 percent. The percent is deducted on the merchant’s income. The consumer only pays the amount awarded by the bank without interest rates. The loan is repaid in small installments.
GreenSky works with four regional banks- Synovus, Fifth Third, Sun Trust, and Regions Financial. These banks have offered about 89 percent of the transactions handled by this fintech. Many regional banks love the business of lending loans to consumers, but the business is highly difficult due to lack of clients. It can cost a just to get consumers willing to take up loans with them, which is in itself a great setback. Another setback comes with servicing loans. Most of the loans average about $7,000 and normally offer challenges to banks. GreenSky is offering solutions to both of them. They bring in the customer and service the loan on behalf of the bank.