As part of the work with his e-consultancy firm, serial entrepreneur David Zalik frequently did business with some of the major names in the home improvement space. He began to notice a pattern. Customers, usually the homeowners themselves, were very bad at accurately assessing how much complex renovation projects would ultimately end up costing. Some of the homeowners would overestimate the costs. This rarely presented a problem for the businesses servicing them. However, when the customers severely underestimated the cost, which Zalik saw happening a majority of the time, customers often suffered from sticker shock.
A customer who underestimated the cost of a new kitchen by one or two thousand dollars usually didn’t put the sale at risk. However, Zalik watched over and over as customers walked away from projects due to estimates that were $25,000 to $50,000 higher than what the customer had anticipated. This was a serious problem, and many deals for contractors and home improvement businesses were being lost as a result.
This was the problem that led Zalik to found GreenSky Credit. The key insight that Zalik had was that the main reason that these homeowners were walking away from the renovations wasn’t due to the fact that they couldn’t afford them. More often than not, the renovations more than pay for themselves by raising the value of the home by more than the cost of the renovation itself even where the estimates are far higher than what the customer expected. On the contrary, the problem was simply one of liquidity. Many of the homeowners just didn’t have $50,000 cash lying around.
GreenSky Credit is now able to solve this problem. Because GreenSky Credit customers have an average FICO score of 760, its customers can be instantly approved for loans of up to seven figures. GreenSky Credit loans often require no interest and no payments for the first year. These loans are provided by some of the biggest and most reputable lenders in the United States, including Region’s Bank, Fifth Third Bancorp and Sun Trust.
The contractors may be the biggest winners of all. GreenSky Credit pushes through billions of dollars each year in deals that would have otherwise certainly been lost.