Sahm Adrangi is one of the top hedge fund managers under 40 in the United States today. As the founder and CIO of Kerrysdale Capital, he has proven himself capable of navigating some of the toughest market conditions, including the fallout from the 2008 financial meltdown.
Recently, Sahm Adrangi has started publicly endorsing one of the most innovative credit firms that has come about in recent decades. GreenSky Credit was founded by genius child prodigy David Zalik back in 2006. GreenSky Credit has a revolutionary lending model. Rather than originating loans themselves, like many other startup companies have focused on, GreenSky simply matches opportunities for great loans with lenders who are willing to extend credit. As unbelievably simple as this business model sounds, it has created billions of dollars in value for more than 12 major lenders and over 17,000 merchants.
GreenSky Credit primarily deals at the retail level with large-scale, big ticket items. One of the areas in which it facilitates a large number of loans is in the area of home remodeling. As the founder of another company that was focused on helping companies in the home-remodeling sector, such as Benjamin Moore and Home Depot, Sahm Adrangi says that David Zalik was able to gain a deep understanding of those companies’ business model. He instantly realized that a ton of business was being lost due to the fact that job bids were coming in over the budget of people wanting to remodel or repair their homes.
Sahm Adrangi says that the problem that GreenSky Credit was able to identify was that people who are just looking to remodel or repair their own homes are not professional contractors and typically lack the job assessment skills. This often resulted in job bids coming in far above what customers had anticipated. As a result, people often walked away from potential remodeling jobs entirely.
GreenSky stepped in with great promotional loan terms, often involving no payments and no interest for an entire year. Because most of its customers have top FICO scores, the majority of customers pay back the loan before interest starts being charged.