GreenSky, which partners with doctors, dentists and other health care providers to offer financing to consumers, has added a new way for repeat borrowers to pay.
The Atlanta fintech on Tuesday announced the launch of a revolving credit line of up to $25,000. GreenSky previously offered only installment loans; the new product is designed to be a better fit for elective medical providers that rely heavily on repeat business.
For example, dog owners who bring their pets to the same veterinarian on a frequent basis would only have to apply for credit once.
GreenSky, which went public last year, derives the lion’s share of its revenue from loans made in partnership with home improvement merchants. But the division of the company that focuses on financing for health care procedures has been growing at a rapid rate.
GreenSky had 2,384 partnerships with elective health care providers in the third quarter of last year, up from just 155 in the first quarter of 2017, according to a recent presentation.
“Our growth trajectory in elective health care transaction volume continued to mirror what we saw early on in our home improvement business,” CEO and founder David Zalik said during the company’s third-quarter earnings call in November.
In an interview Tuesday, another GreenSky executive said that over time he expects revolving lines of credit to become a larger part of the company’s health care business than installment loans.
“We’ll be scaling in a big way throughout 2019,” said Dennis Kelly, the president of GreenSky Patient Solutions.
Health care providers that use GreenSky’s revolving credit line can customize the terms that they offer to their customers, Kelly said.
One of their options is deferred interest, in which borrowers owe no interest as long as they pay off the principal balance before the promotional period ends. In other situations, customers can be charged annual percentage rates of up to 29.99%.
GreenSky is not a direct lender but rather a facilitator of loans made through its bank partners. It plans to pass the credit risk associated with the new financing product on to banks, which is how it operates its installment loan business. The company’s bank partners include Regions Financial, Fifth Third Bancorp, BMO Harris Bank, Synovus Financial and Flagstar Bank.
GreenSky’s share price plunged by 37% in a single day in November
