What the business did
Greensill operated in supply-chain finance, also called reverse factoring. In its simplest form, the company paid a supplier early, at a discount, and then collected the full invoice amount from the buyer later. Packaged and sold to investors, these short-term receivables looked like low-risk, self-liquidating paper. The model scaled quickly, drew backing from large investors, and channelled assets into funds distributed by a major bank.
Where the risk actually sat
Two concentrations turned a plausible model into a fragile one. The first was credit insurance: much of the paper was attractive to investors only because it was insured, so the whole edifice depended on that cover being renewed. The second was client concentration, with a large share of exposure tied to a small number of connected borrowers. When the insurance was not renewed, the paper could no longer be sold as low-risk, redemptions and funding froze, and the structure unwound within weeks.
A model can be the single point of failure. When an entire business depends on one renewable contract staying in place, that contract is not a detail, it is the business. The right diligence question is not "is the paper performing today" but "what happens on the day one counterparty says no", and how concentrated the answer is.
Which framework checks would have flagged it
Running Greensill through our seven checks, three light up well before the collapse. The corporate registry and structure check would have surfaced how much exposure ran to connected parties. The claims-versus-record check would have tested the "low-risk, self-liquidating" description against the reality of insurance-dependent, concentrated paper. And the litigation and regulatory check would have weighted the growing questions raised in reporting and by supervisors. None of these required inside information: the concentration was visible to anyone reading the structure rather than the marketing.
The aftermath
The collapse reached far beyond the company. Investors in the associated funds faced significant losses and a lengthy recovery process, a major bank absorbed reputational and financial damage, and the episode prompted official reviews in the United Kingdom into lobbying and the supervision of non-bank finance. As with any collapse, a careful reader separates the corporate failure from the personal position of individuals: outcomes and findings should be attributed only where the record, courts and regulators place them.