Klarna has outlined a two-year deal to transfer up to USD 6.5 billion in loans to funds managed by Elliott Investment Management as it expands its US lending activities.
The Swedish fintech company confirmed that the arrangement will involve selling part of its existing Fair Financing portfolio to the funds, with newly generated receivables scheduled to move to them on a continuous basis from October.
Expanding the Fair Financing product
The Fair Financing product, which enables customers to distribute higher-value purchases across fixed monthly instalments, has gained traction in the US market. These longer-term repayment options sit alongside the short-term Buy Now, Pay Later features that helped the company establish its position in the sector. Klarna has reported substantial growth in this segment, noting a 244% increase in gross merchandise value in the US, significantly above its global rate.
Under the agreement with Elliott funds, Klarna will maintain responsibility for consumer-facing operations such as underwriting and servicing. The initial facility is valued at USD 1 billion, but the structure allows repaid loans to be replaced continuously under a forward-flow mechanism. This design effectively enables Klarna to originate credit totalling up to USD 6.5 billion throughout the two-year window.
Representatives from Klarna described the arrangement as a means of extending its reach in the US market, pointing to a change among consumers who are considering alternatives to conventional credit products. Analysts suggested that forward-flow agreements offer firms in high-growth phases a way to scale their lending activity without committing extensive balance-sheet resources. A Morningstar analyst noted that such structures help companies respond quickly as they expand merchant relationships and integrate additional payment services.
In November, Klarna also announced that eligible US customers who use autofill on Google Chrome stand to benefit from its flexible payment options at checkout. The partnership came as an extension of Klarna’s long-standing collaboration with Google Pay and focused on facilitating simplified, secure, and advanced payment experiences for consumers living and shopping across the US. Additionally, the move enabled individuals to split their purchases into instalments with Klarna, providing them with more flexibility and expanded options when shopping.
