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Published on
November 18, 2025
5 min read
Klarna Leverages $6.5 Billion Loan Deal With Elliot to Drive Growth in the U.S. Market
In Focus
- Klarna has signed a $6.5 billion loan deal with Elliott Investment Management
- The deal is aimed at growing Klarna’s business in the U.S.
Klarna has struck a deal to sell loans amounting to $6.5 billion to funds that are managed by Elliott Investment Management in the next two years. Reuters reported that Klarna’s loan deal with Elliott is part of its strategy to grow its Buy-Now-Pay-Later (BNPL) business in the U.S.
Klarna Shifts Part of Fair Financing Portfolio to Elliot
Klarna’s agreement with Elliot Investment Management allows the fintech firm to sell a section of its fair financing portfolio to Elliot funds. Starting October 2025, the Swedish flexible payment firm will shift newly originated receivables to Elliot funds on a rolling basis.
“This is another major step in our U.S. growth journey. This agreement lets us reach even more Americans who are moving on from traditional credit and choosing fairer ways to pay,” Klarna’s Chief Financial Officer Niclas Neglén said.
Unlike short-term payment options, fair financing products enable customers to break large purchases into fixed monthly installments for longer periods of time. This option allows Klarna to offer competitive interest rates to customers.
In the U.S., the fair financing product has gained popularity among buyers and merchants. Gross merchandise value has increased by 244% compared to Klarna’s 139% global growth. Klarna launched an EU debit card in September 2025 and is among the largest fintech firms in Europe.
Growing Loan Facility With Forward Flow Agreement
Klarna has established a $1 billion facility with funds managed by Elliott Investment Management. The facility is expected to grow as customers repay their loans and new ones are added through a forward flow agreement. Over the next two years, this move will enable Klarna to originate up to $6.5 billion in loans.
“In its current growth phase, forward flow agreements are a capital-efficient and highly scalable funding source that allows Klarna to execute fast and capture opportunities that present themselves as it is ramping its merchant base rapidly with its new payment service provider integrations,” Senior Equity Analyst at Morningstar Niklas Kammer said.
Klarna will retain all consumer-facing functions which include loan servicing and underwriting, under the latest deal.
Klarna’s Q3 Revenue Exceed Analyst Projections
Klarna reported $95 million in net loss in the third-quarter, representing a $12 million drop from last year. The BNPL company attributed its Q3 performance to growth in the U.S., where gross merchandise volume increased by 43% compared to the same period last year.
“We want to be the one that helps you save time, save money, and be in control of your finances, and that’s obviously not necessarily what we’ve been associated with,” Klarna CEO Sebastian Siemiatkowski said.
Following its September 2025 IPO, Klarna also surpassed analysts’ third-quarter revenue expectations. The flexible payment firm’s revenue stood at $903 million against LSEG estimates of $882 million.
