"Recent move: Klarna struck a deal with Elliott Investment Management to sell up to $6.5 billion in US "Fair Financing" loans over the next two years. These are not short-term, no-interest BNPL loans - they're fixed-term installment loans, with Klarna retaining underwriting and servicing duties. Capital efficiency - By selling receivables under a forward-flow agreement, Klarna frees up balance sheet capacity to issue more loans."
"Scalable risk management - Rather than raising debt or equity, this structure allows Klarna to grow its credit book without taking on too much risk upfront. US-centric growth - Fair Financing is growing faster in the US than globally (Klarna disclosed GMV up 244% in the US, vs. 139% globally over the past year)."
Klarna agreed to sell up to $6.5 billion of U.S. Fair Financing loans to Elliott Investment Management over two years. The loans are fixed-term installment products rather than short-term, no-interest BNPL, and Klarna retains underwriting and servicing responsibilities. Selling receivables via a forward-flow agreement frees balance-sheet capacity and improves capital efficiency, enabling additional loan originations. The structure provides scalable risk management by expanding the credit book without immediate debt or equity issuance. Fair Financing is expanding particularly quickly in the U.S., with GMV rising 244% in the U.S. versus 139% globally year-over-year.
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