Klarna (NYSE:KLAR) shares climbed 4% after the digital payments company announced it had expanded its financing facility with Elliott Investment Management to $2 billion, strengthening a partnership designed to support up to $17 billion in U.S. loan originations.
The updated agreement extends the partnership’s duration from two years to three and builds on the arrangement first unveiled in November 2025. Under the structure, Klarna sells newly originated U.S. financing receivables to funds managed by Elliott on a rolling basis, allowing the company to access off-balance-sheet funding while retaining control over underwriting and loan servicing.
The increase in the facility follows strong momentum in Klarna’s U.S. financing segment, which recorded significant growth in gross merchandise volume during the fourth quarter of 2025. Klarna said the larger facility will help accommodate rising consumer demand for its financing products.
“Klarna’s US Financing is growing fast because it gives Americans something the credit card industry never has: real choice, clear terms, and no surprises. This partnership sets the foundation for us to meet the accelerating demands of our American consumers,” said Niclas Neglen, Chief Financial Officer at Klarna.
The forward-flow and whole-loan sale model enables Klarna to expand its lending operations in the United States without increasing assets on its balance sheet. As existing loans amortize over the three-year period, new loans will continuously replace them within the facility, allowing the company to originate up to $17 billion in U.S. financing loans during the life of the program.
The expanded partnership provides Klarna with greater financial flexibility as it continues to expand its footprint in the U.S., where its buy-now-pay-later and installment financing services compete with traditional credit card products.