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Klarna has secured a €1.4 billion structured financing facility with Santander, marking its first warehouse line with the Spanish lender as the buy-now-pay-later group continues to reshape its funding base.
The arrangement, backed by German receivables, will allow Klarna to recycle capital more efficiently across its short-term lending products. It is the latest step in the company’s strategy to diversify funding sources and reduce reliance on its balance sheet ahead of a potential New York listing.
“This is a key pillar of our growth strategy while at the same time enhancing the funding tools available to Klarna,” said Niclas Neglén, Klarna’s chief financial officer. “This transaction demonstrates strong institutional confidence in Klarna’s platform, product performance, and credit risk management.”
Germany has been one of Klarna’s most important markets since its early expansion into continental Europe. The 2014 acquisition of Sofort, a Munich-based payments company, cemented its presence in the region. Today, Germany remains a hub for Klarna’s merchant network and consumer adoption, making it a natural choice for a receivables-backed facility.
The deal also aligns Klarna with Santander, one of Europe’s most aggressive retail finance banks. The Spanish lender launched its own BNPL product, Zinia, in Germany in 2022 and last year became Apple’s financing partner for German customers. Santander’s decision to finance Klarna’s receivables, despite running a competing product, underlines both the scale of Klarna’s loan book and the appetite for short-duration consumer assets among banks.
The Santander facility comes just a week after Klarna announced a multi-year forward-flow deal with U.S. servicer Nelnet, which will see up to $26 billion in newly originated American “Pay in 4” loans sold over the life of the agreement. In the UK, Klarna has a similar arrangement with funds managed by Elliott Advisors, offloading short-term receivables to investors.
These agreements point to a modular funding model in which Klarna uses a mix of warehouses, forward-flows and potential securitisations across markets. The approach frees up capital, smooths cash flow, and reassures investors wary of the credit risk that comes with BNPL’s rapid growth.
For Klarna, the Santander partnership strengthens its European balance-sheet flexibility at a time when profitability is improving but competition is tightening. For Santander, it extends a consumer-finance franchise already spanning auto, cards and instalments, while giving it a front-row view of Klarna’s loan performance in Germany.
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