Klarna (NYSE: KLAR) has established its first forward flow and warehouse financing agreement in Germany, a €900 million facility intended to support the expansion of its consumer financing products in the country.

Under the two-year agreement, Klarna has sold a portfolio of its German Fair Financing term loans and will sell newly originated receivables on a rolling basis. The structure provides off-balance-sheet funding while Klarna retains consumer-facing activities, including underwriting and servicing.

As underlying assets amortize over the term, new loans will continuously enter the facility. Klarna said it expects the agreement to facilitate the origination of up to €5 billion in German Fair Financing term loans during the life of the program.

Chief Financial Officer Niclas Neglén said in a statement: "This facility is a natural next step, bringing greater capital efficiency as we scale that growth further. We're pleased to welcome new partners to this structure, drawn by the strong credit quality of these products."

The information in this article is based on a press release issued by Klarna Group plc.