Fast-growing FinTech firm Klarna has announced the launch of a new merchant lending product in the UK.

The new offer will give SMEs the opportunity to apply for business financing through the platform, which previously lent exclusively to consumers.

Klarna’s merchant lending product has, since last year, been available in seven other European markets, and it reports that the product has helped businesses boost their growth by 15 per cent compared to those who didn't make use of it.

The fast-growing firm, founded in 2005, is active in 17 countries and has its UK base in London.

It reports that UK merchants which offer the firm’s eCommerce payment option of three interest-free instalments have seen a 55 per cent increase in average order value.

 The firm, which works with major brands including River Island, Boohoo, Made.com, ASOS, and Missguided, said that more than 16 million new consumers are now using the platform globally.

This includes 6m UK consumers on its platform in 2019, and a current rate of almost 55,000 new UK users served every week.

“We know that customers love the flexibility and convenience that comes with our products and by delivering the best possible experience to them, we’ve been able to partner with some remarkable brands and retailers in the UK,” said Luke Griffiths, general manager at Klarna UK.

“As we continue to expand our offering across different verticals and touchpoints, I’m incredibly proud of the momentum we’ve managed to achieve since the start of the year.”

Sebastian Siemiatkowski, founder and CEO at Klarna, added: “Retail is undergoing a radical shift driven by consumers who are expecting more transparency, flexibility as well as intuitive services centred around their needs when shopping.

“Klarna’s trajectory is a result of a relentless focus that the future of retail consists of a high touch experience which will not only drive engagement and reach, but also build customer preference.”