New York Life will commit up to $750 million to purchase Affirm’s installment loans through 2026. This provides Affirm with significant off-balance-sheet funding, projected to support approximately $1.75 billion in annual loan volume. The infusion of capital is poised to bolster Affirm’s capacity to extend its reach within the competitive buy-now-pay-later (BNPL) landscape.
This agreement builds upon an existing relationship initiated in 2023, where New York Life began investing in Affirm’s asset-backed securities and other structured loan products. To date, the insurer has channeled nearly $2 billion into Affirm’s collateral pools, signaling a strong vote of confidence in the fintech company’s credit risk management and underwriting capabilities.
The partnership reflects a broader industry trend. Insurance companies and private-credit investors are increasingly allocating capital to consumer finance assets, drawn by the higher yields available in a rising interest rate environment. This appetite for yield, coupled with sophisticated risk assessment models, has led established financial institutions to explore collaborations with fintech firms like Affirm that possess specialized expertise in consumer lending.
Over the past few years, Affirm has secured similar funding arrangements with Liberty Mutual Investments, PGIM, and Sixth Street Partners. These deals mirror the activity observed throughout the BNPL sector, where companies are actively seeking diverse funding sources to fuel growth and manage balance sheet constraints. Klarna, a major player in the BNPL space, has engaged with Nelnet and Pagaya, securing comparable funding agreements. Likewise, PayPal formalized a $7 billion arrangement with Blue Owl Capital.
Affirm states it has facilitated more than $100 billion in transactions, with over 90% of its borrowers being repeat customers. The company highlights this high level of customer retention as a critical factor contributing to its robust credit performance within the BNPL industry. A high rate of returning customers signals strong customer satisfaction and effective risk assessment.
The partnership between Affirm and New York Life emerges as consumer lenders navigate a complex economic landscape. While consumer spending remains resilient and delinquency rates are exhibiting signs of improvement, investor sentiment is tempered by recent bankruptcies observed in the subprime auto and consumer credit sectors. Affirm’s strategic alliance with New York Life provides the fintech company with added financial stability and enhances its ability to navigate potential economic headwinds. The deal highlights Affirm’s robust model, attracting substantial investment from a major financial player like New York Life.
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