Erad Secures $125m Facility To Expand SME Finance Across The Gulf

erad, the Riyadh-based alternative financing platform for small and medium sized enterprises, has secured a $125m credit facility in partnership with Jefferies, with co-investment from Channel Capital.

The company said the deal will accelerate the rollout of its embedded finance products across the Gulf Cooperation Council and represents Jefferies’ first asset backed financing transaction in the region.

erad credit facility

erad described the agreement as a significant step in its aim to broaden access to working capital for smaller companies. The facility follows what the firm said was six-fold year-on-year growth and more than $700 million in funding requests.

Structure of the facility allows for further expansion as demand increases. Capital earmarked for Saudi SMEs will be deployed through direct financing funds licensed by the Capital Market Authority and managed by Erad Partners Capital.

Co-founder Salem Abu Hammour said: “Our partnership with Jefferies represents a transformative moment for SME financing in the region. By embedding financing directly into existing supplier and platform relationships, we’re making working capital as accessible as a payment transaction.”

He added that support from regulators and investors “demonstrates the strategic importance of alternative finance in supporting the Kingdom’s goal of SME growth”.

GCC SMEs

SMEs account for around half of regional GDP and employ roughly two thirds of the GCC workforce, according to erad. Despite this, the company cited a financing gap of $250 billion that continues to constrain growth, hindering economic diversification plans such as Saudi Arabia’s Vision 2030.

Jefferies managing director Mark Collier said: “We are proud to work with erad and the Channel team on one of our first asset backed financing solutions in the GCC, and our partnership with erad represents a significant step forward in creating seamless access to capital for GCC SMEs.”

He said combining erad’s technology with Jefferies’ global experience would help meet the “real-time working capital needs of SMEs across the region”.

Sharia-compliant assets

Channel’s chief investment officer Johan Nisser said the transaction marks the firm’s first in Saudi Arabia and builds on seven years of Sharia compliant asset backed finance in the Gulf. “We are excited to support the aspirations of erad in powering businesses across the middle east region in this inaugural ABS financing,” he said.

Erad said the new facility will support its expansion beyond consumer-focused sectors into manufacturing, logistics, distribution and real estate services, with financing ticket sizes reaching up to 10 million Saudi riyals.

It has also launched an embedded finance product that enables suppliers and business platforms to offer integrated financing at point of sale. The model is already in use among healthcare and food and beverage suppliers in Saudi Arabia and the UAE.

The company said the deal extends momentum from its recent $33 million debt round led by Stride Ventures. erad has processed more than SAR 250 million in SME financing since launching in 2022, offering approvals within 48 hours.