erad secures US$125m facility to advance SME financing in GCC

erad, the Riyadh-based alternative financing platform for SMEs, has obtained a US$125m credit facility from Jefferies, with co-investment from Channel Capital. The transaction, which represents Jefferies’ first asset-backed financing deal in the Golf Cooperation Council (GCC), is intended to strengthen the firm’s presence in Saudi Arabia and support erad’s expansion of embedded finance solutions across the region.

The facility builds on erad’s strong growth trajectory and more than US$700m in funding requests from regional SMEs. Capital earmarked for Saudi businesses will be deployed through CMA-licensed direct financing funds managed by Erad Partners Capital, providing additional scale to meet rising demand in Saudi Arabia and the wider Gulf.

Co-founder Salem Abu-Hammour described the partnership as a pivotal step for SME financing in the Middle East, noting that erad’s model embeds financing directly within supplier and platform networks to make working capital access more seamless. He also indicated that regulator and investor backing underscores the growing role of alternative finance in supporting Saudi Arabia’s SME-growth objectives.

SMEs generate around half of the GCC’s GDP and employ two-thirds of its workforce, yet face an estimated US$250bn financing gap that constrains their contribution to economic diversification.

Jefferies Managing Director Mark Collier highlighted that the collaboration advances efforts to expand capital access for SMEs and combines erad’s technology-driven platform with Jefferies’ expertise in asset-backed financing. Channel Capital CIO Johan Nisser noted that the transaction is the firm’s first in Saudi Arabia and extends its history of Sharia-compliant financing in the region.

Following the deal, erad is broadening its sector reach and embedded finance offerings, enabling suppliers and business platforms to provide integrated point-of-sale financing. These solutions are already active with partners in healthcare and food and beverage supply chains in Saudi Arabia and the UAE.

The facility follows erad’s earlier US$33m debt round and supports its mission to close the region’s SME credit gap. Since launching in 2022, the platform has processed more than SAR 250m (US$66.6m) in Sharia-compliant financing using a rapid approval model.