Riyadh based alternative financing platform erad has secured a $125 million asset backed facility led by Jefferies, with co investment from Channel Capital, to scale SME financing across the GCC. Once completed, the transaction will represent Jefferies’ first GCC asset backed financing deal and deepen the firm’s presence in Saudi Arabia. The facility is structured to support erad’s expansion of embedded finance solutions that integrate capital at the point of sale for business customers.
Strategic Facility to Scale SME Financing
The new funding line builds on erad’s reported sixfold year over year growth and more than $700 million in cumulative SME funding requests. Designed as a scalable structure, the facility provides room for further increases as demand from small and medium sized businesses accelerates in Saudi Arabia and neighboring markets. Capital designated for Saudi SMEs will be deployed through CMA licensed direct financing funds managed by Erad Partners Capital, reinforcing local regulatory alignment.
Advancing Embedded Finance Across the GCC
A core objective of the partnership is to accelerate adoption of embedded finance for B2B suppliers and business platforms. erad’s model allows financing to be integrated directly into existing commercial relationships so that working capital can be accessed as seamlessly as a payment transaction. Co founder Salem Abu Hammour said the collaboration with Jefferies and Channel Capital marks a step change in how SMEs in the region obtain liquidity to support growth.
Addressing a Persistent SME Funding Gap
SMEs account for roughly half of the GCC’s GDP and employ about two thirds of the workforce, yet they continue to face a substantial funding shortfall. The regional SME financing gap is estimated at around $250 billion, which constrains the ability of smaller businesses to invest, hire, and modernize. By leveraging alternative and asset backed structures, erad aims to support the ambitions of Saudi Arabia’s Vision 2030 and similar economic diversification agendas across the Gulf.
Partners Bring Global Structuring Expertise
Jefferies views this facility as one of its first major asset backed financing solutions tailored to Gulf SMEs, combining its international structuring capabilities with erad’s regional reach and technology. Managing Director Mark Collier highlighted that erad’s proprietary platform positions it to deliver real time working capital access at scale for GCC businesses. Channel’s Chief Investment Officer Johan Nisser noted that this is the firm’s first transaction in Saudi Arabia and an extension of seven years of Sharia compliant asset backed financing activity in the region.
Sector Expansion Beyond Consumer Verticals
With the new facility, erad plans to extend its activities beyond its original consumer oriented segments into a broader range of B2B categories. Target sectors now include manufacturing, logistics, distribution, and real estate services with individual tickets reaching up to SAR 10 million. The embedded finance product is already live with a set of strategic partners, such as suppliers of healthcare and food and beverage products in both Saudi Arabia and the United Arab Emirates.
Momentum From Previous Debt Raise
This transaction follows erad’s recent $33 million debt round led by Stride Ventures, underlining growing institutional interest in its model. Since its launch in 2022, the company has processed more than SAR 250 million in financing for SMEs in Saudi Arabia and the UAE, supported by a 48 hour approval process. Co founders Salem Abu Hammour, Faris Yaghmour, Abdulmalik Almeheini, and Youssef Said have built erad as a Shariah compliant, data driven platform that delivers fast and flexible working capital solutions across sectors including retail, healthcare, and food and beverage.
The $125 million facility led by Jefferies and supported by Channel Capital positions erad to play a larger role in closing the region’s SME funding gap. By combining embedded finance, asset backed structures, and a technology led underwriting model, the company aims to make working capital access more predictable and transparent for growing businesses. As erad scales across new sectors and GCC markets, the partnership reflects how global capital providers are increasingly backing specialized platforms to serve underfinanced segments of the economy.