Erad, the Riyadh-based alternative financing platform for SMEs, has secured a major funding lift as it seeks to accelerate its growth across the Gulf region.
The company, which provides embedded finance tools to help small businesses access capital more easily, has struck a new partnership to support its next phase of expansion.
The business has obtained a $125m credit facility in a deal led by Jefferies, with co-investment from Channel Capital. Once finalised, the deal will become Jefferies’ first asset-backed financing transaction in the GCC and will strengthen the firm’s presence in Saudi Arabia.
Erad operates an alternative financing model that embeds working-capital solutions directly into supplier networks and business platforms. By integrating financing at the point of transaction, the company aims to remove the traditional barriers SMEs face when attempting to secure funding, particularly in fast-growing sectors such as e-commerce, retail and services.
The new capital will be deployed to scale embedded finance offerings across the Gulf and to support the firm’s growing base of SME clients in Saudi Arabia and the wider GCC. Funding earmarked for Saudi SMEs will be channelled through CMA-licensed direct financing funds managed by Erad Partners Capital. The facility provides significant headroom for expansion, particularly as the company continues to experience strong demand from SMEs.
The company highlighted its 6x year-on-year growth and more than $700m in funding requests as evidence of this demand. It also noted that regional SMEs contribute around 50% of GDP and employ two-thirds of the workforce, yet still face an estimated $250bn financing gap.
Erad 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. The support from the regulators, Jefferies and Channel Capital, demonstrates the strategic importance of alternative finance in supporting the Kingdom’s goal of SME growth.”
Jefferies managing director Mark Collier added, “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 which we think erad are uniquely well positioned to provide. The combination of erad’s proprietary technology platform with our global experience in asset backed financing solutions will enable erad to address the real-time working capital needs of SMEs across the region.”
Channel CIO Johan Nisser said, “Channel is proud to team up with the Erad Team, Jefferies and other stakeholders involved in this transaction, our first in KSA and a continuation of our seven years of sharia compliant asset backed finance in the GCC region. We are excited to support the aspirations of Erad in powering businesses across the middle east region in this inaugural ABS financing.”
Following the deal, the company plans to move into multiple new sectors with embedded finance products, enabling suppliers and digital platforms to offer instant financing at the point of sale. The model is already in use with partners in healthcare and F&B supply chains across Saudi Arabia and the UAE.
The new facility builds on erad’s recent $33m debt round led by Stride Ventures. Since launch, the company has processed more than SAR 250m in financing, supported by a 48-hour approval process designed to address the region’s widening SME credit gap.
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