Riyadh-based alternative financing platform erad has partnered with Jefferies, with co-investment from Channel Capital, to secure US$125 million in a credit facility aimed at expanding embedded finance solutions across the GCC.

Once finalised, the transaction will mark Jefferies’ first GCC asset-backed financing deal and support its plans to grow its presence in Saudi Arabia.

The facility builds on erad’s sixfold year-on-year growth and over US$700 million in funding requests.

It provides capacity to meet rising demand from SMEs in Saudi Arabia and the wider GCC.

Funds for Saudi SMEs will be deployed via CMA-licensed direct financing funds managed by Erad Partners Capital.

Salem Abu-Hammour, Co-founder of erad, said:

“By embedding financing directly into existing supplier and platform relationships, we’re making working capital as accessible as a payment transaction. The support from regulators, Jefferies and Channel Capital demonstrates the strategic importance of alternative finance in supporting the Kingdom’s goal of SME growth.”

SMEs contribute roughly 50% of GDP and employ two-thirds of the workforce across the GCC, but face a US$250 billion financing gap that constrains growth.

Mark Collier, Managing Director at Jefferies, added:

“The combination of erad’s proprietary technology platform with our global experience will enable erad to address the real-time working capital needs of SMEs across the region.”

Following the transaction, erad plans to expand its embedded finance products, allowing suppliers and business platforms to offer integrated financing at the point of sale.

The model is already live with partners in healthcare and F&B sectors across Saudi Arabia and the UAE.

Featured image credit: erad