The Jefferies-led deal marks the Investment Bank’s first asset allocation in the GCC as ERAD moves from stimulus funds and new business sectors
ERAD, a Riyadh-based alternative platform for financing small and medium enterprises, has secured a $125m credit facility in partnership with Jefferies, in partnership with the channel’s capital.
The company said the deal will accelerate the rollout of its embedded finance products in the Gulf Cooperation Council and represent the region’s largest financial support transaction.
ERAD Credit Center
Erad described the agreement as an important step in its goal to expand access to working capital for small companies. The facility follows the firm’s sixth-straight year of more than $700 million in financing.
The structure of the facility allows for further expansion as demand increases. The capital reserved for Saudi SMEs will be sent to direct financial funds licensed by the Capital Market Authority and managed by the ERAD Part Capect.
The founder of Salem Abu Hammu said: “Our partnership with jefferies represents a changing time for SME financing in the region. By investing in financing with proceeds from the sale of cash.”
He added that the support of those regulators and investors “shows the importance of different financial strategies in supporting the State’s objective of SME growth.
GCC SMES
SMES account for around half of the region’s GDP and employ nearly two-thirds of the GCC workforce, according to ERAD. In addition to this, the company identified a financing gap of $ 250 billion that continues to increase, preventing plans to diversify the economy such as Saudi Arabia’s 2030 vision.
Jefferies managing director Mark Colbier said: “We are proud to be working with Erad and the channel team on one of our first capital-backed acquisitions in the GCC, and our partnership with Erad develops seamless access to GCC SMES.”
He said that combining ERAD’s expertise with Jefferies’ global experience will help to fulfill the “real-time capital needs of SMEs in the region”.
Shariah compliant goods
The channel’s Chief Investment Officer Johan Nisser said the transaction marks the firm’s first in Saudi Arabia and builds on ASSharia-compliant asset management in the Gulf for seven years. “We are happy to support Erad’s ambitions with businesses that provide energy in the Middle East region in this financial acs acs,” he said.
Erad said that the new center will support its expansion in addition to consumer-oriented sectors in construction, materials, distribution and property services, with tax tickets, with financial ticket sizes, financial sizes reaching Saudi Riyals.
It also introduces an embedded product that enables suppliers and business platforms to offer integrated financing at the 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 builds on momentum from a recent $33 million financing round led by Stride Ventures. Erad has processed more than SAR 250 million in SM funds since launching in 2022, providing approval within 48 hours.
