Dar Albalad Signs SAR 20M Islamic Credit Facility with SNB

Dar Albalad for Business Solutions Co. secured a SAR 20 million Shariah-compliant credit facility from Saudi National Bank, the company said. The deal was signed June 25.

The company provides administrative and business support services. It did not disclose the facility's purpose or profit rate. The agreement uses Islamic financing principles, a standard approach for corporate credit extended by SNB.

The loan is material for Dar Albalad. Its operating revenue for the full year through March was roughly SAR 47 million. At more than 40% of annual sales, the credit line adds significant liquidity to the balance sheet.

Saudi banks tightened lending conditions after a period of rising rates. SNB, the kingdom's largest lender by assets, continues to issue Shariah-compliant facilities to mid-market clients. This deal fits that pattern.

For the business-services sector on Tadawul, the facility shows that smaller-cap companies with recurring revenue can still access bank credit. Other firms in the sector may find similar terms, especially those with stable cash flows and collateral. The business-services sector includes firms handling facility management and staffing. Many service contracts require upfront spending with delayed payment, making credit lines a practical tool for managing working capital gaps.

SNB's mid-market corporate desk has been active in extending such facilities to service-sector companies, consistent with the bank's push to deepen the non-oil economy. The SAR 20 million advance is small relative to SNB's asset base but significant for Dar Albalad.

For Dar Albalad, the facility avoids equity dilution and provides flexibility to fund expansion or cover short-term needs. The company had not disclosed existing long-term debt, so the credit line adds modest leverage. Total debt still appears manageable against revenue.

The bank did not specify whether the facility is secured or the repayment schedule. The Shariah-compliant structure likely follows a murabaha arrangement, where SNB purchases assets on Dar Albalad's behalf and sells them at a markup. That structure is typical for corporate facilities from Saudi lenders.

The stock trades thinly. The facility does not change that. It removes one financing risk that small-cap shareholders often watch. The next quarterly report will show how the company deployed the funds, whether toward working capital or project spending.