Is it permissible to take out a business loan or commercial loan?
February 2, 2017
Q: If looking to buy and take over a business, is it permissible to take out a business loan or commercial loan?
الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب
A: It is not permissible to take out a conventional business loan when looking to buy and take over a business. A an interest bearing loan is not a valid vehicle for securing investment in a business venture. Rather, joint enterprise is the vehicle for this with shared risks and rewards. Thus, if one does not have the funds, one should be ready to accept the partnership of an investor/s in a manner that is compliant with shari’a.