Bank Loan for Business
Q: I like to know whether taking a bank loan to open a business is allowed or not. If not, how else one can start a business in this country Australia?
A:Taking a loan on interest is only allowed under extreme circumstances. Starting a business does not fall under this category. Thus it would not be permissible to take an interest bearing loan to start a business.
Council of Ulama Eastern Cape
Read these QA to learn more..
- I want to ask about this justification which I use based on understanding of some Ulema and majorly my own understanding, which I think could be wrong too, but if Ulema of Sunni Path concur then Insha ALLAH I will stick to it firmly, its about Riba and I want it to be clarified because Insha ALLAH I would be getting into Business field very soon. If a Bank gives you Service and takes a certain amount of money from you then would it be considered as Riba? Like for instance I am a Bank who says to Person X that I will secure your money of Rs 10,000 for the time period of 1 year and in return I take a calculated and fixed amount of money say for example Rs 1000, would this be considered as Riba? My Second Question is regarding Loan, for instance I take loan of Rs 10,000 from a Bank and the Bank says it will charge me Only Rs 1000 at the end of tenor and I will have to return the money in any case even if my business goes in loss would that be considered as Riba?, because usually what happens in Pakistan is that you have to payback the loan with interest so kindly distinguish between these 2 kind of situations.
- I am living in 3% muslim populated area in Rajasthan. Any Islamic Bank/islamic Financial institution is not available in whole area. I want to start a business with 75% Loan money by Bank.I have no other ulternate except to take interest based loan from Bank.The whole economy is interest based. I also consulted Ulema of Other countries on internet,they replied me to take advise of Indian Ulema. What is the Sharia rulings on such Loan and business? If it is completely forbidden, what is the ulternate?
- My husband took loan from bank for business. He made loss in business and it is closed. He lost his job with higher salary and now his current job he is not able to pay off his debt to bank. I am helping him in other expenses. I want to know can i give zakat money to him.
- I am 58 years old doing business. I had taken a loan from the bank to do business about 40 years back as my father had died. Since then, I am unable to pay the loan and clear the dues. I would like you to give me some dua or prayer where Allah will clear my dues and I would like to live according to the Shariat.
- I am businessman, my business consist of rental incomes,exports,imports and local trading.And as per the indian state and central law various taxation if I go to pay the taxes then it will be very difficult to maintain my livelyhood,and as business is concerned I have fine tune with financial institution.If I am taking the loan than I get the benefits in taxation with the propotion of intrest and depriciation ratio.So can I proceed with loan,If yes, can I use the money of loan transfered in my account for my business purpose. 2. If I am taking loan with the best intrest rate and utilise the funds in earning and can make the profits in multiple after paying the installment the balance earned ammount and 30% of that If I distribute in the needy people can it be possible.Which category of people are suitable for this ammount. 3. Can I take my share in the profit earned as my skills and securities utilised for earning and at what extent can I take 70%. 4. What to do with the capital amount of loan sanctioned by bank after the loan is completed who can claim the needy people or me.
- I am going to start a new business with my friend both have agreed to invest 50% amount by each and to share the profit in the same percentage. My share of investment is ready, but my friend is borrowing money from bank to invest into the business on his own risk. As per our agreement my friend will be solely responsible to return the loan amount and our business will not be liable at all for this loan amount. Could you please suggest me if I can enter into this business with him?