Answered by Sidi Faraz A. Khan
Question: Assalamu alaikum, can I borrow money from someone whose wealth is all haram to start up a halal business? Will the money that I get through that business be halal? For example, if I borrow and use this money to build houses and then rent them out or sell them, will the money that I get from selling and renting these houses be halal money if the houses were built with haram money?
Also I know you are allowed to borrow money from someone whose wealth is a mixture of halal and haram, but does the halal money have to be more than the haram money for it to be permissible for you to borrow, or does it not matter if the haram is more than the halal money ?
Answer: Assalamu alaikum wa rahmatullah,
I pray this finds you in the best of health and faith.
One cannot borrow from or financially transact with someone whose wealth is completely, or predominantly, haram.
If it is predominantly halal, then financial transaction, borrowing, accepting gifts, etc. would be permissible.
If one is unsure, then the default assumption is that most of their wealth is lawful, unless one is reasonably sure otherwise. One need not investigate into their wealth, but rather the basis is what is apparent.
[Ibn Abidin, Radd al-Muhtar; Fatawa Hindiyya]
And Allah knows best.
Checked & Approved by Faraz Rabbani