Borrowing to Establish a Business
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Fatwa No. ( 2256 )
Q1: If a person needs a specific amount of money, and wishes to use it to establish a business, and takes a known profit of 9%, is the capital included in riba, or is the riba on the bank, and the borrower is not subject to riba?
A1: If the situation is as described, then the transaction is ribawi (usurious), and both parties—the lender and the borrower—are sinful; because he is a usurer, and his need for the amount to establish a business does not permit him to deal in riba.
Q1: If a person needs a specific amount of money, and wishes to use it to establish a business, and takes a known profit of 9%, is the capital included in riba, or is the riba on the bank, and the borrower is not subject to riba?
A1: If the situation is as described, then the transaction is ribawi (usurious), and both parties—the lender and the borrower—are sinful; because he is a usurer, and his need for the amount to establish a business does not permit him to deal in riba.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.