Is Invoice Factoring A Halal business?
Submitted by rlohiya on Tue, 2010/05/11 - 19:02
Slmz,
I was wondering if Invoice Factoring can be considered a halal/shariah compliant business?
Basically if a company has filled a large order to a customer, with 60-90 day payment/credit terms.
The company gets a 2nd large order, but does not have enough cash-flow to fill it.
I would buy the value of the invoice, paying the company 85% of the invoice value.
When the customer pays me the 100%, I deduct my 10% fee, and forward the remainder to the company.
If the customer does not pay inthe agreed time, the company has to payback my money.
I wish to know if this is a halal business?
Of course I am only asking about factoring invoices for halal/muslim companies, ie. clothing manufacturing, IT resellers etc.
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