Loans for starting business and financing working capital : loan to start a business

Fatawa Question

I hope you are doing great and in the best state of health and Iman. I am writing this email to inquire about financing and business loans. You were highly recommended for your opinion based on your profound knowledge in Islamic finances and transactions. Before I ask you the question, I would like to sincerely thank you for taking the time to consider my question, May Allah make it in the balance of your deeds. I am currently working as an associate dentist in London, Ontario Canada. I have being an associate for about 3 years. I have an opportunity at this stage to purchase the practice I am working at, as the principal dentist (owner) is ready to retire. The practice has being established since 1977 and has large patient base and high yearly gross income. My questions is : the practice is worth about 1 million dollars, I have tried to look for investors, I have found few but I am still way short from getting the whole amount. The other option is getting a business loan from the bank. I have consulted few people from our community that have a strong background in Islamic knowledge (Fiqh) and that are also working in the area of finance. I didn't get a definite answer and that's why I am asking your opinion. Considering that if I take a business loan from the bank, and the interest generated is mostly tax deductible, and I have no other way of acquiring the money, Is this issue closed for discussion pertaining to business loans ? and maybe I should just stay as an associate, or is there room for discussion ? Please advise on this issue and any possible solutions. Jak waiting anxiously for you response,

Fatwa

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Publication Date

2006-05-28

Main Subjects

Economics & Business Administration
Islamic Studies

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-790434

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