Islamic Commercial Property Finance

Islamic Commercial Property Finance lets you fund commercial property purchase in the UK, in keeping with Islamic principles. Our Islamic mortgage product is compliant with the advice we have received from a Shariah Supervisory Board.

Key features and benefits

• No interest charged - as this is forbidden under Shariah law
• £26,000 minimum advance - with no maximum loan
• 25 year maximum term - and a minimum term of one year
• Fixed payments - throughout the entire term of the loan

Our Islamic mortgage uses the Murabaha principle (cost-plus or deferred sale), where we buy the property and immediately transfer it to the customer.

Property selection

• You find a suitable commercial property and agree the purchase price with the seller
• We inspect the terms of the contract you have made and provide you with a decision in principle

Property price

• Jointly, we will agree the cost-plus price for the property. This will take into account the price you agree with the seller, the deferred nature of the sale and the cost of our services. This price will be finalised when the contract is concluded

Completing the purchase

• We will purchase the property from the seller. Your business will then buy it from us, as appropriate under the Islamic Murabaha principles
• You pay a deposit on exchange, and the balance of your initial contribution on completion
• Once the sale is finalised, you start to make regular payments

Restrictions
You can only use an Islamic mortgage to buy existing commercial properties, not for property development. You cannot use it to buy residential property, which will be owned or used by any member of your family.

One of the principles of Shariah law is that interest (or Riba) shouldn't be paid on money lent or borrowed. Normal commercial mortgages generally involve a payment made up of capital repayment and interest. These are therefore unacceptable under Shariah law.

Our Islamic commercial property finance package offers an alternative way of borrowing, which follows this Shariah principle.

The Murabaha principle
Our Islamic commercial mortgages use the Murabaha principle. With this method, we purchase the property directly from the seller. We then immediately sell it to the customer at a higher price. No interest is charged on this higher price and payments made by the borrower represent capital only.

Our product has been developed with the help of a Shariah Supervisory Board. We believe that it is a suitable Shariah compliant method for the purchase of commercial UK properties