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:: You are here: > Islamic Mortgages / Halal Mortgages > Commercial Property Finance > Types of finance available
There are two approaches:
Joint Venture:
The model used is a Joint Venture (Musharaka) model. Here the business owner enters an agreement with the Islamic Financial company to buy the business according to a certain ownership distribution.
The operator agrees to operate the business for a fee. The profit is distributed between the two entities according to an agreed upon formula. The operator may include in the agreement his/her right to purchase the business after a certain period and according to a specific formula.
Joint Venture Lease-To-Purchase
The model used is same as that above in item number one. Here the operator opts to buy back the shares of the company back at cost over a period. The lease rate of such a business is evaluated professionally by both parties. They agree to the monthly lease rate. The monthly payment is calculated based on the same principles used in the Lease-To-Purchase (LTP) agreement.
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