The fundamental principles with Islamic loans;

  • Ribā (prohibition of paying and receiving interest): Interest cannot be charged or paid in any financial transaction under Islamic law.
  • Gharār (prohibition of uncertainty): While ambiguity is forbidden, risk-taking is permitted when the leasing agreement terms are clearly laid out between all parties involved.
  • Profit- and loss-sharing: Under Islamic law, all parties must share the risks and rewards associated with the financial transaction.
  • Musharakah (profit- and loss-sharing partnership): Under this contract, a partnership is established in which the parties agree to contribute to the capital of the partnership and agree to share the associated profit or loss.
  • Musharakah Mutanaqisah (diminishing partnership): This is a musharakah contract in which one of the parties agrees to purchase the equity share of the other party in the form of rental instalments until the title of equity is transferred to the buyer in full.

Construction loan types.

Funding for construction developments:

  • From $500K to $15M+
  • LVR 70% Of net realised value of completed Development (NRV)
  • Maximum LVR 82% of Total Development Costs (TDC).

Project types that are able to be funded:

  • Duplex Projects.
  • Triplex Projects.
  • Townhouse Developments.
  • Multi Story Unit Developments.
  • Commercial/Industrial Developments.

Few requirements are

Strong and feasible projects, pre sales not required for certain projects this is depended on sponsor and project location.