SHARIA-COMPLIANT SALE AND LEASEBACK
Ethical and Flexible Asset Financing
- Fully compliant with Islamic finance principles
- No interest-bearing financial obligations
- Transparent contracts ensuring fair dealings
Why Choose a Sharia-Compliant Sale and Leaseback?
A Sharia-compliant sale and leaseback allows businesses to unlock capital while maintaining ethical compliance and continued asset usage.
Asset Sale
The business sells an asset to a Sharia-compliant financier at a fair market value, ensuring transparency and ethical financial practices.
Leaseback Agreement
The business continues using the asset by leasing it back under pre-agreed terms, maintaining operational continuity.
No Interest (Riba)
The lease payments are fixed and do not include any interest charges. The lessor's profit is based on the rent for the use of the asset, not interest. This ensures the agreement complies with Sharia principles, which prohibit interest (riba).
Ethical Compliance
The leased asset must be used for halal (permissible) activities and cannot be involved in any unlawful practices (e.g., alcohol, gambling, or other haram industries).
Clear Terms
All terms of the sale and leaseback agreement must be clear and transparent. There should be no uncertainty (gharar) about the payments, terms, or obligations of either party.
Risk and Maintenance
Depending on the specific agreement, the lessor may assume the risk of asset ownership, including maintenance responsibilities. Alternatively, the lessee may be responsible for maintenance, depending on the negotiated terms.
Sharia-Compliant Sale and Leaseback Benefits
Experience an ethical and flexible financing model that supports business growth.
Immediate Capital
Receive an upfront lump sum from asset sale while continuing to use it for business operations.
Ethical Compliance
Ensure financial integrity with interest-free lease agreements structured in accordance with Sharia law.
Understanding Sharia-Compliant Sale and Leaseback
A Sharia-compliant sale and leaseback enables businesses to optimize cash flow while maintaining full operational control of their assets under an ethical financial framework.
Learn how this financial model can enhance business flexibility ethically.
Key Benefits
- Immediate access to capital without interest-based financing.
- Continued asset usage with flexible lease terms.
- Ethical asset utilization aligned with Islamic finance principles.
How It Works
- Sell an asset at a fair market price to a Sharia-compliant financier.
- Enter into a lease agreement to continue using the asset.
- Make fixed, interest-free lease payments.
- Return or repurchase the asset at the end of the lease term, if applicable.
Comparison: Sharia-Compliant vs. Conventional Sale and Leaseback
| Feature | Sharia-Compliant Sale and Leaseback | Conventional Sale and Leaseback |
|---|---|---|
| Interest | No interest-bearing elements | May involve interest-based financing |
| Ownership | Asset ownership transferred to financier, with leaseback option | Typically includes financial obligations for ownership transfer |
| Payment Structure | Lease payments are fixed and ethically structured | Payments may include interest charges |
| Compliance | Aligned with Islamic financial regulations | Structured under conventional finance norms |
| Flexibility | Ensures ethical asset utilization with financial flexibility | Designed to maximize financial returns for institutions |
