Shariah-Compliant Finance for Businesses and Investors
Learn about Shariah-compliant finance and how it works. Discover Islamic financing options as well as their benefits for businesses and investors.
Receivables discounting is when you use your accounts receivable as collateral to borrow money.
The loan amount usually ranges between 80% and 95% of the receivables value, which you will pay back with interest and fees to the lender upon maturity.
In receivables discounting, you are not selling your accounts receivable. You simply use them to collateralize a loan. Therefore, you still own the receivables and are responsible for collecting payment from customers.
Here is an example of receivables discounting.
In this receivables discounting example, you will be given $20,000 x 85% = $17,000 upfront. This amount plus interest and fees will be repaid on or before due dates specified by the lender.
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Learn about Shariah-compliant finance and how it works. Discover Islamic financing options as well as their benefits for businesses and investors.
In this article, you’ll find the pros and cons of revenue-based financing (RBF), as well as considerations to help you decide whether revenue-based financing is right for your business.