Is it permissible to take a loan from an interest-based (usurious) bank to pay off partners' debts after losing money, given the unavailability of a benevolent (interest-free) loan?
If the company is based on your friends paying money and you investing it, then it is a Mudarabah (partnership in profit). One of the rulings of Mudarabah is that the loss is borne by the capital, and the worker loses his effort. The worker does not guarantee the loss unless there was negligence on his part. Stipulating participation in the loss is void. The Mudarabah is valid, and the profit is according to the agreement, while the loss is on the capital. It is not permissible to use the partners' funds to pay your debts, and you must guarantee this money that you used. If you are unable to repay the money to its owners because you are insolvent, then they are obliged to grant you respite until you are able to pay. It is not permissible for you to borrow with usury to repay these funds unless failure to repay would cause you harm, such as imprisonment.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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