Credit Cards,
Hard Money Loans,
Mortgages,
Line of Credit,
Credit Unions,
MCA,
Foreign Currency,
Credit Cards, Hard Money Loans, Mortgages, Line of Credit, Credit Unions, MCA, Foreign Currency,
Conduct every transaction according to halacha
A Ribbis Awareness Project of the Business Halacha Institute
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Common Questions
Find answers to the most common questions about ribbis.
Any complex questions must be discussed at length with a Rav who is knowledgeable and experienced with Hilchos Ribbis
Iska Templates
The BHI has drafted numerous Iska templates that cover many common transactions that involve Ribbis.
However, we strongly advise contacting a Rav to ensure use of the most precise document, since even a small change can impact the Halacha.
Find A Kosher Bank
The Business Halacha Institute, along with many other organizations, work closely with banks and lending facilities to draft, update, and customize Iska agreements.
Find a list of some of the businesses under the BHI guidance.
THE PROHIBITION
את כספך לא תתן לו בנשך ובמרבית לא תתן אכלך
WHAT IS RIBBIS?
The Torah prohibits a Jewish lender and borrower from engaging in interest-bearing loans. The prohibition includes compensation due to the time factor. Ribbis applies even when the borrower uses the borrowed funds to generate a large profit.
THE STRUCTURAL SOLUTION
Heter Iska
WHAT IS AN ISKA?
The heter iska is based on the distinction between a loan and an investment. A Jew may not accept interest on a loan to another Jew but may invest and receive a share of the profits. When borrowing money, the money belongs to the borrower, and profits belong to him. Sharing this profit with the lender violates the prohibition of ribbis. In contrast, invested funds belong to the investor, and profits are therefore his.
The determinating factor whether money is given as a loan or an investment is ‘risk’. A loan must be repaid regardless of the borrower's investment outcome, so the lender's capital is not at risk. Investments involve risk, with no guarantee on the capital. The heter iska converts a loan into an investment by having the lender/investor assume risk but minimizes the risk he is undertaking by making several stipulations that are added to the agreement.
A recurring late fee,e.g. in a lease, service providors invoice, is Ribbis
Using anothers credit card to make a purchase and repaying the cost and interest, is Ribbis
Partnership and vendor agreements have Ribbis concerns
Co-signing on a loan or mortgage is a Ribbis concern
A business line of credit with shared responsibility is a Ribbis concern
An MCA (Merchant Cash Advance) to a jew, involves Ribbis
Most Credit Unions and peer-to-peer lending raise Ribbis concerns
Conduct every transaction according to Halacha
Contact the Beis Horaah
How can we help?
We work very quickly to get you the answer and guidance you need so you can operate your business efficiently and with Halacha
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