Cost-plus financing can be used when a client genuinely needs to purchase a commodity, such as cotton for a factory. It cannot simply provide cash for salaries, utility bills, or payment for goods already purchased earlier. A new real sale is required.
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.
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Cost-Plus Financing (مرابحة): From Sale to Banking Structure
Cost-plus financing can be used when a client genuinely needs to purchase a commodity, such as cotton for a factory. It cannot simply provide cash for salaries, utility bills, or payment for goods already purchased earlier. A new real sale is required.
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.