Islamic finance is a financial system that operates according to Islamic law (which is called sharia) and is, therefore, sharia-compliant. Just like conventional financial systems, Islamic finance features banks, capital markets, fund managers, investment firms, and insurance companies. Islam requires that both investors (lender) and entrepreneurs (borrower) share involvement in economic activities that result in profit and loss. Two broad categories of well-known products that support the sharing of profit and loss:
Mudaraba products: In a modaraba contract, a financier (lender) provides capital to an entrepreneur (borrower) who manages an economic activity such as property construction, a business, or a joint venture. When this economic activity returns a profit, both parties share the proceeds; when a loss occurs, only the financier (lender) bears the financial loss. (The entrepreneur loses his effort and time.) However, if the loss is due to the misconduct of the entrepreneur, then he must suffer financial loss as well.
Musharaka products: In a musharaka contract, both parties become involved in a joint venture project or property by investing capital and entrepreneurship. Both parties share any profit or bear any loss generated by the activity.
What makes Esteema Islamic Finance ‘DIFFERENT’?
‘Islamic financing is complex financing expertise, especially when it needs bespoke financing structuring and where the traditional method of financing does not work. Our expertise in real estate & corporate financing & legal structuring support any financing structure for the special need. We have helped numerous complex matters, where traditional finance cannot be competing with.’
Esteema Specialist Finance
|Other Traditional Finance|
|✓ Any Type||Yes: Retails, offices, industrial, shopping centre|
Student Accommodation, Hotel & Leisure etc
|✓ Any Purpose||Yes: Purchase, Refinance, Re-Structure||No|
|✓ Any Borrower||Yes: UK & International||No|
|✓ ANY SPV||Yes: UK or Offshore||No|
|✓ Any Location||Yes: UK or Globally (Selected location)||No|
|✓ Multi-Currency & Cross Border Funding||Yes||No|
|✓ Loan Size||No Upper Limit||Very Restricted|
|Leverage||Up to 65%||Very Restricted|
|Interest Rate||from 3.00% +||From 5%+ onward|
|Any Special Reasons||✓ Non-Recourse |
✓ No maximum age
✓ Any Legal Settlements
Esteema Special Pricing
Less than £5M
65% Loan to Value
More than £5M
65% of Loan to Value
Portfolio / Mixed
(No upper Limit)
Key Factor Affecting Islamic Financing
✓ Personal & Business Profile
✓ A & L and Income Profile
✓ Experience & Track Record
✓ SPV Structure & Location
✓ Assets Types (Resi./ Com./ Mixed)
✓ Sales & Rental Demand
✓ Covenant type / terms
✓ Loan Servicing
✓ Gross / Net Rental Income
✓ Covenant Financial Strength
✓ Lease terms / break clause
Islamic Finance Guide
Islamic Finance Documents
- KYC: ID, Address proof, Personal & Professional History, and credit report for all the Borrower, Director, Partners & Major Shareholders
- Borrowing Structure: Personal /Partnership/Corporate structure full detail & flow chart, Directors, Shareholders, UBO, and registered address
- Money Laundering Documents: Assets & Liability Statements, Income & Expenditures Statements, Equity (deposit) proof
- Income proof (may be required): Last 3-year accounts/tax return, 3 Month Bank Statements (Personal & Business)
- Collateral: Full descriptions, brochure, valuation report (if available), tenancy schedule (if applicable)
- Purpose: Purchase, Refinance, Restructure, Investments, Developments, Business purpose, Refurbishments
Islamic Finance FAQ?
How Much Can I Borrow?
Borrowing against the investment property will depend on whether it is Owner Occupied or Rented/Leased. In case, it is owner-occupied, the finance will depend on the profitability or EBITDA generated to service the loan. Alternatively, if the commercial property is rented, the loan amount will primarily depend on the annual rent being received by the tenant.
Can I Take Out an Islamic Mortgage on profit (Interest) Only?
Yes, Islamic Finance is available on profit ( interest) only or with a full capital repayment option.
What are Regulated Commercial Mortgages?
Islamic mortgages become regulated if 40% or more of the property is to be used as or in connection with a dwelling. This occurs where a property is used to both live in and trade from.
Can I Borrow Against Leasehold Property?
Yes, our commercial mortgage products are available for leasehold properties.
Islamic Finance Costs
The following costs should be considered at the time of availing the Islamic Finance:
- Arrangement Fee: The arrangement fee or the facility fee, is usually charged by the lender as a set-up fee for the loan
- Exit Fee: The fee is payable to the lender when repaying the loan
- Broker Fees: These are the fees payable to the Broker for finding the best lenders and managing the application to completion
- Valuation Fees: This is the fee that has to be paid to the valuer, who shall be instructed by the lender to furnish a report on the collateral/project
- Legal Fee: Usually, the borrower would have to pay the legal fee for their own solicitors as well as the lender’s solicitors fee
We always aim to bespoke the ‘Financing Time Plan and Finance T & C, to meet the individual requirement. Our standard indicative timeframe :
- Initial Finance Terms: We usually provide Initial Finance Terms within 24-48 hours.
- Emergency Finance: We can complete the finance within 48 hours in case of any emergency or distressing situation.
- Standard Finance: We usually complete Standard Finance within 4-6 weeks.
Notes: Financing time frame & Finance T &C are always subject to providing all satisfactory documentation, full credit underwriting, valuation and legal.
Please refer to the Knowledge Bank section for more information
Esteema Syndicate & Structured Funding provides complete peace of mind. Please contact us in confidence for
‘Quick Decision – Quick Financing’
Please send us the ‘DETAILED INFORMATION’ for the ‘Quick Decision & Quick Financing’