Ulamaa ID 12
Bismillahir Rahmaanir Raheem
Al Jawaab Billahit-Tawfeeq
Respected brother,
Factoring is Haraam.
It is clear usury.
"Factoring is a financial transaction whereby a business sells its accounts
receivable (i.e., invoices) to a third party (called a factor) at a discount in
exchange for immediate money with which to finance continued business."
This is such a classic example of usury. The invoices are in fact debts. Selling
debts is clearly haram in itself. And discounting the debt is another step in
usury.
And Allah knows best
