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Fatwa CenterRiba in Fundbox.com loans
Question
Assalaamu alaykom. I just wanted to follow up on question 2623704. FundBox.com basically provides the following service: If I am service provider and have outstanding invoices that I'm still waiting for my client to pay, FundBox can pay me the invoice value temporarily until I recover the due payment from my client. So suppose that my client "A" has a 1000 dollars invoice that is due in 30 days. I can have FundBox.com pay me 1000 dollars, and then I will pay back their loan over 12-week period; basically, I would pay 1000/12 (83 dollars) every week + some fees; by week 12th, I will have paid the entire 1000 dollars plus all of their fees. However, if my client pays his invoice on time (e.g. on week 4), I can pay off the entire remaining balance to FundBox, and they will waive the remaining 8 weeks fees. So I will have paid only 4 weeks of fees. I believe that this service is called Invoice Factoring. FundBox claims that they do not charge interest, although it seems that this might still be included in the definition of interest, right? I was wondering if you could clarify the permissibility of benefiting from that company's services? May Allaah reward you. Thank you.
Answer
All perfect praise be to Allaah, The Lord of the worlds. I testify that there is none worthy of worship except Allaah and that Muhammad 
is His slave and Messenger.
Riba (interest) is apparent in the transaction that you described in the question, which is that you pay the loan with an additional amount that is conditional, and this increase in amount is subject to be decreased according to your early settlement if the client paid his debt to you. Even if the additional amount is subject to a total deduction, it is still not permissible to engage in an interest-based contract, like this one. For more benefit, please refer to fataawa 3522and 98959.
Their statement that this is not interest is not given any consideration. What is taken into account in contracts is their meaning, not their wording.
Allaah knows best.
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