A company got started with an interest based loan. Is it allowed to buy products made by that company ?
For a Muslim is it not allowed to deal with Riba (interest). And it is not allowed to start a company with that. The interest based loans are not permitted and it is from major sins. Allah has told which means:
“And if you do not do it, then take a notice of war from Allah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums). ” (Al Baqarah – 279)
And as for the permissibility of buying the items from a Muslim who deals with Riba, it is Wajib to advice him and clarify to him and if it is found the items from other Muslim company who doesn’t deal with Riba then it need to be given preference.
[Translator’s note: So it is permissible to buy from a Muslim who deals with Riba]
And if the company is from Kuffar, then they have sin (Kufr) which is greater than Riba. So they are demanded to leave Riba and which is of greater importance than Riba which is to accept Al Islam.
The Prophet Sallallahu alaihi wa sallam use to deal with Jews who eat Riba and who eat Suht (impermissble earnings) and he used to deal with them in selling and buying from them and use to accept gifts from them.
So it permissible to deal with them.
Answered by : Shaykh Abu Ishaq Al Qaisee Hafidahullah