Followers of my channel and blog know that I frequently talk about my company BFF Income Share Funding.
In a nutshell we provide interest-free, loan-free financing in the U.S. for individuals wherein a customer is able to obtain financing for themselves in return for committing to share a fixed percentage of their income for a fixed period of time.
One of the main selling points of this product, aside from being Halal, is the fact that payments are designed to stay affordable. If a person experiences an interruption in their income for whatever reason they can rest assured that they will be able to afford their next payment because if their income goes down so do their payments potentially all the way to zero.
As one can expect with any new product, we have received some criticism, exclusively from people who have never used our product.
The people who criticize our product typically argue from one of two opposite extremes:
Criticism of BFF Income Share Funding # 1: It’s No Different From a Loan
People who make this critique often argue that layoffs don’t really happen that often and people’s income almost always goes up so we’re basically guaranteed to make a profit.
Recent events have really exposed this claim and the real absurdity behind it. Take the following two headlines from only the past two days:
US weekly jobless claims double to 6.6 million
Approximately 700,000 mortgage loans could need forbearance: FHFA director
It is logical to expect that if the individuals and businesses from these headlines had BFF’s income share funding (or something like it) wherein their payments to their creditors were a fixed percentage of their income and not a fixed dollar amount many of the difficulties they are experiencing would be alleviated.
People who are applying for forbearance on their mortgages wouldn’t have to and businesses would lay off far fewer people since their obligations would decrease while their income was down and would only pick up when the economy picked back up again.
With interest-bearing loans, any interruption in the incomes of individuals or businesses, even for a relatively short period of time such as a few weeks, can lead to many individuals and businesses defaulting on their financial obligations.
The more debt an individual or business has, the more vulnerable they are financially.
So I think recent events have provided additional validation for our financing product and additional motivation for people who are on the fence about whether or not they should try our product to do so.
It’s not just about being Halal, it’s the financially wise thing to do. Which if you’re a Muslim and you understand Islam as I do, should be synonymous concepts in your mind.
Remember Allah swt created us with two kidneys and normally we only ever need one our entire life. However, the second kidney is an added layer of protection in case you need it and I think this is also why Allah swt forbade us from using interest-bearing debt.
The interest-bearing loan contract is an inherently risky product that does not account for the possible ups and downs of life.
Criticism of BFF Income Share Funding # 2: Indentured Servitude
The second criticism I sometimes hear for BFF’s product is that it’s actually way different from loans and in fact it’s akin to slavery.
People who say this don’t realize that sharing in income is not a new concept. When you take out a loan, you are committing to share your income with your lender. The difference being that when your income goes down the percentage you share with your lender goes up and when your income goes up the percentage you share goes down.
So basically the opposite of what you want to have happen.
Now the question to those who compare income sharing for a fixed period of time with indentured servitude: who is sleeping better at night these days? BFF’s customers who know that, God forbid, if they lose their job their payments will automatically go into deferment or the borrowers of interest bearing loans that go to sleep not knowing what they may have to do if they lose their job. Who is in a more financially secure position?
So yeah, I feel rather good about the comfort that we have been able to provide our customers in this tumultuous time and my faith in our product and what we are doing has been further validated.
If you would like to learn more about BFF’s Income Share Funding go to fundmebff.com. Currently we are limited to individuals who reside in the United States.
If you would like to become an investor in some of our income share agreements and you earn more than 200K annually go to fundmebff.com and apply to become an investor.