Amanah

Read the numbers before the story.

The study in five numbers

What a murabaha is, mechanically

Six steps. If any one is skipped or reordered, it stops being a compliant sale and becomes an interest-bearing loan with extra paperwork.

1. 1The customer identifies the equipment and the vendorThey choose it. We do not sell equipment and we do not advise on it.
2. 2Amanah appoints the customer as purchasing agent, or buys directlyAn agency (wakala) instrument, written, dated, before any money moves.
3. 3Amanah buys the equipment and takes titleThis is the step that makes it a sale. Ownership and its risk sit with Amanah, however briefly.
4. 4Amanah sells it on to the customer at cost plus a disclosed markupThe markup is stated in dollars, fixed at signing, and never changes for any reason afterwards.
5. 5The customer pays in instalments; Amanah takes a purchase-money security interestFiled within 20 days of the customer receiving the equipment, which is what gives it priority 8.
6. 6On the last payment the security interest is releasedNo balloon, no residual, no renewal trap.

Why business equipment, and why this ticket size

What this deliberately does not do — yet

Scope discipline is the difference between a finance company and an accident. Each of these is a later phase with its own approval.

• No consumer finance, of any kindThe moment an individual borrows for personal or household use, an entirely different statute applies 1 and a licence is required. Business purpose only, evidenced in writing 4.
• No real estateHome and commercial property financing is a different product, a different regulator, and a market with entrenched incumbents 2021.
• No working capital, no cash advancesThere is no asset, so there is no compliant sale. This is the single most common way an Islamic finance product quietly stops being one.
• No depositsTaking deposits requires a bank charter. Capital comes from equity raised under an exemption 25.
• No leasing (ijara) in phase oneIjara is a better product for some assets, and a heavier one — it puts residual-value risk and maintenance obligations on the financier. It earns its own study.

Who already offers Shariah-compliant business equipment finance

This is the slide most first-time decks leave out. It is also the first thing anyone who knows the market will ask about.

• Devon Bank — Chicago. Does exactly this.Its own published product list includes "Murabaha financing for business equipment and trade goods" and a "Murabaha Guidance Line" that aggregates smaller transactions 20. It states it has offered Islamic financing since 2003 23. It is a chartered bank, so its cost of funds is structurally lower than ours will be.
• UIF Corporation — a subsidiary of University Bank, Ann Arbor, Michigan.The one Islamic finance institution headquartered in this state. Its published products are home purchase and refinance, commercial real estate, construction, renovation, vehicle finance and deposit accounts. Business equipment is not on that list 21.
• The market just consolidated.UIF absorbed American Finance House LARIBA, the oldest US Islamic finance house, effective 1 April 2026 22. One fewer independent operator; the remaining ones are bank-affiliated.
• So the honest claim is narrow, and it is still a claim.Not "nobody does this". Rather: no Michigan-based institution offers Shariah-compliant business equipment finance, and the one out-of-state bank that does is a bank — it prices, underwrites and moves like one.

What that leaves as the actual opening

The demand side, from industry data rather than assertion

The demand nobody has to go and find.

A murabaha involves two sales. Taxed carelessly, that costs 6% twice.

The tax architecture, from the statute

This is the single most under-modelled cost in US Islamic finance. It is also the most checkable.

• The purchase from the vendor: bought for resale, so exemptAmanah registers for sales tax and buys with Michigan's exemption certificate, Form 3372, claiming resale 28. The same mechanism every equipment dealer in the state already uses. Tax is not paid twice because the first leg is not a retail sale.
• The markup: outside the taxable base, if it is stated separatelyThe definition of "sales price" excludes "interest, financing, or carrying charges from credit extended on the sale of personal property or services, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser" 6.
• Which makes invoice design a tax control, not a formatting choiceBundle the markup into one deferred price and 6% lands on the profit. Itemise it — equipment price on one line, markup on another — and it does not. On the $100,000 contract modelled later in this deck the markup is $18,714, so that is $1,123 of tax per deal — created or avoided by how the document is laid out.
• And the customer pays tax once, on the equipment, as they would anywayThe structure is tax-neutral to the buyer versus a conventional loan. That neutrality is the point: a compliant product that costs 6% more than the conventional one does not get bought.
• And the tax is due on the sale, not on the instalmentsMichigan reports a sale in the period it happens, including an instalment sale. So the 6% on the equipment may have to be remitted before the customer has paid a single instalment — about $6,000 of cash out of the door at closing on a $100,000 deal. Either it is collected from the customer at signing or the company is financing a tax receivable it never budgeted for. This is a working-capital cost the model does not currently carry, raised in review, and it is stated rather than absorbed.
• This needs a tax opinion in writing before the first contractThe statute is clear on its face. Whether Treasury reads our specific document flow the way we read it is a question for Michigan tax counsel — together with the timing point above, which is the one that affects cash rather than margin. Both are on the list of things this study does not price.

And there is a conflict inside that exemption that has to be named.

Title, priority, and what happens when it goes wrong

The credit box, stated before the first deal rather than after the first loss

All five are DECISIONS. They are written here so that a later exception is visible as an exception.

• Two years of operating history, and financial statementsNo start-ups in the first book. A new finance company and a new business are two risks multiplied, not added.
• A personal guarantee from the principalsStandard in small-ticket commercial equipment finance, and the thing that most changes behaviour when a borrower is deciding who to pay first.
• The equipment must have a resale marketIf we cannot name two places it could be sold, we are lending against scrap. Custom and installed-in-place assets are declined or priced as unsecured.
• Debt service coverage measured, not assumedCash flow after existing obligations must cover the instalment with margin. The threshold is a decision; the calculation is arithmetic on their statements.
• No concentration above 15% of the book in one borrower or one asset classA first book funded entirely by one relationship is not a portfolio. This constraint binds hardest on the anchor customer, which is precisely when it matters.
• And the loss rate in the model is smoother than reality will beThe model applies losses as a steady annual rate. A single defaulted $95,000 contract against a $2.5m first book is a 3.8% loss in one event — nearly three times the base assumption, from one borrower. Small books do not have loss rates, they have incidents. Raised in review; it is the strongest argument for the concentration limit above, and for not writing the first ten contracts quickly.

The problem Shariah creates that conventional lenders do not have.

What compliance requires in practice

AAOIFI publishes the standards these contracts are judged against, including its Shariah Standard on murabaha 27.

• Real ownership, for a real momentAmanah must own the asset before selling it. If money goes straight to the customer, or the sale is papered after the fact, the transaction is a loan and no certificate repairs it.
• Risk must actually sit with the ownerBetween purchase and resale the ownership risk is ours. It is brief, and it is not notional — which is why the agency documents and the timing of title are reviewed, not just the contract's title page.
• A fixed, disclosed markup that never movesStated in dollars at signing. It does not increase on late payment, it does not reprice, and it does not compound. Ever.
• No penalty incomeLate charges are permitted as a deterrent and paid to charity net of documented costs. This is audited.
• Early settlement handled explicitlyA customer who pays early may be given a rebate, but it cannot be an enforceable contractual right to a discount calculated like interest. The treatment is decided by the board in advance, not improvised.
• The operational risk is bigger than the contractual oneThe contracts get reviewed once. The execution — which account paid the vendor, on what date, against which purchase order — is where compliance is lost, every time. That is a systems problem, and systems are the part I actually build.

Getting credible scholars on board — the realistic sequence

Timeline is a DECISION about how we phase it. The one thing that cannot be compressed is the last step.

1. 1Decide what is being certified, and write it downProduct architecture, contract set, document flow, default remedies, early settlement. A board cannot review an intention.
2. 2Approach two or three scholars or advisory firms with that documentNot with a pitch deck. An advisor's first read tells you whether your structure is serious, and costs nothing but their time.
3. 3Structuring review and revisionExpect the structure to change here. If it does not, the review was not real.
4. 4Certification of the product, with conditions attachedThe conditions are the valuable part — they tell operations exactly what must be true on every single deal.
5. 5Annual audit of executed transactions, on a sampleChecking that what happened matches what was approved. This is the step that makes the certificate mean something a year later.
6. 6A standing board once volume justifies itNamed scholars with published credentials, disclosed on the website. Credibility in this market is a function of whose name is on it — and that cannot be bought quickly, at any price.

What certification buys, and what it does not

The accounting has to satisfy two frameworks at once

Licensing — why business-purpose credit sits outside the consumer statute

Quoted from the statutes, with links. This is a reading of the law, not legal advice — a written opinion from Michigan counsel is on the list of things not yet priced.

• The Regulatory Loan Act's defined term is consumer — but its prohibition is worded widerThe act defines a regulated loan as "a loan made by a licensee to an individual for personal, family, or household use" 1. The operative prohibition, however, reaches the business of making loans of "money, credit, goods, or things in action" above the otherwise-lawful rate 35. In 1939 language, a sale of goods on deferred terms is arguable either way. An earlier version of this slide said "the act is a consumer statute" and stopped there. Review would not let that stand, and it was right — the reading is probably ours, but it is a reading, and it goes to counsel as one.
• The primary answer is that a credit sale is not a loan at allMichigan's usury act states it does not apply "to any time price differential which may be charged upon sales of goods or services on credit" 29. A murabaha markup is exactly that: the difference between the cash price and the deferred price of goods. This is the argument the structure should rest on — and an earlier version of this deck rested instead on the loan statutes, which quietly conceded the transaction was a loan while every other slide argued it was a sale. Review caught the contradiction.
• And if a court ever recharacterises it as a loan, there is a fallbackA non-bank and a business entity may "agree in writing to any rate of interest not exceeding the rate allowed" by the criminal-usury act 2 — a ceiling of 25% simple per annum 3. The base case prices at 11.5%, less than half of it. So the position holds on either characterisation, which is the point of naming both.
• The written record is what creates the exemptionA "business entity" includes a natural person who provides "a sworn statement in writing specifying the type of business and business purpose" for the funds 4. That sworn statement is therefore a compliance document, collected on every deal, no exceptions.
• And a murabaha is a sale, which changes the question againWe are a seller of equipment on deferred terms, not a lender of money. That helps on the lending statutes and is exactly what pulls sales tax into the picture. Both analyses have to hold at the same time.
• Commercial financing disclosure law is the live riskSeveral states now require APR-style disclosure on commercial credit and treat a markup as a finance charge. Whether Michigan has, or will, is a question for counsel — and the product should be built to disclose cleanly regardless, because it can afford to.
• Vehicles — a review finding that the statute refutedReview warned that financing a van on instalments needs a Michigan Motor Vehicle Sales Finance Act licence regardless of business purpose. Reading the act shows otherwise: it defines an installment buyer as one buying "for personal, family, or household use, and not for commercial, business, or agricultural use" 31, so a business-use vehicle sold to an entity sits outside the licence hook. The warning was still worth having — phase one excludes vehicles anyway, because titled assets carry registration and lien mechanics that equipment does not, and because a vehicle that drifts into personal use drifts into a different statute.
• And one licensing question that stays openA sole proprietor rather than an entity changes the analysis on several of these statutes at once. Asked, not answered. Until counsel comes back, the product is written to entities only, with the sworn business-purpose statement 4 on every file.

Federal obligations, as they stand today

• OFAC screening — no threshold, no exemptionSanctions compliance binds every US person and entity 26. Every customer and every vendor is screened before money moves. This is automated on day one because it is strict liability.
• Beneficial-ownership reporting: no longer required for US companiesFinCEN's final rule, announced 11 August 2026 and effective on its publication in the Federal Register, permanently removes the requirement for US companies and US persons to report beneficial ownership under the Corporate Transparency Act — and FinCEN is deleting what US persons already filed 24. Foreign entities that are reporting companies must still report for foreign individuals, which matters only if a non-US investor holds through a foreign vehicle. An earlier version of this slide asserted an effective date of 14 August; the source does not say that, and review caught it.
• Raising capital without registeringEquity from investors under Rule 506 of Regulation D 25, with its conditions on accreditation, solicitation and information. The documents are a securities lawyer's work product, not a template.
• Anti-money-laundering programmeA non-bank commercial equipment financier's formal obligations are narrower than a bank's. We adopt a written programme anyway — because the first bank that opens an account for us will ask for it, and because the cost of having one is trivial next to the cost of not.

And Michigan courts look past what you call it.

The federal rule that catches most people who assume business credit is unregulated

Truth-in-lending does not reach business-purpose credit. Fair-lending law does. Raised in review and verified against the regulation itself.

• Regulation B covers business credit explicitlyIt defines "business credit" as "extensions of credit primarily for business or commercial (including agricultural) purposes" 32. Being commercial-only is not an exemption from the Equal Credit Opportunity Act — it is squarely inside it.
• So every decline needs an adverse-action process, and the threshold mattersFor an applicant whose gross revenues were $1 million or less in its preceding fiscal year, the notification rules apply with modifications — the action taken may be given orally or in writing, and the right to reasons may be disclosed at application 33. Above that, notify within a reasonable time and give written reasons on request within 60 days. Most customers buying $25,000 to $250,000 of equipment are under that threshold.
• A guarantor is an applicant for part of the ruleRegulation B includes guarantors and sureties in the definition of applicant for the signature rules 34 — which matters, because a personal guarantee is a requirement in our credit box, not an option.
• Which makes an explainable decline a design requirement, not a courtesyEvery credit decision has to be recordable, reasoned and retrievable. That is a systems obligation and it is cheap to build in and expensive to retrofit — the underwriting file is structured for it from the first contract.
• And credit-report use brings its own regimePulling a personal or guarantor credit report engages the Fair Credit Reporting Act, with its own permissible-purpose, accuracy and adverse-action duties. Raised in review; the specific obligations go to counsel with the rest.

What this study deliberately does not price

Five empty lines. Each says who to ask. An empty line with a name on it is worth more than a filled one with a guess in it.

• Shariah advisory and certificationObtain written quotations from three named advisory firms. No figure is stated anywhere in this deck.
• A Michigan tax opinion on the invoice structureMichigan tax counsel. The statute is quoted above; the opinion is what makes it safe to rely on.
• The contract set — master murabaha, agency, security agreementMichigan commercial counsel. Templates from another jurisdiction are how structures fail.
• Securities documents for the raiseSecurities counsel. Cost scales with the structure chosen, which is not yet chosen.
• Insurance — errors and omissions, and cover on assets in transitA broker, with three quotes. Not modelled, because I have not asked.

A single $100,000 contract over 36 months

Base-case pricing. The arithmetic is in model.py, published beside this deck, and reproduces from the inputs shown — no line here is a plug. Review pointed out that the earlier version made that claim without publishing the file.

Two lines on that table were wrong an hour ago.

Which is why the only question that matters is scale

One contract contributes a few thousand dollars over three years against several hundred thousand a year of overhead. So the business does not turn on pricing — it turns on how much is outstanding at once. Overhead divided by the net yield: profit rate, less losses, less the funding cost on the borrowed share.

That number was wrong when this deck was first built, and it is worth saying how.

Where the money to lend comes from

How this model is built, so you can attack it properly

• It is a cohort engine, not a growth curveContracts are originated month by month; each one amortises over its term while profit accrues on the declining balance. Nothing grows by a percentage — the portfolio is the sum of real contracts.
• Capital is a hard constraintIf the capital is not there, the deal does not happen. This is why the pessimistic case stalls: it is not pessimistic pricing alone, it is pessimistic capital.
• Every input carries its classDECISION, MEASURE, or SOURCED with a citation. Open model/model.py and every one is labelled in the source.
• Losses, prepayment and utilisation are all modelled, not waved awayIncluding the cash that sits idle between deals, which is the cost first-time models always forget.
• It produces the failure case as readily as the success caseThe same code, different inputs. The pessimistic column is not decoration — it is what happens if pricing lands at 9.5%, losses run at 3%, and the raise comes in at $1.5m.
• Three limits of the model, stated rather than discoveredIt is a profit-and-loss engine, not a balance sheet. It shows capital as a constraint but does not produce a cash-flow statement, so it cannot prove there is no liquidity gap in month eighteen. Every figure is pre-tax — federal and Michigan corporate tax sit on top, so a 3.3% pre-tax return on capital is lower still after them. And it carries no day-one credit allowance, which in practice is a capital haircut on the same book the model treats as fully earning. All three raised in review.
• And the break-even figure uses year-one overhead, which does not stay at year oneOverhead grows with the team: roughly $395,000 in year one and about $622,000 by year five in the base case. Break-even is therefore a moving line — at year-five overhead it is closer to $10m of contracts outstanding than $6.5m. The company has to reach scale faster than it adds cost, which is the whole discipline of the hiring plan.
• The leverage actually used is lower than the leverage setThe base case names a 1x facility and the optimistic 2x, but origination pace and the capital constraint bind first — so realised assets-to-equity lands near 1.5x in both. Review spotted it. The optimistic case is better because of price, ticket size, volume and losses, not because of gearing, and the label was misleading.

Base case

The case this plan is actually built on.

Pessimistic case

Weaker pricing, triple the industry loss rate, and a smaller raise. This one does not reach profitability in five years — that is the answer the model gives, and it is not adjusted.

Optimistic case

Stronger pricing, losses near the industry rate, and capital available when the pipeline is.

The three side by side, on the fifth year

Same engine, same code, three sets of inputs. What separates them is on the next slide.

What actually moves the outcome

Year-five pre-tax, moving one variable at a time and holding everything else — because moving two and attributing the result to one is how plans mislead their own authors.

• Price to the customer$26,460 → $637,511
• Credit losses$26,460 → $423,643
• Cost of funding$113,697 → $477,511
• Capital actually deployed$98,344 → $425,777
• Operating cost$174,633 → $489,337
• Leverage$174,893 → $344,696

The conflict at the centre of this, said plainly

Two things about the collateral that a generic equipment plan misses

Both raised in review. Both specific to financing equipment inside licensed healthcare buildings — which is exactly the anchor case.

• Half the equipment on that purchase list is a fixtureStandby generators, HVAC plant, walk-in refrigeration and nurse-call systems are bolted to a building. Once attached they can become fixtures, and a claim against a fixture competes with the mortgage holder on the real estate rather than sitting cleanly under Article 9. Recovering one needs a landlord or mortgagee waiver obtained at signing, not at default.
• And some of it cannot lawfully be repossessed at allRemoving a nurse-call system or the emergency generator from an operating licensed care facility is not a collection action, it is a regulatory event for the operator and for us. The credit box therefore has to separate movable equipment we could actually take back from installed plant where the only real remedy is the guarantee — and price the second as effectively unsecured.
• A non-performing contract also stops earning while the overhead continuesThe markup cannot increase on default and no penalty reaches income. So a delinquent contract freezes: no accrual, no fee, full collection cost. The model applies a smooth loss rate and does not model that non-accrual drag — stated here rather than left for someone to find.

What breaks this business

Ranked by how much damage, not by how likely. Each one has a countermeasure or is declared unmanaged.

• Pricing lands below 10% — the single biggest leverIf compliant borrowers will not pay a premium for compliance, the margin disappears. Countermeasure: test price on the first ten contracts before the second raise, and be willing to stop.
• Losses run at three times the industry ratePlausible for a first book with no scorecard. Countermeasure: personal guarantees, PMSI filed inside 20 days, resale-market test on every asset, and hard concentration limits.
• The capital arrives more slowly than the pipelineIdle capital and idle staff at the same time is the fastest way to burn a seed round. Countermeasure: hire against contracts signed, not against forecast — the operating budget is deliberately small for this reason.
• Borrowers pay us last because we cannot punish them for itStructural to compliant finance, and nobody in the room will raise it. Countermeasure: impersonal third-party recovery on a published timetable, from the very first delinquency, including with people we know.
• A single operator dependencyOne person who understands the structure, the systems and the compliance is a single point of failure an investor should refuse. Countermeasure: written procedures and a second underwriter before the book passes $5m. Until then, unmanaged and disclosed.
• A tax or disclosure ruling lands against the structureCountermeasure: written opinions before the first contract, not after the tenth.

The year-one team, and why each seat exists

Every figure on this slide is a DECISION — a budget we set. None is a salary survey, and none pretends to be. Verify against live postings before making an offer.

Everything else it costs to run, year one

Vendor lines are DECISIONS pending quotation. The three marked obtain a quotation stay empty until somebody has actually been asked — they are not guessed.

What runs it — and why this part is not bought off a shelf

The operational risk in Islamic finance is not contractual, it is procedural. Systems are the control.

• One ledger, two presentationsGAAP for filing and banking, AAOIFI for the board — produced from the same transactions rather than reconciled afterwards 27.
• A document flow that cannot be executed out of orderAgency instrument, purchase order, vendor invoice, title, resale invoice with the markup separately stated 6, UCC filing inside the window 8. The system refuses the next step until the previous one exists.
• Screening and filing as gates, not remindersOFAC before any payment 26. The 20-day filing clock starts automatically on delivery confirmation and escalates on day 12.
• Every figure in every report traceable to a transactionThe same discipline this study is written under: a number with no source behind it does not render.
• Built, not licensed, for phase oneBecause the compliant document flow is the product, and no off-the-shelf loan system models a sale with a separately-stated markup and a charity account for penalties.

Eighteen months, in the order it has to happen

Nothing here needs the next thing to start. Each step is a gate — if it fails, the plan stops rather than proceeds on hope.

1. 01Entity, counsel, and three written opinionsStructure, tax treatment of the invoice, and the securities route. Before anything else.
2. 02Shariah advisory engaged and the contract set reviewedQuotations first. The product changes in this step, by design.
3. 03Capital raised under an exemption 25The raise defines capacity, so it defines everything downstream.
4. 04Systems built and tested against a dry-run contractDocument flow, screening, filing clock, dual ledger. No live deal until a fake one passes end to end.
5. 05First ten contracts — the measurement phasePrice, cycle time, cost to close, exception rate. These replace the four MEASURE inputs in the model with facts.
6. 06Re-underwrite the plan on those ten — against written kill criteriaStop if: no funding facility is available on any terms · the tax treatment comes back adverse and cannot be priced in · realised losses exceed twice the modelled rate · or the cost to originate a contract exceeds its lifetime contribution. Written now, while nobody is invested in the answer.
7. 07Scale origination; approach a compliant funding facilityOnly with a seasoned book and real performance data behind it.
8. 08Second product — ijara — as its own studyNot an extension. A different risk with a different structure.

If the name should also say what it does — ten A.M.A.N.A readings

Asked for, and answered honestly: the last two are the only ones worth using, and the recommendation at the bottom is not to use any of them.

And the recommendation is to use none of them on the mark.

The name

The mark

Four options were drawn, all set in open-licensed typefaces and converted to outlines so the logo renders identically anywhere with no font installed. Option A is the chosen mark.

Chosen · EB Garamond, caps, 18% letterspacing

B · geometric sans

C · high-contrast serif

D · bilingual lockup

Why the serif capitals, and not the other three

• A serif in capitals is the register of institutions that hold other people's moneyIt is what Goldman Sachs, J.P. Morgan and Guggenheim have in common typographically, and it is not an accident: the letterforms predate the company, which is exactly the impression a custodian wants to give.
• The wide letterspacing does the work an emblem would otherwise doEighteen percent tracking turns six letters into a considered object. It reads as deliberate at any size, and it needs no symbol beside it — which is why there is no icon, no crescent, no geometric device.
• The geometric sans (B) was rejected for saying technology, not custodyIt is the register of a payments app. Correct for a product, wrong for a balance sheet.
• The high-contrast serif (C) was rejected for fragility at small sizesIts thin strokes disappear on a business card and in an email signature — where a finance mark actually lives.
• The bilingual lockup (D) is kept, but as a secondaryأمانة set beneath the Latin is right for the community-facing surfaces and wrong for a vendor invoice or a UCC filing. A mark that cannot be used on a legal document is not the primary mark.
• Both typefaces are open-licensedEB Garamond and Noto Naskh Arabic, both under the SIL Open Font License. No licence to buy, no rights question at scale, and the outlines are embedded so nothing depends on a font being installed.

Colour

Three options, one recommendation. Colour on a financial mark has one job: to be unremarkable for twenty years. Anything that reads as a trend has already failed.

Recommendation: ink navy, with a single copper accent used only for emphasis and never for the mark itself. One colour for the wordmark, one accent, nothing else. The palette is a constraint, not a system.

The questions only you can answer

Each of these changes the model. None of them is rhetorical.

• Does the name stay Amanah?Everything downstream — trademark screening, domains, signage, the mark — waits on this one word.
• Which scholars, and will you introduce them?Credibility in this market attaches to names. Whose name can this carry, and who will make the introduction?
• What does the group actually buy, and when?Not an estimate of it — the purchase ledger. It converts the hardest question in the plan into a schedule.
• What capital is realistic, and on what timetable?The three scenarios differ mostly on this. It is the input that decides which column we are living in.
• What return do the partners expect, and over what horizon?This is the question that decides it. The base case returns 3.3% on capital in year five. Investment-grade corporate credit — liquid, rated, requiring no work — yielded 5.86% in September 2026 11. So on the base case this is an illiquid, unrated, first-time book returning less than a bond, and only the optimistic case (10.3% by year five) pays for the risk. If the partners need better than a bond from the base case, the honest answer is that this structure does not deliver it at this scale, and the conversation should be about scale or about not doing it.
• Who else is in the room?A structure like this is reviewed by whoever the partners trust on credit. I would rather meet them early and be argued with than be approved politely.
• And is this a partnership, or a supplier relationship?I am asking for the first. If the answer is the second, say so plainly and I will price it as a build and we both save the negotiation — but the salary in this plan, the fact that the study was written before anyone paid for it, and the fact that the systems are the product all assume ownership rather than an invoice. It is better settled at the start than discovered at the end.

What each side would bring

So the ask is not a fee. It is a partnership.

What adversarial review changed, after this was built

Six independent models across five vendors were given the finished deck and told to attack it. This is what survived and what did not — recorded here rather than corrected quietly.

• The headline break-even number was wrong by two thirdsIt divided overhead by profit rate minus losses and ignored the cost of the borrowed money. $3,910,891 → $6,528,926. Two lineages raised it independently.
• The funding assumption was indefensible7.0% from year two for a book with no history. Now 8.1% and not until year three — which pushed the first profitable year from three to four and cut the five-year cumulative from $306,459 to $84,012.
• A legal statement was simply wrongMissing the 20-day filing window was described as leaving the deal unsecured. It does not — the interest still perfects and ranks by filing date 30. Corrected on the slide, with the error named.
• The usury argument rested on the wrong statuteIt cited the loan exemption, conceding the transaction was a loan while every other slide argued it was a sale. It now leads with the time-price differential 29, which is both correct and consistent.
• Two adjacent rows of the unit economics used different denominatorsLoss charged on the original balance, funding on the average. Both now on average outstanding.
• And the tax exemption is more fragile than the first draft admittedThe statute wants the markup called a financing charge; Shariah requires it not be. A private letter ruling is now named as a precondition rather than the exemption being presented as settled.
• The market data was a month staleThe deck cited the June equipment-finance index; the July figures had been published on 25 August. Updated: $14.3bn monthly volume, +16.8% year to date, 1.8% delinquency, 0.73% small-ticket losses 141517. Caught by the seat that went and looked.
• A citation asserted a date its own source does not containThe FinCEN entry claimed an effective date of 14 August. The press release says only that the rule is effective on its publication in the Federal Register, and it also carries a foreign-entity limb the deck had omitted. Both corrected. This one stings: the source was linked, and nobody had read past the headline — including me.
• Michigan courts look past labels, and that reaches this structureSoaring Pine (Michigan Supreme Court, 2023) holds that a fee can be analysed as interest and that a savings clause does not rescue an agreement requiring an unlawful rate 36. The 25% ceiling is therefore all-in, not nominal — and the "a sale, not a loan" argument is itself a label a court will look past. New slide.
• An inspectability claim that was not trueThe unit-economics slide said the arithmetic is in model.py. The file was not published. It is now, beside the deck, and the slide links to it.
• Two slides contradicted each otherThe anchor-pipeline slide and the credit box cannot both be satisfied in year one: one ownership group is one credit, and 15% of a $2.5m book is four contracts. Now stated on the slide as a choice to be made out loud rather than left for a reader to find.
• Three findings were refuted by going to the sourceA claimed motor-vehicle licensing requirement — the act covers consumer-use buyers only 31. A misquotation of the Regulatory Loan Act's defined term. And two seats called the FinCEN change and the market data fabricated; both are real, and both had been fetched from the issuing authority. A model's report is a claim, not evidence — including when it is a claim about your own work, and including when two models agree because they share the same blind spot.

Sources

Every figure in this deck carries a number. Each number is a link to the source that stands behind it.

• 1
  Under the Michigan Regulatory Loan Act, a regulated 'loan' is one made to an individual for personal, family, or household use — the act is a consumer statute — MCL 493.1(2)(j)
  Michigan Legislature “"Loan" or "regulatory loan" means a loan made by a licensee to an individual for personal, family, or household use.”
• 2
  A non-bank may agree in writing with a business entity to any rate of return up to the criminal-usury ceiling — MCL 438.61(3)
  Michigan Legislature “it is lawful in connection with an extension of credit to a business entity by any person other than a state or nationally chartered bank … for the parties to agree in writing to any rate of”
• 3
  Michigan's criminal-usury ceiling is 25% simple interest per annum — 25%
  Michigan Legislature — MCL 438.41 “at a rate exceeding 25% at simple interest per annum or the equivalent rate for a longer or shorter period”
• 4
  A 'business entity' includes a natural person who gives the credit provider a sworn written statement of the business purpose of the funds — MCL 438.61(1)(a)
  Michigan Legislature “a natural person who furnishes to the extender of the credit a sworn statement in writing specifying the type of business and business purpose for which the proceeds … will be used”
• 5
  Michigan sales tax is 6% of gross proceeds — 6%
  Michigan Legislature — MCL 205.52(1) “an annual tax for the privilege of engaging in that business equal to 6% of the gross proceeds of the business”
• 6
  Financing or carrying charges on credit extended in a sale are EXCLUDED from the taxable sales price if separately stated on the invoice — MCL 205.51(1)(d)(viii)
  Michigan Legislature “Interest, financing, or carrying charges from credit extended on the sale of personal property or services, if the amount is separately stated on the invoice, bill of sale, or similar docume”
• 7
  Michigan sales tax applies to a conditional sale or installment lease sale where title is retained as security and intended to transfer later — MCL 205.52(2)(c)
  Michigan Legislature “A conditional sale, installment lease sale, or other transfer of property, if title is retained as security for the purchase but is intended to be transferred later.”
• 8
  A purchase-money security interest in equipment outranks an existing blanket lien if it is perfected within 20 days of the debtor receiving the goods — 20 days
  Michigan Legislature — MCL 440.9324(1) (UCC Article 9) “if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter”
• 9
  US bank prime loan rate — 6.75% (9 Sep 2026)
  Board of Governors of the Federal Reserve System, via FRED (DPRIME)
• 10
  Secured Overnight Financing Rate — 3.62% (10 Sep 2026)
  Federal Reserve Bank of New York, via FRED (SOFR)
• 11
  ICE BofA BBB US Corporate Index effective yield — the market price of investment-grade-floor corporate credit — 5.86% (10 Sep 2026)
  ICE Data Indices, via FRED (BAMLC0A4CBBBEY)
• 12
  Delinquency rate on business loans, all US commercial banks — 1.27% (Q2 2026)
  Board of Governors of the Federal Reserve System, via FRED (DRBLACBS)
• 13
  Net charge-off rate on business loans, all US commercial banks — 0.58% (Q2 2026)
  Board of Governors of the Federal Reserve System, via FRED (CORBLACBS)
• 14
  Equipment finance loss rate, small-ticket segment — a blended figure across banks, captives and independents; ELFA separately reports that the rate at independents rose in the period — 0.73% small-ticket; 0.46% overall (July 2026)
  Equipment Leasing and Finance Association, CapEx Finance Index, July 2026

Sources (cont.)

Every figure in this deck carries a number. Each number is a link to the source that stands behind it.

• 15
  Equipment finance receivables over 30 days delinquent — 1.8% (July 2026), up from 1.7% in June
  Equipment Leasing and Finance Association, CapEx Finance Index, July 2026
• 16
  Equipment finance credit approval rate — small-ticket — 79.7% small-ticket; 77.4% industry-wide (July 2026)
  Equipment Leasing and Finance Association, CapEx Finance Index, July 2026
• 17
  Monthly new business volume reported by ELFA member companies — $14.3bn seasonally adjusted (July 2026); year-to-date +16.8% on 2025
  Equipment Leasing and Finance Association, CapEx Finance Index, July 2026
• 18
  Muslim American population — about 5.5 million of all ages, roughly 1.6% of the US population (2026)
  Pew Research Center, '25 Years After 9/11, a Portrait of Muslim Americans', 3 September 2026
• 19
  Michigan UCC filing fee, and the fee to search the UCC records — $15.00 to file; $6.00 to search
  Michigan Legislature — MCL 440.9525 “the fee for filing and indexing a record under this part is $15.00 … The fee is $6.00”
• 20
  Devon Bank (Chicago) already offers Shariah-compliant business-equipment financing, including a facility that aggregates smaller transactions — "Murabaha financing for business equipment and trade goods"; "Murabaha Guidance Line for aggregating smaller transactions"
  Devon Bank — Faith-Based Products
• 21
  UIF Corporation, a subsidiary of University Bank (Ann Arbor, Michigan), offers home, commercial real estate, construction, renovation and vehicle financing plus deposit accounts — its published product list does not include business equipment — product list as published
  UIF Corporation
• 22
  UIF absorbed American Finance House LARIBA, consolidating the two onto one platform — effective 1 April 2026
  UIF Corporation
• 23
  Devon Bank states it has offered Islamic financing structured to avoid conventional interest since 2003 — since 2003
  Devon Bank — Faith-Based Financing
• 24
  FinCEN permanently removed the requirement for US companies and US persons to report beneficial ownership information under the Corporate Transparency Act. Foreign entities that are reporting companies must still report for foreign individuals — final rule announced 11 Aug 2026; effective on its publication in the Federal Register
  FinCEN (US Treasury) “The final rule is effective on its publication in the Federal Register. … Under the final rule, foreign entities that are reporting companies will still be required to report beneficial owne”
• 25
  Private capital may be raised without SEC registration under Rule 506 of Regulation D, subject to its conditions — 17 CFR 230.506
  Electronic Code of Federal Regulations
• 26
  OFAC sanctions compliance obligations apply to all US persons and entities — 31 CFR Part 501 — Reporting, Procedures and Penalties Regulations
  Electronic Code of Federal Regulations
• 27
  AAOIFI publishes the Shariah standards that govern murabaha and the related contracts, including Shariah Standard No. 8 on Murabaha — AAOIFI Shariah Standards
  Accounting and Auditing Organization for Islamic Financial Institutions
• 28
  Michigan's exemption certificate for a purchase made for resale is Form 3372 — Form 3372, Michigan Sales and Use Tax Certificate of Exemption
  Michigan Department of Treasury

Sources (cont.)

Every figure in this deck carries a number. Each number is a link to the source that stands behind it.

• 29
  Michigan's usury act expressly does not apply to a time-price differential charged on a credit sale of goods — which is what a murabaha markup is — MCL 438.31
  Michigan Legislature “nor shall it apply to any time price differential which may be charged upon sales of goods or services on credit”
• 30
  A late-filed security interest is still perfected — it ranks by time of filing rather than becoming unsecured — MCL 440.9322(1)(a)
  Michigan Legislature “Conflicting perfected security interests and agricultural liens rank according to priority in time of filing or perfection.”
• 31
  The Motor Vehicle Sales Finance Act defines an installment buyer as one buying for personal, family or household use and NOT for commercial, business or agricultural use — so its licensing requirement does not reach a business-use vehicle sold to an entity — MCL 492.102(h), with the licence requirement at MCL 492.103
  Michigan Legislature “"Installment buyer" or "buyer" means a person that buys, hires, or leases a motor vehicle for personal, family, or household use, and not for commercial, business, or agricultural use”
• 32
  Regulation B (implementing the Equal Credit Opportunity Act) expressly covers business credit — extensions of credit primarily for business or commercial purposes — 12 CFR 1002.2(g)
  Electronic Code of Federal Regulations “Business credit refers to extensions of credit primarily for business or commercial (including agricultural) purposes”
• 33
  Adverse-action notification duties apply to business credit applicants, with the rules turning on whether the applicant's gross revenues were $1 million or less in its preceding fiscal year — 12 CFR 1002.9(a)(3)
  Electronic Code of Federal Regulations “With regard to a business that had gross revenues of $1 million or less in its preceding fiscal year … the statement of the action taken may be given orally or in writing, when adverse actio”
• 34
  Under Regulation B an applicant includes a guarantor for the purposes of the rule on signature requirements — 12 CFR 1002.2(e)
  Electronic Code of Federal Regulations “For purposes of § 1002.7(d), the term includes guarantors, sureties, endorsers, and similar parties.”
• 35
  The Regulatory Loan Act's prohibition is worded more broadly than its defined term — it reaches the business of making loans of money, credit, goods, or things in action above the otherwise-lawful rate — MCL 493.2(1)
  Michigan Legislature “a person shall not engage in the business of making loans of money, credit, goods, or things in action and charge, contract for, or receive on the loan a greater rate of interest, discount, ”
• 36
  Michigan courts look beyond the parties' labels when deciding whether an unlawful rate has been imposed, and a usury savings clause does not save an agreement that otherwise requires one — even where part of the return is labelled a fee or charge. The Court also declined to exempt sophisticated commercial borrowers — Soaring Pine Capital Real Estate & Debt Fund II, LLC v Park Street Group Realty Services, LLC, Michigan Supreme Court, decided 23 June 2023
  Michigan Supreme Court “a usury savings clause is ineffective if the loan agreement otherwise requires a borrower to pay an illegal interest rate; this is so even if some of the interest is labeled something else, ”