Some banks and financial institutions are beginning to offer Shari’ah (in accordance with Islamic law) compliant financing. Most of these transactions, however, are focused on real estate, particularly to replace home mortgages. If you are not able to find a suitable Shari’ah compliant loan, you can still look for an "equity" investment.

An "equity" investment is when the investor becomes a part owner of the business. The most common form of this is purchasing a share of the entire business, thus becoming shareholders or partners in the business. An investor can also take an interest in only a part of a business’s operations.

For example, if a clothing company wanted to manufacture a new line but did not have the capital necessary to pay the upfront fees, the investment could be limited to that new line. It is up to the investor and the business owner to decide exactly how the profits may be split and when the money will be paid back.

The agreements can also contain provisions limiting the investors rights to just that new line, and/or allowing you to buy them out for a set amount.

There are many different sources of investment and many professionals to help you find them.

The more common investors in small businesses, however, are the families and friends of the owners.

Even if friends and family do not have the money to invest themselves, maybe they could introduce you to someone who is financially able and pass along their trust in you.

If friends and family are not a viable option, many business owners look for venture capital or angel investors. Both of these types of investors are typically looking for new or early stage companies.

Venture capital firms, however, are typically highly organized and look to make investments of at least several million dollars.

Businesses that do not need that much money can turn toward angel investors, individuals or smaller groups that typically make smaller investments.

Many cities and regions have organizations and regular meetings to introduce angel investors to business; if you attend a meeting you might find the capital your business needs.

Of course professional help is often needed, and bankers, accountants and attorneys should be consulted depending on your personal needs.

This article is for informational purposes only; if you need legal advice you need to consult with an attorney qualified in your jurisdiction.

Todd Gallinger is an attorney practicing business law in Irvine, Calif. He can be reached at (949) 862-0010 or This email address is being protected from spam bots, you need Javascript enabled to view it