Shtar Iska
Below is the standard text of the Shtar Iska, which allows for the charging of interest-like fees among Jews in business transactions. For special circumstances please contact the cRc.
SHTAR ISKA
Agreement Concerning Interest on Loans
Introduction
Jewish Religious Law strictly prohibits the paying or receiving of interest on loans made between Jews. However, when monies are advanced in the course of a business transaction, an agreement may be entered into, whereby the provider and receiver of these funds are considered equal partners. This partnership is based upon the stipulation that, upon request, every loss must be attested to by two trustworthy witnesses, and all profits verified by oath. All consequent profits and losses are then equally shared. However, in order to avoid these very stringent requirements, the provider of the funds, under this “Shtar Iska”, agrees to waive his or her share of the profits upon receipt of a fixed percentage of the money advanced. This percentage is then considered profit rather than interest on a loan. This agreement becomes effective when the receiver of the funds executes a form as set below.
The Agreement
I, the undersigned, have received from ______________________ the sum of ________________, repayable over ____________ years for the purpose of transacting business in all of my investments, in which profits and losses are to be equally shared. However, the said _____________ has agreed that in lieu of such sharing of profits and losses, which would require substantiation of all losses by two trustworthy witnesses, and verification of all profits by oath, he shall accept my payment of an annual percentage of _______________% of the said sum of ______________ and waive all other profits which may be earned from the advanced funds. I have received a token payment of $1.00 from the said ___________ for my efforts in connection with this undertaking, and have signed herewith the receipt of the said amount of $_____________.
SIGNED THIS _____ day of __________ at ________________.
_______________________________________________________
, Recipient of Funds
_______________________________________________________
, Provider of Funds
