when musharakah is employed to finance large purchases banks tend to lend by using floating rate interest loans pegged to a company s rate of return that peg serves as a lending partner s profit 
musharakah are not binding contracts either party can terminate the agreement unilaterally types of musharakahwithin musharakah there are differing partnership arrangements a diminishing musharakah also known as a declining musharakah usually takes one of two forms a declining balance musharakah is common in home buying the lender generally a bank buys a property and receives payment from a buyer via monthly rent payments until the whole balance is paid off in the case of a default both the buyer and lender get a share of the proceeds from the sale of the property on a pro rata basis this differs from more traditional lending structures which have the lender alone benefiting from any property sale following a foreclosure 