The money (furlough) that the government is paying out is totally halal so long as it is paid back in time to avoid any interest, as interest is haraam. However, you then go on to say that if you were to 'create an illusion of a business hit by Covid-19 or creating a fictious business, is that money halal or haraam?'
Before I answer your question here is a question for you which will instantly give you the answer "well is it halal to deceive people? Is it halal to claim money not due to you?" If it isn't then that means that that is also haraam because it consists of both:
- deception (claiming ones a business that doesn't really exist) and
- claiming money that they are not eligible for
Of course the answer to my question would be that it is indeed haraam for The Qu'ran teaches against deception and against receiving that which one isn't eligible for.
See the following:
And do not argue on behalf of those who deceive themselves. Indeed, Allah loves not one who is a habitually sinful deceiver. [Quran, 4:107]
They [think to] deceive Allah and those who believe, but they deceive not except themselves and perceive [it] not. [Quran, 2:9]
In their hearts is disease, so Allah has increased their disease; and for them is a painful punishment because they [habitually] used to lie. [Quran, 2:10]
So He penalized them with hypocrisy in their hearts until the Day they will meet Him – because they failed Allah in what they promised Him and because they [habitually] used to lie. [Quran, 9:77]
And a believing man from the family of Pharaoh who concealed his faith said, ‘Do you kill a man [merely] because he says, “My Lord is Allah” while he has brought you clear proofs from your Lord? And if he should be lying, then upon him is [the consequence of] his lie; but if he should be truthful, there will strike you some of what he promises you. Indeed, Allah does not guide one who is a transgressor and a liar.’ [Quran, 40:28]
But if they intend to deceive you – then sufficient for you is Allah. It is He who supported you with His help and with the believers. [Quran, 8:62]
But We have certainly tried those before them, and Allah will surely make evident those who are truthful, and He will surely make evident the liars. [Quran, 29:3]
Allah will say, ‘This is the Day when the truthful will benefit from their truthfulness.’ For them are gardens [in Paradise] beneath which rivers flow, wherein they will abide forever, Allah being pleased with them, and they with Him. That is the great attainment. [Quran, 5:119]
Sahih Muslim, book 10
Chapter 12: He who deceives in business transaction
Number 3663:
Abdullah b. Dinar narrated that he heard Ibn 'Umar (Allah be pleased with them) saying : A man mentioned to the Messenger of Allah (may peace be upon him) that he was deceived in a business transaction, whereupon Allah's Messenger (may peace be upon him) said : When you enter into a transaction, say : There should be no attempt to deceive.
Then there's many more (too many to mention)
So from the above we learn that lying and deceit go hand in hand and it's one of the characteristics of an hypocrite. The liars and deceivers shall be exposed by Allah and the truthful shall be rewarded by Allah. If one intends to deceive you then Allah is a sufficient protector for the one who is about to be deceived. Now on to deceiving within a business transaction (ie to gain finance through deception) we learn that this is also haraam (see "Muslim" above) and this would indeed be the same case as you mentioned, to gain money through deceit
May Allah guide us to the truth and keep us steadfast
