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I am posting on behalf of a friend, I understand not ideal, but she has issues that need advise and is not comfortable asking for advise.


Back ground

She runs a livery and stud farm, Earlier this year she thought she had sold one of her foals, but this fell through due to new owner not being able to make payments, for what ever reason, also not convince the foal would be safe,


In between time she purchased a colt, this left her short of finance, stupid i know but was an impulse purchases. She took  a Loan and the agreement was it would be paid back in instalments first payment December.


First payment was paid, as agreed, but was handed back as now she was told it was an investment not a loan. There was no written agreement for a loan or an investment,


I have advised her to make the repayment via bank transfer with reference loan repayment payment in full.


The loaner has said they will just send the money back, as far they are concerned it was an investment.


Where does she stand ????




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OPPS sri caps

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Thanks for responding dx 100uk


There was no paperwork nothing in writing at all


Thanks for responding Hightail


The Loan was from one of the Liveries Mother, who has 2 horses on the yard.



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Right I have pushed for more info, 

The farmer who owns the land and the stables, is applying for Planning for 42 more (35 at the moment) but not all full) he intends to invest big money to bring it up to standard .

The loan was given before this person was aware of the above, 


In my opinion the Loaner saw an opportunity, once this info was made available, I have work it out if all were full livery

the turn over would be £29,000 per month with a profit of approximately, £5000 per month,

I can see the reason behind the change .


As said before originally a loan then when she tried to make part payment and handed back, now an investment, according to the loaner. 

No written contract for loan or the investment.


The loaner has stated if paid by bank transfer it would be paid back into the original account. 

What can my friend do to end this? 


She wants to pay it back and can pay in full in January with the sale of 4 horses, which should bring in approximately, £60.000.

To make matters worse  the Loaner works for the inland revenue and the livery (her daughter ) is a police officer.



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i still can't make head nor tail:pound:of this!

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Ok putting it simply 


When does a loan become an investment,

if the person who lent the money decides this.


No written contracts


Will not accept payments from the person she loaned too. And now says she has invested in the Livery yard.

without the owner agreeing she could invest.






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How much money is involved please? I think the biggest problem for both sides is the lack of paperwork.


See what other people think but I might repay the money to show that was my intention all along and keep proof of making the transfer, even if it's returned.


It sounds as if your friend has the bank details of this customer - is that right? If someone invested in my business, I wouldn't need to be paying them money, would I?



Illegitimi non carborundum




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£1750.00 It was paid to the Hay and Straw supplier direct to settle an invoice.


Yes has the bank details and will pay back in full once the horses are sold, with  Reference Loan repayment.



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Yes clearly the whole problem here is a lack of evidence and I suppose that your friend now realises that they have been very foolish in borrowing money in this very casual way. If you run a business then you have certain responsibilities and one of the responsibilities is to be aware of the repercussions of involving anybody else – whether it be by way of a loan, investment, or even having someone share the workload with you – particularly if they are apparently doing it unpaid. It is quite easy for someone eventually to be treated by the law as a partner in your business.

Every involvement should be evidenced in writing – and that doesn't mean that it has to be in a legal form, strutting or pompous. It just needs to be a note outlining the basis of the arrangement.

This definitely needs to be sorted out as quickly as possible because the longer it goes on, the more it will take on the appearance of an investment.

I suggest that your friend writes a letter objecting to the fact that the lender is now treating their loan as an investment.

Your friend should detail the facts of the original arrangement including,

  • the circumstances in which the arrangement was made,
  • details of the conversation,
  • details of the basis of the loan
  • the way in which it would be repaid
  • whether or not interest would be paid.

Also your friend should make it clear that

  • the lender appreciated at the outset that this was never intended to be an investment
  • is simply attempting to change the character of the loan for their own purposes.

In particular your friend should point out to the lender that

  • the loan has none of the characteristics of an investment
  • particularly that it was not paid into the business,
  • it was not paid into the business in order to contribute to the growth of the business
  • but rather it was paid directly to a third party for a specific purpose.



  • That it was not an investment because no agreement had been made as to the value of the business
  • or what percentage of the business which the loan would have represented
  • or the conditions upon which the investment might have matured and produced a return.

Your friend should point out in the letter

  • that nothing has been put in writing
  • and that for instance, if the investment was intended to purchase shares, then any creation or transfer of shares should be in writing and on the contrary, no writing or written evidence exists.

Your friend should make it clear that

  • they will be returning the money as agreed into the lender's bank account
  • but if the money is returned at all then it will be placed in an ordinary bank savings account
  • where it will earn the ordinary rate of interest that the bank pays on that account.
  • That the lender will be provided with the account details
  • and will be free to use or withdraw the money as they want.

The lender should be informed that

  • this letter will be provided to a court if ever any litigation develops from this dispute.

I suggest that you get your friend to write the letter and then to put it up here so that we can have a look and maybe suggest amendments if necessary.

In the meantime, make sure the repayments are made absolutely religiously, on the dot and that if they are refused, then your friend should open a savings account specifically to receive the money where it should remain untouched. Your friend will have to open the account in their own name because the bank will be unwilling to open the account in the name of a third party – but the details in the account should be provided to the lender.

You should emphasise to your friend that if they miss a payment then this could have very serious repercussions. If for some reason they run short of money and they dip into the savings account then I think that they are creating serious trouble for themselves.

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Just to be clear, sending this letter does not really have any "legal" effect. It simply produces a weight of evidence and also hopefully will help to discourage the lender.

You really would be best off getting rid of the problem by paying the whole sum off in one go. Otherwise it is just going to be a load of baggage which is going to cause stress and complications.

Also, any letter should be sent recorded delivery – or even better special delivery but make sure it is all tracked

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13 hours ago, hightail said:

So this person paid a third party and is now claiming it was an investment though your friend is treating it as a loan.  If this is the whole truth there's no proof it was either.

yes that is the case



Thank you I suggested she did a bank transfer with the reference, repayment of loan.

But your substantial response makes 100% sense, 


I will speak to her in the morning, and will sort out a draft letter, and post here first,

She will not see the loner until next Sunday, so will have time,


Thanks to everyone who has responded, and will ne back soon


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