Investing in a small business

buildersdaughter

Hello all, I have no knowledge of how this would work. I will get 'proper' advice before I part with money, but wanted the kind of perspective folk on here know about.
My son & wife have bought a property with about 10 acres of land, with a view to setting up a campsite. At present they both have full-time jobs, but will be looking to reduce hours to manage the site. I have every confidence in their ability to sort this out and to work hard.
I could afford to sink about £15k into this venture (this still leaves me 'rainy day' and 'other family' savings). I am happy for it to be a long term loan, but cannot simply 'gift' it. As I understand it, these are my options:
1. Loan the money, with a repayment plan in place, which allows for some flexibility (provision for 'loans' is already accounted for in my will)
2. Take a share of the business - I am not keen to do this, as I don't want the responsibility I understand this would entail.
3. Buy a 'share' in the house / land.
I'd be grateful for your thoughts

martindow

I think the first step is to see if it is going to be possible to comply with the planning policies of the local authority.


https://www.pitchup.com/how-start-campsite-caravan-park/


Then you can start thinking about how to invest in the venture.

Comms69

buildersdaughter wrote: »

Hello all, I have no knowledge of how this would work. I will get 'proper' advice before I part with money, but wanted the kind of perspective folk on here know about.
My son & wife have bought a property with about 10 acres of land, with a view to setting up a campsite. At present they both have full-time jobs, but will be looking to reduce hours to manage the site. I have every confidence in their ability to sort this out and to work hard.
I could afford to sink about £15k into this venture (this still leaves me 'rainy day' and 'other family' savings). I am happy for it to be a long term loan, but cannot simply 'gift' it. As I understand it, these are my options:
1. Loan the money, with a repayment plan in place, which allows for some flexibility (provision for 'loans' is already accounted for in my will)
2. Take a share of the business - I am not keen to do this, as I don't want the responsibility I understand this would entail.
3. Buy a 'share' in the house / land.
I'd be grateful for your thoughts

Let's put it this way - it's almost impossible to loan your husband / wife money and for it to be enforceable in legal terms.


Assuming you are happily married the court would correctly take this money to be a marital asset and therefore available to either one of you.


That's a very simplistic version.


As to the viability of the business, it's very premature as it's unlikely the land has the correct permissions to be used as a leisure facility.

buildersdaughter

Thank you for your thoughts. I'm not worried about planning and other practicalities - they are a sensible pair, who I trust to look that all up and organise it properly (and yes, initial enquiries show that it would be allowed in principle)
Comms69 - I assume you mean that the money would belong to both of them, and not just my son? I'm not too concerned about that either - I have known my d-i-l all of her life and am friendly with her parents. Failure of the marriage is a risk I am willing to bear.

00ec25

so the business will be operated by your son and his wife.

That means if both are engaged in owning it, it would need to be:
- either a formal partnership
- or a fully fledged limited company

for obvious reasons it cannot be run as a sole trader since there would be 2 owners.

Both partnership and company are separate legal entities to which a loan agreement has independent legal standing and would not be part of a divorce/marital asset pot, ie. the loan to the business ranks before the split of the asset.

buildersdaughter

Thank you all