1. framework. If illegal lending involves a crime, it shall be convicted and punished for the crime of illegal business operation in the criminal law. In terms of performance, it is "regularly issuing loans to unspecified objects in society", that is, issuing funds to unspecified objects (including units and individuals) in the form of loans or other names for more than 10 times within two years. We can know three key words from the above: unspecified -2 years-10 times. It should be noted that if the repayment period is extended after the loan expires, the loan issuance times shall be calculated as 1 time.

2. Interest rate. The actual annual interest rate of more than 36% may not only constitute the crime of illegal business operation, but also belong to the situation of "serious circumstances" and the punishment will be aggravated. The amount of illegal borrowing shall be based on the actual amount of principal lent to the borrower. If the illegal lender charges interest in the name of introduction fee, consulting fee, management fee, overdue interest, liquidated damages, etc. Or deducted from the principal in advance, and the relevant amount is included in the actual annual interest rate calculation.

3. Where does the money come from? In private lending, the lender's funds must be his own. The non-governmental lending behavior of lenders who obtain credit funds from financial institutions and lend them to borrowers at high interest rates shall be deemed invalid. If the borrower can prove that the lender still owes the bank loan when signing the loan contract, it can generally be presumed that the lender has borrowed credit funds. However, the Trial Points and Judgment Standards of Private Lending Disputes in Shenzhen Intermediate People's Court were published on April 20, 200911(please refer to local standards). It is also said that it is different from non-financial institutions, legal persons or other organizations that use credit lines to make profits, and it is still a way of personal financial management, not disturbing the financial order. Once it is determined that the loan is transferred with high interest rate, at least the validity of the loan behavior will be denied, and the expenses of the borrower during the period of occupying funds will be determined according to LPR.

4. Professional lenders. Professional lenders: legal persons who have not obtained the lending qualification according to law, and unincorporated organizations or natural persons engaged in private lending are deemed invalid according to law. If the same lender engages in paid private lending for many times within a certain period of time, it can generally be recognized as a professional lender. Once recognized as a professional lender, it will at least deny the validity of the lending behavior, and the expenses of the borrower during the period of occupying funds will be determined according to LPR.

5. who to lend it to. If it is only lent to specific objects such as relatives and friends, internal personnel of the unit, it does not constitute a crime. Our team's understanding is that it is ok to borrow occasionally between shareholders and business partners, because business purpose is the main purpose, rather than one party borrowing for a living. Therefore, when writing a loan contract, the "Whereas" part should clearly explain the background of the loan.

6. The purpose of borrowing money. The use of funds is also very important. As the logic of the above five articles, it needs to be clear that it is aimed at specific objects and specific commercial purposes. When using entrusted loans, it should be noted that if there is a lot of money to lend, lawyers will generally suggest operating through entrusted loans and trust loans. However, judging from the second-instance ruling of Zaozhuang Intermediate People's Court in mid-March 2020, the court ruled that the use of entrusted loans was to evade financial supervision and engage in illegal private lending for profit, thus ruling that creditor's rights and mortgages were invalid.

Therefore, the operation of this method should be cautious. The interest rate should not be set at 2% of the highest monthly interest, which is obvious to the naked eye. Our team believes that even the channel business, after all, is financial lending, not private lending, and the court's decision has made a bad start. If we want to strengthen supervision, we must start from the administrative point of view; However, the direct judgment of the judicial organ is invalid, which denies the creditor's mortgage and priority and directly leads to the loss of creditor's rights, which is suspected of being simple and rude.

From the lender's point of view

1. Keep a low profile. What cannot be disclosed to the public should be "peer-to-peer".

2. If loans are made to multiple debtors, please separate the loan details from personal information.

3. Lawyers will be involved in this process. Pay attention to the strictness of loan agreement and the standardization of risk control measures. When the borrower is unable to repay the loan, the lawyer will intervene to protect the rights through legal channels such as sending a lawyer's letter and litigation, and avoid using extreme methods to collect debts.

4. If it is agreed that the borrower will not repay the loan, the lawyer's fees, legal fees and property preservation guarantee fees arising from the lender's investigation of its legal responsibilities shall be borne by the borrower.

5. The dispute settlement method is agreed to be arbitration.