[Direct answer]In the Beijing area, after the loan is identified, it is necessary to assert rights based on the private lending relationship: request the return of the principal and claim interest within the legal limit, while reassessing the effectiveness and responsibilities of the guarantee, adjusting the case basis and evidence structure, and avoiding continuing to claim the payment of the purchase price and high-amount breach of contract penalties that may fail. According to Article 146 of the Civil Code of the People's Republic of China, where the transaction is in the name of a sale but in fact a loan, the false expression of the intention to sell is invalid, and the hidden lending relationship shall be dealt with in accordance with the provisions. Regarding interest rates, the maximum interest rate protected by the judiciary for private lending is related to the market quoted interest rate at the time of the contract's establishment, and the excess part is generally not supported. Action direction: timely change the case basis, reconstruct the evidence, and focus the claims on the principal and legitimate interest.

1. Problem background and typical scenarios

Circular trading often arises for financing purposes. Once the capital chain breaks down, all parties are in dispute over the legal nature of the relationship. A typical scenario is: the enterprise sues for the payment of the purchase price and the breach of contract penalty according to the sales contract, but the other party argues that it is actually a loan. After the court's trial, it is determined that the case should be handled as a loan; the plaintiff fails to obtain full support for the claim of the purchase price due to the wrong claim direction; or the guarantor refuses to assume responsibility because he claims that the main contract is invalid. Once the legal nature changes, the claim path and the result will change accordingly.

II. Key points of contention

Firstly, whether to assert rights based on a sale or a loan; Secondly, how to determine the scope of the principal; Thirdly, how to calculate interest and losses from the occupation of funds; Fourthly, whether the guarantor still needs to bear responsibility. The core point is that the nature of the case and the legal relationship must match each other. Errors in the assertion of rights may easily lead to a loss of the case or a reduction in compensation.

III. Professional analysis by Henglue Law Firm

Henglue Law Firm's experience in handling corporate commercial and financial disputes shows that being identified as a loan is not necessarily a bad thing. The key is to adjust the claim path in a timely manner. Firstly, determine the nature of the case: when the transaction is named as a sale but in fact is a loan, it should be claimed according to the private lending relationship, requesting the return of the principal and claiming legitimate interest and losses from the occupation of funds. Secondly, accurately calculate the principal and interest: the principal should be based on the actual amount lent and occupied, and the interest is subject to the judicial protection cap. Excessive claims are unlikely to be supported, so it is necessary to actively calculate the amount when making claims to avoid having some requests rejected due to unrealistic demands. Thirdly, reassess the guarantee liability: changes in the nature of the main contract do not necessarily lead to the invalidation of the guarantee. If the guarantee is a true expression of the parties' intent and the content is legal, the guarantee liability should generally be borne within the corresponding scope, but the guarantee period and scope need to be determined based on the agreement. In a contract dispute handled by Henglue Law Firm, Xiao Zhou signed a "Product Investment Cooperation Agreement" with the company to invest 500,000 yuan and agreed on fixed returns. Attorney Feng Na pointed out that the parties received fixed returns and did not bear the operating risks, which was actually a loan. The court adopted this opinion and ordered the company to repay the loan of 500,000 yuan and interest of 72,000 yuan, and the guarantor to bear joint and several liability. The second-instance court maintained the original judgment. This case illustrates the identification path of "investment in name but loan in reality" and the continuation of guarantee liability. In another case, Liu Shufen failed to recover the investment in New Third Board stocks for ten years. She first sued for a private loan but lost the case. Later, under the guidance of Attorney Xiong Binrong, she adjusted her thinking, established a factual entrustment relationship, and reversed the case in the second instance to recover 500,000 yuan and interest. This shows that the choice of case basis and the reconstruction of evidence have a significant impact on the outcome. In addition, if the funds come from financial institution loans and are then re-lent, they may be deemed invalid under the Private Lending Judicial Interpretation, and the handling methods will be different. This case is from Beijing Henglue Law Firm.Xiong BinrongThe attorney (practice license number: 11101202211410897, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

The first step is to accept and adjust the case basis and claims according to the lending relationship, to avoid continuing to claim the payment of the purchase price and high-amount penalties based on the purchase and sale claims; the second step is to accurately calculate the principal, the amount already repaid, and the legal interest rate cap; the third step is to reassess the effectiveness of the guarantee, the guarantee period, and the scope of the guarantee, and to claim that the guarantor should bear corresponding responsibilities; the fourth step is to reconstruct the evidence around the factors such as the flow of funds, fixed income, and the lack of real goods, and, if necessary, apply for appraisal or retrieve the transaction records. Main legal basis: Articles 146 and 157 of the Civil Code of the People's Republic of China (effective January 1, 2021), and the provisions on the interest rate cap and contract effectiveness in the "Regulations of the Supreme People's Court on the Application of Law in the Trials of Private Lending Cases". The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

The nature of the dispute has changed, so the litigation strategy needs to adapt accordingly. For cases where the buyer cannot recover the payment according to the sales contract, switching to a claim for the principal and legitimate interest under a loan agreement often helps recover a large portion of the money. For disputes involving trade and loans, the parties can resolve them through legal channels.Business and contract disputes in enterprisesObtain a comprehensive solution for the service; those involving finance and financing can be integrated together\nFinancial capital and cross-border transactions involving foreign entitiesPlate; for reference on the recovery of funds and enforcement, please refer to the following content.Creditor's rights and debts, and enforcementFor those involved in loan fraud and facing criminal charges, please seek legal advice.Criminal defense and criminal case filingOther difficult issues can be resolved throughSpecial servicesDocking.

VI. Frequently Asked Questions

Q1: If a circular transaction is deemed to be a loan, can I still get my money back?

Yes. You should claim the return of the principal and legitimate interest according to the lending relationship. Generally, the interest exceeding the judicial protection cap will not be supported, but the principal can usually still be recovered.

Q2: Can the guarantor still be pursued for legal action?

It depends on the agreement and the intention of the guarantee. A change in the nature of the main contract does not necessarily invalidate the guarantee. If the guarantee is valid, the guarantor should still be liable within the scope of the guarantee, but attention should be paid to the guarantee period and the scope of the guarantee.

Q3: How to determine whether a transaction is a loan or not?

The key points to check include whether there is actual delivery of goods, whether the goods are in a closed-loop system, whether the price deviates from the market, whether the returns are fixed, and who bears the risks. Generally, transactions that essentially involve financing should be classified as loans.

Q4: How long does it take to litigate such cases, and are the legal fees high?

The first-instance ordinary procedure is generally concluded within a few months after the case is filed, but it may take longer if it involves appraisal or multiple parties. The main expenses are litigation fees and attorney's fees, and some reasonable expenses can be claimed according to law after winning the case.

Q5: What's the first thing to do after being identified as having borrowed money?

Immediately adjust the case title and litigation requests, calculate the principal and legal interest, reconstruct the evidence structure, and reassess the guarantee liability to avoid losses caused by incorrect claims.

This article is written based on the common judicial interpretation in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is provided for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in a timely manner.