You’re being given a hard time here which is unfair
Your brother is treating his employee badly by keeping him strung along with no income rather than making him redundant , which would give him rights to redundancy money, and to claim unemployment benefits, neither of which he can get if he just quits. The fact it’s his BIL makes it worse. Your brother doesn’t have to keep the business going, but he does need to decide if he is going to keep running it as a business, or close it. If he’s closing it he needs to make any employees (your husband) redundant properly.
It’s possible BIL know this and is worried about needing to pay out redundancy money. However there are schemes I think where if a business can’t afford to pay the government covers some of it.
I suggest you and DH get some advice from CAB, ACAS or a legal helpline (see if you have anything through home insurance) to find out what he might be entitled to, especially as he’s on some kind of zero hours set up which may complicate things.
If you would be willing to take over the business from your brother, then you need to talk to him about that. Once you know the redundancy situation, I wonder if you could use that to talk to your brother. Offer that, rather than him needing to pay DH redundancy he “sell” you the business in lieu of what he would otherwise owe you. I’m assuming that would save you some or all of the £5k you’d need otherwise.
If you think you could make a go of the business then you could find out if there might be any government help available for the start up costs. There might be nothing these days, but there used to be schemes from the job centre to help ppl who wanted to start their own business . At least you might be able to get a low interest loan that way.
Unless there is just no demand from customers anymore it sounds like there should be a solid business here .
good luck