Lending money to a Friend

[Evolved]

Not a chance! If he has another 'successful' business, why can't he bank roll the second one?

[All that jazz]

steve2 said:

You did not read the opening post properly, he needs to borrow the £15k to buy the business,

Fair enough, but my points still stand.

[hora]

PAULJ5555 said:

DanL said:

It's "only" £15k - why can't they borrow that from a bank?! Whatever the reasons are that prevent them from borrowing from a bank are the same reasons your friend shouldn't lend to them...

There is no interest to pay back as with a bank, the lending friend can afford to lend the £15k for 1 year without interest.

You usually approach a bank before others I find.

Anything I give to friends or family I go into it 'it'd be nice to see it back but don't expect it 100%'.

What will his cadh flow be like down the line? Who knows what 'hard brexit' does

[DanL]

PAULJ5555 said:

DanL said:

It's "only" £15k - why can't they borrow that from a bank?! Whatever the reasons are that prevent them from borrowing from a bank are the same reasons your friend shouldn't lend to them...

There is no interest to pay back as with a bank, the lending friend can afford to lend the £15k for 1 year without interest.

Fair enough. However, I just looked - the interest cost of £15k over 12 months with Barclays for me is a touch over £500 - call it £45/month in interest plus the repayment.

Unsecured personal loan, with no friendships as risk, 7.3% APR. If he can't fund that then there's something wrong. APR drops to 3.9% if the loan is over 24 months - total interest costs are higher for the full term by about £100, but I think he could pay back at the end of the first year in full with just one month's interest payment as the fee.

I can't see why anyone would borrow from a friend except if they can't get the money from a bank, but I don't know any of the parties concerned and it's none of my business really.

[hora]

I knew someone who loaned a family member over 100k when the banks pulled lending in the recession. He's still waiting for the money.

[PAULJ5555]

DanL said:

PAULJ5555 said:

DanL said:

It's "only" £15k - why can't they borrow that from a bank?! Whatever the reasons are that prevent them from borrowing from a bank are the same reasons your friend shouldn't lend to them...

There is no interest to pay back as with a bank, the lending friend can afford to lend the £15k for 1 year without interest.

Fair enough. However, I just looked - the interest cost of £15k over 12 months with Barclays for me is a touch over £500 - call it £45/month in interest plus the repayment.

Unsecured personal loan, with no friendships as risk, 7.3% APR. If he can't fund that then there's something wrong. APR drops to 3.9% if the loan is over 24 months - total interest costs are higher for the full term by about £100, but I think he could pay back at the end of the first year in full with just one month's interest payment as the fee.

I can't see why anyone would borrow from a friend except if they can't get the money from a bank, but I don't know any of the parties concerned and it's none of my business really.

Having spoken with them both and the subject of a bank loan came up, I think it boils down to a long term friend wanting to help out another, there will be no interest to payback and also there will be flexibility paying him back that he would not get with a bank or loan company.

As said in a post above will the one friend take the other to court to get the money back - Who knows.
It will be a test of friendship and if the guy messes the other around I suppose the friendship of 20 odd years is not that important that he looses a friend. If this happens I suppose it opens up the door to the other to take him to court as the friendship will be no more.

[stevensdrs]

If you have 15k in cash and would not be overly upset if it went on fire and burned to ashes, then you can afford to lend it to a friend. If your expectation is different from that then don't lend it to anyone.
Many years ago I lent 5k to a friend for his business. I never expected to get it back and wasn't disappointed not to. What did boil my p!ss was when he appeared after 10 years to ask for some more.

[fatjon]

DanL said:

It's "only" £15k - why can't they borrow that from a bank?! Whatever the reasons are that prevent them from borrowing from a bank are the same reasons your friend shouldn't lend to them...

^this.

It will cost £292.00 at today's rates from Satander to get this loan. Is the friendship worth less than that? No way I would lend anyone 15k if the bank won't and the interest of <£300 is hardly a reason to not use the bank and suggests another reason may exist.

[PAULJ5555]

stevensdrs said:

If you have 15k in cash and would not be overly upset if it went on fire and burned to ashes, then you can afford to lend it to a friend. If your expectation is different from that then don't lend it to anyone.
Many years ago I lent 5k to a friend for his business. I never expected to get it back and wasn't disappointed not to. What did boil my p!ss was when he appeared after 10 years to ask for some more.

I would have told him yeah fine no problem mate, when do you need it and then just would of strung him along, every time he asks oh just waiting for the bank mate its deffo coming. Hopefully he would have a deadline to meet and you could have kept him going and going.

[montecristo]

Is the borrower a friend or a Friend?

If the former, then what everyone else said.

If the latter, and the bank won't lend, and the lender can afford it, just lend the money and if you don't get it back, so be it. It wouldn't be ideal, but being able to help friends is worth more than £15,000. When we are all 90, no one will care about £15,000. Unless your lender friend will, in which case don't do it.