Getting Personal With a Loan

So, your friend asks you to borrow money. This is an unpleasant situation, but you do not want to send them away because you care about your friend. They cannot afford to go to one of those quickie loan stores that have high fees Wells Fargo Spending Report and hold their car title as collateral, and their credit is not good enough to be approved for a bank loan. You would be happy to lend them the money, but you might be worried about what it might do to your relationship.
The first thing to talk to your friend about is whether you are the only source that they have to get this money. Phrase this in such a way so that it does not sound like you do not want to lend them the money, as you might hurt their feelings. You might want to say something like “Oh I know what it is like to come up short like that. Does your company do pay advances that is what I had to do” or something of that nature. If your friend does borrow this money from you, you need to be clear with your friend as to what payment arrangements Importance Of Strategic Financial Management you find acceptable. Your friend may be expecting to pay you back by next year, and you may be expecting them to pay you back by next month. If this topic is covered up front, there will not be any surprises for you or your friend. You also need to be prepared for the fact that your friend may not be able to pay you back. Chances are if they got in a bind such as having to ask you for money, they get in a bind where they cannot pay you back. You need to be get ready to be upfront with your friend, and re-establish your expectations.

READ  Personal Bank Loans and How to Get Them