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to NOT lend my friend money to save her business?

(33 Posts)
littleblu Fri 06-Nov-09 14:04:13

I have a friend who has been running her business for a few years now, the recession and bad luck have meant she is not doing well at all. Her house and everything is tied up with the business too. She's borrowed money from her family to save the business recently ( a very large sum ) and now the banks want more or they'll close on her. She hasn't been very clear about what this means though.

I could probably scrape together what the banks are asking her for, but think I'm not doing her any favours really, probably getting her into more debt in the long run. I really don't think I'll get it back.

I love her dearly and don't want to see her lose her house (and her marriage in the process probably) but feel really bad about saying no.

Advice please.......

Oh and she was talking about going on holiday, and I suspect that her DH doesn't know what's going on so she's keeping up appearances.

PartOfTheHumphreysGroup Fri 06-Nov-09 14:07:21

No I wouldn't give her any money. Obviously you need to tell her to talk to her DH and not go on holiday.

thatsnotmymonster Fri 06-Nov-09 14:09:06

Definitely not.

Why would she lose her marriage?

She needs to be honest with her dh about the state of her business and then they need to look at their options. It is not up to you to bale her out, though it sounds as though you won't be anyway.

She needs to face up to it now before it gets any worse- she may still be able to get out without too much damage!

Acanthus Fri 06-Nov-09 14:10:44

Don't give her anything you can't afford to lose and not be niggled by

NancyBotwin Fri 06-Nov-09 14:12:23

Yes never lend money unless you are going in with the attitude that you are giving it, not lending it - if you get it back it is nice but you are not expecting it, iyswim.

paisleyleaf Fri 06-Nov-09 14:12:51

It's sad. But I think you're probably right in that, in reality, it wouldn't be doing her any favours to bail her out for this time.

DaftApeth Fri 06-Nov-09 14:23:15

If she has already borrowed from all of her family and that has ben enough, it is unlikely that what she gets from you would be enough either.

Unless you have loads of money yourself and could easily afford it, I would not do it. It is an odd thing to ask a friend.

It sounds as though she is burying her head in the sand rather than tell her dh what is going on.

blueshoes Fri 06-Nov-09 14:25:35

Your friend sounds like she is in denial. If you lend her the money, you will probably never see it again.

porcamiseria Fri 06-Nov-09 14:25:50

NO, YANBU. I would never dream of asking a friend for this.

Morloth Fri 06-Nov-09 14:25:51

I agree with NancyBotwin if you can't afford to give it (with no strings) then you can't afford to lend it. The strain money can put on relationships is horrible.

MillyMollyMoo Fri 06-Nov-09 14:27:53

I'm afraid the truth is if your business is built on credit and loans it isn't a viable business and this is what a lot people who've been playing shop for the past 10 years are learning the hard way.
She'll pick herself up and start again, you or the banks bailing her out is not the answer.

bumpsoon Fri 06-Nov-09 15:02:18

Milly valhalla has put a message on the pets boeard for you ,sorry for hijack smile

MorrisZapp Fri 06-Nov-09 15:06:53

Christ! Don't give her a penny.

Does anybody else remember that episode of SATC when Carrie realises that she's spent all her money on inconsequential pish, and then berates her friend Charlotte for not offering her a loan?

I'm still scratching my head over that one.

MillyMollyMoo Fri 06-Nov-09 15:13:42

bumpsoon I have that topic on ignore I think I've had all the advice I take thank you.

Confuzzeled Fri 06-Nov-09 15:24:06

My dh and I have a business that is struggling, we have borrowed money to survive and it might not be enough to get us through so I understand where your friend is coming from.

Saying that the business isn't viable might not be the case, other factors might be pulling it down.

In our case we had a bad year last year but our business is now getting stronger. The problem is our creditors changing credit terms from 90 days plus to 30 days. Nobody offering payment plans and the banks taking longer to process credit card payments so our money is tied up for longer. The way people conduct business has changed and it's killing hundreds of small businesses.

My advice is to ask to see your friends accounts, is she making money and is she likely to be able to set up a payment plan to make sure you get your money back.

bumpsoon Fri 06-Nov-09 15:24:16

sorry ,really didnt mean to interfere ,it just sounded like a woman from a rescue could rehome your dog this weekend if that was still what you needed .Shall b*gger orf now grin

Winibaghoul Fri 06-Nov-09 15:24:24

It's as Warren Buffet says 'when the tide goes out, you find out who's been swimming naked'
That's what has happened in this recession - it's shown that too many businesses have been built on credit, now with credit no longer easily accessible they're going under.
money is tight for everyone, YANBU at all not to lend her the money.

dittany Fri 06-Nov-09 15:30:34

Message withdrawn at poster's request.

MillyMollyMoo Fri 06-Nov-09 15:33:12

I run my business so that I could clear all my debt in 7 days if I had to and that was the way I was taught back in ye olden days of 1997 and i've stuck to it throughout the credit binge, no way would I ever risk our family home or childrens future.
If we couldn't pay our bills at any time then it would have been game over.
Oh and chase your bank because Natwest Streamline haven't slowed down any processing at all.

solongpumpkin Fri 06-Nov-09 15:40:55

Its very sad that your friend might lose her business and house but it would be far worse for her to drag her family and friends' financial futures down with her. If you never saw your money again (highly likely) she would feel guilty and you would feel resentful.

Maybe you can offer her emotional/practical support instead.

littleblu Fri 06-Nov-09 16:29:56

thanks for all the good advice, I just need to tell her now. Mostly that I'm here for emotional support not financial.

I'm going to earmark a little money that I can afford to GIVE her, so that if it all does go tit's up I'm more than happy to help her out for rent/food etc if she needs it.

reservejudgement Fri 06-Nov-09 16:55:45

littleblu, I think that is wise and you sound like a lovely friend!smile

GroundhogsRocketScientist Fri 06-Nov-09 16:56:46

Friends and money are like Oil and Water. They just don't mix.

LilyLoovesGuyFawkes Fri 06-Nov-09 16:59:51

Liitleblu that sounds like a good idea!

Stigaloid Fri 06-Nov-09 17:02:29

Don't lend her any money - it is her business and she has to deal with it. She should never have tied her mortgage up with her business and it was a risk she and her husband would have taken knowing that this could happen. it is not for you to risk your own family's finances for her - although it shows a kind and considerate nature - it is not worth risking your family for someone else's business.

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