Friend asked dh for 2 year loan

If it makes you feel any better, I (normal professional with normal professional friends who do not have lots of money lying round in businesses) asked my husband (high net worth business partners) if he went to any of them (they’re all friends) and said he was really struggling financially, mentally struggling because of it etc would they loan him £25k to get through it and he said without hesitation they wouldn’t loan, they’d just gift it - because they’d all know that for him (or any of them) to ask, it must be absolutely desperate.

It sounds as though your husband can afford to lose it, ultimately he’s gambling on the strength of his friendship. He can’t morally have the money in the bank and watch his friend lose everything (in his opinion, or he wouldn’t be willing to do it). If his friend defaults, he will go to court and get the money back by way of a charge or forced sale on the house - friendship will be over but at least he can reconcile his conscience about his friend. If his friend repays, he’s proven that the 20 year friendship is as valuable to him as it is to your husband. If he doesn’t lend him the money, the friendship will probably never recover.

I think it’s hard to understand when you don’t have these kinds of sums lying around to play with. People regularly gamble by investing large sums of money on various businesses/opportunities/start ups. The idea horrifies me, but the attitude is generally you win some, you lose some.

I, on the other hand, wouldn’t ask a friend if I could lend a tenner! But I come from a totally different background….

And what happens when something comes up in your life, and you need the lump sum back ASAP?

The money is in a bank account somewhere, surely it's earning interest...?

How on earth are you okay with your husband doing this?

Because you can tut and go "well if he mucks us around I'll tell the wife".... Won't make any difference when the friend ficks off with YOUR money.

So...TELL THE WIFE. Now.

He can’t pay his other friend back he won’t pay you back
don’t do it

I would tell the wife.

Id also be telling my husband if he gives this man our money, against my wishes, I'd be looking at divorce.

Oh so now it's a 1 year loan?

How is this man going to find £2000 a month if he's spending beyond his means and the wife not finding out.... ?

So now it's a 12 month loan with repayments of £2000 a month?

Yeah right. This has disaster written all over it.

Quite frankly I would be going ape-shit. What if you need that money for something urgent yourselves? None of us know what's round the corner. As PP say you won't get that money back.

And if DH won't listen to you, his wife, and puts his so-called friend above you, I'd be telling him that you will be telling your friend as she has a right to know, and you are going to put her first just as he is putting his friend first.

Honestly, why wait? Why are you happy to give away £25000?

Are you incredibly wealthy and won't miss it?

Jesus it gets worse, you're losing out on 2 years of interest on the money?

Are you sure you're happy for your husband to give away £25000?

Because that's how you need to frame it, you and your DH won't see this money again.

Just tell her noooooww.

Never lend money unless you're prepared not to get it back.

If he can’t afford to pay friend back how can he afford to pay DH back?

25k over 2 years is a grand a month. That’s a lot of cash to have spare and if he had that spare what he £25k in debt?

Life would just be so simple and everything should carry on as normal if he just says NO! There probably isn’t even a friend waiting for the money. Op I hope there isn’t a similar thread in 3 months time saying “gave friend 25K, now we never see him, sorry but it’s all wrong

Friend has told dh he knows he has been living beyond his means and will rein it in.

So he needs to stop living beyond his means plus find 2k a month?

I wonder what his earnings & outgoings are?

It’s not the director or shareholder taking the money out. It’s a genuine loan.

A director actually can take a loan out of the company at any point, but if it isn’t repaid at year end, interest must be added.

That is a simplistic version and there can be nuances but in a nutshell.

Agree - if it is company money, there will absolutely be tax implications. At the very least, if it is regarded as drawings by OPs DH he has to pay PAYE on it. And frankly, that’s the best option because OP’s DH will have to repay it himself from personal funds if it is not repaid by the BF.

The attached describes a directors loan, which is what this is, I think? The director (OPs DH) is effectively taking a personal loan from the company and then using it to give to his friend.

https://www.1stformations.co.uk/blog/borrow-money-from-limited-company/

Surely the solution is his wife gets a job

There will be no capital paid either!

Ssshhh! It's all a secret. No one must know. It's a scam. We all know this. The person needs to confront his debts/debtors/addiction.