Friend asked dh for 2 year loan

You don't sound as if you have much agency in your marriage if your husband gives away marital assets without your agreement.

The only thing that you can do to try and protect your name in this is to tell your husband you will need to see that payment every month with your own eyes and the minute he defaults, his wife is being told.

He has children.
It really is unconscionable to keep his wife in the dark about the shit show going on in the background.

Guys like him rob peter to pay paul when they are in too deep. This will come out. She deserves to be told.

My friends neighbours husband took his life in 2008 and what he left behind for his poor wife to deal with was truly shocking.
He left her in enormous debt, the whole business was leveraged up to the hilt.
Bank took their house within months, remortgaged multiple times.
Traumatised children, still traumatised in their 20's.
Her parents and family paying her rent and bills, and food during a tough recession.
She was, is, a lovely woman I believe, who trusted her husband.
She has paid a horrendous price for her trust and so did her children.

If he can’t discuss this mess with his wife he is an untrustworthy narcissist. He needs to let her know that they are spending beyond their means. He’s treating her like one of his children. They need to spend less and she should look at working. I wouldn’t rule out lending him money but he has to be more honest and realistic and give up his Mr Bountiful self image and he and his wife need to look at how they can live within their means

It's too much risk unfortunately

So he borrowed from someone / an institution and couldn’t pay them back, then he borrowed from someone else to pay back the institution, then when he couldn’t pay back that person he wants to borrow from your DH to pay them back, will he have to borrow from someone else to pay your Dh back

This sounds like long term financial bad management, he needs to find out where he is going wrong and deal with that issue or else he is never going to get out of this

Does his wife work as he seems to be under a lot of pressure if he is crying from the stress of it

The choice to lend is mainly your DH's, as its his company. Although most couples in practice make these decisions together.

But the decision to lie/not disclose to his wife is yours, and a poor one in my opinion. You and DH are enabling dishonest financially irresponsible behaviour.

How would you feel if you were his wife and you found out many of your friends (I can guarantee your DH won't be the only one he has asked for money) knew your family was financially struggling and hadn't talked to you. I would feel humiliated, and never trust any of you again

There is a strong whiff of lies about this.
I wouldn’t be surprised if he has a loan from the other friend (which he’s paying back in instalments), but he now needs another loan (to pay back in instalments). I reckon his debt is just multiplying, and soon the instalments will be unpayable as his wife continues to spend, in blissful ignorance.

Tell DH to pay the other friend back directly, rather than it going through his good friend. Otherwise, it simply won’t reach the supposed target.

This is correct - you can withdraw the money as a Directors Loan - as long is it's paid back with a certain time there should be no tax implications :

This has got ‘shit show’ written all over it.
I get that your DH wants to help his best friend but he’s not helping him is he? Helping him would be encouraging him to come clean to his wife and helping him to get professional support. Not bailing him out and keeping quiet re the wife and enabling his secretive behaviour!
If the wife knew and your DH can afford to help then that’s one thing but it’s the deceit from all of you that is absolutely abhorrent. She’s blissfully unaware that three people are being deceitful behind her back. Awful.

This is spot on.
It also sounds like your DH has a people pleasing problem, wishing to be seen as the great saviour galloping in to rescue people. This is difficult behaviour to manage, because he IS getting something out of this deal, it makes him feel good.

If he’s regulated, he also won’t have all ‘normal’ channels for someone in need of fast money open to him (sub prime lenders for example). This would show on a credit check and suggest he’s in financial difficulties - which he is, but losing his license will compound those!

The days of easily getting £25k limit 0% credit cards are all but over. If he’s paying interest, £1k a month may cover little more than the interest payments so he’s getting no chance to get out. The days of getting a £25k unsecured loan easily are over too.

If he has a 90% mortgage (likely if living beyond means), there’s no equity to secure a standard secured loan against (they won’t secure against the 10%).

It is not likely to be as simple as getting the finance elsewhere. Responsible lending regulations mean that where before you could move and shift and move and shift debt, you can’t do this in the same way any more. If you’re flagged as being in persistent debt, even if you’ve never missed a payment, or you sit near your credit limit etc, you are not going to be able to continue to move the debt around.

I am not saying I would lend the money - I wouldn’t. But people saying her husband is just stupid etc, that’s not necessarily true. He probably just understands the difficulties and nuances of the situation better than OP and her post online and knows this is the only
real option for his friend. And he has the means to help and so is going to.

Hope there's something in writing, not that it will help if he can't pay it back. Bad idea, you shouldn't lend anything you're not willing to lose.

This isn’t helpful.

If the company belongs solely to her husband (and her) this is irrelevant and scare mongering. The ABSOLUTE worst case scenario (which won’t realistically happen by the way) would be it would have to be treated as drawings so her husband would have to pay tax on it because it would be seen as essentially he took money out of the company personally and used that to pay his friend.

It could cost him money personally, yes, in theory. But it’s never going to have ‘implications’ for his future. And it’s no different in that respect to being paid from a personal bank account as a loan (to get into anyone’s personal bank, you have to pay tax on it) - this just gives time for it to be repaid without that being necessary.

If this was a company owned by a number of shareholders then your answer would be valid, but in that situation this also just wouldn’t be possible so would be irrelevant.

You also don’t know enough about this man or the business to understand the structure of this loan. He may have a business himself and it’s technically a business to business loan, from which he will then draw down the funds as his own drawings or directors loan.

All I will say is that if her husband has built up a successful company, and has a competent accountant, these scaremongering stories aren’t helpful or relevant. What he describes he’s doing to a lay person will not be how he’s actually going to account for the money - he will discuss (clearly has discussed) with his accountant how that’s going to be done.

The ONLY risk would be if the company is at risk of insolvency - which it clearly isn’t. At that point, you can’t dispose of any assets, loan or not, because you need to make every effort to pay your own creditors. But this doesn’t apply to this situation either.

He is going to pay back £25k in a year? That is over £2k per month. Unless he has an exceptionally high income that feels very unrealistic.

OP please do come back in 6 months and update us on everything.

Of course he isn't.

The friend hasn't made any attempts to decrease spending and is just going to accept this lovely gift from OP and carry on as normal.

OP- you keep saying how kind your DH is and whilst his intentions may be kind, there is a big difference between being nice and being responsible.

If he is the MD of a company and anything went wrong with it, they got into financial trouble for example, your DH's decision to lend out an unsecured loan to a friend with a history of financial problems could well be seen as mis managing his company's finances. What happens if this friend never pays it back? does that mean the company will suffer a loss due to an irresponsible decision by a company director?- you really should consider this because it could have big ramifications in the future.

Not only that, but chucking money at someone who has a history of extravagant spending and not being able to budget according to his income and lending money to pay off another lender is irresponsible. People in debt often think the solution is to give them more money, it isnt. The proper solution is for them to learn how to manage their debts responsibly and that wont happen if someone is constantly bailing them out because they never actually learn how to manage their money. They get used to relying on others to fix the problem for them. This "friend" is using deceit, emotional manipulation and even telling your DH that he shouldn't share this with his own wife.

Your DH may be a "nice person" but he is absolutely not a responsible person because doing this wont actually help this "friend" and I use that term very loosely, considering his appallingly manipulative behaviour.

I'd never do this.
What is the plan to pay the money back? Is he going to change his spending habits to make the monthly repayments? How?
I think this has disaster written all over it.

Surely a couple of 12-24 month % free transfer cards would be better than begging off friends. Thats the usual way to consolidate card debt and freeze interest, he would know that being in finance. He must have really shit credit not to be able to do that.

So you don’t even know what the original debt was for and have to ask the friend who originally borrowed the money? 🚩🚩🚩🚩🚩🚩🚩

He probably does this to all his friends and isn’t actually repaying anyone. £25k isn’t a huge amount to get from the bank so he must have exhausted absolutely every other avenue.

If the friend is lying to his wife about this, then his current financial situation isn’t ’bad luck’ or some sort of freak circumstance, it’s years of mis management of money. Unless he’s completely turned his finances upside down and made some very large steps (such as downsizing his house etc), chances are he’ll be back in the same situation in a few years time.

another thing to think about is c what happens if his friend loses his job, gets ill or has an accident? What legal protection does your DH have for his money?

This man is committing financial infidelity.

It’s still a marital asset…