Friend asked dh for 2 year loan

[ParsnipPuree]

Dh’s closest friend broke down to dh and told him he’s in trouble. Owes £25k to a friend who now needs it back. Dh offered to help on the basis it’s payed back in instalments every month for up to 2 years.

I am friends with his wife who is oblivious. Her dh won’t confide in her. She doesn’t know there’s a problem so will carry on as normal. I don’t think she’s a big spender but that’s not the point. They had a week away shortly before her dh and mine had this conversation.

Im angry because if there was a medical situation they couldn’t cover, that would be one thing but they’re obviously living beyond their means. Dh is taking the money out his company so it doesn’t affect me. If my friend knew she’d be mortified.

I would put a stop to it. That's far too much money to ask off a friend. The wife is oblivious so he's obviously not going to face up to his spending issues. I very much doubt he'll stick to a payment plan and you'll have lost thousands and a friend.

Good health service😂 are we both talking about the nhs? Yup what a reliable service with no delays.

I've never experienced any delays?

I’m really baffled by this ,he needs to tell his wife if he won’t then surely it’s something dodgy(gambling or drugs).If he stays quiet she is going to carry on spending as usual

I do wonder why his other friend has now asked for the money back in one go rather than sticking with the installments. Maybe the installments were not happening as regularly as was agreed? I certainly wouldn't be happy to lend this sum of money to someone, though I know we could afford to do it. I never think it is a good idea to mix lending money with friendship.

So there is no wait, no queues on the nhs?🤣 Why does it need fixing then?

Stop trying to distract yourself from the fact your DH is giving his friend £25,000 as a gift 😂😂

His friend is going to pay back £25k over 12 months by cutting back? If he can do this why doesn't he do it or why hasn't he done it to pay back the previous friend? If he can do this why wouldn't a bank loan to him?

Your DH values relationships over money and that's all well and good but what about when this money is gone and your family needs it?

Obvs he's defaulted on the payments

It’s concerning that he works in finance - people are regulated by the FCA; if he ends up with CCJs or a debt management plan, he could lose his ‘fitness and propriety’ status and therefore his job. In certain roles, people can’t even have unauthorised overdrafts or loans, they have to be able to demonstrate they can manage their own money.

If he’s in financial trouble and his employer found out it would be gross misconduct in some instances, so I can understand the friend’s concern - usual avenues aren’t available to him and I assume he’s trying to do this ‘on the down low” before his whole career and life crashes. He might even have made a poor investment for someone and that’s why he owes the money, to cover that up.

It doesn’t sound straightforward at all. He should tell his wife and solve it together - maybe your husband could make that a condition of lending? If it was above board it would be better - sounds like there’s a much bigger back story.

My thoughts exactly!

Whenever there’s a thread like this, or one about affairs etc, I often wonder if the oblivious wife is reading / contributing to the thread.

Never ever lend money to friends- physical help, a friendly ear, yes, but money never- he is just kicking the debt down the street to a different friend.
He will in all probability continue to accumulate debt, you would not be helping him, it's just compounding the problem. You have, with all due respect absolutely no way of knowing there is no drink/ drugs or gambling problem.
Some people re just happy to borrow off friends and family and not pay it back. My brother is like this- he would ask you for money to make an investment or pay for something, even if he had that money in the bank-he just doesn't see anything wrong in that.
Even if his friend eventually pays it back (unlikely) it will still end badly- your DH will resent how long it has taken and the friend will resent having to pay it back.
It's death to the relationship either way- better that death doesn't cost your DH £25,000.

OP, have you actually asked your husband how he thinks his friend is going to pay this off in a year? That if he could have saved up that money, if he could pay that off each month, he wouldn't need the loan?

If this was my DH, I would tell him that he needed to make the loan conditional on his friend telling his wife. How is he planning on saving 2k a month from cutting back on his lifestyle if his wife doesn’t know the severity of their financial situation?

This but also to make sure the story is true about needing to pay back a friend

I'm just surprised your accountant says no tax implications. A loan over £10k with no interest charged is classed as a benefit in kind as far as I'm aware, and there could definitely be repercussions if it is not paid (not to mention the paperwork involved to document it).

This whole thing has regret written all over it (and 21 pages of people agree). You'd be mad to let your DH do it. Doesn't matter that you're a director in name only, you should still have a say in decisions like this.

Edit: sorry, didn't mean to quote that earlier post.

I wonder if the friend has a cocaine problem? Op still adamant that the money will be leant and it'll be paid back🤣🤣🤣🤣 so not sure why we are all still offering help 🤣🤣🤣🤣

It’s clear that OP’s DH has a big heart & is very generous & has a history of helping his family financially. That his friend has asked him for money is unsurprising because he knows he’ll jump to help him. It’s strange that neither OP or her DH aren’t thinking all the obvious things we all are, like the likely extent of the debt, the likely reasons underlying it & the duplicity & manipulation going on, that they too are now becoming embroiled in. Not to mention how unrealistic the proposed repayment is & how he’ll be able to pair back their lifestyle without his own DW noticing or wondering why., It’s also interesting that OP is blind to the dynamics involved in being a giver/fixer/helper. She’s seen her DH act in this way before & doesn’t see that it can rather than solve a problem, merely mask & delay it from being addressed properly. I have to assume then that the amount isn’t considered that substantial to her DH (which she admits he is less concerned about & favours relationships over material things which is no bad thing) & that if it’s not repaid it won’t make much difference to them. Basically her DH has the luxury of being able to give it & will not really suffer if his friend doesn’t give it back. I’d find this really infuriating & I’d get even more frustrated that my DH isn’t able to take off the rose coloured glasses when it comes to his friend & his predicament. I also think it’s going to add a layer of stress because it will be one impossible to view his friend & his DW without this knowledge & hard not to be hyper aware of what they’re up to & their lifestyle as a result. Also the level of mistrust where the friend has asked her DH to lie to OP about it is really bad. I’d really dislike his friend after this.

It really makes me wonder actually how nieve this man actually is!!.
Op states a 2 year loan finding 1k a month without the wife noticing is bad enough but to believe this guy can come up with 2k a month without his wife knowing is utterly ludicrous, I don't run a business but I certainly know that's not doable by any stretch. This guy is not financially switched on at all

Just one more thought, OP (apologies if this has been raised) but if he takes the £25k from the business as a loan, and the friend defaults, won’t your DH have to repay the loan to the business? Otherwise anyone could withdraw large sums tax-free and claim they are loaning friends who have defaulted. Your friend, if he is struggling, may also convince himself that it’s ok to default as it’s company money and not from DH’s own pocket. Also, if your husband or you ever wants to sell the business, it’s unlikely that this episode will be looked on favourably by a buyer.
I’d be asking for the full implications of the loan for the business and going over the loan terms in some detail. Your husband’s generosity could end up costing you a lot of money. (Are you a director? If so you will also have legal responsibilities to the business and governance issues which you need to abide by).

Yes he will.

Ops husband is giving away £25,000 as a gift and will have to repay it himself.

This will cost the OP £50,000+

I think the OP is delusional tbh

She keeps saying "oh if he misses then I'll tell..." Which she won't donate Ali, because she'll always give him one more month etc

And even if she did tell the wife in 5 months time... what good will it anyway? They still won't have the £25k and they'll have to go to court and probably won't see the money again anyway.

And then OP and DH will have to magic up £25,000 to pay back the company...

You are correct
However, OP says that her H will not be taking the money out but it will be The Business who lends the money to his friend.
While this means The Directors won't have tax implications themselves from it it may mean that there would need to be some justification in doing it from a Business Perspective as Directors have certain legal obligations.
I can't see what legitimate business reason there could be for doing it and it is possible that the ramifications for not only the H but OP herself as a director could be worse than just having to repay the money themselves. It could also be seen as Tax evasion
IMO (not an Accountant) its a worse way of doing it than paying from personal funds, whether those are taken from the Business or not, and if OP's H is so wealthy he can afford to do this and risk losing the money I am not sure why he would need to take the money from his Company.

Is your husband actually going ahead with this despite your misgivings?

A lot of nonsense. The FCA is not concerned with the general borrowings that financial services staff take out. Formal or informal. They only are interested in senior management who require approvals for their roles and certain staff subject to certification regimes. Even then the information comes through the employer. OP would look very foolish to phone up the FCA telling tales about a randomer working in finance borrowing from his mate.

OP not sure if your DH has considered that perhaps his wife is already knows that her husband has a problem with money that perhaps she is trying to manage within her marriage. Maybe there is a known gambling problem or something that he has told her he is trying to work through and maybe that is the only reason she stays. She perhaps understood him to be sticking to a budget unaware of this debt. Her not having the full picture is a complete deception that you and DH are now a part of. The fact that his friend thought nothing of asking him to withhold it from you tells me he lies to his wife very easily. I would be very uncomfortable becoming part of a lie in another couples relationship.