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 do indeed have easy access to all our accounts. Dh makes the business decisions though and has been successfully doing this for more than 30 years. I trust him implicitly as he is open with me about all aspects and he has never given me reason not to. Sure, this could be my friend talking.. but it isn’t.

I’ve already stated that dh’s salary varies annually. Dh of course talks me through the big decisions and we plan our lives together, but despite being a director, if I made the business decisions there wouldn’t be a business.

So why start the thread? You are happy with financial decisions husband makes. You believe that the friend has just over spent and can and will pay back 25k in 12 months. You believe friend is suicidal but not such a risk to themselves that wife doesn't need to know so that they can get help for friend. You believe friend can save the 2k every month (he needs to save to pay back husband) by cutting back in luxuries. He can do this because it's just the wife over spending and he can get wife to cut right back on spending without her knowing she needs to and without her noticing she has 2k less to spend.

You have no concerns and everything will be fine with the business and your personal family money. Husband is just kind and generous but also very business savvy.

Baring all the above in mind begs the question why even start this thread?

Ensure you have a written signed contract, stating the date monthly payments will start and a time limit to be repaid by. Signed by both parties, should you go ahead.

I get it, OP. Your husband is a good man. You love him and you trust him. I’m sure you are right to do so. I also trust my husband implicitly (although I’m the one with the business and I do all the finances).
However, what he is proposing is highly unusual, potentially damaging for the business should your husband’s motives ever be called into question, and could have potentially devastating consequences for your relationship with the other couple and their relationship with each other.
Your husband’s decision to take his friend’s explanation at face value is ringing more alarm bells than a nuclear attack. Everyone on this thread is trying to warn you of the potential consequences.
From your perspective, you are a director of the company. This means you have legal responsibilities under the Companies Act. You have a legal obligation to understand these responsibilities and to act on them. You can’t bury your head in the sand on this.
This loan, however you spin it, is so clearly not in the best interests of the company that the independent directors need to record their concerns and do whatever they can to stop it. It’s not a question of you making “business decisions”; it’s a question of you carrying out your basic duties as a director. The Companies Act expects you to be independent of your husband in this matter. If you can’t carry out your responsibilities independently in the best interests of the company you need to resign the directorship. You need to read and understand the Companies Act. You’ve been put in an invidious situation here. The secrecy is making it ten times worse. You are in danger of breaching just about all the basic tenets of The Companies Act (see image) with this highly irregular loan. You need some professional advice here. I hope everything works out ok but you really need to protect yourself. Ignorance of the law is no defence.

If your husband is insistent on making this loan, he should pay it directly to the person his friend is in debt to. His friend will have no issue with this if he is being genuine.

But as PP have said, your DHs friend owes this money as he has not been paying his other loan back...so where does he intend to magic up repayments from now? If they're living beyond their means, his wife isn't going to suddenly start spending 2k a month (or whatever the repayments are) less without asking questions.

Your DH is making both of you complicit in a massive, potentially marriage-ending, certainly life-changing lie. That is completely unfair. How will you look them in the eye?

Overly kind or not, if your DH has £25k cash to effectively give away, he's presumably successful/business savvy and not an idiot...so is he having a contract drawn up for this loan? Is he prepared to take his friend to court when he doesn't pay, take his house/car etc? Because that's what any other money lender would do.

But you said you don't really know her on previous threads. Which is it?

You have still not answered the questions I have posted quite a few times
Do you know and understand your legal responsibilities as a Company Director?
Do you fully understand the consequences of YOUR company making a loan to someone unconnected to your Business?

So, if your husband were to drop dead tomorrow, what would you do? Do you know how to run the business and discharge your obligations for as long as it would take to wind up the business?

Sure. But even if income is varied you still can see bills going out and must be aware of how big your mortgage is etc?

I do all the finances in our household but my husband still knows roughly how much we can spend each month in terms of are we going to Spain or the Maldives and are we buying whatever we like in the shops or are we on a tight budget!

Why would she need to know all that?

No doubt she would involve their company accountant to advise her on the best way to proceed, that is what you pay people for, you also don’t know what provisions the husband has put in place, he has been running a successful company for 30 years.

if her husband dropped dead tomorrow the business would be the least of her worries I’m sure.

as would the £25k loan.

why are you badgering op about what ifs?

Its because OP seems very unaware of what being a Company Director involves and should not be one if that is the case
It is not as simple of closing a company, she actually has legal liability and if there are certain discrepancies OP could be held legally responsible and face prosecution. An Accountant could advise on how to wind up a company but he won't have a time machine and can't change or cover up anything that has not been done properly.
A Business is legally not just an extension of a person, it is an entity in its own right and anyone who does not know how that all works should not be involved because even if they think its "just on paper" (usually for tax purposes) its really not.

I started the thread as I was and am uneasy about the situation because obviously I cannot guarantee it will be repaid in full. Neither can dh despite him being sure. I do not believe friend is suicidal, he told dh it had briefly occurred to him as a solution. I started the thread to see if anyone has ever had a similar situation.

This would be done.

I started the thread to see if anyone has ever had a similar situation

I think there are many people who have been in a similar situation and it has never ended well.

Which thread were you reading? I said she was not my best friend, not that I didn’t know her. I have known her for over 30 years and know her very well.

Thank you.. I not sure either why I’m being bombarded with what if’s.. dh has a whole team of legal experts and advisors who would assist but yes if gd forbid that happened the business would be the very least of my worries as would the loan.
i think this thread has been done to death but im grateful for the replies.

If you have known her over 30 years, I would tell her.
At that point, I would rather piss my DH and his friend off.
And as a company director, I would go nuclear.
If he went to a bank he couldn’t just sit and cry and say he was suicidal and ask for £25k to pass to his mate who he already owes money to.
I would not passively sit in my own home and accept this, nor would I keep this a secret. Your husband is not being kind to you to expect this of you, nor to his friend’s wife, who is on the outside here.
Secrets make you sick. And old saying but it’s true.

Yes of course we are both aware of that.

That is good
I am sorry if you felt bombarded OP and I agree that if anything happened to your DH The Business would be the least of it BUT it could be more stress you wouldn't need at that time. I was just concerned that you were a Company director without knowing what that meant as a lot of people are in that position.

The company makes loans to people all the time, and yes I fully understand the consequences after speaking to our accountant.. there are none. He’s an incredibly sharp one we’ve been using since the early days and this is good enough for me.

This is about finances not affairs. I can assure you I know exactly all about my finances, income, outgoings. I certainly wouldn't be handing that all over to my DP. But then clearly you and I are very different. I earn my own money for a start. If I was a director on a company I would want to know the company inside out. It amazes me how in this day and age some women are still so blindly dependent on their DH's. I see a partnership as teamwork, not leaving it all to your DH. Even down to him buying you a nice car. Why on earth wouldn't you be involved in choosing your own car? Smacks of Stepford wives, particularly second marriage etc. You sound very naive, possibly deliberately, so I should imagine you wouldn't even pick up on the signs if your DH was being dishonest with you.
Anyway sounds like you are supporting of his ridiculous loan, so you've only got yourself to blame if one day the lifestyle all unravels.

I agree with OP that this thread has been done to death.

It sounds like you were alway going to lend this money so not sure why you in your OP you said you were angry.

I'm not sure why posters are so worried about you OP, it sounds as though your lifestyle will not be affected at all if the loan isn't paid back.

Trust your husband and his accountants to do the right thing, just let it go.

Coming back to the request for £25K
If DH’s friend borrowed from someone else, has been paying that person back as was initially agreed, how much did he ‘borrow’ in the first instance?