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.

The only possible way that this could ever work is if the friend was completely honest with his wife and they radically overhauled their spending so that every spare penny went on paying back the debt. If he isn’t doing that, then the only thing that is going to happen is that they’re going to get deeper and deeper in debt and then his choices are bankruptcy (not what you want if you work in finance; will possibly mean the loss of his job) or he’ll be borrowing money from the sort of people who definitely won’t be letting him pay it back in dribs or drabs. The situation needs to end now, before he gets in beyond the point of return. If your DH lends him the money, then he’s just enabling his friend to get himself deeper in. If it were my best friend, I’d want to do everything possible to come clean with their spouse and help them get on a budget and stick to it. Your DH would not be helping him. He’d be giving him a bandaid. As it stands, he may as well gift him the money because he’s never going to see more than 5k of it again, and that’s being very optimistic.

There’s something a bit off here. What is his other friend going to do if this man says ‘no, I haven’t got the money and I don’t have the credit to borrow it. I told you I was going to pay it back in instalments. I will carry on doing that but if I had 25k laying around to give you, I wouldn’t have needed the loan in the first place’? And if he and DH are best friends, and he knows DH is in a position to lend that sort of money, then why wouldn’t he approach him in the first place? It’s making me wonder exactly who he borrowed the money from, and whether it’s either bailiffs time from someone legal, or repaying someone dodgy.

In the meantime, be prepared for your relation with your friend to be impacted. I don’t think you’d be human if you didn’t feel some sort of negative emotion watching her spend whatever she likes, even though you know she has no clue that it’s your family’s money she’s talking about spending on her next trip. Are you ready for that?

Both dh and I own equal shares in the company but it’s morally his as I don’t work. That’s why even though I want to, it’s not for me to say he can’t ‘lend’ it.

ffs, that's not how it works! There is no such thing as 'moral' vs actual liability.

You have equal shares so, if shit hits the fan, you are both equally liable.

Never mind the fact that your are, you know, married, and decisions of such magnitude are a joint responsibility.

You need to grow up and stop this ship from hitting the rocks!

Whaaaaaaat? You can't 'just take the money out of the business' - a business is not a piggy bank. There will be tax implications and possibly other issues, and thats even if this loan is properly documented, repayment plan written up etc.

I would ask to see every scrap of paperwork ensuring that this loan is above board because whilst the business may not morally be yours if your name is on there ... then you might well be liable for any of the fall out!

Nails it. 👏

he’s a giver,

That's just as well!

You're sounding as daft as him though.

Have you suggested it be paid directly to whom it is owed?
(If that person really exists?)

If he can't afford to pay the other lender back he can't afford to pay your husband back. It should be a firm no and his wife should be made aware. You possibly don't know the real reason why he owes £25k!

The friend asking for you not to be told is outrageous.

There is absolutely no way I wouldn't be telling his wife.
I would also be telling her that I was very upset and it had caused an argument because her husband wanted both women kept in the dark.

Deeply disrespectful and misogynistic of his friend.
He knows your husband is a mug, that's why.

No way I would be letting this fly.
Highly highly unlikely that money will be seen again.
The friendship will be damaged as you will understandably not want to be around him going forward.

Spell all this out to your husband, plus the tax implications, the flat etc.

He hasn't thought this through.

Oh and god knows what shit he is up to if he is happy to lie to his wife.

As for the tears? 🙄
Wouldn't trust him as far as I would throw him.

My jaw dropped at my friends BIL's gambling coming to light 2 years ago.
He'd been juggling for years and years.

I will NEVER be surprised again.

There are 3 giant red flags waving in this scenario.

1. this man is extremely unlikely to pay back the loan in a timely fashion. If he has taken loans before it is a pattern. He should not be trusted. Did anything even get put in writing?
2. your husband never should have agreed to this without talking to you first. If the money hasn’t transferred yet, I would not let this go.
3. most importantly, you are complicit in this man committing financial infidelity. How would you feel if you found out your spouse had secret debt?

Who’s going to report him? You’d never have a peaceful night’s sleep again!

Wife doesn’t work and they go on quite a few holidays a year

She doesn’t work and he wants to borrow money off of you!!
I’d be absolutely raging.

I understand the pressure that friend is under but it’s tough, he needs to tell his wife and adjust their lifestyle/she get a job until it’s paid back.

He wants to maintain a lifestyle which he just can’t afford and it’s not fair that DH bails him out because both him and the wife don’t keep a close enough eye on their finances.

If DH wants to risk lending him the money out of his own business, then that’s his choice but id be telling him to tell the friend to tell the wife first.

Just because you don’t work it’s still your liability your dh might be generous but you are a partner so have as much say in this. Even families would be hesitant with this situation especially if there not going to change the way they live. Why are you surprised he didn’t want you to know if he can lie to his own wife he’s not going to care about you if it’s just between the men if something happens to your dh he wouldn’t have to repay you. I would be saying that’s a no from me I’m out.

Is it legal for him to draw on his company funds?

Would the loan count as directors drawings that DH would then be obliged to pay tax on in his next tax return?

Or will it be a loan made by the company, in which case, there needs to be a contract protecting the money plus interest charged for his company in case a future financial auditor questions what the money is for and why it hasn’t been repaid (with interest, upon which tax would also be due)?

Honestly - DH is being very very naive - at least encourage him to speak to his accountant/auditor before releasing the funds so that he is fully aware of all the legal and tax implications.

ETA I see you are a shareholder/director… this implicates you too. As the brilliant post upthread states, this is all very dodgy.

No chance.

If he's coming to friends for a loan, its because he can't get a loan anywhere else. If he can't get a loan anywhere else, then he's a credit risk. If he's a credit risk, the chances of you seeing that £2k again are minimal.

Just no.

ESPECIALLY if he's hiding it from his wife.

Also, OP, if this friend has a grand a month free to make the repayments, then where is he taking that from? It’s not just extra left over from his wages because if he had that much to play with, he wouldn’t have needed the loan in the first place? If your DH is Paul, who is the Peter he’ll be robbing to pay him?

So many things, many of which have been said.

1. If the friend can't pay back the other friend, he will not be able to pay back your husband.
2. I don't see how your husband can just take the money out of his business. Even if he owns the business, it is not that simple. It is not his personal money to do with as he pleases. He should consult an attorney.
3. Trying to hide this from the wives is shady and unethical and deeply selfish on the part of the friend.
4. Your husband may be worried about upsetting the friendship, but he should be more worried about upsetting the marriage.
5. This friendship is going to end on worse terms if he lends the money. Much worse.
6. He wouldn't need to borrow so much if he was honest with his wife and she cut back on their lifestyle. How are you going to feel when she talks about her new handbag or the Christmas gifts they bought, etc? That will be funded with YOUR money!
7. The friend has made it your problem when in fact, it is his.

Finance?
Playing the stock market?
Lots of losses for gamblers/investors recently.
Its a bloodbath out there for a lot of them.
Even the most conservative have been badly hit.

A lot of guys in Finance play the stock market because they THINK they have special powers.

Its fancy gambling often, and just as lethal.

I think it’s fine to lend a friend money if he thinks he’ll get it back. But he should get it in writing and he needs to tell his wife.

at the end of the day it money from his business not I assume from the family pot.

It’s fine to give him counsel on what you think he should do but at the end of the day it’s on him.

If he's been paying this other friend off in installments up until now and the friend now wants a lump sum of 25 grand - then how the hell much did he owe him in the first place and what did he use all that lump sum for?

Personally I think this story is bullshit. There is no friend he has to pay back -because just how many friends does this guy have willing to lend him 25 grand plus? This is all very fishy and I wouldn't touch it with a barge pole.

'Never a borrower nor lender be'
Do not do it, I can guarantee he will have other debts racked up. He needs to sort the problem not the symptoms ie not how to get a loan, but to stop living an unsustainable lifestyle they can't afford. Is the loan with interest ? I bet the first friend he borrowed off has called it in because he's defaulted on the payments.
And how is he going to set up a dd for regular repayment without wife seeing bank statements etc.
I'd tell her if I were you.
This loan will be the last you see of 25k snd the friendship...and iam speaking from experience not 25k but 7.5k

he could be gambling etc many possibilities

What MylittleNest said

I do however wonder if you asked the friend to show you 12 months bank statements proving the money was paid back on time each month what you would see.

I wonder why the friend wants the money back all of a sudden.

Why won’t a bank lend him it?

But no I wouldn’t lend it to him, not unless I was prepared to not get it back. He’s clearly a liar - he lies to his wife - you 100% know he’s prepared to lie to his wife daily and he’s happy to live as a liar, booking holiday etc. Why does your husband think he’s more special than her?

Unless happy to kiss goodbye to £25k forever. Don’t do it

I’ve said before on another thread. I did a loan for a family member as they had bad credit

they paid it for a year. Then lost job. Got ill (own fault) and now on uc and Havnt paid loan for a year and guess who pays me. Me !!!

as in my name

I will never loan money to any friend family or anyone ever agaib once this sodding loan has Beenpaid off. I have 4yrs to go 😡

if they say paying it back in 2yrs how will they afford the £2k monthly payments

Surely this is a joint decision? That's what would piss me off, DH agreeing to loan the money without discussing with me first.

Never. Loan. Money.
You are not a bank.

I’ve told dh if he defaults on one payment and my friend tells me they’re going away, I’m telling her. It also pisses me off that he asked dh not to tell me, which is lying to his wife.

Why wouldn't you just tell her now? He's clearly in serious financial trouble, which means she is too! Even if he makes the re-payments (although doubtful) doesn't necessarily mean all is ok and that this womans home and her childrens security isn't at risk. For all you know, he could be borrowing off someone else to pay your DH back!