Unless she is a very close friend, say you can't afford to lose it, so no! But say it kindly.
I got sucked in by a work colleague like this too. Newly single mum who worked at the same place and she had two young kids. She (lets call her "L") walked past my office and had clearly been crying and as soon as I asked if she was OK she broke down and then ran off to the bathroom. Eventually L messaged me to apologise and explained she was behind with the child care fees and after school club fees for the eldest and needed £800 or they would not take the kids the next day and no childcare, no work. L said she would have it in a couple of weeks (had PPI claim coming through) so could sort it then but she needed it now. L was overdrawn at the bank, lived in rented accommodation and had no-one she could turn to. I was due to go on holiday 3 mths later and I could loan her some of my holiday money but strictly needed it back within three months or my holiday would go belly up. She was really grateful and I was a mug. I was discreet and didn't tell anyone as she said she was very embarrassed.
Two months later she had become the illusive pimpernel and no money had been returned. I had gently emailed her and she had not initially replied but eventually said there had been a delay and replied it would be with me within a week.
A week later (three weeks to my holiday) still no money.
I was then told by a fellow colleague in passing, that L had committed to going to a Ladies Race Day the following week and was staying in a hotel the night before and after and that she had purchased a lovely dress and hat, all courtesy of her PPI winnings!
I casually floated past L's office door, saw she as alone and went in, not alerting her to the fact that I knew she had already got her PPI monies. And according to her she was still skint and awaiting the bank transfer for the PPI monies. At this point I asked how she had managed to book and prepay the race day outing. She denied it, I thought I may have got the wrong end of the stick as she was so adamant it wasn't true. I was embarrassed (or naive) at not checking my facts before confronting her.
Later on, I checked my source and got proof positive that she was going to the Raceday (she had taken someone elses place who had cancelled) and I commented I was only asking as I hadn't seen her leave request.
I went back to see her, we were in the midst of an argument when the person she was PA to (and was in the adjoining office) came in and told us off for arguing as they could hear everything and asked when I had lent L money and what for. L denied she had discussed the childcare fees with me but I had her email and my subsequent bank transfer to her account as proof. Her boss asked if they could have a private word with L. Anyway to cut a long story short, she had borrowed money off me and her boss, neither of which had been repaid.
She had needed money for the childcare fees, she had made a PPI claim but had already received that money (not sure how much but over £1000) which she had spent on her mini break without repaying either of us. Not sure of the conversation that took place between her and her boss after I left, but I got a bank transfer later that day for the full amount of the money, who knows where it came from, I wasn't asking.
If you can't afford to lose it, don't lend it. I learnt my lesson the hard way.