‘My friend needs money to save her ailing business – is it wrong to say no even if I can afford it?’

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Dear Moral Money,

My oldest friend has been running her business for several years and it seemed to be doing well at the start but it has gone downhill really quickly during the pandemic. She’s asked to borrow £5,000 from me and even though I could easily scrape the money together, I don’t know if I should.

Her family home is tied up with the business and she has already borrowed from her family to pay off part of her loans. Now the bank wants more and she’s run out of cash. 

I don’t see how the business can keep on running, it’s falling apart and soon she will have to shut it for good. I don’t have the heart to tell her this, I think she is deluded thinking she it can work because she so badly wants it to. 

I’m worried about her and what it means for her family because her husband doesn’t know the extent of the issue. I love her dearly and want to help but I really don’t think I would get any of the money back. Am I a terrible friend if I say no? I’m worried I might break and just give it to her because I feel so guilty for not helping.

HF, via email

Your friend has put you in a very difficult position. Loans and money can strain even the best of relationships. First, it is clear how much you care for her. It is kind of you to even consider giving her the money when you seem sure you would not ever get it back. I suspect many others reading your letter would not have even entertained the idea. 

Her situation is precarious but you are in no way responsible for helping her to put it right and have no obligation to intervene. On the contrary, you are more likely to hurt your friendship by doing so. If, as you predict, she is unable to pay you back, she may feel guilt down the road, especially if going on holiday or spending on luxuries. Equally, you may feel resentment.

By the sounds of it, there are several people who are in line to get their money back before you. You should only consider helping her out if you can afford to lose that money and it is given with no strings attached. If you would not miss the money, nor be upset if she is never able to pay you back then why not help her. But if you do have to “scrape” it together, then you must think more carefully. 

Turning her down may seem like the harder thing to do right now but it may save you a lot of money and heartache. The best you can do is to support her emotionally, if not financially.

What do you think? Let us know in the comments section below and by emailing moralmoney@telegraph.co.uk.

You can also put any question to us (and anonymously) by using the email address above.

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