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Dear Jido,

A friend of mine, who is known to burn through money and not repay loans, is continuously asking me for a loan. Fortunately, I do have the funds to lend him, and it will not be the end of the world if he is unable to pay me back. But I still would rather not lend him any money. I’m concerned that if he is unable to pay me back not only will I lose the funds, but more importantly, I will lose a good friend. While I’m willing to risk losing some money,
I do not want to risk losing a friend.

However, I was told that one should always give a loan when asked. So, my question to you is – should I be giving my friend a loan?

Signed,
Afraid of Being a Loaner

Dear To Loan or Not to Loan,

William Shakespeare once said, “Neither a borrower nor a lender be…” We say just the opposite. As you indicate, it’s a great hesedand mitzvahto lend somebody money when they need it.

But you have a complication. You know going in that it’s only 50/50, or maybe 60/40 that you might ever get paid back. So, here is my advice.

You say you are willing to take the loss if need be. Good. Take it now. Tell him, “Joe, I am giving you this money as a gift.” (Make sure it isn’t more than the amount you are willing to lose without having bad feelings if you never get it back). “Not a handout, a gift. If in six months or a year from now you feel that you want to pay me back, fine, I’ll take it. No interest, no presents, no special ‘thank-you’ – nothing. If not, the money is yours.”

You see, Pirke Avothas a very specific name for someone who borrows and doesn’t pay back. I won’t mention it outright, but it isn’t nice. Therefore, if you give him the money as a loan knowing full well that he might not pay you back even though he assured you that he would, you are, in fact, putting the proverbial stumbling block in front of him.

There’s agood chance he won’t take the money under these terms. And if he does, he likely won’t keep coming back to the well. And if he does, at that time you have every right to say, “Joe, we’re good friends, let’s keep it that way:”

Your friend,

Jido