Hey, Must Be The Money

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Dear Dharma,

A business acquaintance/friend has asked me for a loan.  Yes, I am aware not to mix money /business/friendship etc., but she is in financial trouble and the loan would be secured by her home.

In her view because the loan is secured she thinks it shouldn’t be a problem, but it really is! The loan could go south regardless, and she thinks I don’t know she is into some expensive drugs.  I do not want to be the one to support her habit.

I’m thinking she must have had other friends or family decline her request and I must be a last resort… so, why do I feel guilty for choosing to deny her request? And how do I say no to her and still preserve her dignity and our business relationship?

Mo’ Money, Mo’ Problems

Dear Mo’,

It’s human nature to feel guilty when declining someone’s appeal for help, but you are absolutely correct in your decision to deny this request!  Trust me, your feelings of guilt will be nothing in comparison to how you will feel if you don’t get the money back, right?

And there’s a good possibility of that happening – the general premise is that you need to be prepared to walk away from monies lent to friends and family. That isn’t to say that friends and family never pay back loans (of course they do), but when they don’t it’s a bitter tonic that just doesn’t fade, no matter how much gin you add.

Also, this sounds like a sizable loan you are being hit up for!  So big she would use her home to secure it??

So the guilt? Kiss it goodbye.

The second part is a bit trickier, because it’s where you have to look a friend in the eye and say no.  Never an easy thing. What will help is coming up with other solutions for her situation. So instead of “Pound sand, drug riddled friend of mine,” it can be something more along the lines of, “Sally, I really wish I was in the position to help you out, but that just isn’t feasible for me right now.  There must be some other options we can come up with…”

Offer no excuses as to why it isn’t feasible, you don’t need to defend your decision.  As soon as you say “we” it shows you are not abandoning her – you would never! When you enthusiastically throw yourself into helping her finding other options, you show a willingness to be helpful while leaving your cheque book at home.

Then be prepared to brainstorm with her.  Have ideas at the ready so it doesn’t get uncomfortable immediately after having denied her the cash. My first thought is that if she has a home that she was willing to use as collateral, could she not just do the old fashioned thing and go to the bank? Just a thought…

Dharma

 

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