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-   -   Lending money? (https://britishexpats.com/forum/sand-pit-116/lending-money-784928/)

kittycat1 Jan 24th 2013 7:27 am

Lending money?
 
I've been asked to lend a friend money- 10K sterling.

I hate being put into the position. He is having cash flow problems but should be fine once he gets paid by an outstanding job which should be in the next 6 weeks and will pay me back then. His credit rating with the bank means he can't borrow it from there.

Would you loan it?

In theory I don't need the money until later this year. He is a good friend and a colleague who I have previously had a shared business venture with and I do trust him. He has said that if he is unable to pay back by 1st June he will sell his car ( worth 7 1/2K) and some of his kit (worth thousands) to pay me back so he does have the collateral.

If you would what would you put in a contract? does a contract need to be drawn up by a solicitor?

With this kind of thing if he were not to pay would I be able to take him to the small claims court?

Anyone? Advice please.

weasel decentral Jan 24th 2013 7:32 am

Re: Lending money?
 

He is having cash flow problems but should be fine once he gets paid by an outstanding job which should be in the next 6 weeks and will pay me back then. His credit rating with the bank means he can't borrow it from there.
Don't do it

britexpat76 Jan 24th 2013 7:35 am

Re: Lending money?
 

Originally Posted by kittycat1 (Post 10502322)
I've been asked to lend a friend money- 10K sterling.

I hate being put into the position. He is having cash flow problems but should be fine once he gets paid by an outstanding job which should be in the next 6 weeks and will pay me back then. His credit rating with the bank means he can't borrow it from there.

Would you loan it?

In theory I don't need the money until later this year. He is a good friend and a colleague who I have previously had a shared business venture with and I do trust him. He has said that if he is unable to pay back by 1st June he will sell his car ( worth 7 1/2K) and some of his kit (worth thousands) to pay me back so he does have the collateral.

If you would what would you put in a contract? does a contract need to be drawn up by a solicitor?

With this kind of thing if he were not to pay would I be able to take him to the small claims court?

Anyone? Advice please.

Its not something we can answer, only you know this guy and how trustworthy he is, has he borrowed before and paid back etc............Gut instinct advice says no, I know people that have been burnt, even family members doing it.......... Though I know there is a few people I would lend that sort of sum too. A bit like the gambling thread on here today, Can you afford to lose it?

kittycat1 Jan 24th 2013 7:43 am

Re: Lending money?
 
Brit- of course i can't afford to lose it. I have also had my fingers burnt before which is one of the reasons I'm hesitant and would want a legal document confirming terms etc, I don't know what level of contract. Is something written down by us and signed by both of us enough to stand up in court? I would need to take to the small claims court though.

britexpat76 Jan 24th 2013 7:47 am

Re: Lending money?
 

Originally Posted by kittycat1 (Post 10502340)
Brit- of course i can't afford to lose it. I have also had my fingers burnt before which is one of the reasons I'm hesitant and would want a legal document confirming terms etc, I don't know what level of contract. Is something written down by us and signed by both of us enough to stand up in court? I would need to take to the small claims court though.

If you need something in writing then I wouldn't do it. Do you really want the hassle of going to a small claims court (Is 10k a small claim?) having to fly back to theUK, Pay a Shark (Solicitor) which will increase your 10k dramatically...............

kittycat1 Jan 24th 2013 7:51 am

Re: Lending money?
 
I would want to put it in writing just so he understands my terms completely- and i want no room for misunderstandings. I would do that whether he was my brother or parent as well.

I'm too much of a girl as I hate to say no as I know he hasn't asked easily

britexpat76 Jan 24th 2013 7:53 am

Re: Lending money?
 

Originally Posted by kittycat1 (Post 10502356)
I would want to put it in writing just so he understands my terms completely- and i want no room for misunderstandings. I would do that whether he was my brother or parent as well.

I'm too much of a girl as I hate to say no as I know he hasn't asked easily

Tell him you don't have it? Or is that too late now

kittycat1 Jan 24th 2013 7:55 am

Re: Lending money?
 
he knows I have it as he knows I have a house deposit saved.

britexpat76 Jan 24th 2013 8:01 am

Re: Lending money?
 

Originally Posted by kittycat1 (Post 10502365)
he knows I have it as he knows I have a house deposit saved.

Hmmmm. In my eyes its either a no brainer or a no I think the fact you asked the masses reveals you are hesitant. 10k is not small change and anyone that cannot raise that sort of money from a bank etc obviously has a history of missed payments or defaults. Why would lending from you be any different?

scot47 Jan 24th 2013 8:06 am

Re: Lending money?
 
50 quid - yes. 10,000 ???????

NO

mikewot Jan 24th 2013 8:08 am

Re: Lending money?
 
No, it'll only end in tears.

Garbatellamike Jan 24th 2013 8:09 am

Re: Lending money?
 

Originally Posted by scot47 (Post 10502383)
50 quid - yes. 10,000 ???????

NO

+1

If you can't afford to lose it - don't lend it.

DesertOcean Jan 24th 2013 8:14 am

Re: Lending money?
 
I only loan money I can afford to lose;)

al dente Jan 24th 2013 8:30 am

Re: Lending money?
 
That amount is too large to mess with. It's your deposit for a house, you don't have it spare though it is a liquid asset at the moment.

Maybe offer 1k and get him to find the rest from 9 others if you really believe him when he says he'll pay it back.

Round-Bum Jan 24th 2013 8:59 am

Re: Lending money?
 

Originally Posted by al dente (Post 10502413)
That amount is too large to mess with. It's your deposit for a house, you don't have it spare though it is a liquid asset at the moment.

Maybe offer 1k and get him to find the rest from 9 others if you really believe him when he says he'll pay it back.

^ That.

Tell him that, while you're not expecting to need the money 'til later in the year, if the right place comes on the market before hand, then you need to have that money available at short notice.

1K is more than sufficient risk IMHO, particularly if you're as unsure as you seem to be...

UKCityGent Jan 24th 2013 9:01 am

Re: Lending money?
 
Cant you loan him £5k instead of the full amount and say to him you have some unexpected expenses ?

DesertOcean Jan 24th 2013 9:07 am

Re: Lending money?
 
no no no...tell him the truth, that you are saving up for a home, it's the only reason you are giving up your freedom.

Garbatellamike Jan 24th 2013 9:08 am

Re: Lending money?
 

Originally Posted by DesertOcean (Post 10502462)
no no no...tell him the truth, that you are saving up for a home, it's the only reason you are giving up your freedom.

+1

Don't lie to your friend - be honest tell him you are uncomfortable with lending that sum of money to him.

shiva Jan 24th 2013 9:15 am

Re: Lending money?
 
If you have to ask on here then you already know that the answer should be a resounding NO.

Its you who will be screwed not him if he doesn't pay you back
If he doesn't then small claims will be of no use as he cant apy anyway
If his credit rating is insufficient to borrow then he has proved to many others that he doesn't repay debt
if he has collateral he can sell to repay you then why not sell it now to raise the funds in the first place

and just i case your confused.
NO

mentalist Jan 24th 2013 9:29 am

Re: Lending money?
 
I don't like his reason for the loan...after all, don't we all get cash flow problems? If it was for some essential hospital treatment, then maybe. My answer would be no. Ask yourself why he has not looked elsewhere for the money. He probably assumes that, working in Dubai, you must be loaded and won't miss it if he never pays you back.

Kix Jan 24th 2013 9:38 am

Re: Lending money?
 
Just to add my 2fils worth, he is saying he'll pay you back in 6 weeks and then mentions if he hasn't by 1st June he'll sell stuff. The 1st of June is 18 weeks away!

Too many inconsistencies for my liking.

No.

Bahtatboy Jan 24th 2013 9:41 am

Re: Lending money?
 
You say he's a good friend. I guess we all have different ways of assessing that. I have perhaps half-a-dozen friends who I would lend money to, and I did to one of them when I was in my 20's. I knew and trusted him well enough to know that he'd pay it back.

But here's the rub: I went a bit overboard in the contract I drew up, and it damaged our friendship for a while.

Only you can decide how deeply you trust him. If you go ahead, it would be wise to have a simple contract. Doesn't need to be drawn up by a solicitor, it just needs to be sufficiently clear and enforceable. But you need to know that he really does own assets that could be converted to cash if he fails to pay and you decide to enforce the contract. I'm assuming he's in the UK: in which case those assets must also be in the UK. His car seems to be a major one: does he actually own it?

Not sure of the limits at the small claims court. You don't need to be represented by a lawyer there, but it would be hassle.

The real risk is not the money. If he's truly a good friend then, and if it goes pear-shaped, you could lose that friendship.

Alexa Jan 24th 2013 9:55 am

Re: Lending money?
 
No.
a. only lend money that you can afford to lose.
B. money business between friends usually ends bad.
C. he already has money problems, that shows he is not exactly good at handling money matters...why should it be different when it comes to the money you gave to him?

claimsboys Jan 24th 2013 10:20 am

Re: Lending money?
 
NO, NO, NO. And what’s with this if you can afford to lose it business?

I put all of my cash in the 'can't afford to lose it bracket'. Whether it is 10 bob, or 10 grand. It's mine, as it is yours, no doubt you have worked hard to earn it, and no amount should be lost through doing someone a massive favor.

A lifelong friend of the wife’s borrowed money from us as she got herself into the shit through being owed money from her firm, nearly £8K in all, we even paid to fly her home, and put her up for 3 months. She finally got her money, but we never. She left for OZ as she had been offered a position shortly after.

Her parents made the very kind gesture of offering to pay on her behalf, as the misses has known them from childhood, and they were both deeply embarrassed , but the wife turned it down, probably the right thing, although had I of been there I would have taken it.

This may not happen to you, but my/our experience from someone my wife trusted and was friends with from nursery, has left me not wanting to part with a penny to anyone.

I am also of the opinion that friends should not put you such a position. A couple of grand perhaps, but £10K:thumbdown:

LaLaLayla Jan 24th 2013 10:53 am

Re: Lending money?
 
No, Kitty - don't do it. None of us know how long we are here for. Imagine if you had to leave tomorrow. Would you still have enough (minus the 10k) for a deposit? I would help anybody in a jam, but not to the tune of 10k. It's too much.

If he needs the money that desperately, then he should sell his car and get a hire car for a while.

soukie Jan 24th 2013 10:53 am

Re: Lending money?
 
Don't do it - my husband lent a family member a substantial sum last year and they promised to pay back in instalments each month. 13 months on they have paid some but missed three instalments and bought a new car! The payment gets later every month and I am not confident that we will get it all back.

Beakersful Jan 24th 2013 11:07 am

Re: Lending money?
 
Madness! Loans over £50-100 are the domain of the banks. Not your mates. Unless it's a gift. You stand to lose so much if said mate bails.

Irishbeekeeper Jan 24th 2013 11:37 am

Re: Lending money?
 
I learnt the hard way that lending money always looses you friends, and sometimes that money as well ;)
Say no and if he is a good friend he wouldn't be offended
If he does get offended.....

Meow Jan 24th 2013 12:05 pm

Re: Lending money?
 
You don't need a solicitor to draw up a legally binding contract, but I'd advise you not to do it. Tell him the money is tied up in a savings account that you can't access for six months.

Myusernamewastaken Jan 24th 2013 1:48 pm

Re: Lending money?
 
What does your friend need the 10K sterling for? If it's for paying bills has he asked for an extension of the due date? Has he asked for an advance payment of the outstanding job, perhaps if he gets 85 percent of it now instead of 100 percent in 6 weeks? Is there any other credit institute that will lend him the money but with a higher interest?

I assume the friend is in the UK so what's the worst thing that could happen to him? His credit rating seems to be rather low anyway.

If you can have the car in your name and at your place, the same thing with the other assets that would be a different story. Sort of like a beneficial pawn shop. I guess that's not possible though. Bear in mind that as it is now other creditors might be entitled to a share of his assets.

I would have offered him advice on how to sort out the situation.

Myusernamewastaken Jan 24th 2013 1:59 pm

Re: Lending money?
 
Is the outstanding job done through his own company? If that is the case I guess it shouldn't be too hard to find a company that is buying the invoice against immediate payment of most the the invoice's worth.

Patsy Stoned Jan 24th 2013 2:49 pm

Re: Lending money?
 
No... definitely don't do it darling. If he is that desperate for the money then he can sell the car and the other stuff to raise it. He sees you as an easy touch..it will end in tears.
Just explain to him that this money is for your house deposit and you just can't risk it. If he is a true friend he will understand, if not he will snub you... then you will know what sort of a friend he is.

commander Jan 24th 2013 3:09 pm

Re: Lending money?
 
No. Don't be soft.

OriginalSunshine Jan 24th 2013 3:21 pm

Re: Lending money?
 

Originally Posted by Patsy Stoned (Post 10503041)
No... definitely don't do it darling. If he is that desperate for the money then he can sell the car and the other stuff to raise it. He sees you as an easy touch..it will end in tears.
Just explain to him that this money is for your house deposit and you just can't risk it. If he is a true friend he will understand, if not he will snub you... then you will know what sort of a friend he is.

what she says :amen:

Myusernamewastaken Jan 24th 2013 3:33 pm

Re: Lending money?
 

if he has collateral he can sell to repay you then why not sell it now to raise the funds in the first place

If he needs the money that desperately, then he should sell his car and get a hire car for a while.

If he is that desperate for the money then he can sell the car and the other stuff to raise it.
+1

BTW, I assume that you have been speaking with him about it over the phone? There are scams going around where hacked facebook accounts etc are used.

kittycat1 Jan 24th 2013 10:00 pm

Re: Lending money?
 
Thank you for all the advice guys, appreciate it loads. :)

I have spoken to him and we have found a comfortable ground that helps him and is pretty risk free for me, I don't want to go into the details but it's a solid solution, which guarantees I will get the money back.

Just to make it clear I have asked on here as I know other people have been put in a similar situation and I wanted general feedback as to whether people lend this kind of money (to anyone)or not, It's not that I don't trust him, but lending such a large amount of money takes me way out of my comfort zone and I would be nervous loaning such an amount to anyone.

NorthernLad Jan 25th 2013 4:24 am

Re: Lending money?
 
Look at it from another angle, you moved out here, have found it difficult at times but put up with it. Worked hard, all for a deposit for a house.

Are you going to risk losing all of that?

Kix Jan 25th 2013 6:28 am

Re: Lending money?
 

Originally Posted by kittycat1 (Post 10503987)
Thank you for all the advice guys, appreciate it loads. :)

I have spoken to him and we have found a comfortable ground that helps him and is pretty risk free for me, I don't want to go into the details but it's a solid solution, which guarantees I will get the money back.

Just to make it clear I have asked on here as I know other people have been put in a similar situation and I wanted general feedback as to whether people lend this kind of money (to anyone)or not, It's not that I don't trust him, but lending such a large amount of money takes me way out of my comfort zone and I would be nervous loaning such an amount to anyone.

Can you lend me a tenner....

Millhouse Jan 25th 2013 8:17 am

Re: Lending money?
 
Never lend money.

Oh, and a contract etc. means nothing when dealing with a friend/ family. You'd never enforce your rights anyway, so no point in wasting the effort drawing it up.

Bahtatboy Jan 25th 2013 8:23 am

Re: Lending money?
 

Originally Posted by Millhouse (Post 10504613)
Never lend money.

Oh, and a contract etc. means nothing when dealing with a friend/ family. You'd never enforce your rights anyway, so no point in wasting the effort drawing it up.

Try telling that to Ethos.


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