Lending money?

Old Jan 24th 2013, 7:27 am
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Default 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.

Last edited by kittycat1; Jan 24th 2013 at 7:28 am. Reason: extra questions
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Old Jan 24th 2013, 7:32 am
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Default 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

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Old Jan 24th 2013, 7:35 am
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Default Re: Lending money?

Originally Posted by kittycat1 View Post
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?
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Old Jan 24th 2013, 7:43 am
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Default 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.
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Old Jan 24th 2013, 7:47 am
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Default Re: Lending money?

Originally Posted by kittycat1 View Post
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...............
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Old Jan 24th 2013, 7:51 am
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Default 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
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Old Jan 24th 2013, 7:53 am
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Default Re: Lending money?

Originally Posted by kittycat1 View Post
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
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Old Jan 24th 2013, 7:55 am
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Default Re: Lending money?

he knows I have it as he knows I have a house deposit saved.
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Old Jan 24th 2013, 8:01 am
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Default Re: Lending money?

Originally Posted by kittycat1 View Post
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?
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Old Jan 24th 2013, 8:06 am
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Default Re: Lending money?

50 quid - yes. 10,000 ???????

NO
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Old Jan 24th 2013, 8:08 am
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Default Re: Lending money?

No, it'll only end in tears.
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Old Jan 24th 2013, 8:09 am
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Default Re: Lending money?

Originally Posted by scot47 View Post
50 quid - yes. 10,000 ???????

NO
+1

If you can't afford to lose it - don't lend it.
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Old Jan 24th 2013, 8:14 am
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Default Re: Lending money?

I only loan money I can afford to lose
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Old Jan 24th 2013, 8:30 am
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Default 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.
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Old Jan 24th 2013, 8:59 am
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Default Re: Lending money?

Originally Posted by al dente View Post
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...
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