2) you have some terms and conditions or attach some "strings"
3) you require collateral
4) you make your friend sign papers, and you leave "legal" options open
When I loan a friend, all I say is "dude, this is just to help you, I know you are going through tough times. No way this is to insult or patronize you. you can return the money when you can, even if it takes you 5-10 years"
That is trust and friendship, one friend helping the other, nothing more nothing less and definitely not a business.
It's bullshit. Invariably lending money to a friend leads to resentment. You are putting a dollar amount on the friendship. If they don't pay you back, will you still be friends? if yes, then why not just give them the money?
Its just like borrowing your friend's car. You use it for a weekend, and return it back, don't you? Does your friend take "deposit money" from you for it? Does he charge you "rent" for using his car? No. That is the difference between your friend and a rental car company.
You are putting a dollar amount on the friendship
Nope, I am not. All I am saying is, if I am in a better position than my friend, and he needs help, I am willing to help. He has to borrow money from someone anyway, why not from me, interest free and trouble free? He can sleep peacefully at night, knowing that I wont foreclose his house or something, if he is going to be late in repaying, or even if he is not able to repay at all.
If they don't pay you back, will you still be friends?
Yes. We are talking of FU money here, and also assuming that I am in a situation like Mint founders. I am in a position to loan money, without affecting my own lifestyle. Obviously, if I am myself living paycheck to paycheck, this won't apply.
why not just give them the money?
because, I don't want to patronize them, and don't want to insult them.
Frankly, I don't understand why you call this bullshit. Loaning money to friends happens all the time. I've done it many times, and have always been repaid.
False dichotomy. You don't have to say "we're not friends if you don't pay me back" but you can still want to be repaid. Who here hasn't loaned a friend a small sum of money? My friends and I are constantly in debts of 20 or 30 dollars to each other. I've had a friend/roommate owe me a month's rent without any problem. At no point were we every "putting a dollar amount on the friendship".
It's often a bad idea to mix friends and business/money. That doesn't mean it is always a bad idea.
It becomes a business when
1) you charge interest
2) you have some terms and conditions or attach some "strings"
3) you require collateral
4) you make your friend sign papers, and you leave "legal" options open
When I loan a friend, all I say is "dude, this is just to help you, I know you are going through tough times. No way this is to insult or patronize you. you can return the money when you can, even if it takes you 5-10 years"
That is trust and friendship, one friend helping the other, nothing more nothing less and definitely not a business.