My friend has approached me for a loan knowing fully well that I have the funds. How do I proceed? Do I risk our friendship by loaning/not loaning the money? From experience I know he is not fiscally disciplined.

From experience, that's a big NO, NO. But tell him of other channels eg banks where he can get the funds he needs. And if you must, here's what you do, if a friend comes for a loan of let's say 20k, give him 1k (which you're ready to lose) and encourage him to get another 1k from 19 other friends. Thereafter there's no hard feelings.

lending to a friend is a very tricky issue since if he/she fails to pay as agreed your friendship is ruined. My advice would be, since he/she already knows you have the funds, just lend him 1/4(quarter) of what he/she is borrowing and let him/her know that the rest of the funds are already commited. Also info him/her that you will need the cash that u have lend him/her in a few weeks time so that he does not become comfortable with your cash. repayment should be at the earliest oppurtunity possible.


in most cases avoid lending to friends and relatives unless in exceptional cases

dont try. Money has broken many friendship.

Seriously, ask him / her for collateral. we all know no one has collateral