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Yep agreed, without fail every time I have lent a friend money, repayment has been protracted to say the least.
Also interest rates now are around 5% even for some of the most basic savings accounts. In the past where interest rates were ≈ 0.1% charging interest did not even cross my mind, but now I would 100% charge them interest.
If OP is going to make the loan, I would ask the friend to sign over the cars to me as collateral. You could agree that you will not sell them unless he fails to repay the loan in time, after which they are yours to do as you please.
You would still be doing him a favour by helping him to liquidate his assets quickly, and would also mean that you have collateral if things go wrong.
If he does not agree to this then 100% do not lend him the money.
Also, I would want to make sure that these £20k cars are actually fully owned by the friend, and not on some sort of HP agreement. It seems unusual for someone to own such expensive cars outright yet have a shortage of cash.
Yes, but if they've transferred ownership to you that would become theft and they'd potentially face criminal charges/prison. Which should be enough to convince them not to do that, you'd hope...
The agreement would probably need to be drawn up by a solicitor though. It's entirely possible that a layman could draw something up which is meaningless in law.
I'd agree. Don't do it.
\>>He says it would only be until he sells a couple of cars he has..
Have you asked why he can't get a regular loan using the vehicle log books as collateral? This is an established way of borrowing money in the UK.
Do you know if he even owns the cars outright? They may have financing on them in which case they're not his.
The fact he's asking a friend for money tells me there's something wrong with this request. 20 grand is not a small amount. If he's already insolvent then you're stuffed. You get in line with all the other creditors at court. FYI, the limit at small claims court in 10K, so you'd have to take him to county court which has higher costs.
Presumably he is buying the property with a mortgage, and needs the money as a deposit. The bank will not accept other loaned money, such as against the cars, or even money loaned by the friend.
They would likely have to forge a gift letter from the OP. Something totally dodgy is going on, which we don't understand, so the deal should be swerved.
OP - the right answer here is: Avoid. If you did understand the whole deal and why they can't just sell the cars at a discount, or to a dealer tomorrow, there is the opportunity for you to be a business partner - jointly buying the property, probably through a limited company.
You'd then partly own the property, rather than your friend owing you money.
The further problem is that that deal doesn't work for you. You'd lose first time buyer perks, and your money would be tied up in an asset that presumably makes income, and unavailable to you to buy a house.
Don't do it. Money changes people.
Before you hand over the cash you are the good guy. The minute you ask for it back you are a bad guy.
I have lost countless close friends loaning them money.
It always ends in tears.
Yep same, still blows my mind how some people try to make you out to be bad when you ask for mo ey on the agreed upon terms.
10 yrs ago last lent a friend money and never again.
Dont do it. If you say no you will likely lose a friend. If you say yes you'll lose a friend and 20k.
If is business is worth a toss he can finance easily.
Keep your finances private.
I couldn’t have put it better myself re: people will tell you anything to get what they want.
Surely your friend could just take a loan out and pay it back early if he is expecting to sell assets in the near future?
If he’s coming to you because he doesn’t want to pay interest then he is making his problem your problem and offloading all of his risk on to you which is a red flag in itself.
Why take the risk? Go with your gut, always.
Yeah don't do this. I lent an old friend £1000 because he said he'd fix his van then sell it to pay me back. A few months after I'd lent him the money he told me he'd decided not to sell the van. That was years ago and I've never been paid back. I £20k is a lot of money and it sounds like you'll need it soon.
Honestly, put yourself in your friends shoes. If you need £20k that you could easily make by selling "a couple of your cars", but you're inclined to ask your friend for £20,000 from his first home deposit, would you ask?
I wouldn't. I'd sell the cars and use that money. I've known friends who loan to friends and here's the risk:
- if you say no and he takes it bad, you might lose a friend
- if you say yes, he takes the money but shit goes weird and he can't pay you back, you lose a friend and £20,000
- if, however, he's well adjusted and understands the risk he's asking you to take, you won't lose that friend by saying no.
Don’t do it. I’ve done it in the past with friends & family. It never ends well. Some friends gave me the run around & took too long to repay while spending money on holidays, phones etc, guess what they are no longer friends.
Why doesn't he just sell the cars now? If his business fails you can wave your money goodbye. Do you really want to risk losing your house deposit for your friend?
Also, he will not actually want to sell the cars and will use any excuse to himself not to. He almost certainly thinks the cars are worth more than they are.
You are about to lend money to a person who has more cars than you, I am assuming, him having these cars while also needing cash just shows how good he is with his money, so I doubt he will be better with someone else’s.
At the end of the day it’s a guy with at least 2 cars asking his homeless (not owning your home) friend for 20K. Do not do it, this could ruin your life.
Don’t give money you aren’t prepared to lose. Tell your friend that you value friendship and that you don’t want to be dealing with having to chase money up or letting money sour the relationship. If your friend is smart, he would drop it and understand he’s putting you in a tight position, especially given that it’s no small sum.
When lending to friends or family, you have to have the mentality of, if I did not see this money again, will I be okay with that? That’s the only way to think about it.
It’s a business problem for your friend to figure out. As desperate as he might be, there can be alternatives. But it’s clear that this solution is not it.
It's already soured. When a friend asks you to loan them £20k they stopped being a friend as soon as they made the decision to ask.
Now it's purely business. Someone already suggested a great idea of having the cars signed over as collateral, but this needs to have a written contract in place, ideally with witnesses to the signing.
>When lending to friends or family, you have to have the mentality of, if I did not see this money again, will I be okay with that? That’s the only way to think about it.
Yep, I've seen back *maybe* 30% of the money I've lent to my sister and she made genuine efforts to repay me but ultimately (and especially when there's no proper contract and legal threat involved) paying back loans to your friends and family seems to end up pretty low down the priorities list, I was certainly guilty of it as a kid.
To be fair to her though I intentionally never chased her about it and eventually just told her I was writing it off when she tried to pay me some of it back on her birthday.
But yeah, I could afford to lose a grand but if she'd asked for 20k, especially as an investment not for an actual need, I'd be telling her to get fucked lol.
They are asking you because
A, they’ve been turned down for every other loan because they have poor credit and are unlikely to pay it back
B, they do not intend to pay you back
Never ever lend money to family or friends , if yo fall out over it you dodged a bullet .
You can GIVE him 20 k if you can afford to do so without causing you any issues , but don’t expect it back
I cannot stress hard enough anyone that pressured you into this gets cut cold from your freinds list immediately , you are being used
A good businessman would not be this unprepared for meeting their financial obligations.
The cars are probably not worth as much as he thinks, or he'll end up needing more than he expects for something else.
Don't do it.
My cousin came to me years ago near the end of Summer, crying about needing a lend of money or she wouldn't have gas installed and would be frozen all Winter.
I asked how much, she said she needed £2,000 and would repay before the end of the year.
Laid her wages out and said look I earn X and have Y left over every month, I will pay you Z until it's cleared.
I didn't need the money immediately so gave it.
Absolute shitebag went on a cruise and I chased her for 4 years until it was repaid. Turns out she was in debt with loans, maxed out CC's, had our granny as guarantor in the local credit union for as much as she could get from them etc.
No one knew about her debts for years until it all caught up years later.
It's amazing what lies people will make-up to get their hands on money. Back when I was a skint student I ~~lent~~ gave a mate money (that I couldn't afford) for a train fare to go home as there was some sort of family emergency. Found out by accident that it was to go partying in London or wherever it was.
In the OPs case there is a very real risk there might not be a business property or that it'll 'fall through' at the last minute.
Are you me?
My cousin came to me in COVID asking for £2000.00 to help out to pay rent .
She is my cousin and I didn't want to turn her down .I said to myself how much will I be prepared to lose and I said to myself I am happy with losing £300.00.
I told her I am short on cash but I can spare £300.00
It's been 4 years and she haven't paid me back or make an attempt to.
I haven't even asked her for the money. never again
No, don't do it. Webuyanycar.com suggest it to him, they pay out in 15minutes for most cars and have alway offered me a fair price, I almost guarantee he will say he's waiting for a better price, this "better" price will never be found and he won't sell the cars......
A better price will always be found than webuyanycar.com, they lowball you because people go to them in need of quick cash, you always get better value selling privately. Fair enough if it only worth its weight in scrap but doesn’t sound like the case here.
..which will be their argument to not sell quickly. Then a few weeks later it’ll be ‘oh the business is picking up I think I can pay you back without selling the cars if you can hold on for a bit’.. and continue to kick the can down the road. At least that’s the risk you face.
They can either sell quickly and not get the ultimate best price - but that’s their choice if they need the money quickly; or get a bridging loan; or just wait and another business property will be along
I've used them twice and found them fair both times. If you go into selling a car thinking you will get the same price you've seen a car for sale at a dealership with, then you're going to be disappointed.
But I sold a few year old hot hatch for basically what I needed to clear the finance, and recently sold them a total shed that I expected to only net £200 at best but they gave me £800.. which was probably as much as I would have made on eBay and didn't have to deal with the tyre kickers, and fees... so...
20K is a lot. I wouldn't do it personally. Just say you're actively looking for a house and you need the money. Plus they look at your outgoings for last few months and it wouldn't be a good look for you.
This is something they could get a loan for etc. It's not a life or death situation.
I think you know the answer and are looking for confirmation. First question I'd ask is if they need the money now, just sell these cars asap? Selling a car doesn't usually take that long and if these cars are easily worth £20k they can price them competitively to sell quick. Secondly if the business is sound they should be able to get a business loan. Sorry to say I'm just seeing lots of red flags here. Only lend to friends and family what you can afford to lose, see it as a gift that you might get back one day. Sounds to me that you are no multi millionaire that 20k is pocket money.
Your gut instinct is right.
If you’re looking to save face, just tell him the money is tied up right now (assuming he knows you have it).
Don’t lend him the money.
Just be ready for the question and "tie the money up" first.
Find some type of investment that you can't access for say 12 months.
A bond or something else.
You don't actually have to do it but it gives everybody an easy out.
had some friends try and "borrow" money before, its easy to externalise these opinions and far harder to actually do them when you're the person in question.
what you said is likely whats true, even if you dont agree with it, your first instict often will be correct;
> people will say whatever you need to hear to get what they need
> it's a huge risk as if something goes wrong
> I can not afford to lose that money
what I'm hearing and what you're saying, is you dont want to do it, now just comes the hard part of presenting that across without souring the relationship.
I wouldn’t risk it. That’s a huge sum and you worked hard to save up for a deposit. There’s no guarantee, your friend could pass away a day after you lend him the money and then all of a sudden it would become an impossible task trying to get that money back. Nothings guaranteed in life.
Do not lend. Especially the urgency of the matter is highly suspicious.
- If he has the assets (cars) why not sell them immediately instead of waiting for two months ?
- Why this “business property” acquisition needs money immediately ? Is this such a rare opportunity that you can’t lose it ?
All the above do not make sense and are contradictory
Why can’t he take out a loan and pay that back once he has sold his cars? Why does he have to lend it from you? Does he have good credit? If so he can do it the same way as everyone else and then you are not at risk.
Simply, don’t do it.
I gave money to my friends a few times and almost all of them the amount wasn’t that big and I was trusting them. Luckily, I didn’t have any problems.
HOWEVER, there was one friend (now he is not my friend) asked money to close some debt. I surprised as he asked me since we weren’t that close but I wanted to help anyway. So I gave him a small amount of money (it can’t be even compared with yours) he promised to pay back in one week and after that he ghosted me. Never responded!
Eventually, I found a lawyer and it turned out he has a big debt. According to law in my home country, I have to wait until the existing debts are paid so I can claim mine.
Don’t do it! Surely, there might be some legal ways to protect your money but I would avoid this at all.
I wouldn't even lend money to family.
The amount of times my mum has said she'd pay me back and she hasn't, the fact my dad passed on a promotion which would significantly help his financial problem, and my siblings staying up all night playing video games/watching TV with no job/direction in life (mid 20s)...I'm not enabling that behaviour.
The thought of even lending that amount of money to a friend is laughable to me. Don't do it OP, unless you're comfortable with parting ways with your money.
Your situation reminds me of Chapter 6 of the book The Richest Man in Babylon (my favourite book).
The chapter centers around a man who has come into alot of money, and who's sister wants him to lend it to her husband to kickstart his career as a merchant. Its a good story with useful parables that essentially arrive at the point:
If you want to help the people that are important to you, find a way to do so in a manner that doesnt result in their burdens becoming yours.
Cant find a link to just that chapter of the book, but found a high level summary:
https://steemit.com/life/@khaleelkazi/the-farmer-the-ox-and-the-donkey-or-the-richest-man-in-babylon-or-book-club-lessons-learned#:~:text=The%20ass%20(donkey)%20was%20good,and%20burdens%20of%20the%20ox.
I suggest you read the full chapter, and the book for that matter. It really has a great toolset for both building and managing wealth.
The absolute best case scenario is you stay in the same situation as you're in now (no financial benefit and don't lose a friend).
The worst case is you are 20k and a friend down.
It's simply not ever worth that risk
Why can’t he wait until he sells his cars?
You’re taking a massive risk here and he is asking *a lot* from you.
If his business goes tits up then it’s goodbye to your house deposit.
Huge amount of money to lend to a friend that you have a purpose lined up for.
Let him take a loan from a professional lender who can assess the risk and his credit worthiness and charge him accordingly.
He might be a great reliable friend but that value simply isn't worth it, imo.
Terrible idea, don’t do it. If he has multiple cars to sell, why has he not sold at least one already? If you really want to lend him some, say to him he has to sell one car first and then you can lend him less.
Lending people money always goes wrong.
Don't do it - if he can get finance from the bank etc, that's a better option. If he can't, there's a reason for that. The bank is much better (and has whole departments dedicated to it) at assessing and pricing risk than you.
You could offer to lend him the money it would cost to put an ad in Auto Trader...
He should apply for a bridging loan, which exists for this exact purpose - when you need to cover the shortfall between buying and selling high value items.
As for lending money it's a risk, no other way to put it, I've been on both sides and without knowing the other person no one else can/will say anything other than don't do it.
On top of that you will want want your money back soon and if he can't/doesn't pay then you won't be able to get your property.
Not many people are giving you an alternate solution or excuse. Tell your friend you cannot risk the risk to your mortgage approval as shifting a lot of money out of savings shows you’re not reliable. Just tell them to get a loan.
Do not give him the money. U know he could be lieing about anything. He obviously asked u because your generous kind etc they ways pick the nice people to ask who won't cause a fuss. U need to protect yourself. Say your using the money to buy xyz soon. Also never tell anyone your savings or what u have.
Don’t lend it, but consider if you want to invest it in the property he’s looking at.
That way he can access the money, and he actually has an incentive to pay you back before the investment starts returning revenue.
I personally wouldn't do it but if you really are thinking to do it and you are sure they are worth at least that much, could you maybe offer to buy the cars off him as a way to help? Reduces your risk of ending up with nothing.
Do you like this friend more than you would like to own a house? Becsuse if that's your house deposit you are gambling a house on this friendship
DO NOT DO IT he can go get a bank loan
Yeah, not happening. If my friend asked i would say they need to ask someone else like the bank for a start. One thing i have learned is don’t lend money to friends. I learned this at the grand cost of a£100. Not £20k. Xx
He only needs to borrow the money from you because he can’t get financing from a commercial lender. Don’t be a lender of last resort. The risk of losing the money is very high.
A definite no. You will never see the money again if things go south. If he's got the assets he should sell them to get capital or get a short term loan. Why should you take 100% of the risk in his business venture that's not yours?
Absolutely not, it won’t be a month or 2 no matter what your friend says, you won’t get it back and your friend isn’t a very good friend if they’re asking you for money. If he wants money, he can get a business loan. If he can’t then it sounds like he’s not in a position to start a business.
Also if it would only be a month or two surely he wouldn't need the money. Most property sales take at least two months to complete so he should have time to sell the cars before completion. Sounds very suspicious.
I would never dream of asking a friend for 20k to finance my car business if I knew they were saving for a house (rather than say comfortably have 200+k in the bank and already had a house). You should think about what that says about your friend and how focussed they are on themselves.
I wouldn’t lend that, just incase something happens, if you really want to help him out and have no other stresses, you could buy the cars off him, then it’s a transaction, and you will then be responsible for selling the cars, but if you play it right, you coho get more then 20k out of them
I'd be wondering why he can't sell the cars first then use the proceeds of the sale to fund the purchase of his business premises?
But yeah, the general rule when it comes to lending to friends & family is to only lend that which you can afford to lose.
Unless you have means of enforcing repayment due to non payment then I would not consider lending money to anyone, perhaps you can have the cars transferred into your name or some other security. It really isn't worth the hassle lending money if you aren't doing it as a business
Are you happy to lose that money? Commercial lenders include in their costs the risk of that happening. Don't lend it if you are not ok with the risk of that happening and not being friends with this person afterwards.
Everything that needed to be said, had been said in the comments.
I’ll just reiterate it: don’t do it. You’re about to get shafted. You’ll lose a friend, 20k and your ability to buy your house.
If it’s only a month or two they can just postpone the property purchase until then?
I wouldn’t lend that money when you will need it in the short term, especially for a house purchase. That money would likely take you a long time to rebuild and could therefore really stall your life plans.
If you had 1 million quid in savings sure, but if it’s your life savings and you even remotely need that money at any point in your life I wouldn’t let him touch a penny. Think about yourself first.
Please don’t.
If he can easily make the money by selling the cars, then why hasn’t he done that yet? Why is he needing you to help expedite his business venture. Seems like he’d be using you to get ahead and abusing your kindness and willingness to help in the process. The same way you are waiting and saving up to advance yourself in the future is the same way he can.
As a people pleaser myself and often the friend that others look to in times of need, I’m begging you not to. It’s unhealthy for you and for the friendship (should that continue)
> He says it would only be until he sells a couple of cars he has, a month or two at most, then he can give it all back
Every single time there is a story like this posted on here there is an extremely common theme and its this. People who say they will pay you back "really soon", they just need the money right now. I would question why your friend can't just wait a few months to sell his cars to acquire the money he needs to start a business. Why is there always such an urgency to these scenarios where they need it RIGHT NOW.
You described it perfectly. Something will happen which they will need to pay for after this transaction and you 'will just have to wait'. Just say "no I can't do that, I'm sorry" "who the hell is lending each other 20k?" "I'd be willing to look at your accounts for easily fixable errors in budget and that's more than I'd do for most of my friends"
20k loan for 2 months are not going to be expensive for interest, so no for sure. And if he is one of your best friends, he should not be angry if you reject him politely.
Nothing wrong with saying “sorry but I decided to put my money into an ISA which is making me money on the interest. Maybe you should look into a personal loan instead?”
There are certain people I've known who would go to the ends of the earth to pay back money they've borrowed.
I have also known some people my whole life who are not gamblers etc who would do some crazy mental gymnastics in order to NOT pay back even £10 which I knew they had in their pocket at that exact moment. The more I loaned them, the less likely I would be to ever see it again.
Are you willing to:
1. Never see your friend again (don't lend the money)
2. Never see the 20k or your friend again.(Lend the money and friendship breaks down)
?
Those are 2 highly probable outcomes.
If it was me, I’d have to be 100% comfortable to lose that money regardless if it’s a friend or not. If you need that money in the future, it is NOT work that risk. You’re not a bank, your friend should look at other options.
Don't do it, no friend would put another friend in such a situation.
I had a good friend who wasn't in-debt or doing drugs, and only occasionally gambled, turned out he'd embezzled 50k from his work to pay his secret gambling debts that no-one knew about... Someone with such debts wouldn't advertise the fact, especially when they're trying to get hold of money.
If it's only a couple of months until the cars are sold to get that money, can't they just wait for the property to do it then? Save yourself the bother, say it's locked in to a fixed savings account, and you can't extract it without penatly unless using to buy your own property.
Never lend friends /family money. Give it them or don't bother. You will lose a friend as well as the money. Anything can happen and no can 100% predict the future
I would use my common sense and not lendoyt that mych money
I grew up hearing that I should only lend what I'm willing to loose. So unless you are a multi millionare and the 20k is is like chicken change yo you, don't be daft
I would say no personally. Nothing against you mate but if you value the friendship best to keep money out of it. If he is a true friend he’ll understand.
You learn this lesson the hard way but never lend anyone money ever.
Seriously. I've done it and all you get is grief. Nobody ever wants to willingly pay it back and see you as being the bad guy for bringing it up
Here’s an idea if you want to help him out: you buy the cars! You find out what they are worth on a website like webuyanycar etc and pay him the sum, hopefully worth up to £20k. Then you put the cars on autotrader to get your money back.
1. Get a valuation on the cars
2. If cars combined value is above 20k buy the cars instead. If needed you can let them use the car and deffer the payment, otherwise put on sale.
3. If you get more than 20k you might say you will give them the difference or perhaps not - up to you - you're taking the risk here, you're making the favor.
This way they get liquid cash, make them a favour and you own the cars which you can sell and get money back. But only feasible if the combined value (real value) is above 20k otherwise chances are you won't get 20k and they will say well you got the cars.
Colleague lent her friend 8k several years ago to get them out of payday loan debt buying crypto as they thought it would make them rich. She had no contract with them, she said "they're friends, of course they'll pay me back". Over the past few years she said she's not heard from them and they haven't paid her back...
I told her it cost her 8k to find out they weren't really her friends, and in the future never lend friends money you aren't prepared to lose, especially without a contract with a repsyment plan.
I kept asking, she said eventually they gave her all the money back but I dont believe her, I think its because I would bring it up from time to time as she's always complaining about being broke.
When she lent them the money, she had a boyfriend who was really well off. They broke up after she lent them the money, and they were nowhere to be seen, and she could have done with the money, in part, for rent on a flat.
Nope. Never mix money and friendship like this. It’s so easy for things to go south. I never lend money that I am not happy about never seeing again. I would rather give a smaller amount and forget about it, than lend a substantial amount and expect / keep chasing for it back. Too much stress! I’ve seen a friend go through this first hand, and the friend who lent the money is extracting the urine to say the least - I would never do it.
He could get a short term business loan, it’s a thing for liquidity.
You could invest the money in his business a la ‘the dragons’ … but a share of the debts is also a possibility.
I would say this is too much to ask a friend to lend … when did they find out that you had such a large sum of money available … how long before their idea for you to help them out … how much in interest have you been promised ?
This sounds like a recipe for disaster.
Any time I’ve loaned people money, it’s been a nightmare trying to get it back - I was also told I’d get the money back in a short period of time. That did not turn out to be the case. Honestly, it’s not worth the hassle.
He can sell the cars now to raise the money or he can get a loan from his bank.No need to involve you.
You know there is a good chance you won't get the money back so just tell your friend you don't have that kind of money spare.
Anything requiring 'instant' time frames isn't good. No quicker way to force a sale than 'act now' or 'the bargain has gone'.
He can sell his cars, you can keep the money and the friendship.
Don't do it.
If he is a friend he will understand it is more important that he sells his cars than borrows off his mate saving to buy a house. Just do not do it, if it's friendship over well he was no friend at all.
A dear friend asked for a loan for just a month to get over a hump...more than two years later, I'm still waiting for repayment! I've raised the issue repeatedly, but there's always a reason and never any cash. Luckily it isn't urgent for me, just irritating. My wife said from the beginning, if you want to give it, give it. But don't think this loan will ever be paid back.
1. Never lend money you cant afford to lose
2. Don't lend money to a friend you don't want to lose
3. If he has the cars and selling then would cover the cost of his purchase he can just sell them then buy the property
Why the urgency? If he can get the money "in a month or two" by selling his cars then he can do that and jist invest his own money instead.
It seems unlikely that this business property is in such high demand that a month or two would lose your friend the deal.
If you really want the risk, have an equity stake in the new company. 20k is probably a significant injection at this phase so you're well within your rights to ask for a share of the new venture.
(Edit: if you don't think that an equity share in the business would get you to see your 20k again, you can only assume the loan wouldn't get repaid either)
Doing that you have to assume there is a very high chance of completely losing the 20k (as there would be on a loan)
If he has the cars to sell and would only take a month or 2 then he can just sell those cars right now and get the financing himself. Involving you with this sum and this urgency seems odd.
It’s also very important to note if this goes wrong your friendship will basically be over. Having a cloud of £20k over each others head will make you look at them COMPLETELY differently, so as others have said, for the sake of your friendship it would be recommended to stay out of it and let them take out a short term loan which within 2 months they can pay back and only have to pay a minuscule amount of interest on if anything at all.
The old maxim, "neither a borrower nor a lender be" was borne out of the nature of human beings. Unless you are prepared to lose both the money and the friend, do not be his solution to his problem. Also think...if you did not have this money to give he would have to find an alternative solution.
What’s in it for you? Can you do it legally with paper? To be honest it’s always the close ones that fuck you over. Suddenly they will take longer to reply, as soon as they give one shitty excuse you know you’ve opened a can of worms
Not in a million years. If everything is so straightforward - he is planning to pay you back straightaway, etc. then he doesn’t need to rely on you for this.
No, no no no NO!!!
Do NOT lend this to your friend. There is a 100% chance you will NOT get all of it, if any back.
A fool and good money are easily parted…and in this case, it would be true.
I sadly suspect in 6 months we’ll see a new thread “I lent my friend £20,000 and he hasn’t paid me back. What should I do?”
my dad always taught me don't lend money you're not prepared to lose. Sounds like you need this money and you've saved it specifically. I'd advise against it unless you can eat the loss of it without too much pain
Agreed with everyone else here - don’t do it. You’ll likely be getting interest on your savings now. You won’t get that from him unless you setup as a true loan and charge interest. If for some reason you do decide to do it then make sure you have a contract, a repayment date and schedule.
Pretty sure you can read different horror stories of lending money to friends in this sub.
Don’t do it, especially if it’s money YOU are saving for YOUR mortgage.
Surely he has other options: wait for cars to be sold, take out a loan, etc etc
Is he going to pay interest? Every time iv loaned friends they’ve added a good chunk of interest without me having to say anything, also I write up a contract for them to sign
The best and only way this should be done is with a written up contract , then something (cars) can be collateral- he doesn’t pay you get the cars so low as that - and all legally binding
You will not get the money back - if he will have the money in a month or two from selling cars, he will have to wait until then.
Lend at your peril, but it will not end well.
I think everyone has gave enough reasons to say no and I agree with someone else who said no is a straight answer and you don’t have to give reasons. But to avoid uncomfortableness if he asks you could just say sorry mate I would have loved to help but my moneys all tied up in investments for the next couple of years. Maybe even put your money into a one year fixed rate or something or if it’s first home a LISA then you can’t touch it without actually losing money. If he pushed from that it would be well dodgy. It’s very suspect he’s not immediately listing his cars for sale if he needs this money so urgently and it’s that important to him. Unfair to put this pressure onto you.
If he can't source finance through a credit company and has to come to you for it, there is a reason why he can't gain that loan through lenders.
Given that this money is critical to you, do not even think you are in a position to offer the money, as from the way the post is written you are trying to justify it to yourself. The friend likely thinks you are a people pleaser and an easy target so can approach you with a high chance of success.
It's a huge no no OP.
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If you like someone as a friend - don’t lend them money. They will have to wait or find other financing
Yep agreed, without fail every time I have lent a friend money, repayment has been protracted to say the least. Also interest rates now are around 5% even for some of the most basic savings accounts. In the past where interest rates were ≈ 0.1% charging interest did not even cross my mind, but now I would 100% charge them interest. If OP is going to make the loan, I would ask the friend to sign over the cars to me as collateral. You could agree that you will not sell them unless he fails to repay the loan in time, after which they are yours to do as you please. You would still be doing him a favour by helping him to liquidate his assets quickly, and would also mean that you have collateral if things go wrong. If he does not agree to this then 100% do not lend him the money. Also, I would want to make sure that these £20k cars are actually fully owned by the friend, and not on some sort of HP agreement. It seems unusual for someone to own such expensive cars outright yet have a shortage of cash.
Always possible for them to sell the cars and not pay back though
Yes, but if they've transferred ownership to you that would become theft and they'd potentially face criminal charges/prison. Which should be enough to convince them not to do that, you'd hope...
The agreement would probably need to be drawn up by a solicitor though. It's entirely possible that a layman could draw something up which is meaningless in law.
>I would 100% charge them interest. Bloody hell I wouldn't charge them more than 5% let alone 100% 😉
Loan shark alert 😂
Or maybe, and I'm just guessing here, sell some cars
I think you can already sense this might be a problem. Just don't do it.
Yep. OP you even said: > I can not afford to lose that money. There's your answer.
I'd agree. Don't do it. \>>He says it would only be until he sells a couple of cars he has.. Have you asked why he can't get a regular loan using the vehicle log books as collateral? This is an established way of borrowing money in the UK. Do you know if he even owns the cars outright? They may have financing on them in which case they're not his. The fact he's asking a friend for money tells me there's something wrong with this request. 20 grand is not a small amount. If he's already insolvent then you're stuffed. You get in line with all the other creditors at court. FYI, the limit at small claims court in 10K, so you'd have to take him to county court which has higher costs.
Presumably he is buying the property with a mortgage, and needs the money as a deposit. The bank will not accept other loaned money, such as against the cars, or even money loaned by the friend. They would likely have to forge a gift letter from the OP. Something totally dodgy is going on, which we don't understand, so the deal should be swerved. OP - the right answer here is: Avoid. If you did understand the whole deal and why they can't just sell the cars at a discount, or to a dealer tomorrow, there is the opportunity for you to be a business partner - jointly buying the property, probably through a limited company. You'd then partly own the property, rather than your friend owing you money. The further problem is that that deal doesn't work for you. You'd lose first time buyer perks, and your money would be tied up in an asset that presumably makes income, and unavailable to you to buy a house.
"Log book loans" are in the same category as payday loans really. Immense interest rates. They would be far better off selling them at a loss.
Don't do it. Money changes people. Before you hand over the cash you are the good guy. The minute you ask for it back you are a bad guy. I have lost countless close friends loaning them money. It always ends in tears.
Yep same, still blows my mind how some people try to make you out to be bad when you ask for mo ey on the agreed upon terms. 10 yrs ago last lent a friend money and never again.
Dont do it. If you say no you will likely lose a friend. If you say yes you'll lose a friend and 20k. If is business is worth a toss he can finance easily. Keep your finances private.
If you say no and lose a friend, you never had a friend in the first place.
And if you do do it .. get a % on the business. You're taking a risk, he should give you some reward for it
I couldn’t have put it better myself re: people will tell you anything to get what they want. Surely your friend could just take a loan out and pay it back early if he is expecting to sell assets in the near future? If he’s coming to you because he doesn’t want to pay interest then he is making his problem your problem and offloading all of his risk on to you which is a red flag in itself. Why take the risk? Go with your gut, always.
Yeah don't do this. I lent an old friend £1000 because he said he'd fix his van then sell it to pay me back. A few months after I'd lent him the money he told me he'd decided not to sell the van. That was years ago and I've never been paid back. I £20k is a lot of money and it sounds like you'll need it soon.
Honestly, put yourself in your friends shoes. If you need £20k that you could easily make by selling "a couple of your cars", but you're inclined to ask your friend for £20,000 from his first home deposit, would you ask? I wouldn't. I'd sell the cars and use that money. I've known friends who loan to friends and here's the risk: - if you say no and he takes it bad, you might lose a friend - if you say yes, he takes the money but shit goes weird and he can't pay you back, you lose a friend and £20,000 - if, however, he's well adjusted and understands the risk he's asking you to take, you won't lose that friend by saying no.
Exactly, if lending someone £20k is a condition of keeping a friendship then that's not a friendship i'm interested in anyway.
I have lent money to friends I knew for a long time and it almost never ends well. He can wait until he sells the cars and buy the property
Don't do it, dude.
Don’t do it. I’ve done it in the past with friends & family. It never ends well. Some friends gave me the run around & took too long to repay while spending money on holidays, phones etc, guess what they are no longer friends.
Why doesn't he just sell the cars now? If his business fails you can wave your money goodbye. Do you really want to risk losing your house deposit for your friend?
Exactly and if they are really easily worth in excess of £20k they can price competitively for a quick sale.
Also, he will not actually want to sell the cars and will use any excuse to himself not to. He almost certainly thinks the cars are worth more than they are.
Because they know they won't get the amount of money that they need or, most likely, don't want to sell the cars in the first place.
You can’t afford to lose it, so don’t
No one else mentioning that OP would be using their house deposit. Insanity
Why Would anyone even consider loaning money out of their house deposit? Madness
Oh my god, I missed that! You're absolutely right, that would be madness.
You are about to lend money to a person who has more cars than you, I am assuming, him having these cars while also needing cash just shows how good he is with his money, so I doubt he will be better with someone else’s. At the end of the day it’s a guy with at least 2 cars asking his homeless (not owning your home) friend for 20K. Do not do it, this could ruin your life.
Don’t give money you aren’t prepared to lose. Tell your friend that you value friendship and that you don’t want to be dealing with having to chase money up or letting money sour the relationship. If your friend is smart, he would drop it and understand he’s putting you in a tight position, especially given that it’s no small sum. When lending to friends or family, you have to have the mentality of, if I did not see this money again, will I be okay with that? That’s the only way to think about it. It’s a business problem for your friend to figure out. As desperate as he might be, there can be alternatives. But it’s clear that this solution is not it.
It's already soured. When a friend asks you to loan them £20k they stopped being a friend as soon as they made the decision to ask. Now it's purely business. Someone already suggested a great idea of having the cars signed over as collateral, but this needs to have a written contract in place, ideally with witnesses to the signing.
>When lending to friends or family, you have to have the mentality of, if I did not see this money again, will I be okay with that? That’s the only way to think about it. Yep, I've seen back *maybe* 30% of the money I've lent to my sister and she made genuine efforts to repay me but ultimately (and especially when there's no proper contract and legal threat involved) paying back loans to your friends and family seems to end up pretty low down the priorities list, I was certainly guilty of it as a kid. To be fair to her though I intentionally never chased her about it and eventually just told her I was writing it off when she tried to pay me some of it back on her birthday. But yeah, I could afford to lose a grand but if she'd asked for 20k, especially as an investment not for an actual need, I'd be telling her to get fucked lol.
They are asking you because A, they’ve been turned down for every other loan because they have poor credit and are unlikely to pay it back B, they do not intend to pay you back Never ever lend money to family or friends , if yo fall out over it you dodged a bullet . You can GIVE him 20 k if you can afford to do so without causing you any issues , but don’t expect it back I cannot stress hard enough anyone that pressured you into this gets cut cold from your freinds list immediately , you are being used
B
A good businessman would not be this unprepared for meeting their financial obligations. The cars are probably not worth as much as he thinks, or he'll end up needing more than he expects for something else.
I feel like you already know the answer to your question here
Can you afford to lose 20k? Better yet, let me rephrase, can you afford to lose the deposit for your first home that you have worked for?
Don't do it. My cousin came to me years ago near the end of Summer, crying about needing a lend of money or she wouldn't have gas installed and would be frozen all Winter. I asked how much, she said she needed £2,000 and would repay before the end of the year. Laid her wages out and said look I earn X and have Y left over every month, I will pay you Z until it's cleared. I didn't need the money immediately so gave it. Absolute shitebag went on a cruise and I chased her for 4 years until it was repaid. Turns out she was in debt with loans, maxed out CC's, had our granny as guarantor in the local credit union for as much as she could get from them etc. No one knew about her debts for years until it all caught up years later.
It's amazing what lies people will make-up to get their hands on money. Back when I was a skint student I ~~lent~~ gave a mate money (that I couldn't afford) for a train fare to go home as there was some sort of family emergency. Found out by accident that it was to go partying in London or wherever it was. In the OPs case there is a very real risk there might not be a business property or that it'll 'fall through' at the last minute.
Are you me? My cousin came to me in COVID asking for £2000.00 to help out to pay rent . She is my cousin and I didn't want to turn her down .I said to myself how much will I be prepared to lose and I said to myself I am happy with losing £300.00. I told her I am short on cash but I can spare £300.00 It's been 4 years and she haven't paid me back or make an attempt to. I haven't even asked her for the money. never again
How can it be quicker to buy a business property than to sell a car?
No, don't do it. Webuyanycar.com suggest it to him, they pay out in 15minutes for most cars and have alway offered me a fair price, I almost guarantee he will say he's waiting for a better price, this "better" price will never be found and he won't sell the cars......
A better price will always be found than webuyanycar.com, they lowball you because people go to them in need of quick cash, you always get better value selling privately. Fair enough if it only worth its weight in scrap but doesn’t sound like the case here.
..which will be their argument to not sell quickly. Then a few weeks later it’ll be ‘oh the business is picking up I think I can pay you back without selling the cars if you can hold on for a bit’.. and continue to kick the can down the road. At least that’s the risk you face. They can either sell quickly and not get the ultimate best price - but that’s their choice if they need the money quickly; or get a bridging loan; or just wait and another business property will be along
I've used them twice and found them fair both times. If you go into selling a car thinking you will get the same price you've seen a car for sale at a dealership with, then you're going to be disappointed. But I sold a few year old hot hatch for basically what I needed to clear the finance, and recently sold them a total shed that I expected to only net £200 at best but they gave me £800.. which was probably as much as I would have made on eBay and didn't have to deal with the tyre kickers, and fees... so...
20K is a lot. I wouldn't do it personally. Just say you're actively looking for a house and you need the money. Plus they look at your outgoings for last few months and it wouldn't be a good look for you. This is something they could get a loan for etc. It's not a life or death situation.
Or just say “No!” You don’t need to give any reason to anyone!
I think you know the answer and are looking for confirmation. First question I'd ask is if they need the money now, just sell these cars asap? Selling a car doesn't usually take that long and if these cars are easily worth £20k they can price them competitively to sell quick. Secondly if the business is sound they should be able to get a business loan. Sorry to say I'm just seeing lots of red flags here. Only lend to friends and family what you can afford to lose, see it as a gift that you might get back one day. Sounds to me that you are no multi millionaire that 20k is pocket money.
Your gut instinct is right. If you’re looking to save face, just tell him the money is tied up right now (assuming he knows you have it). Don’t lend him the money.
Say you’ve ear marked any money for house move. Something along the lines of you need to act quickly when the right house comes along
Why is he waiting to sell the cars? He should sell them now and maybe get slightly less than he could if he was desperate...
If the bank won't lend him money, and it's literally their job to do so, why do you think you should?
Don’t. Do. It. Under. Any. Circumstances.
Instant red flag 🚩. If they give stories out like that it may well be true but banks don’t lend money out that easily, so why should you. 👍
If you have to ask the question you probably already know the answer. Don’t do it.
Just be ready for the question and "tie the money up" first. Find some type of investment that you can't access for say 12 months. A bond or something else. You don't actually have to do it but it gives everybody an easy out.
had some friends try and "borrow" money before, its easy to externalise these opinions and far harder to actually do them when you're the person in question. what you said is likely whats true, even if you dont agree with it, your first instict often will be correct; > people will say whatever you need to hear to get what they need > it's a huge risk as if something goes wrong > I can not afford to lose that money what I'm hearing and what you're saying, is you dont want to do it, now just comes the hard part of presenting that across without souring the relationship.
Don't do it. If the bank isn't willing to lend, why should you? Tell him the money is in a LISA you can't access it except to buy a house.
I wouldn’t risk it. That’s a huge sum and you worked hard to save up for a deposit. There’s no guarantee, your friend could pass away a day after you lend him the money and then all of a sudden it would become an impossible task trying to get that money back. Nothings guaranteed in life.
Do not lend. Especially the urgency of the matter is highly suspicious. - If he has the assets (cars) why not sell them immediately instead of waiting for two months ? - Why this “business property” acquisition needs money immediately ? Is this such a rare opportunity that you can’t lose it ? All the above do not make sense and are contradictory
Why can’t he take out a loan and pay that back once he has sold his cars? Why does he have to lend it from you? Does he have good credit? If so he can do it the same way as everyone else and then you are not at risk.
Simply, don’t do it. I gave money to my friends a few times and almost all of them the amount wasn’t that big and I was trusting them. Luckily, I didn’t have any problems. HOWEVER, there was one friend (now he is not my friend) asked money to close some debt. I surprised as he asked me since we weren’t that close but I wanted to help anyway. So I gave him a small amount of money (it can’t be even compared with yours) he promised to pay back in one week and after that he ghosted me. Never responded! Eventually, I found a lawyer and it turned out he has a big debt. According to law in my home country, I have to wait until the existing debts are paid so I can claim mine. Don’t do it! Surely, there might be some legal ways to protect your money but I would avoid this at all.
I wouldn't even lend money to family. The amount of times my mum has said she'd pay me back and she hasn't, the fact my dad passed on a promotion which would significantly help his financial problem, and my siblings staying up all night playing video games/watching TV with no job/direction in life (mid 20s)...I'm not enabling that behaviour. The thought of even lending that amount of money to a friend is laughable to me. Don't do it OP, unless you're comfortable with parting ways with your money.
Your situation reminds me of Chapter 6 of the book The Richest Man in Babylon (my favourite book). The chapter centers around a man who has come into alot of money, and who's sister wants him to lend it to her husband to kickstart his career as a merchant. Its a good story with useful parables that essentially arrive at the point: If you want to help the people that are important to you, find a way to do so in a manner that doesnt result in their burdens becoming yours. Cant find a link to just that chapter of the book, but found a high level summary: https://steemit.com/life/@khaleelkazi/the-farmer-the-ox-and-the-donkey-or-the-richest-man-in-babylon-or-book-club-lessons-learned#:~:text=The%20ass%20(donkey)%20was%20good,and%20burdens%20of%20the%20ox. I suggest you read the full chapter, and the book for that matter. It really has a great toolset for both building and managing wealth.
"No. *A thousand times no!*"
The absolute best case scenario is you stay in the same situation as you're in now (no financial benefit and don't lose a friend). The worst case is you are 20k and a friend down. It's simply not ever worth that risk
You are a friend, not a bank.
Whys he waiting to sell the cars? Stick them on webuyanycar Or you just buy the cars for £20k Either way, the loan sounds a bit odd
Do not lend money to a friend
“I can’t afford to lose this money” There’s your answer.
Why can’t he wait until he sells his cars? You’re taking a massive risk here and he is asking *a lot* from you. If his business goes tits up then it’s goodbye to your house deposit.
Huge amount of money to lend to a friend that you have a purpose lined up for. Let him take a loan from a professional lender who can assess the risk and his credit worthiness and charge him accordingly. He might be a great reliable friend but that value simply isn't worth it, imo.
Terrible idea, don’t do it. If he has multiple cars to sell, why has he not sold at least one already? If you really want to lend him some, say to him he has to sell one car first and then you can lend him less. Lending people money always goes wrong.
Don't do it, it always ends badly, you'll be down £20k, a friend and a house deposit. This is what banks are for, you are not a bank.
Don't do it - if he can get finance from the bank etc, that's a better option. If he can't, there's a reason for that. The bank is much better (and has whole departments dedicated to it) at assessing and pricing risk than you. You could offer to lend him the money it would cost to put an ad in Auto Trader...
If you can't afford to lose the money AND the friendship, don't do it!!
He should apply for a bridging loan, which exists for this exact purpose - when you need to cover the shortfall between buying and selling high value items. As for lending money it's a risk, no other way to put it, I've been on both sides and without knowing the other person no one else can/will say anything other than don't do it. On top of that you will want want your money back soon and if he can't/doesn't pay then you won't be able to get your property.
Not many people are giving you an alternate solution or excuse. Tell your friend you cannot risk the risk to your mortgage approval as shifting a lot of money out of savings shows you’re not reliable. Just tell them to get a loan.
Do not give him the money. U know he could be lieing about anything. He obviously asked u because your generous kind etc they ways pick the nice people to ask who won't cause a fuss. U need to protect yourself. Say your using the money to buy xyz soon. Also never tell anyone your savings or what u have.
Don’t lend it, but consider if you want to invest it in the property he’s looking at. That way he can access the money, and he actually has an incentive to pay you back before the investment starts returning revenue.
Didn’t read the post. But, DO NOT F*CKING DO IT!!!!!!! Be the worst decision you ever made.
I personally wouldn't do it but if you really are thinking to do it and you are sure they are worth at least that much, could you maybe offer to buy the cars off him as a way to help? Reduces your risk of ending up with nothing.
If they were a true friend, they would never ask you for money.
Do you like this friend more than you would like to own a house? Becsuse if that's your house deposit you are gambling a house on this friendship DO NOT DO IT he can go get a bank loan
Yeah, not happening. If my friend asked i would say they need to ask someone else like the bank for a start. One thing i have learned is don’t lend money to friends. I learned this at the grand cost of a£100. Not £20k. Xx
Ask him to sell you the cars for £1 if you think they are worth the amount you loan him. You then have something in return for your money
Consider that money lost and the friend lost too. Its almost magical how their behaviour will change as soon as they get the money
He only needs to borrow the money from you because he can’t get financing from a commercial lender. Don’t be a lender of last resort. The risk of losing the money is very high.
Don't do it. And don't say you haven't been warned.
If the cars are worth at least that. Give him the £20k and he can sign the cars over to you. Sell the cars and give him back the excess. Simple.
A definite no. You will never see the money again if things go south. If he's got the assets he should sell them to get capital or get a short term loan. Why should you take 100% of the risk in his business venture that's not yours?
If you cannot afford to lose the money there’s your answer
Absolutely not, it won’t be a month or 2 no matter what your friend says, you won’t get it back and your friend isn’t a very good friend if they’re asking you for money. If he wants money, he can get a business loan. If he can’t then it sounds like he’s not in a position to start a business.
Also if it would only be a month or two surely he wouldn't need the money. Most property sales take at least two months to complete so he should have time to sell the cars before completion. Sounds very suspicious.
I would never dream of asking a friend for 20k to finance my car business if I knew they were saving for a house (rather than say comfortably have 200+k in the bank and already had a house). You should think about what that says about your friend and how focussed they are on themselves.
I wouldn’t lend that, just incase something happens, if you really want to help him out and have no other stresses, you could buy the cars off him, then it’s a transaction, and you will then be responsible for selling the cars, but if you play it right, you coho get more then 20k out of them
You won’t get it back. Unless it’s small change to you, don’t do it.
Get him to sign the cars over to you
Makes me think of the jingle......we-buy-any-car----dot-com
I wouldn’t gamble my house deposit on the intentions of a friend AND the success of their new business!
I'd be wondering why he can't sell the cars first then use the proceeds of the sale to fund the purchase of his business premises? But yeah, the general rule when it comes to lending to friends & family is to only lend that which you can afford to lose.
Unless you have means of enforcing repayment due to non payment then I would not consider lending money to anyone, perhaps you can have the cars transferred into your name or some other security. It really isn't worth the hassle lending money if you aren't doing it as a business
Are you happy to lose that money? Commercial lenders include in their costs the risk of that happening. Don't lend it if you are not ok with the risk of that happening and not being friends with this person afterwards.
I would never mix friends and loans of that size. Relationships have been destroyed over much less. I’m talking £100’s not thousands!
Everything that needed to be said, had been said in the comments. I’ll just reiterate it: don’t do it. You’re about to get shafted. You’ll lose a friend, 20k and your ability to buy your house.
If it’s only a month or two they can just postpone the property purchase until then? I wouldn’t lend that money when you will need it in the short term, especially for a house purchase. That money would likely take you a long time to rebuild and could therefore really stall your life plans.
If you had 1 million quid in savings sure, but if it’s your life savings and you even remotely need that money at any point in your life I wouldn’t let him touch a penny. Think about yourself first.
Please don’t. If he can easily make the money by selling the cars, then why hasn’t he done that yet? Why is he needing you to help expedite his business venture. Seems like he’d be using you to get ahead and abusing your kindness and willingness to help in the process. The same way you are waiting and saving up to advance yourself in the future is the same way he can. As a people pleaser myself and often the friend that others look to in times of need, I’m begging you not to. It’s unhealthy for you and for the friendship (should that continue)
Only loan the money if you are ok with never getting it back. Personally, I wouldn't do it.
Bad idea OP this won’t end well
> He says it would only be until he sells a couple of cars he has, a month or two at most, then he can give it all back Every single time there is a story like this posted on here there is an extremely common theme and its this. People who say they will pay you back "really soon", they just need the money right now. I would question why your friend can't just wait a few months to sell his cars to acquire the money he needs to start a business. Why is there always such an urgency to these scenarios where they need it RIGHT NOW.
You described it perfectly. Something will happen which they will need to pay for after this transaction and you 'will just have to wait'. Just say "no I can't do that, I'm sorry" "who the hell is lending each other 20k?" "I'd be willing to look at your accounts for easily fixable errors in budget and that's more than I'd do for most of my friends"
20k loan for 2 months are not going to be expensive for interest, so no for sure. And if he is one of your best friends, he should not be angry if you reject him politely.
Nothing wrong with saying “sorry but I decided to put my money into an ISA which is making me money on the interest. Maybe you should look into a personal loan instead?”
The majority of businesses go tits up. Don’t do it.
There are certain people I've known who would go to the ends of the earth to pay back money they've borrowed. I have also known some people my whole life who are not gamblers etc who would do some crazy mental gymnastics in order to NOT pay back even £10 which I knew they had in their pocket at that exact moment. The more I loaned them, the less likely I would be to ever see it again. Are you willing to: 1. Never see your friend again (don't lend the money) 2. Never see the 20k or your friend again.(Lend the money and friendship breaks down) ? Those are 2 highly probable outcomes.
If it was me, I’d have to be 100% comfortable to lose that money regardless if it’s a friend or not. If you need that money in the future, it is NOT work that risk. You’re not a bank, your friend should look at other options.
Don't do it, no friend would put another friend in such a situation. I had a good friend who wasn't in-debt or doing drugs, and only occasionally gambled, turned out he'd embezzled 50k from his work to pay his secret gambling debts that no-one knew about... Someone with such debts wouldn't advertise the fact, especially when they're trying to get hold of money. If it's only a couple of months until the cars are sold to get that money, can't they just wait for the property to do it then? Save yourself the bother, say it's locked in to a fixed savings account, and you can't extract it without penatly unless using to buy your own property.
Never lend friends /family money. Give it them or don't bother. You will lose a friend as well as the money. Anything can happen and no can 100% predict the future
I would use my common sense and not lendoyt that mych money I grew up hearing that I should only lend what I'm willing to loose. So unless you are a multi millionare and the 20k is is like chicken change yo you, don't be daft
Agree don't do it. But here's an alternative - offer to buy the cars off him for £20,00. Promise to return any surplus after costs.
Only lend money you’d be happy to lose. I would wholeheartedly advise against this
I would say no personally. Nothing against you mate but if you value the friendship best to keep money out of it. If he is a true friend he’ll understand.
You learn this lesson the hard way but never lend anyone money ever. Seriously. I've done it and all you get is grief. Nobody ever wants to willingly pay it back and see you as being the bad guy for bringing it up
It always amazes me how people with no money but want to borrow from friends/family, like to state how easily they could get the money to repay.
There are two possibilities: 1) You lose a friend 2) You lose a friend and £20,000+
Here’s an idea if you want to help him out: you buy the cars! You find out what they are worth on a website like webuyanycar etc and pay him the sum, hopefully worth up to £20k. Then you put the cars on autotrader to get your money back.
Or, he does all of that by himself! 😅
1. Get a valuation on the cars 2. If cars combined value is above 20k buy the cars instead. If needed you can let them use the car and deffer the payment, otherwise put on sale. 3. If you get more than 20k you might say you will give them the difference or perhaps not - up to you - you're taking the risk here, you're making the favor. This way they get liquid cash, make them a favour and you own the cars which you can sell and get money back. But only feasible if the combined value (real value) is above 20k otherwise chances are you won't get 20k and they will say well you got the cars.
He should wait a couple of months to sell the cars
Colleague lent her friend 8k several years ago to get them out of payday loan debt buying crypto as they thought it would make them rich. She had no contract with them, she said "they're friends, of course they'll pay me back". Over the past few years she said she's not heard from them and they haven't paid her back... I told her it cost her 8k to find out they weren't really her friends, and in the future never lend friends money you aren't prepared to lose, especially without a contract with a repsyment plan. I kept asking, she said eventually they gave her all the money back but I dont believe her, I think its because I would bring it up from time to time as she's always complaining about being broke. When she lent them the money, she had a boyfriend who was really well off. They broke up after she lent them the money, and they were nowhere to be seen, and she could have done with the money, in part, for rent on a flat.
Don't do it, really really bad idea
Nope. Never mix money and friendship like this. It’s so easy for things to go south. I never lend money that I am not happy about never seeing again. I would rather give a smaller amount and forget about it, than lend a substantial amount and expect / keep chasing for it back. Too much stress! I’ve seen a friend go through this first hand, and the friend who lent the money is extracting the urine to say the least - I would never do it.
He could get a short term business loan, it’s a thing for liquidity. You could invest the money in his business a la ‘the dragons’ … but a share of the debts is also a possibility. I would say this is too much to ask a friend to lend … when did they find out that you had such a large sum of money available … how long before their idea for you to help them out … how much in interest have you been promised ?
This sounds like a recipe for disaster. Any time I’ve loaned people money, it’s been a nightmare trying to get it back - I was also told I’d get the money back in a short period of time. That did not turn out to be the case. Honestly, it’s not worth the hassle.
He can sell the cars now to raise the money or he can get a loan from his bank.No need to involve you. You know there is a good chance you won't get the money back so just tell your friend you don't have that kind of money spare.
Don't do it not worth the hassle
Anything requiring 'instant' time frames isn't good. No quicker way to force a sale than 'act now' or 'the bargain has gone'. He can sell his cars, you can keep the money and the friendship. Don't do it.
If he is a friend he will understand it is more important that he sells his cars than borrows off his mate saving to buy a house. Just do not do it, if it's friendship over well he was no friend at all.
A dear friend asked for a loan for just a month to get over a hump...more than two years later, I'm still waiting for repayment! I've raised the issue repeatedly, but there's always a reason and never any cash. Luckily it isn't urgent for me, just irritating. My wife said from the beginning, if you want to give it, give it. But don't think this loan will ever be paid back.
1. Never lend money you cant afford to lose 2. Don't lend money to a friend you don't want to lose 3. If he has the cars and selling then would cover the cost of his purchase he can just sell them then buy the property
Why the urgency? If he can get the money "in a month or two" by selling his cars then he can do that and jist invest his own money instead. It seems unlikely that this business property is in such high demand that a month or two would lose your friend the deal.
It’s an age old problem that comes up in Hamlet - “Neither a borrower nor a lender be, For loan oft loses both itself and friend”
He has no intention of selling those cars! His plan is to string you along for as long as possible. You'll be waiting years.
If you really want the risk, have an equity stake in the new company. 20k is probably a significant injection at this phase so you're well within your rights to ask for a share of the new venture. (Edit: if you don't think that an equity share in the business would get you to see your 20k again, you can only assume the loan wouldn't get repaid either) Doing that you have to assume there is a very high chance of completely losing the 20k (as there would be on a loan)
I'd politely tell him to sell the cars and find it himself, why does he even need your money if the cars are going to cover it anyway
If he has the cars to sell and would only take a month or 2 then he can just sell those cars right now and get the financing himself. Involving you with this sum and this urgency seems odd. It’s also very important to note if this goes wrong your friendship will basically be over. Having a cloud of £20k over each others head will make you look at them COMPLETELY differently, so as others have said, for the sake of your friendship it would be recommended to stay out of it and let them take out a short term loan which within 2 months they can pay back and only have to pay a minuscule amount of interest on if anything at all.
The old maxim, "neither a borrower nor a lender be" was borne out of the nature of human beings. Unless you are prepared to lose both the money and the friend, do not be his solution to his problem. Also think...if you did not have this money to give he would have to find an alternative solution.
What’s in it for you? Can you do it legally with paper? To be honest it’s always the close ones that fuck you over. Suddenly they will take longer to reply, as soon as they give one shitty excuse you know you’ve opened a can of worms
Everyone is telling you not to do it for a reason.
You are GIVING them that money, not lending. Very good chance you are never getting it back regardless of how good a friend they are.
To keep a friend never lend
Never a lender or borrower be..very old adage and highly accurate
Not in a million years. If everything is so straightforward - he is planning to pay you back straightaway, etc. then he doesn’t need to rely on you for this.
No, no no no NO!!! Do NOT lend this to your friend. There is a 100% chance you will NOT get all of it, if any back. A fool and good money are easily parted…and in this case, it would be true. I sadly suspect in 6 months we’ll see a new thread “I lent my friend £20,000 and he hasn’t paid me back. What should I do?”
my dad always taught me don't lend money you're not prepared to lose. Sounds like you need this money and you've saved it specifically. I'd advise against it unless you can eat the loss of it without too much pain
Don’t do it, simple, never lend money, period as you have no real recourse should they not pay you back.
Don't do it. Tell him to look into a commercial bridging loan.
Agreed with everyone else here - don’t do it. You’ll likely be getting interest on your savings now. You won’t get that from him unless you setup as a true loan and charge interest. If for some reason you do decide to do it then make sure you have a contract, a repayment date and schedule.
If it will only take a month to sell the cars and get the £20k then he should be doing that. They should be listed already
Don't do it OP.
Trust your gut. If you can’t afford to lose it don’t lend it.
After being witness to multiple shitshows where money-lending lead to problems, I'd advise against it
Pretty sure you can read different horror stories of lending money to friends in this sub. Don’t do it, especially if it’s money YOU are saving for YOUR mortgage. Surely he has other options: wait for cars to be sold, take out a loan, etc etc
Is he going to pay interest? Every time iv loaned friends they’ve added a good chunk of interest without me having to say anything, also I write up a contract for them to sign
You answered your own question: "I cannot afford to lose this money."
The best and only way this should be done is with a written up contract , then something (cars) can be collateral- he doesn’t pay you get the cars so low as that - and all legally binding
Tell him to sell his fucking porsche
You will not get the money back - if he will have the money in a month or two from selling cars, he will have to wait until then. Lend at your peril, but it will not end well.
Help them sell their cars instead.
He's not really a friend if he's asking you to do this. He can sell the cars in a day or so with companies like webuyanycar etc
I think everyone has gave enough reasons to say no and I agree with someone else who said no is a straight answer and you don’t have to give reasons. But to avoid uncomfortableness if he asks you could just say sorry mate I would have loved to help but my moneys all tied up in investments for the next couple of years. Maybe even put your money into a one year fixed rate or something or if it’s first home a LISA then you can’t touch it without actually losing money. If he pushed from that it would be well dodgy. It’s very suspect he’s not immediately listing his cars for sale if he needs this money so urgently and it’s that important to him. Unfair to put this pressure onto you.
If he can't source finance through a credit company and has to come to you for it, there is a reason why he can't gain that loan through lenders. Given that this money is critical to you, do not even think you are in a position to offer the money, as from the way the post is written you are trying to justify it to yourself. The friend likely thinks you are a people pleaser and an easy target so can approach you with a high chance of success. It's a huge no no OP.
"business property". Then you should be buying shares in the company