Lending Money to Co-Workers

A co-worker, a guy, has asked me for a loan.  We’re not dating, exactly, but we are quite close.  I am reluctant to give him a loan but I really value our friendship.  Any advice for me?
 
I sense you are open to a romantic relationship and perhaps have even imagined the possibility of marriage.  Now you are confronted by a request that causes you some concern.
 
The loan is much more than an amount of money changing hands for a particular period of time.  It is all about confidence and the expected capacity to pay.
 
In addition, unlike a bank or credit union employee considering a loan to a customer, an arrangement between two people reveals the nature of the friendship.  Trust is manifestly more significant.
 
Your friend has revealed he is in a difficult financial situation which is confidential information he would probably not share with others.
He is comfortable confiding in you.
 
Nonetheless, you may characterize his circumstances to be potentially “desperate” as he has made himself vulnerable by identifying a failing which requires your assistance.  You may be wondering why he can’t get a conventional loan from a financial institution, for example.
 
While it is the principle you will need to address, the requested amount and the promised payment schedule will also be relevant.  If, for instance, he is asking for, say, $200, it may be less problematic than $2000.
 
On the other hand, the smaller important, perhaps ironically, could reveal a greater issue.  If his financial state is so difficult that he needs a small loan to make it to payday, then he is obviously struggling with his personal finances.
 
A larger amount may be more strategic; however, again, you should be wondering why he can’t secure a bank loan or even take a cash advance on his credit card.  What about help from family members?
 
His request for a loan has altered your relationship. Whether you agree to lend him the money or not, you will have likely lost some respect for him.
From his perspective, too, the vulnerability he has demonstrated will alter the friendship – and not for the better.  The loan request is a secret, after all, and you have been made aware of his financial difficulties.
 
My advice is to diplomatically refuse to make the loan and explain your reasons without sounding condescending or judgmental.  Your response may cause hurt feelings, but you should accept the consequences.
 
Ultimately, you will need to decide if you still respect him.  Can you see yourself becoming more serious?  The loan request may be tip-off that he is not someone you should consider for a long-term relationship in any event.
 
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