It can quickly become a difficult situation when you have a friend who wants to borrow money from you. It puts you in a very awkward position and can be an issue in your friendship.
When a friend wants to borrow money, there is always the chance that it will work out fine for you. You could choose to lend them money and they could pay you back in a timely manner and it may just be a one time event. But it could also end up being disastrous. If you feel comfortable allowing your friend to borrow money, that is completely fine.
But if you feel uncomfortable with it, you have the right to say no. That is the first thing to realize; that you are under no obligation to loan your friend money. If you do not feel comfortable with it, explain that to your friend. Tell them that you don’t want to mix finances with your friendship because you are afraid that it would have a negative impact on it.
But you don’t have to totally leave your friend high and dry, either. Offer to brainstorm with your friend to help them think of ways to deal with their situation instead of the choice to borrow money from you or someone else. Maybe you can help them figure out a way to tap into a resource they had forgotten about. Perhaps you can think of a way they can make a little extra money on the side to help them out of the current financial hardship they are in.
Making those efforts to help your friend find a solution to their financial woes helps them to know that you do care about them and what they are going through, even though you didn’t feel comfortable allowing them to borrow money.
For more insight on this subject, this article by Get Rich Slowly may be of help.