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If you lend money – get it in writing
I’m sure that you heard the old adage never mix business with pleasure. Most people prefer to keep their personal and professional lives separate, particularly where money is involved. Poor business decisions or ventures can lead to a rupturing of a friendship and the same holds true in a money-lending situation. Many good friendships have been lost because money has been lent and then misspent or not repaid. But what about situations when there is no one else to turn to? You’re desperate for money and your best friend offers their assistance. Can you afford to turn him or her down? Or what about the reverse - one of your closet friends comes to you with a financial problem and asks for your assistance because they have no other options? Would you feel right turning them away? How can you avoid falling into the pitfalls of mixing friendship and money as either the lender or the borrower? Here are a few tips on how to approach a loaning situation between friends.
• Eliminate All Other Options Before you accept money from a friend or offer money to a friend, make sure that there aren’t any other options you can pursue. Are there other lending companies that will work for your situation?
• Have you cut back your expenses to the absolute minimum or are there some non-essential items that you can do without?
• The most important thing to keep in mind is that borrowing from friends should be your last option, not your first. If you can get it from someone or somewhere else, then you should.
• Treat it like a business arrangement. Use a company such as One 2 One Lending to document and collect your loan. A third party can prove to be very valuable in removing the emotions from a private loan.
• Most friends don’t mind lending the money and helping someone out, but it can be very aggravating to believe that money is being misspent. If you’ve borrowed money from anyone your first priority is to pay that money back.
And if you are the lender, don’t let your frustration build up - make your feelings heard and let your friend know. Introducing One 2 One Lending can act as your voice and maintain a professional relationship.