Have you have ever loaned money to a friend or family member when you really didn’t want to because you felt you had to? Then, here is some timely advice for you: Never feel that you must surrender when it comes to making a decision about whether or not to loan your money. There are ways for you to turn down a loan request in good conscience without agonizing over it, or hurting or antagonizing the feelings of the person who has made the request. Here are some suggestions:
If you do not have the money, do not be embarrassed to say so. You can say this frankly and candidly without embarrassment to any person that you are close to and consider to be a friend. Simply, say: “I wish I could help, but I simply don’t have it.”
If you have the money but do not want to loan it, let the person know in a tactful manner. Like most people you have financial limitations. Explain your important purpose for the money that you have set aside and that you don’t want to put him or her in the position of feeling guilty if for some reason he is late in repaying or unable to pay you back at all.
Help your friend maintain a sense of dignity even though he or she had to ask you for a loan. Remember, your friend may be more embarrassed about making the ask than you are about having to refuse. Saying something like, “I understand. I’ve been in the same position myself.” can help to keep you both on an equal plane.
If the friend is simply a constant borrower, turn the tables. Tell the person that you were about to ask for a loan from him! This can really be effective in bringing the subject to closure, quickly. Even more, it lets your friend know how it feels to have to turn down a friend.
Sometimes a person will ask for a loan as a way of testing your friendship. This type of person cares less for the money than identifying someone to lean on. The only way to keep enjoying the positive qualities of such a person is to gently and firmly refuse the request. The individual will soon learn to deal with you that way, or will eventually find another person to lean on. Either way you will eliminate a constantly needy person from your life.
Do not turn completely off when you have a friend who makes the request. Find out why your friend is asking for the loan. Does he want the money because of a crisis in his family? Is there a true need? Or does the person just want to satisfy an impulse to buy some non-essential item that went on sale? If you can see that the request is being made because your friend genuinely needs help and you are certain it is not because the person considers you a soft touch, perhaps there is something else that you can do other than loaning money. For example, you could assist him in finding a temporary second job. Or, offer child care as your time permits while the person takes on a part-time temporary job. If he or she just wants to buy the latest fashion designer bag or tie, you can suggest that he do some comparison shopping and by that time he may have another paycheck.
Remember true friendship can is never bought. If you cannot maintain the relationship loaning money as a factor, then perhaps it was never a true friendship from the start.
If you decide to take a chance and provide the loan, be sure you are prepared in event that your friend decides not to pay you back. Age old wisdom dictates that a person should never loan more than they are willing to give away. As they daytime court shows have taught us, it is always helpful upfront to obtain an I.O.U. or promissory note just in case you decide that legal action is the only option for seeking re-payment on the loan.

Author's Bio: 

Bette Lawrence-Water is a community health advocate and certified professional coach with more than 20 years experience in helping people and organizations reach optimum performance. She is recognized as an educator, public speaker, and master collaborator. She embraces the philosphy of "To lead is to serve." She facilitates dynamic workshops on personal improvement, leadership development, volunteer recruitment.