Shakespeare was dubious. “Neither a borrower nor a lender be,” we are advised in Hamlet, “for loan oft loses both itself and friends”.
For example: Your best friend asks you to lend her money to tide her over after an unexpected job loss. You have no qualms, because she has always been so responsible with money. But 6 months later when the loan comes due she’s disappeared, you can’t get her to return calls or emails. Feeling angry and betrayed you vow to cross her off your friend list, and never be so foolish as to lend money to a friend again.
Could this have gone down any other way?
The Lending Money Agreement is a straightforward, downloadable agreement that makes sensitive, potentially emotional arrangements like lending money to friends or family much less fraught with confusion and misunderstanding – and more likely to have a happy outcome. Why?
You’ll pause to consider if you really do want to lend the money – and how much you can comfortably afford. The reason for the loan can be spelled out, and the manner of repayment clarified. In the case of your friend who disappeared under the radar, the agreement spells out in advance options for remedying this situation, from offering a grace period, to modifying the terms.
When both parties take the time to think through the arrangement, including their commitment to communicate with each other even if something goes awry, the chance for a successful outcome is greatly improved. In this case, your friend would have realized that you both were committed to each other and the success of your agreement – and that there were options for modifying the arrangements so that both parties could walk away happy.
Like all the Friends & Family Agreements, the Lending Money Agreement is written in straightforward language, and thoughtfully engages both parties so that the outcome is satisfactory to all. The agreement can be adapted and modified to suit the needs of the particular situation.
There may be something rotten in Denmark, but let’s keep those personal relationships healthy by putting it in writing!