ArcaMax

Dear Amy: I'm wondering how to balance friendship and faith with a business transaction that has gone bad.

I loaned several hundred thousand dollars to a longtime friend, as his business was struggling and he was going through a divorce.

We agreed on standard documentation and precise payment terms. He has paid only part of the loan back, and the nonpayment is creating financial issues for me.

We are both Christians, and I want to follow biblical mandates (as I see them) that require people to lend when asked. I also want to be a good friend. However, although my friend says that he feels bad about the situation, he does not seem to be prioritizing repayment or making wise financial decisions. For example, he and his business have incurred new expenses recently that I view as unnecessary.

Would you consider the friendship over and treat this as a purely financial transaction? Or would you continue to cut him some slack? I see no reason to harm my own financial situation due to a friend's bad choices, but I don't want to be unfair or cruel to someone.

-- A Remorseful Lender

Dear Remorseful: You frame your question by asking what I would do. But nothing in my own faith practice (or bank account) would enable this sort of extreme lending. If I want to and can afford to, I give, versus lend.

Not to put too fine a point on it, but bailing out your friend has resulted in financial hardship for you, and has also enabled him to persist in believing the fiction that he runs a successful business. As you point out, he is not running a successful business. So -- except for delaying the inevitable -- how have you actually helped him?

Now you have fewer assets to put toward doing good works, taking care of family members, helping those in dire need, contributing to charity (and, of course, your own church community). Imagine how many hungry mouths your thousands could feed, how many schoolbooks it could buy, how many church missions it could fund...?

Instead, your kindness and generosity has resulted in lost assets, enabling your friend's mistakes, and, likely, a lost friendship. This is not your fault (it is his); your own choice, however, is your responsibility.

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