Asking friends for loans is like asking them for sex: Whatever happens, the relationship will never be the same again.
At this point in history, money holds such massive emotional baggage that asking "Can I have some of yours for a while?" or "Will I ever get it back?" are some of life's weightier questions.
And now, we the people -- underwater, unemployed and terrified -- are forced ever more into the position of borrowing and lending among ourselves. Facing increasing personal financial crises, many of us now gaze dollar-sign-eyed at those with whom we lunched and shopped and shared secrets in gladder times.
When friends ask friends for loans, what's really being asked? What's the emotional "interest" on such loans -- and can friendships survive them?
Ella Hodges had three kids and worked part-time for a law firm when her husband's business failed in 2010. For the first time in her life, she needed to borrow money. But from whom?
"I knew that my friend Bree had a lot of money, and I knew she would say yes," Hodges remembers. "She knew I had always been very fiscally careful, so she trusted me. But how could I put Bree into the position of worrying that maybe the payback might never come? How could I put that burden on our friendship?"
Debating endlessly what she calls "the ask," Hodges thought about a neighbor who had run into hard times.
"She received numerous $1,000 loans from fellow church members who, when they later saw her at McDonald's or the movies, were clearly thinking: 'Sarah, is this really the best use for my money?'"
Borrowing from banks has its downsides, "but money loaned between friends is not free of strings. It's not clean. Conditions are imposed either implicitly or explicitly that give the giver a permanent one-up over the getter," Hodges says.
"One friend will always be high, the other low, and someone will always feel judged. Borrowing money from Bree would make her my banker. She could then justifiably scrutinize every decision I made. If she loaned me money, then asked me out for drinks, should I not drink? If I buy a car, does she get to choose it?
"I'm a very self-conscious person. Others aren't. They wouldn't share my concerns about borrowing money or spending it."
Tory Fisk learned this when his friend, a laid-off computer programmer we will call Jed, asked Fisk last year for an $800 loan.
To music-teacher Fisk, $800 was a lot. "Friends are usually in the same economic class as each other, so if you ask your friend for money, that friend is probably not going to be some cavalier Richie Rich smoking solid-gold cigars. It'll be someone to whom the amount of money you're requesting seems substantial."
Having always earned more than Fisk, Jed spent freely -- "so we always had the same amount: not much. And always assuming that he would always be employed, he eventually realized that he wouldn't."
Jed told Fisk he needed the $800 "for essentials like food," and promised to repay it in $50 monthly installments.
"In typical scam-artist fashion, he lavished me with praise: 'You're my best friend in the world.' So you feel guilty for not wanting to give. Also in typical scam-artist fashion, he said, 'If the situation was reversed, I would do it for you.' But the situation never would be reversed. So of course he could make these grand promises that he knew he would never need to keep," Fisk says.
Fisk loaned Jed the money.
Jed missed the first payment, then the next. One day Fisk was startled to see Jed "wearing a fancy new suit. He said that when you're down and out, you need good clothes to impress potential future employers.
"With every missed payment, I found myself feeling more and more critical about his lifestyle. It was like, if I'm supporting you, then I have a stake in your choices. You're supposed to use that money to get back on your feet -- not enjoy yourself," Fisk seethes.
It angered Fisk that Jed refused to seek work in any field besides programming.
"He said he wouldn't lower himself. Suddenly, every little thing he did made me incredibly annoyed. He'd invite me out and when I said no, he'd offer to pay my way. Right -- pay my way with my money. How generous."
Eventually, Jed stopped mentioning the loan. No more apologies or promises to pay double or triple next time.
"He probably assumed it was forgotten and that since it was forgotten, it was forgiven," Fisk says. "But in fact it was a festering sore. To me, $800 is a lot of money. It's not like a cup of sugar loaned to your neighbor."
Jed's changed situation -- jobless, indebted -- "didn't change his personality," Fisk says. "It didn't imbue him with responsibility."
As a last-ditch effort, Fisk created a small business with Jed.
"His carelessness ruined the business. That, along with never repaying the loan, ended our friendship."
Every human relationship has its boundaries and taboos. If sex and money are our culture's twin obsessions, both wreak similar havoc on friendships. Asking friends for loans is not unlike asking them for sex: Whatever the answer, the relationship changes forever -- typically in a haze of guilt, shame and regret.
The size of a loan that one friend requests from another puts a neon price tag on that friendship. Is a new iPad worth more to you than a roof over my head?
After Rose Guinne lost her job, "I had no choice but to borrow money. I had always prided myself on being able to pay my bills," but for the first time in her adult life, "I had no savings, no way of earning extra cash. I was embarrassed to approach my parents because I wanted to be able to demonstrate my independence.
One day Guinne ran into a friend we will call Howard. Twenty years her senior, he asked in a fatherly way why she seemed so sad.
"So I told him. ... Then it just burst out of me; I said, 'I know it's a lot of money, but is there any way you'd have $300?' ... I was ashamed. I had always wanted to project the image of a good businessperson and I felt I had failed."
Howard wrote her a $300 check.
"I had been brought up to know that my actions were and are accountable, so I said, 'Let's draw up an agreement and we'll each have a copy,'" Guinne recalls.
They drafted and signed it on the spot.
"It was to be paid back in installments at no interest, with a particular target date. If there was a delay in payment it had to be agreed upon by both parties.
“Howard smiled at me -- I’ll never forget that smile -- and said, 'I trust you.'
"Every two weeks, I’d hand him a check and we noted on our agreements what had been paid and what the remaining balance was. We were like two business associates doing this, and we even laughed about it.
"Because we handled it in a businesslike manner and were professional about it, our friendship remained very much on track -- as a matter of fact, even more so, because he knew he could trust me and I could trust him. Trust is so important," Guinne says.
True. That's why Ella Hodges decided not to ask Bree for a loan after all.
"Our response when a friend asks us for a loan reveals our true feelings about that person," Hodges says. "You can cloak your answer in whatever terms you want, but it reveals either that you think they'll pay it back or that they won't. There might be good reasons for either thought, but as soon as you have to confess this by saying no, it's horrible."
Hodges borrowed money from a relative instead. Nor did she ever cash the check that another caring person had given her.
"I kept it in my wallet for a long time, just in case," Hodges says. "Then I gave it back."