5 Things to Consider Before Lending Money to Friends and Family Many business owners have learned the hard way that family, friends and finances don't always mix.

"Neither a borrower nor a lender be," Polonius advises in Hamlet, "for loan oft loses both itself and friend." Shakespeare was a smart man.

When a friend or family member asks to borrow money, think about why they're asking you and not someone else. They may see lots of money coming into your business, payroll being met, maybe your nice house and car. What they don't see is the credit line that keeps your doors open or how thin your profit margins really are.