Money is unfortunately a common cause of conflict. So before exchanging cash, consider this...

Have you ever had to borrow money from a colleague? How about lending money? Whether you’re the borrower or lender, loans between friends, family and colleagues can become complicated very quickly. Even when the intention is good, it’s often safer “neither a borrower nor lender be, for oft loan loses both itself and friend.”

But what if your intentions as the borrower are good? And you as the lender can offer your help? Should money and colleagues ever mix?

According to research, there are important considerations for both the borrower and the lender to make before any money is exchanges are made.

If you’re the borrower:

Is it an essential?

If you’re asking for money to pay off a portion of your debt or to purchase a bus ticket to take you home in the afternoon, then go ahead and ask your colleague to help you out. However, if your intentions are to satisfy a ciggy craving or to put down a lay-buy for a pair of those ‘must-have’ Nike sneakers, it’s not essential to ask for help.

Read: 7 things you need to stop wasting your money on

Offer proof of your trustworthiness 

Should you be in a dire need for extra cash, offering a timeframe for when you plan to pay back the money. It will give your colleague reassurance that you're committed to paying back the money in the time you promised. Also consider offering something your colleague can hold onto as security, especially when you’re asking for a large sum of money. 

Put your agreement down in writing

More pressing things come up, memories get hazy, you forget and tensions start to run high. That’s why it’s important to never rely on verbal agreements.  When you put everything on paper, both you and your colleague will have a written document detailing when payments will begin, how much you’ll pay back and if there is any interest involved.

If you’re the lender:

There's a possibility of default in payment

If your colleague is asking for financial assistance to pay back someone else they owe, chances are that they cannot plan their finances very well, and you’ll probably never get your money back in time... if at all. If they are borrowing money to start up a business, what guarantee do you have that it’ll be successful? Rather say ‘no” politely, and save yourself the risk.

Offer alternative solutions

If you’re in a situation where you don’t want to lend your colleague any money (perhaps they have a reputation for being compulsive borrowers), offer assistance in another way. For instance, if your company has an in-house counsellor who can assist, suggest this to your colleague. In this way, you’re showing kindness without losing anything financially.

Never give in to pressure

It’s very easy to give into pressure when your colleagues think that you’re never broke and definitely have a ten to spare. Unless you are really keen to lend a helping hand, fight back the pressure to give money just because you can. This includes offering up an excuse for your decision. You do not owe anybody any explanation.

Read: Blurred lines: When colleagues cross office boundaries

In ending, there are instances where loans between colleagues go smoothly. But you need to think twice before any transaction, and remember that the risk of damaging a relationship with a colleague comes at a much higher price than borrowing or lending money.