The most awkward part of lending to friends? The ask and offer. Frank explains how to solve it.
The Problem: Asking Friends for Money is Weird. Offering is Weirder.
One of the biggest barriers to lending money between friends and family is just getting started.
Friends and family often don't know when someone they're close with either needs help or is willing to help. And communicating either of those is fraught with social and cultural taboos.
Frank's research found that asking/offering is a major issue for over 60% of people thinking about lending or borrowing money from a friend. In fact, it's the #2 reason that makes people feel uncomfortable mixing money and friends (behind only the annoyance of reminding them pay you back).
Asking a friend or family member for a loan can be an awkward -- and potentially stigmatizing -- event. It may reveal vulnerabilities that people can be unwilling to expose, even to close friends. And even if unjustified, people worry that it will make them appear unable to manage their finances. Furthermore, people worry about how the relationship would be harmed if they are told "no".
Offering help can be just as tricky. If it's done poorly, it can come across as chest-thumping and arrogant. It can inject a non-equal power dynamic that can be uncomfortable amongst friend. It can feel -- for lack of a better word -- "douchy"
So is there a way to get around these issues? Of course.
The Solution: What if someone else asked for you?
There are a few imperfect solutions that others have come up with: asking people in a more credible way or offering in a less aggressive one. These help, but the best system is one where you don't even need to ask or offer, cause someone else does it for you.
What if someone else could ask your friends whether they'd lend you money?
What if someone else could ask your friends whether they need money?
And if there is a match then it could make the connection!
This double blind system is how Frank works.
You import your contacts and, over a period of time, we ask your various friends whether they'd be willing to lend you money if you needed it. If you do need money, you can select the people you'd be willing to borrow from and, if they've offered, then the money is made available to you. So nobody has to risk that awkward ask or offer.
Think of it like dating. It used to be awkward to ask someone out, but now you just swipe right with the knowledge that they'll only find out if they swiped right too. The double blind system: solving so many of life's awkward moments :)
Next Article: Part 4: Terms Without Negotiation
Previous Article: Part 2: The Advantages
This is Part 3 on our series about the challenges and solutions to lending money to friends and family
Part 5: How do I Get Paid Back Without Being a %$^?
Part 6: Power Dynamics with Friends and Money
Part 7: Friendships at risk
Part 8: Something Went Wrong, Now What?
D'Arcy Coolican, Co-Founder, Frank
Frank is a platform that uses behavioral research to help make it easy to lend and borrow money with friends and family.