I've seen far too many financial deals between family members go south--in both mine and my wife's family. Buying homes, buying cars, and even lending money. As such, we are adamant. We don't lend to family, we don't co-sign for family, and if the opportunity presented itself, no matter how good of a deal it was, we wouldn't go into business with family.
We've been hit up by family for money a couple of times. Each time, wife and I talked about it and both concluded, "Ya know, if we lend this money, we are pretty much giving it away as we won't ever see it again?"
If we're both OK in giving a gift, then we do it but still call it a loan. That way, with one loan "still outstanding", that borrower won't ever hit us up again for another loan. In that regard, it's worth it to gift away a few hundred bucks so as to avoid being asked again in the future.
The B.S. story is always, "I need money to pay the rent or feed the kids", but it always turns out to have been for a boat, a truck payment, some lame-brained "business venture", or other rathole.
