The Iron Law of Lending Money

Before borrowing money, ask yourself: "If I never get this money back, am I okay with that?"
If not, don't lend.
"Needs investment," "Business cash flow," "Just a little short for buying a house"—these are not issues you should solve with personal relationships. If their financial hole requires borrowing from friends to fill, the problem is far more serious than they tell you.
Decided to lend? Do three things: write a IOU, transfer via bank, reset your psychological expectations to zero.
If they don't repay the first time, absolutely do not lend a second time. This judgment is nearly 100% accurate.
Learn to say: "Sorry, I have a principle— I don't lend money to friends because I don't want money to ruin our relationship."
The few seconds of discomfort when saying this are far better than the outcome of not getting hundreds of thousands back and losing a friend.
These days, the most expensive thing isn't money; it's boundaries.