Positive command to loan money to a needy Jew:[1]

It is a Biblical positive command to lend money to a pauper (if one is able to afford it[2]).[3] This applies even if the borrower is wealthy and is simply in temporary need of the money.[4]

Lending money to a person who has no means of paying back:[5] If the lender knows that the borrower does not have the means to pay back the loan, and does not plan to invest the money in a business which will bring profit, but rather wants to use it in a way that will not produce any income and will leave the lender without the means of collecting his debt, then not only is one not obligated to lend him the money, but it is even better not to do so.[6] [If however one knows that the borrower has income coming in that can cover the loan, or that he owns items that can be sold to cover the loan, then he is allowed to lend him the money.[7] Nevertheless, he is not obligated to lend him money simply on the basis that he can sell his items if there is worry that he may not do so.[8]]

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[1] Admur Halva 1

[2] Admur ibid in parentheses; The Shiur for “Hasagas Yado” is explained in Y.D. 249/1

[3] Admur ibid; Michaber C.M. 97/1; Rambam Malveh Veloveh 1/1

The source: This command is learned from the verse “Im Kesef Tilveh Es Ami Es Hani Imach.” One may think that this is voluntary and not an obligation, on this it says “Vehavet Tavitenu.” [Admur ibid; Mechilta Mishpatim 19]

[4] Admur ibid; Michaber ibid; Sukkah 49b; Bava Metzia 71a

The source: From the above verse one would think that opne only needs to lend a pauper. From where do we learn that it is a Mitzvah to also lend to a wealthy person who needs money temporaraily? From the words [Shemos 22/24] “Es Ami”. [Admur ibid; Smeh 97/1]

[5] Admur Halva 5; Michaber C.M. 97/4; Tur C.M. 97/8

[6] The reason: As in the end he will need to pressure him to pay back the money and will transgress each time the prohibition of “Lo Sihyeh Lo Kenoshe.” [Admur ibid]

[7] See Ahavas Chesed Dinei Halvah 1/9 that if a Mashkon is given he may lend him the money if he wants, and the same would apply to if he has items he can sell, as Admur Halvah 13 rules that so long as one has more than Sidrei Baal Chov one does not transgress “Lo Siyeh Lo Kinoshe.”

[8] See Avnei Yashpei 2/119

[9] See Admur ibid that one is not obligated to lend to a person who is known not to have the means to pay back, and certainly this would apply to one who does not want to pay back; See Ahavas Chesed Dinei Halvah 1/10 that one does not have to lend money if he may incur a loss as the result; See Avnei Yashpa 2/119 that one does not need to lend to a person who one does not know.

[10] Avnei Yashpei 2/119

[11] See Admur ibid 1

[12] See Admur Halva 1 that giving a loan is like Tzedaka; Likewise, see Admur 5 that it is forbidden for the borrower to use the money for extravagances and thus not have how to pay back, and certainly one is not obligated to lend him money in such a case; See Smeh 97/5 that the borrower may not use the money unless it is for a great need. Now, although the above is discussing one who does not have the means to pay back, nevertheless, seemingly the same would apply if he does have the means to pay back that he is not obligated to lend him money for superfluous matters.