I can tell you, from my experience, it's a no win situation either way.
I once loaned a friend several thousand dollars. For awhile we stayed friends, and kept socializing etc., and I never asked about the repayment, or put any "heat" on the guy. Yet, after a bit, he quit calling to go out, and the friendship just slipped away. We still run into them on occassion at social events, and we speak, but that friendship basically ended.
After that, in another situation, a friend asked me for a $25,000 loan, I said no... and that friendship ended almost immediately afterwards (not by me).
Both had been fairly long term friendships. It's true that money and friendship don't mix well.