When Not to Borrow
Question: May someone borrow money from an individual or from a Free Loan Fund although he has no foreseeable way of repaying the loan and relies only on "borrowing from Reuven to pay Shimon" or on some miracle to provide the money?
Answer: Borrowing money when you know how you are going to pay it back is an integral part of both business and domestic life. The Torah therefore urges Jews to lend money and one of the beautiful features of observant Jewish communities is the proliferation of Gemillat Chassadim (gemach) Free Loan funds.
The borrower who takes a loan from such a fund or from a friend must, however, do so only when he knows how he will pay back the loan and on time! It is a wonderful thing to have faith that "Heaven will provide," but not at the expense of others.
When Rabbi Yochanan ben Zakkai, the great Talmudic Sage and head of the Sanhedrin, challenged his five outstanding disciples to identify the ideal path of human behavior and which path was the one to most carefully avoid, he received a variety of responses. One praised a good eye, others a good heart, a good friend or a good neighbor, while Rabbi Shimon extolled the virtue of anticipating the outcome of ones actions. When it came to warning against negative courses each of the first four simply named the opposite of the positive an evil eye, evil heart, evil friend or evil neighbor. Rabbi Shimon, however, did not condemn the one who fails to anticipate the result of his actions as we would have expected him to do, but rather directs his warning against one who borrows but fails to repay.
The explanation offered by the commentaries on Pirkei Avot where this advice appears is that Rabbi Shimons position was that although it is a very positive thing to anticipate the outcome of ones actions, it is impossible to condemn one who is not so careful in his planning and relies on his ability to improvise should a crisis result from his lack of caution. Should one, however, borrow money without anticipating how he will repay the loan, such reckless reliance on improvisation will backfire on him, because when he will ever be in need of a loan again he will be unable to get one since he has lost his credibility. We may add to this the reflection that relying on improvisation or miracles at anothers expense is certainly something to be avoided.