I've borrowed money from family several times. However, it was always for a mortgage, with set repayment terms and near-market interest rates. My dad actually viewed it as a win/win. I got a slightly (about .2) lower interest rate than we probably could have found, and he had a near guaranteed return on that money. And instead of my interest going to Bank Of America (or whomever), it stayed in the family. We were never lent more than we'd have qualified for, so it wasn't like we were getting money from family because it was or only option. Each time (subsequent home purchase), the loan was secured with a formal lien. Also, my parents know our financial situation and the fact that we are very responsible.
I share that to say that I'm not against family loans. But to just hand someone cash to afford something they otherwise can not? Nope. If they have no money before the loan, then they don't have the habits necessary to save any money after the loan. I suppose there are a few exceptions I *might* consider (e.g. major medical expenses, although in that case I'd likely encourage bankruptcy). But in general, giving someone money because they have spent all their own is foolish, particularly when there have been no major changes that indicate their financial picture in the future will be better. So not only are you taking on a probably loss of some or all the money, but you aren't really helping them anyway. You enable them to stave off a financial crisis a bit longer, which just gives them more time and money to waste.