Buyer wants to make a short term loan to a seller to close a house?

[Coire Fox]

Greetings BiggerPockets community!

I have what I believe to be a rather strange situation on my hands. I am in the process of purchasing a primary residence for myself and my significant other. We are doing a 203k streamlined renovation loan. This is the second 203k loan I will have done and I thought it was going to go a lot smoother than the first which was a full 203k (about 75k in repairs).

Anyway, the problem is this: We are supposed to close tomorrow and the financing is not ready yet due to the construction side of the loan being backed up. The seller doesn't want to give us an extension to close the loan. Her initial rider on any extension was that she wanted to keep her appliances. This sounded odd to me as I have met her a few times during inspections and such. I had to go over to the house anyway to do a lead based paint test for the construction department, so I asked her, "Is doing this test even going to matter? Are we going to extend this thing?"

This is where she started to really lay it all on me. She needs cash by Friday. Now, I know you are probably thinking--How does not extending the purchase agreement get her money by Friday? She wants to be free of the purchase agreement so she can start hawking her appliances and other odds and ends. She claims she has already exhausted all her options for personal loans. She has taken out a few payday loans to make some repairs on the house that I asked her to make as a condition of the sale. OK...so now that I know what she needs I am in solution mode. I hate the idea of me giving her a personal loan. There is no other way to get the deal done and not have me out of pocket any more money (assuming I can get my personal loan back).

My question is: is it possible for the buyer to make a personal loan to the seller to be paid out of the seller's funds at closing? She already said she would accept and extension agreement that included her paying me $2500 in closing costs. But what happens if the loan doesn't close for whatever reason?

Should I just let this one go? I like the house and the neighborhood. There is nothing out there like the house today, but that doesn't mean there won't be tomorrow. And I know they are sunk costs, but of course all the time and money I already have wrapped up in the place.

Thanks in advance for any advice!