The Tosefot find a way to get around a rabbinic prohibition TB Baba Metzia 70-71

The Torah prohibits one Jew from lending another Jew with interest. “If your kin, being in straits, come under your authority, and are held by you as though resident aliens, let them live by your side: do not exact advance or accrued interest, but fear your God. Let your kin live by your side as such. Do not lend your money at advance interest, nor give your food at accrued interest. I YHVH am your God, who brought you out of the land of Egypt, to give you the land of Canaan, to be your God.” (Leviticus 25:35-38) Nevertheless, this law does not apply to loans between Jews and non-Jews.

On today’s dappim TB Baba Metzia 70-71, Rav Naḥman argues that rabbinically Jews are forbidden to lend money to non-Jews with interest. “Apropos the discussion concerning the halakhot of interest, the Gemara cites several aggadic statements on the subject. The verse states: “He who augments his substance by interest [beneshekh] and increase [vetarbit] gathers it for him who has pity on the poor” (Proverbs 28:8). The Gemara asks: What is the meaning of the phrase “him who has pity on the poor”? How does this money ultimately reach someone who has pity on the poor?... Rav Naḥman said: Rav Huna said to me that this verse is necessary only to state that even interest that a Jew took from a gentile will ultimately reach the government treasury, and the one who took it will not be successful.” (Sefaria.org translation)

“Rava raised an objection to the statement of Rav Naḥman based on another difficulty in the Mishna (TB Baba Metzia 70b-gg), which teaches: One may borrow money from them and one may lend money to them with interest. And similarly, with regard to a ger toshav, one may borrow money from him and lend money to him with interest, since he is not a Jew. The mishna indicates that a Jew may lend money with interest to a gentile ab initio. (Rav Ḥiyya, son of Rav Huna now answers this difficulty-gg)

“Rav Ḥiyya, son of Rav Huna, said: This ruling of the mishna is necessary only to teach that one may lend money with interest to a ger toshav only to the extent required to provide a livelihood to the lender, but not to do so as a regular business.

(Ravina provides a different answer to solve this contradiction “Ravina said: Here in the mishna we are dealing with Torah scholars, for whom it is permitted to lend money to a gentile with interest. The Gemara explains: What is the reason the Sages decreed that one should not lend money to a gentile with interest? The reason is that perhaps the Jew will learn from the gentile’s actions. Continuous interactions with gentiles for the sake of financial dealings may have a negative influence on a Jew. And since in this case the lender is a Torah scholar, he will not learn from the gentile’s actions.” (Sefaria.org translation)

The Gemara cites Rav Naḥman holding the complete opposite position that a Jew may loan money to a non-Jew with interest. “The Master said above: If one of My people and a gentile come to you for a loan, My people take precedence. The Gemara asks: Isn’t this obvious? Is there any reason to think that a gentile would take precedence over a Jew? Rav Naḥman said that Rav Huna said to me: It is necessary only to teach that even if the choice is to lend money to a gentile with interest or to a Jew for free, without interest, one must still give preference to the Jew and lend the money to him, even though this will entail a lack of profit.” (Sefaria.org translation)

As you may well know during the Middle Ages in Europe Jews were forbidden from guilds and owning land. As life became urbanized loans became essential for the continued prosperity. Since Christians believed that they were the new Israel, they were forbidden to loan money to other Christians with interest. One occupation a Jew could become was moneylending because there’s no prohibition for Jews to lend money to Christians with interest from the church’s point of view.

But as we learned from Rav Naḥman’s first statement, lending money to non-Jews is prohibited from the Jewish point of view. Tosefot ד"ה תַּשִּׁיךְ לָא סַגִּי דְּלָאו הָכִי gave three reasons why Jews could be the Christians money lenders.

1.    They can poskin like Rav Naḥman’s second statement which is the more lenient position.

2.    Lending money to the non-Jew was necessary because it was required to provide a livelihood for the Jew as per Rav Ḥiyya, son of Rav Huna’s statement.

3.    Jews live now in Galut, the diaspora, amongst the Christians and have business dealings with them.  They were not afraid that these dealings will have a negative influence on the Jewish businessmen. If this is the case, there is no difference between having business dealings with them and lending them money.

Problem solved.