If you know him well, and trust him as you say, I would do it. If I was able to lend it to him with no problem on my part (financial wise), I would do it, and I would never bring it up again, and I would assumed that I wouldn't get paid back. I feel that if you never bring it up again, and then he does and wants to pay you back, then great. But I personally would never bring it up to him. This way it hopefully never causes an issue. When you make your next meeting with him, expect to pay full unless he says otherwise. But it has to be in your mind that you are giving him that money as a gift.
This is just me. If you fully trust him, and can afford it, why not do it? You know he really probably needs it.
Just my .02 cents.
Vanyel