Should he ask for payment of the loan from someone who deals with riba?

Praise be to Allah.

There is nothing wrong with lending money to someone who needs it for a permissible matter. This comes under the heading of showing kindness and doing righteous deeds, and the one who does that will have reward from Allah, may He be exalted, because of the hadith of Ibn Mas‘ood (may Allah be pleased with him), according to which the Prophet (blessings and peace of Allah be upon him) said: “There is no Muslim who lends something to another Muslim twice, but it will be like giving charity once.” Narrated by Ibn Maajah (2430); by Ibn Hibbaan in his Saheeh; and by al-Bayhaqi in both marfoo‘ and mawqoof reports. It was classed as hasan by al-Albaani in Irwa’ al-Ghaleel (5/225).

If your friend is going to take out a riba-based loan to start his project, then the sin of riba is on him, and it will not affect you if he pays back his debt from the profit of this project, because the riba has to do with what he takes from the bank, not what results from it of the profits of his project.

Even if we assume that he pays off the debt from what he receives of interest, it is permissible for you to accept it from him, because you are receiving the money in a way that is permissible according to Islamic teachings, which is repayment of a loan.

But you should advise your friend to keep away from riba which is the cause of doom and loss in this world and the hereafter, as Allah, may He be exalted, says (interpretation of the meaning):

{O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers

And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged } [al-Baqarah 2:278-279].

Muslim (1598) narrated that Jaabir (may Allah be pleased with him) said: The Messenger of Allah (blessings and peace of Allah be upon him) cursed the one who consumes riba, the one who pays it, the one who writes it down and the two who witness it, and he said: They are all the same.

And Allah knows best.