The moralising about what the friend should have done won’t help the dog, and his lack of insurance can’t be altered now.
I agree that you are in a difficult position, Lucyloo. Much depends on whether you can afford it and whether you think the friend would pay you back. If you don’t think he can, or if not getting the money back would cause you hardship I wouldn’t lend it, and there is no need to feel guilty about that. If you can afford it, you could ask for a signed and witnessed payment IOU, and for your friend to set up a standing order. Giving an interest-free loan is a kind gesture and one that a true friend would do IMO if they don’t need the money. You should not run yourself short though.
As others have said, a halfway measure would be to help him find other means of financing the op. Do vets do payment plans? Or could he cover it with a credit card? He might even get an interest-free one, which would make the situation easier.