I think I'll second @KateS on a lot of what she says. I don't know if hiring an editor for submission or querying is beneficial. And even if your friend wouldn't charge you much, Kate's also right in that you shouldn't put that forward in any of your query submissions.
As an alternative to potentially going into debt on the book before submission, maybe you could find a critique partner or group you could work with. A lot of writers have workshopped manuscripts with groups online or in person and feel they've grown a great deal as writers in so doing.
You can actually check your local library for local writing groups, depending on where you are, or you can Google for the online groups. Many of them have strict membership requirements, though, and I even heard of one with a waiting list for new members. So bear that in mind.
As one more alternative, you can check out the KBoards yellow pages listing for editors. You could save a lot of money that way, though most or all of those people charge for their services. You still pay, just a more reasonable amount, IMO.
You also could look for an editor who will give you a sample edit for free. You get a feel for what the editor will do for you, and it might give you a guide you can follow to self-edit.
Additionally, there is this thread on KBoards, in which someone who trained under editor Sol Stein offers to give an overview of your writing and how to improve it. It's not a full edit, but offers insights into where your writing might improve. A large number of indie authors have used, and acclaim, the editor's service, and for the money she's asking, it's worth investigating.
Last, the legendary book Self-Editing for Fiction Writers by Renni Browne and Dave King is highly recommended. It might give you a basis from which you learn to edit your own work.
Hopefully this will help you in your choice. Good luck with your manuscript whatever you decide.