You should advise your friends to repent to Allah, may He be exalted, from what they have done, because dealing with riba, whether by lending or borrowing, is a major sin, and there are warnings concerning riba that were not issued concerning any other sins, including the curse on the one who does it, the one who writes it down and the two who witness it. We ask Allah to keep us safe and sound.
Money acquired through a riba-based loan -- even though it is haraam and abhorrent -- becomes one's property according to the correct scholarly view; this is the view of the Hanafis and Hanbalis, and is one opinion of the Shaafais. In other words, the one who takes out a riba-based loan becomes the owner of the money that he borrowed. Based on that, it is valid to start a project with it, despite the sin of riba.
See: al-Manfaah fi'l-Qarad by Abdullah ibn Muhammad al-Umraani, p. 245-254
According to this opinion, it is permissible for you to join them, whilst taking care to avoid joining them in any haraam transaction.
But if you can avoid joining your friends in this money altogether, that will be better and will be more on the safe side for you, and it will be more effective in objecting to their entering into the haraam riba-based transaction.
And Allah knows best.
Reproduced from Islam QA