SBA loan pls help (North Port, Punta Gorda: sale, loans, purchasing)

[north port]

Hi
I want to start a new business like convanient store. I talked with a bank for getting $100,000 as SBA loan . Summary of the conversaton is:

01. I need to pledge my real state as collateral
02. I need to downpayment 20% of the loan.
03. Interest will be 6% to 8%
04. Loan period 10 yrs.
05. Need to pay the closing cost like3%

The money will be stored on lenders account, it will never be tranfered to my own bank account. I need to show them receipt for purchasing anything for my shop and then they will sanction invoice money to my account. But interest charge will be continued on $100000 what is stored in lender account from the date of loan closing. It's weird but banker told me this. Anybody has any idea on this point, pls share.

Thanks,
John

[gettinoutofjersey]

we have been thinking about a business since we moved here a year ago. there are more and more failing every day. the economy and consumer confidence is not improving. gas prices keep rising which will eat up disposable and for that matter alot of personal income. hate to be doom and gloom but be careful.

[Harbor Hopper]

If you read the Florida Weekly (free publication), Mickey Gorman, who runs the Entrepreneurial Acadamy in Punta Gorda and North Port, is always writing about people who want SBA loans to start their business and alternative financing options. He gets quite irritated with people who come to him without a business plan and expect to walk out with money. You may want to try contacting him for his "expert" opinion. Good luck!

[Skunk Workz]

To add to what others have posted already;

If you haven't taken advantage of SCORE you really should.

Manasota SCORE

This is a free service that provides workshops and mentoring to help with the various steps involved in starting a business, including working with SBA loans.

[north port]

Today I e-mail some mentors. Just waiting what they say. By this time, can anybody answer me:

What I need to have a license for convanient store?
Can I sale produce items like vegetable, fruits in my convanient store?
What type of loan will be the best for me?


Thanks,
George

[Sunscape]

This doesn't sound like a SBA loan to me.
I again suggest you visit SCORE. They can answer your questions by email and in person. Visit the local chapter to see a counselor who will help you with all your questions.

[mr&mrssunshine]

the terms of that loan as you describe them suck. if i read it correctly.

you borrow 100k but have to put down 20 so effectively borrow 80000
yet you pay 6-8% (big difference there the 2 pts) on the whole 100 ??
this means more like you are paying closer to 9 to 10% on the 80 you borrow
thats a high rate AND you pay it whether you borrow 8 or 80 ???
so effcetivley for whats little more than a giant over draft facility you could end up paying 70-80 grand over ten years. and maybe never borrow that much


no thanks I would not touch that with a barge pole