Draw of an 8% Interest Rate?
I'm about to graduate college and the leasing shop I'm interning at offered me a $40k draw, an advance against future commissions for the first year.
The contract states "If the remaining balance of the draw is not paid back, in full, within twelve (12) months of Agent's termination (voluntary or involuntary), then the loan will automatically begin to accrue interest at an annual compound interest rate of eight percent (8%)."
I like the guy running the shop and he has a lot of integrity but I feel like he's being very stringy with charging an 8% interest rate. Should I push back and rewrite certain parts of the contract?
It's usually a commission only shop but they offered me a draw since I'm not from the area and they don't want me taking a second job to pay my bills. I feel like the draw should be, "if the agent terminates they owe $0".
I thought a draw is a draw, not a loan. I'm trying to figure out how to go about this, I want to tread lightly. Has anyone had a scenario like this before?