Best Business Loans for Existing Pharmacies
A community pharmacy has become a challenging business due to the competition in the healthcare industry of the big pharmacies like Rite Aid, Walgreens and CVS. Business financing gives the smaller pharmacy an opportunity to compete in many ways. A pharmacy can use business loans for a variety of reasons including inventory, displays and equipment, advertising, renovations, expansion and other initiatives that can help the existing pharmacy grow.
Knowing how to find the right pharmacy business loans to match your qualifications and needs is very important, so we have put together the most popular business funding products that would best suit your financing needs.
8 Best Pharmacy Business Loans (September 2023)
There are many financing options that existing pharmacy owners can use to their benefit from our network of alternative lenders. Finding the right pharmacy financing that works best for your business may take some guidance. That’s why we put together the eight best small business loans options for medical shop & pharmacies. Each of these financing options offers unique benefits such as pharmacy equipment financing, or straight-up funding and qualities that may work for your company. Take a look!
Long-Term Small Business Loans for Independent Pharmacies
Long term loans provides pharmacy financing for large projects and/or expansions requiring long term loans greater than 2 years. Interest rates, terms and monthly payments are attractive to small business owners.
Small Business Line of Credit for Independent Pharmacies
Line of credit is a popular option for pharmacy owners looking for a credit facility they can use on demand and draw money when needed, while you only pay interest rate on the outstanding balance.
Small Business Administration Loans for Community Pharmacies
SBA loans are popular small business loans with small business owners because of their great interest rates and repayment terms. The Small Business Administration sets the guidelines and underwriting requirements for SBA loans for small businesses.
Business Credit Cards
Business credit cards are a good supplement to other pharmacy business loans. Credit cards are quick and easy option to make purchases and pay expenses.
Short Term Small Business Loan for an Independent Pharmacy
Short term pharmacy business loans are typically 6 to 24 months in duration with fixed rates and terms.
Business Cash Advance for an Independent Pharmacy
Business cash advance is a alternative to pharmacy business loans when qualifications are an issue. Advances are not loans, but an advance off of future receivables of the pharmacy business.
Merchant Cash Advance for an Independent Pharmacy
Merchant cash advance, also know as a future receivables sales agreement, is another option when a pharmacy can't get approved for a traditional loan. Merchant cash is an advance of future receivables, repaid by a percentage of future credit card processing.
Equipment Financing for Pharmacies
Equipment financing is a good option when purchasing new equipment at affordable terms and payments.
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How to Qualify for Pharmacy Loans
Its important to know how to qualify for pharmacy business loans. The qualifications and requirements can be different from small business loans to business line of credit, but there are basic qualifiers to be aware of.
- Application: Lenders will require you to complete an application that includes business information and businessowner personal information.
- Credit Lenders look at not only the business credit but also the small business owners credit history to determine credit worthiness. A small business owner should always review and monitor your credit and determine if it needs repair and act on making improvements when possible. The better the credit the better the options rates and terms.
- Documents: Pharmacists need to keep good records and maintain financial statements. Lenders will require a variety of financial statements to determine eligibility. They may consider bank statements to review the businesses cash flow, tax returns to review the profit & loss and balance sheet and also accounts receivable/accounts payable aging reports.
- Time in the Pharmacy Business: Demonstrating experience in the pharmacy industry as a pharmacy owner, or previous work experience as a pharmacist, can enhance your credibility and increase your chances of qualifying for a loan. A new pharmacy may have less financing options than a mature and experienced existing pharmacy.
- Collateral and Personal Guarantees: Sometimes you will need to offer collateral, such as property or equipment, that can secure the loan. Personal guarantees from the pharmacy owner may also be required, especially for smaller or newer pharmacy.
Qualifications and requirements will vary from business financing product to another so make sure you shop and compare to find the best product for you and your pharmacy.
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Why Do You Need a Pharmacy Business Loan?
When considering financing a business, its important to find out the "why" first. The reason, as well as your qualifications, will dictate what products and terms you may be offered. The "why" also will tell you whether the benefits of business financing will out way the costs and terms known as the benefits vs. cost analysis. Lets look at some of the most popular reasons why financing is a good idea for you and your business.
Working Capital Loan for Pharmacy Operations
Like any business, a pharmacy has a variety of expenses to manage such as inventory, payroll, rent/mortgage and other expenses. Sometimes cashflow can be tight due fluctuating revenue and reimbursements, so having a working capital loan can come in handy to smooth cash flows during difficult times.
Inventory Financing
Inventory is key for a pharmacy. If you don't have the prescriptions or other household items at the pharmacy you can be at a strategic disadvantage to competitors. When you need to purchase and expand inventory the costs can be high. Having a credit facility to access funds is critical pharmacy operations.
Renovations/Facility Maintenance
A pharmacy, like any other business, needs a facility that is appealing to the customers experience. The overall appearance and flow of the premise can create more sales and retain customers. Renovations to keep the pharmacy relevant and current can be costly. Facility maintenance is important for providing a safe environment for staff and customers. Repairs and equipment purchases can add to costs and expenses. Most renovations will require some type of financing.
Marketing and Advertising
To keep relevant and to compete for customers with the big box pharmacy, advertising and marketing are important components of gaining a competitive advantage. Advertising investments cost money and financing may be necessary to achieve marketing goals.
Making Payroll
The pharmacists and staff are vital parts of the pharmacy and the customer experience. Funding payroll is not an option, but a necessity. Having a credit facility to cover cash flow shortages is a must.
Adding Pharmacy Services
To compete with competition like Walgreens, CVS and or Rite aid you may need to add services like medication therapy management.
Why Small Businesses turn to AdvancePoint Capital?
Experience with community pharmacies. We’ve helped countless pharmacists find pharmacy business loans that work best for their business. Our simple diverse range of pharmacy loans and our network of alternative lenders gives community pharmacists the freedom and flexibility to find a financing solution that works for their small business regardless of the challenges.
With AdvancePoint Capital, you’ll get the benefit of loan specialists familiar with the pharmacy industry. With our simple application process and a trusted name in the pharmacy funding industry, we make it easy.
- Experience – We have been funding pharmacies throughout the industry for years.
- Trust – Excellent customer experience reviews and feedback from independent Pharmacies.
- Loan Specialists – Experienced business funding specialists who know the pharmacy industry in and out and treat your interaction as a business relationship and not just a transaction.
- No cost, no commitment quotes-Pharmacy owners can rely on accurate, no obligation offers with reliable rates, terms and loan amounts.
- Products – A variety of pharmacy business loans and financial institutions. We don’t just provide what we have; we offer what’s available in the marketplace for most businesses.
Pharmacy financing can be intimidating, but it doesn’t have to be. Credit history, time in business, and financial documentation may seem daunting if you’re dealing with a bank — but with AdvancePoint Capital, we find a funding solution that works with your pharmacy instead of against it. We are here to find the RIGHT pharmacy financing option for YOUR business.
Frequently Asked Questions
The Bottom Line
Searching for a business loan for your pharmacy requires consideration of your qualifications, the specific need verses the available products and terms. Its important to shop and compare offers and consider the rates, product features, terms and conditions before deciding what is the best financing options for your pharmacy. Banks, lenders and business loan brokers can offering varying qualifications, products and terms so getting terms in writing to consider is essential to make good decisions.
AdvancePoint Capital can take those challenges your pharmacy may have at getting approved at a bank and turn those problems into the right solution with various working capital loan programs at our disposal.
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