Business Loans for Pharmacies

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Best Business Loans for Community Pharmacies

Community pharmacists are always in need of capital due to the nature of their business and its challenges. Pharmacists have a lot to manage and must deal with many challenges when operating a pharmacy. Getting capital to help run the pharmacy is essential for cash flow to balance the Inventory of drugs, margin pressures from insurance companies, and over-the-counter products sold at the pharmacy. You often have to purchase supplies and meet payroll before funds come in from clients or insurance. Traditional banks can make it challenging to get funding for small business owners such as pharmacies. It’s no secret that it’s hard for a borrower to get a loan or any financing, for that matter, from a bank. AdvancePoint Capital can provide that working capital to independent pharmacies like yours, so you focus on running your business and make it grow. There are many financing options that pharmacy business owners can use to their benefit. 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 loan options for funding small, independent pharmacies. Each of these financing options offers unique benefits and qualities that may work for your company. Take a look. Where do companies get the necessary information to make solid financing decisions? While traditional routes such as bank loans are often difficult for the average small business owner to get approved for loans, you still have many other financing options in the marketplace. The following are the most common types of loans for small companies.

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The 8 Best Small Business Financing Options for Independent Pharmacies

1. Long-Term Small Business Loans for Independent Pharmacies

Long-term business loans have a repayment duration of 2 years or greater. These pharmacy business loans offer a fixed lump sum upfront, repaid over an extended period of time (2 to 10 years), with the costs based on a principal and interest rate.

Product Overview

Rates: Interest rates starting treasury index plus 1% to 2.5% (currently 5.5%)
Terms: 2 to 10 years
Fees: Origination fees 0% to 3%
Payments: Monthly or bi-weekly payments
Credit Standards: All types considered, good to excellent preferred

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Long-Term Business Loans

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2. Small Business Line of Credit for Independent Pharmacies

A small business line of credit is an open, revolving line that allows Ohio small business owners to draw funds when needed on-demand and make purchases up to a certain limit. Small business lines of credit require renewal, either semi-annually or annually, to be extended. The biggest benefit of this product for pharmacies is its flexibility, allowing you to draw funds at any time up to a limit.

Product Overview

Rates: Principal and interest rates start at treasury or prime rate index plus 1% to 2.5%
Terms: Open revolving line
Fees: Origination fees 0% to 3%
Payments: Monthly, bi-weekly or weekly payments
Credit Standards: All types considered, good to excellent preferred

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Business Lines of Credit

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3. Small Business Administration (SBA) Loans for Community Pharmacies

The Small Business Administration (SBA) is a federal government agency that provides programs, guidelines, and loan guarantees to approved lenders for business loans. The SBA is not a lender and merely provides a guarantee that gives approved lenders the ability to take on the risk of business lending with attractive rates and terms that could not normally be afforded to small businesses.

Without the Small Business Administration (SBA) to provide guarantees, the approved lender would not be comfortable lending under the terms outlined by Small Business Administration (SBA). The Small Business Administration’s SBA loans are very popular but difficult to acquire due to the requirements, guidelines, and restrictions. AdvancePoint Capital can help guide pharmacies through the process in a clear, fast, and efficient manner to have the best likely hood of approval.

Most Popular SBA Loan Programs:

  • Standard 7(a) SBA Loan Program – This is the SBA’s primary program designed to provide financial assistance to small businesses. Like the guaranty percentage and loan amount, the terms and conditions may vary by the type of loans to small businesses.
  • 504 SBA Loan Program – This is a powerful commercial real estate loan program that will provide small businesses another avenue for business financing while promoting business growth and job creation. The use of proceeds from SBA loan 504 must be used for fixed assets such as construction, real estate, land or land improvements (and certain soft costs) or can also be used to refinance existing debt. Commercial Real Estate will be needed for collateral.

Product Overview

Rates: Interest rates starting at treasury index plus 1% to 2.5%
Terms: 3 to 25 years
Fees: Origination fees range from 0% to 3%
Payments: Fixed monthly payments
Credit Standards: Good to excellent preferred, but all types considered.
Documentation: You will need to provide complete documentation. Application, six months of business bank statements, two years of business tax returns, year-to-date profit & loss, and a balance sheet, and more documents may be requested upon review.

  • (New) Paycheck Protection Program (PPP) SBA Loan – The Small Business Administration (SBA) has established the SBA Paycheck Protection Program loan to provide funding to small businesses affected by the COVID-19 crisis. Contact AdvancePoint Capital for additional information about this disaster relief. A pharmacy is an eligible industry.

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SBA Loans

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4.Business Credit Cards

Business credit cards are open lines of revolving credit that offer principal and interest rates with a set limit. A card is issued and can be used for making payments or purchases. It is not uncommon for a pharmacy to utilize business cards as well as other business financing options.

Product Overview

Rates: Introductory rates starting at 0% up to 28.99% (based on prime rate)
Terms: Open revolving line with a set limit
Fees: Annual fees range from $0 to $500
Payments: Flexible monthly payments
Credit Standards: Must have good to excellent rating and deep credit history


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5. Short Term Small Business Loan for an Independent Pharmacy

Short-term business loans are loans that have a repayment duration of 6 to 18 months. Short-term business loans feature a fixed lump sum of money offered, with a fixed payback amount calculated using a factor rate. This pharmacy financing option is popular with pharmacy owners that cannot get approved through traditional means because of documentation requirements or credit tolerances.

Product Overview

Rates: Factor rates ranging from 1.09% up to 1.45%
Terms: 6 to 18 months in duration (typically 12 months or less)
Fees: Origination fees 0% to 5%
Payments: Weekly, bi-weekly, and in some cases, daily
Credit Standards: All types considered
Application Process: 1-page application

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Short-Term Loans

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6. Business Cash Advance for an Independent Pharmacy

Business cash advances (BCA) are a type of purchase of future sales agreement that advances future sales at a discount to the business. The business is responsible for paying back a fixed amount (also known as a specified amount). The difference between the advance amount and the specified amount is called the “factor rate or cost.” A fixed percentage of future overall sale deposits is the method used for repayment. The payments are collected by an ACH fixed daily or weekly from the business bank account based on the specified percentage of future deposits.

Reconciliation can occur at the end of every month. If the fixed payments taken are more than the set percentage of deposits in the agreement, a business owner can request a refund to the business for overpayment, so the set specified percentage of revenue matches the sales volumes.

Product Overview

Rates: Factor rates from 1.09% up to 1.45%
Terms: No term limit
Fees: Origination fees that range 0% to 5%
Payments: Weekly or daily
Credit Standards: All types considered

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Business Cash Advances

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7. Merchant Cash Advance for an Independent Pharmacy

A merchant cash advance (MCA) is also known as a purchase of future sales agreement that operates very similarly to a BCA. The most significant difference is the repayment process, which is connected to the future credit card revenue instead of overall deposits. No fixed payment is deducted from the business bank account. The set percentage of future card sales payment method is used. A pharmacy may use this option because most of the prescription sales payments come from credit cards.

Product Overview

Rates: Factor rates 1.09% up to 1.45%
Terms: No term limits (payoff depends on future revenues)
Fees: Origination fees range from 0% to 3%
Payments: Fixed percentage of future credit card revenues as payment
Credit Standards: All types considered

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Merchant Cash Advances

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8. Equipment Financing for Pharmacies

Equipment financing is used for the purchase of equipment, securing the equipment as collateral. This type of funding comes in the form of a loan or a lease.

Product Overview

Rates: Factor rates 1.09% up to 1.45% or interest rates 4.5%-28%
Terms: 2 to 10 years
Fees: Origination fees range from 0% to 3%
Payments: Monthly fixed payments
Credit Standards: Good to excellent credit required
Time Frames: Same day to 3 days depending on the lender

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Equipment Financing

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Identify Why You Need a Business Loan

The first step in any search is clearly defining why your small business needs the funds. The “why” will direct you many times to the right loan product. Working capital is the most popular reason because there are so many ways it can be used. When cash flow gets tight due to fluctuations in sales, extra capital can provide the buffer needed to carry the business through rough times.Other reasons for the need for business financing include, but not limited to:

Working Capital

Sometimes cash flow can get tight, and a working capital loan is needed to maintain proper levels of money to operate the business.

Business Needs

A new venture that requires a down payment, upfront capital, recruiting key employees, initiating a new business relationship, or research and development.


Common need for eCommerce, manufacturers, and other retailers.

Infrastructure Improvements

This category could include a move to a more prominent location or office that requires capital.

Information Technology & Software

In today’s world, capital may be needed for business needs related to website development and site maintenance, customer relations management software, computers, machines, and other products essential for a business’s success.


Small business owners need funds to promote their business. A variety of advertising strategies include internet marketing, direct mail, radio advertising, flyers, and paper ads, to name a few.


Most small businesses have some type of equipment. Perhaps you’re a business that requires machinery, furniture, medical equipment, construction equipment, computers, or tools. These are common requests from restaurants, auto repair shops, construction industries, medical practices, and manufacturers.

How to Qualify for a Small Business Loan

There are a few factors involved in your approval.

1. Credit Worthiness: Credit Score

How does your personal credit and credit report as a business owner affect qualifying for small business financing?
Personal credit score information of the business owner plays a significant role in determining what, if any, loans you can be approved for by lender loan applications. As a business owner, the better your personal credit is, the more business funding options you will have to choose from. However, it’s essential to know that not all financing offers involve a personal credit check.

How to Understand, Review, and Analyze your Credit
A smart thing to do is pull your own credit information using all three credit bureaus to see your credit scores: Equifax, Experian, and TransUnion. (Be wary of sites that offer you “a credit score” as that may be another credit risk model other than FICO.)

FICO credit score risk model:

What is a good credit score to get approved during a business loan process?

As a rule of thumb, a 750 FICO score and up is Excellent, 720 FICO and higher is good, 680 FICO and higher is Fair, below 680 to 620 FICO is marginal, and below 620 is considered poor. For the most part, the longer the term and the lower cost small business loans will require the highest credit scores and standards.

2. Length of Time

How long you have been in business is a significant factor in determining qualifications and repayment guidelines for loan products. Let’s face it; business lending is a risky business. Business lenders need to see a track record to take a calculated risk in providing you a term loan. Many small businesses don’t make it past the first year in business, so obviously, business lenders will be cautious if you have less than two years in business when providing loans.

3. Financial Statements

What financial documents and information will business lenders need for small company loans?

Business Bank Statements

Almost all small loans will require bank statements to review. Typically three months are needed, but sometimes 6 to 12 months may be necessary if the business is seasonal or has made a considerable loan amount request. Bank statements show business lenders the cash flow activity of the company and your ability, as the business owner, to manage the business’s finances.

Profit & Loss and Balance Statements

These statements provide a more detailed view of the business and its health and may be required for the longer-term and lower-cost term loan options. The good news is that Profit & Loss and Balance Sheet statements typically are not necessary for alternative business lending products.

Business and Personal Tax Return

Some business lenders will need to see tax returns. If that is going to be a challenge, there are a lot of alternative business online lenders who will not require these documents, but keep in mind, most likely, the term loan offers you receive will be impacted by the lack of documentation and therefore be reflected in the costs and repayment guidelines you will be provided.

Benefits of Business Loans for Pharmacy Owners

Working Capital Loans

Operating a pharmacy can be complex. Pharmacy owners need to balance customers, inventory purchases, employee payroll.


Inventory financing for prescription medications, over-the-counter drugs, healthcare industry products, household goods, and other items often offered at pharmacies.

Renovations/Facility Maintenance

When running a pharmacy, the pharmacy facility needs to have a customer experience that is appealing, accessible, and convenient. Pharmacy owners may need to renovate the facility to draw in or maintain customers against competition like CVS, Rite Aid, and Walgreens. Projects such as these require various pharmacy financing. Real estate loans may be necessary to improve the property due to the high costs of renovations.

Marketing and Advertising

Many pharmacists need advertising to maintain and grow their customer base. Business loans allow you to design and optimize a website for greater exposure and access other marketing methods, including pay-per-click advertising, SEO and buying leads. Traditional outlets like radio, newspaper, and signage may also help grow your business.

Making Payroll

As a business grows, payroll will grow into something that must be managed and maintained with zero tolerance for cash flow shortages. Unexpected issues related to pharmacy business receivables can put a business in a position they can’t afford to be in, which is missing a payroll. Working capital and other operational costs are a necessity for successful pharmacy businesses. The right pharmacy financing option to help is a real game-changer. The vast and diverse range of pharmacy business loans gives pharmacists the freedom to make sound financing decisions and eliminate payroll as a problem.

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Why AdvancePoint Capital?

Experience with pharmacists. We’ve helped countless pharmacists find pharmacy business loans that work best for their business. Our simple diverse range of pharmacy loans and financing opportunities gives ownership/borrower 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 pharmacy industry professionals, experience, and a marketplace of lenders. Our simple application process and a trusted name in the pharmacy funding industry. We make it easy to get started.

  • Experience – We have been funding pharmacies throughout the industry for years.
  • Trust – Excellent reviews and feedback from Pharmacists
  • Loan Specialists – Experienced business funding specialists who know the pharmacy industry in and out
  • No cost, no commitment quotes
  • Products – A variety of pharmacy business loans. We don’t just provide what we have; we offer what’s available in the marketplace.

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.

Frequently Asked Questions

This may depend on which type of loan you’re looking for for your pharmacy. Luckily, there is a wide variety of options for you to choose from for a pharmacy, each with different qualifications based on the business’s health so that you can discover a solution that works for you.

Yes, there are pharmacy funding options that you can take advantage of even if you have a poor credit history. A business line of credit, shorter-term options, and invoice financing are great options for pharmacists struggling with creditworthiness.

It is possible to obtain a startup loan for a pharmacy, but the options may be more limited and difficult to qualify for. The SBA has some incredible financing opportunities for startups. However, SBA financing is not easy to be eligible for and may require excellent credit health from businesses that are applying.

That depends on a wide range of factors, including how long you’ve been a pharmacy, what you need the funds for, credit history, and the pharmacy’s current financial health. The best way to determine which financing option is best for your company is to look at all of your options or consult with a lending professional regarding your unique circumstances.

Typically a lender will require ownership/ borrower name, business name and business address, phone number, and business bank statements for review will check off the box for most Lenders.

The Bottom Line

When searching for a pharmacy loan, the bottom line is that pharmacists have to evaluate all the financing products available in the marketplace. You shop insurance companies, don’t you? The same goes for acquiring a pharmacy loan. Bank loans aren’t always the way to go due to a lack of flexibility with credit, cash flow, and financials for pharmacy loans that a bank would offer.

AdvancePoint Capital can take those challenges your pharmacy may have at getting approved at a bank and turn those problems into solutions with various loan programs at our disposal.

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The fast, convenient and straightforward way to get the money you need for your pharmacy – now!

Get your quote today by filling out our simple form.


Get Quote Now!

The fast, convenient, and straightforward way to get the money you need for your small business – now!

Get your quote today by filling out our simple form.