Financing a pharmacy practice is becoming more important than ever as the role of the community pharmacy evolves with changing demographics and technology. Despite the seemingly inevitable demise of the independent pharmacist, recent developments show that there is a resurgence in the value of this group, with a profound impact on patient outcomes and quality of healthcare. PHD Financial will work with you to help you understand the opportunities, and properly finance your pharmacies to meet the challenges of this ever-evolving industry.

Health professionals, including pharmacists, face financial needs just like other business owners. Pharmacies, often face cash flow issues because of slow-paying insurance companies and disputed reimbursements. Pharmacists also must consider the high costs of digitizing medical records, ever-increasing insurance rates, rising rents and the other costs of running a pharmacy.

Typical Loans for Pharmacies

  • SBA loans
  • Bridge Loans
  • Conventional Bank Loan
  • Equipment Loans

Small Business Administration (SBA) Loans

SBA loans can be difficult to qualify for and require that the borrower submit a lot of extra paperwork. However, considering the low risk associated with offering business loans for pharmacists, the SBA loan program is an ideal option for financing your pharmacy business.

PHD Financial may likely look first to an SBA(7a) loan for your pharmacy.

This program has features that align well with the needs of the pharmacy professional, including its maximum loan amounts, repayment horizons, interest rates, and flexibility in the use of funds.

What to expect:

  • Loan Amounts: Up to $5 million
  • Repayment Term: 5 to 25 years
  • Interest Rates: Starting at 6.75%
  • Time for Approval: Approximately 6 weeks

Conventional Bank Loans for Pharmacies

Traditional banks are still the leading source of small business loans. Some lenders have loan programs especially designed for pharmacy professionals. The high success rate of pharmacies and drug stores makes loans for pharmacists an attractive proposition for lenders we work with. We can generally secure favorable rates for financing a pharmacy practice.

Bank terms are not generally as favorable as SBA-backed loans, but here is what you may expect from a bank loan:

  • Loan Amounts: $30,000 to $5 million
  • Repayment Term: Up to 10 years
  • Interest Rates: Starting at 7%
  • Time for Approval: average 4 weeks

Bridge or Hard Money Loans

Non-bank lenders provide bridge or hard money business loans for pharmacists on an accelerated approval basis. These lenders tend to have shorter approval cycles, lower credit standards, and less paperwork than the sources mentioned above.

However, pharmacists should expect that there will likely be higher interest rates and fees associated with the convenience of quicker approvals and lower credit standards. If you require a quick solution to your pharmacy financing needs, PHD Financial may find an alternative lender or non-bank source could be the right solution. Non-bank lenders are not subject to the same regulations as banks; PHD Financial will carefully review your loan documentation before agreeing to the terms.

What to expect from non-bank lenders:

  • Varies
  • Repayment Term: Three to 18 months
  • Interest Rates: Starting at 10%
  • Time for Approval: As fast as one business day