Pharmacy Business Loans up to $750,000
Are you a pharmacy business owner in need of additional capital? We’ve helped hundreds of pharmacies get funded with up to $750,000 in as little as 48 hours. To learn how much your pharmacy qualifies for, simply fill out our quick online application.
If you own a pharmacy or want to open one, you may be interested in applying for pharmacy business loans. These loans can provide the money health professionals need to establish a new independent pharmacy in your town or expand a current one. In this article, we’ll discuss everything you need to know about obtaining a pharmacy business loan.
What Are Pharmacy Business Loans?
Having enough capital to cover necessary expenses is critical to your pharmacy’s success. A pharmacy business loan is a loan pharmacy owners can utilize in a variety of ways. Depending on the type of loan applied for, it can be used to sustain, grow or expand your pharmacy business.
How Does a Pharmacy Business Loan Work?
Pharmacy owners who want to establish or upgrade their business can look at different institutions that provide pharmacy financing or small business loans. They choose the loan providers they wish to apply with and provide the necessary information. If the loan is approved, the company will contact the owner and deposit the money into their account.
Ways to Use Pharmacy Business Loans
You can use them to buy a pharmacy. However, you can also use them for other things. Other ways you can use them include:
Hire More Staff: If you’re currently the only employee at your pharmacy, consider hiring someone else to help with some day-to-day tasks. With a small business loan, you can expand your payroll and concentrate on growing your business.
Expand Your Business: If the pharmacy is doing well, you may consider opening a new location to serve more customers. Pharmacy loans are a great way to stay afloat as the industry becomes more saturated. Taking out a loan will help you purchase inventory or purchase or rent a space you can afford despite real estate being expensive.
Tech Investments: All businesses need to invest in new technology to stay competitive and provide their customers with the best service and care. A loan can help if you haven’t upgraded your equipment or systems recently.
Renovate: You can also remodel your existing pharmacy with funds from a business loan. If you haven’t updated your pharmacy since you bought it, a more modern look may help you attract new customers.
Pharmacy Funding and Finance Options
Banks and other lenders reject most small business loans and loans for smaller amounts. However, people who want to open a second location for their pharmacy or purchase new equipment, furniture, supplies, or new or additional inventory should consider small business loans. They’re also helpful for people who want to upgrade to new technology or pharmacies who need cash flow during a seasonal rush or shutdown.
Merchant cash advances give pharmacies a lump sum of money in exchange for a share of future sales. So you’ll receive working capital, and they’ll receive a percentage of sales until the amount of purchases they have made is received.
A business line of credit lets pharmacy owners use funds as they need them. They can borrow money from a set credit limit then pay back what they borrowed over time. And they only pay interest on what they actually withdraw. High credit applicants can receive a higher credit limit and favorable interest rates, while lower credit applicants may receive a higher rate and a lower limit.
The US Small Business Administration backs loans made to pharmacy business owners through approved banks and financial institutions. Their flagship 7(a) loan is a standard option for pharmacies that need working capital or equipment financing.
Borrowers can receive a 7(a) loan up to $5 million with a maximum interest rate of 13.50%. The lender approval process may require collateral, a down payment, or a guarantee fee, depending on the individual loan. The SBA also provides 504 loans to cover pharmacy real estate purchases and microloans to fund smaller amounts.
How to Qualify for a Pharmacy Business Loan (With the Best Rates)
To qualify for a pharmacy loan, you have to take several steps:
Improve Your Personal and Business Credit Scores
Lenders that offer small business loans will look at your credit score to decide whether or not to lend you money. A credit score tells if you can repay your personal debts such as your mortgage, car loan, and credit cards.
The higher your credit score is, the less risky you are in a lender’s eyes, which increases your chances of getting approved.
It is considered good to have a credit score of 700 or higher, while a score of 800 or higher is considered excellent.
Understand the Requirements
You can increase your pharmacy’s chances of approval by understanding a lender’s minimum requirements. A few lenders may be flexible, but most require borrowers to meet a minimum credit score, revenue, and years in business.
Bank loans and SBA-backed loans are the most difficult to qualify for out of all types of business loans. These types of loans usually require a credit score of 670, but they prefer a higher score of 740+.
To complete the application, you’ll need various financial and legal documents. These will likely include things like your business license, a voided check, a bank statement, a profit and loss statement, and tax returns.
How to Apply for the Best Pharmacy Funding
Eligibility Requirements
To be approved by mCashAdvance™, the following requirements must be met:
- U.S. citizens and legal residents only
- Must be 18 years old or older
- Your pharmacy must be at least six months old
- 500 or higher credit score
Funding Limits
Your pharmacy may be eligible for up to $750K in funding, depending on your sales volume and financial health.
Term Length
Repayment periods vary from 1 to 5 years, depending on the amount funded and your pharmacy’s sales.
Pharmacy Loans: Pros and Cons
Pharmacy Loan Advantages
- Many lenders provide loan options to fit your pharmacy’s business needs
- You can obtain large amounts of money
- The interest rate is lower than alternatives
Pharmacy Loan Disadvantages
- There can be a lot of requirements to obtain a pharmacy business loan
- Your credit history determines the interest rate you’re offered
- New businesses are less likely to be approved by lenders than established ones
- Collateral may be required
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Frequently Asked Questions About Pharmacy Business Loans
Opening a pharmacy usually costs between $400,000 and $600,000. You need to realistically decide how you’re going to raise the money using the different options available to you.
Banks and credit unions generally require at least a 670 credit score to qualify for a pharmacy loan. Even if you receive a loan despite a poor credit score, the interest rate and/or repayment plan will be high. Alternative funding options such as merchant cash advances have less strict requirements and can often work with those with lower credit scores.
It depends on the lender, and the type of loan you apply for. Some lenders can approve and fund in as little as 24 hours; others may take longer depending on how much information they need. For example, SBA loans are known for taking several weeks, or even months for approval.
First, you’ll need to find a location and develop a business plan. Then you’ll have to research your options for getting a loan to open a pharmacy. This will more than likely be a long-term arrangement.
It depends on the type of loan. For example, SBA loans usually don’t require collateral, but conventional business loans generally need to be secured with collateral.
Funding Your Business Is Our Business
Pharmacy Business Loans May Help Grow Your Business
By using a pharmacy business loan, you could help grow your business by opening a new location or making changes to your current location. As you choose the best pharmacy business loan option for you, consider how much you’re going to need to make the changes you want to make, and whether you want it all at once or just want to be able to have access to funds you can use as needed.
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to Hold your Business Back
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