Banks are actively seeking good projects to fund and that includes independent pharmacies.

Many pharmacists become interested in starting a pharmacy from scratch with the idea that the initial investment will be smaller than acquiring an existing pharmacy for $1 million or more. In fact, properly funded startup projects can be close to $500,000. When considering a startup, it is important to budget for the full project, including initial startup costs, build out, fixtures, furniture, equipment, inventory, and sufficient working capital to carry the business during the ramp up until the pharmacy becomes cash flow positive. To fund a startup request, a bank will need a detailed business plan complete with realistic projections. Startup projects need to be properly funded from the outset. It is difficult for a lender to provide financing to a recently opened business that has been underfunded.

When approaching a bank to fund a project, pharmacy owners should consider the project from the banker’s view. Is this a clear, understandable, and viable project? Are the pharmacy’s financial statements and/or projections complete and reasonable? Do all of the owners have good personal credit? Is the loan request file thorough and organized? Many people believe banks are reluctant to loan money; in fact, banks are actively seeking good projects to fund. Of course, banks need to understand, and properly document the projects they are funding. Pharmacy owners who have spent the time considering a viable project and preparing a complete loan request will generally find a banker who is eager to fund their request.

Read the full article here: A Primer on Pharmacy Financing

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