pharmacy financing information

A Primer on Pharmacy Financing: Pharmacy Expansion Financing

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

Increasingly, entrepreneurial pharmacists are becoming multiple pharmacy owners. The 2013 NCPA Digest, sponsored by Cardinal Health, shows that 25 percent of community pharmacy owners have ownership in two or more pharmacies. The average number of pharmacies in which each owner has ownership is 1.79, and that number is rising. Financing a second pharmacy (or third, or fourth, etc.), whether it is an acquisition or a startup, is easier than financing the first.

First, an owner usually won’t need to draw a salary from a second location, so all of the excess cash flow can be devoted to debt service. Second, a banker may be able to consider cash flow from all of the owner’s businesses, or the global cash flow, when evaluating financing an additional pharmacy. Strong cash flows from the owner’s existing pharmacies can support the acquisition or startup. For owners with a fair amount of equity in their existing pharmacy, a bank can often offer 100 percent financing for the expansion.

Read the full article here: A Primer on Pharmacy Financing