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What You Need to Know About Financing an Independent Pharmacy

Owning an independent pharmacy can be challenging, but it isn’t impossible with the right preparation and lender.

Finding financing to start up, acquire or expand an independent pharmacy can present unique challenges. Pharmacies may have higher initial costs than many other small businesses, and once you’re up and running, you’ll have to closely manage your cash flow to bridge the gap between wholesale prescription purchases and insurance reimbursements. But challenging doesn’t mean impossible, and the right lender can help your business thrive.

Compare financing options and lenders

As you look to finance your pharmacy, you should compare different types of financing. Although conventional loans are sometimes a good fit, many business owners find that a loan backed by the U.S. Small Business Administration (SBA) is a better option. The popular SBA 7(a) loan program offers large loan limits, longer amortization and flexible terms. Additionally, SBA 7(a) loans can be secured by a business’s cash flow rather than hard assets, which is critical for pharmacy financing.

Choosing the right lender is also an important decision. Local banks will often know the area, and some may have experience in SBA lending. However, if you’re looking for an SBA loan, ask the lender about their depth of experience with SBA programs and if they’re an SBA Preferred Lender. Read more >

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