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Running a pharmacy can be a particularly lucrative business, letting you use your professional skills to tap into a wide range of commercial opportunities. However, there may come a time when you need to access funds to support or grow your business.
Whether you are buying a pharmacy or investing in new pharmacy equipment, you will likely need finance. Investing in your business is key to its success, so let's look at the different types of pharmacy finance that business owners can access.
Whatever your plans, you'll need the financial backing to turn them into a reality.
From buying the freehold rights to your pharmacy, investing in shopfitting, stock, hiring new staff or simply navigating day-to-day costs like taxes and your mortgage, you might find that you need additional financial support to ensure consistent cash flow.
There are so many different types of loans available to pharmacies, including commercial mortgages and even goodwill loans, that all you to release funds from your business.
At Rangewell, we understand the particular challenges you face as we work with pharmacy business owners every day to apply for and access the best possible finance for their specific goals.
We can help you find the right type of funding option:
Whether you are buying into an existing pharmacy as a partner, buying it outright or buying further pharmacy practices, you will have several costs to consider.
If you are acquiring an existing business, these income streams and costs may be a little easier to predict. Factors such as previous business performance and cash flow will impact the business's current value and will allow you to agree on a fair price. To ensure you're making the right decision, make sure to do your due diligence when buying a pharmacy.
The price you negotiate for the business as a going concern should include:
If you are thinking of buying into a larger pharmacy, you may need to do so as a partner - or buy out a partner who may be retiring. Buy-in and Buyout Finance recognises the challenges and provides funding tailored to help you make full use of the opportunity
Buying your first pharmacy will have some substantial costs. For example, you will need to consider the costs of the pharmacy as well as the business itself and any stock and equipment included in the sale.
Remember, you will also need to make provision for your working capital cash flow. This includes funds to cover all business expenses, including your own salary and that of any staff you are acquiring with the purchase or hiring to run the business. If this is a new or struggling business, take into account a buffer period to establish a customer base in your local community.
As an independent pharmacy business, you may face stiff competition from the major chains. A pharmacy franchise from one of the leading pharmacy names could reduce the risks, let you offer a familiar brand and provide support with marketing and buying, while still allowing you to be your own boss. Other challenges include changes to running a pharmacy post-Brexit and navigating the ins and outs of NHS pharmacy ownership
By working with Rangewell, we can help to identify risks from the outset and establish a plan of action for your finance. From supporting with the application process through to scouring the market and securing the best acquisition finance with affordable monthly repayments, we're here to help at every step of the way.
Most business owners will turn to high street lenders for business loans. Perhaps they already have finance through the main lenders, or they don't know where else to look. However, we strongly encourage working with an independent broker to search the whole of market.
At Rangewell, we don't just look at all lenders available to you, we also take your unique circumstances and use these to determine the best type of pharmacy loan for your business. You may find that specialist lenders tend to have more flexible repayment terms and will look to provide finance solutions that will allow for a larger element of funding for goodwill and/or upfront VAT funding.
The type of loan available to you depends largely on your individual circumstances. Alongside traditional loans like commercial mortgages and secured loans, you may also be able to access more modern, flexible solutions such as Merchant Cash Advance and Tax Loans.
Equipment is a vital part of any business operating in the pharmacy sector. Your own dispensing equipment is an obvious cost, but you will also need retail equipment, with displays, shopfitting and POS systems.
There are specific loans available to support the purchase of equipment. Pharmacy equipment financing can provide the most cost-effective solutions for most kinds of equipment your pharmacy will require. To find out if you are eligible for asset finance, and to get the best possible deal, speak to Rangewell. Here's a little more about the different types of equipment finance.
If you need equipment that you want to go on giving service for years, Hire Purchase brings you outright ownership of the asset and enables you to spread the cost over a term that suits you of up to five years.
If you need the latest equipment without the burden of ownership, leasing will give you the freedom and flexibility you need. Leasing can mean that responsibility for maintenance remains with the leasing company, reducing demands on your time as well as reducing costs.
Asset finance solutions could also help provide a business vehicle, which could be essential if you want to offer a delivery service. There's even specific vehicle finance options that could help you cut the cost of transport.
Good quality used equipment can be a sound investment, especially if you are setting up a new practice. However, many pharmacists miss out on the potential savings because they believe they need to find the cash to pay for it.
Retail premises in a good location, ideally with parking and public transport nearby will be a major cost for successful pharmacy practice. You may need to for the deposit on a long-term lease. Alternatively, you might be able to reduce your monthly outgoings and acquire a valuable asset for your business with a commercial mortgage.
A commercial mortgage could help you acquire new premises, or acquire your existing premises from your landlord. It could also help if you want to buy additional premises as a branch of your existing business. If you already own your premises, you may also be able to raise finance by remortgaging them.
Even if you aren't buying or selling a pharmacy, there are still considerable outgoings to consider. For example, you may want to refurbish your premises or even take on new staff.
At Rangewell, we know all the solutions available and we can work with you to find the finance that is most appropriate for the particular challenge you face.
Large quarterly VAT bills or annual tax demands can cause problems with your cash flow, particularly when that falls at the same time as other costs. Tax loans help you to spread the cost of your tax demand into affordable monthly payments. See how a tax loan can mean better control of cash flow with fixed monthly payments.
Working Capital Finance is designed to boost the working capital available to a business. It's often used to provide cash to pay staff during the early weeks and months of opening a practice, or during a period of growth. It is designed to be repaid in the short- to medium-term.
Our finance experts can help solve your working capital needs.
Having access to substantial finance is essential if you have major plans for your practice, such as acquiring a competitor. Growth Finance is a special type of funding designed to fund your growth plans.
Even if your practice does not have the history and profit record that lenders usually require, we can help you find solutions. Get our help in finding the most competitive lending for your needs.
Your professional status can help you secure attractive rates for the funding you need, especially if you can demonstrate a successfully performing business through accounts and potential through a detailed business forecast.
Finding the most competitive deal across the entire market takes time and knowledge. We know the lenders who can offer the most competitive rates for all types of finance. Alongside traditional finance products, we can help you find alternative funding, using new loan providers and styles of funding.
Whether you have a straightforward, small-scale funding need, or require a complicated ‘Jigsaw' funding plan made up of a combination of financial products, we can work with you to find the answers. Call us now to get our experts working for you - from funding for a pharmacist competitor buyout to affording equipment and more.
Last update: 23 July 2024
Have a question?
The financial rewards of owning your own pharmacy can be amazing, but it's not going to be all smooth sailing. You'll be responsible for hiring and firing, paying off loans, being in charge of stock, and probably working around the clock. But if you're patient, your pharmacy could reap incredibly high rewards. It's worth it, but only if you're aware of the responsibilities.
Generally speaking, you'll probably need a 30% deposit to buy a pharmacy, but each lender will have its own deposit criteria. Speak to Rangewell to find out more.
Firstly, you'll need to choose the pharmacy you'd like to buy. Then, our experts at Rangewell can talk you through your requirements and help obtain a better understanding of the market dynamics in your area. We can also advise you on all aspects of the purchasing process.
Yes, Rangewell's experts can help source a loan that works for you and your business needs. If you're keen to own an independent pharmacy, starting one from scratch will be faster and less expensive than buying an existing pharmacy. However, it will require hard work and determination - speak to Rangewell for more information.
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