Securing £2million funding for a pharmacy group
Even at 100% LTV
Going to a bank when you have a large-scale funding need may be the simple option - but coming to Rangewell can be more cost-effective - because we can compare funding from several providers to secure the most appropriate deal.
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Banks may consider pharmacists and pharmacy purchase as being a relatively good risk and be very eager to help - even when large sums are involved. However in practice, your bank may not be able to provide the funding required - especially if your needs don’t match their strict lending criteria.
We were recently approached to provide the funding to help a pharmacy group with eight chemist shops in the Leicester area. They had been offered the opportunity to buy another group, with four established shops.
“It was a deal that made a great deal of sense for us. We have a presence in the area, and we could not expect to do much more business in the local communities we already served. Buying another group would increase our geographical reach which would mean more customers - and of course give us economies of scale. Our buying power would be increased 50% at a stroke. That is a powerful business advantage when you are dealing with price-sensitive lines - we never forget that with over the counter products our biggest competitors are supermarkets, not other chemist shops.”
With a profitable business base, the client was confident that they could borrow the funding required - although this came in at £2.2 million.
"It is a large amount of money - and of course at that level getting the most competitive deal is essential. A few fractions of a percentage point makes a big difference to the monthly repayments.”
The partners came to came to Rangewell to for a solution that would provide the funding they needed - and at a rate that would be hard to beat.
We immediately saw that we could help the client find lenders - but we saw that there was a complication. The group had no spare cash to call on, and it would be necessary to find a lender prepared to offer the whole £2.2million as a loan.
Most lenders have set the levels of LTV that they will offer, and most will offer less than 80%.
The client would have to find £400,000 as a deposit - which they simply did not have. It looked as though the deal could not proceed.
Not only would we need to find a loan with a market-beating rate - we would need to find it at 100% LTV.
How we helped
At Rangewell our service is unique. We can search the entire UK lending market to find the most competitive lender for any type of loan.
We support this ability with expert knowledge. We understand the pharmaceutical sector, the challenges and the opportunities it presents, and the lenders who may be the most sympathetic. So when we have a client with a need that is outside the normal lending criteria, we can use our expertise to find a solution.
Because we have direct contacts at high levels within banks and other lenders, we were able to sidestep the usual limitations .
We went directly to the decision-makers in a high street bank that specialised in the pharmacy sector, and explained the position. Because of the value built up in the group’s existing pharmacies we were able to secure a firm offer within just 10 working days.
Not only did we secure the funding that our client had been waiting for, we were able to secure the offer at 100% LTV.
We provided funding of £2.2 million - and despite the high LTV we were able to do so at just 2.2% over base over 15 years.
The funding Rangewell secured
£2.2 million at 2.8% over base over 15 years
Our client was able to buy the smaller group and start enjoying the benefits of scale.
We help pharmacists - and other business owners - with all their funding needs. If you are ready to buy a single chemists shop- or a pharmacy group , our pharmacy funding specialists are ready to provide the help you need to secure a deal that’s right for you.