Pharmacy finance

With our vast amount of knowledge about the pharmacy sector, we can give you unbiased finance solutions and options to pair you with your ideal finance provider.

Running a pharmacy business can be a very successful business that allows you to take advantage of a variety of business options. To support or expand your firm, you could eventually need to access finance schemes and funding options for pharmacists.

You’ll probably require financing whether you’re purchasing a pharmacy, dental practice or spending money on new pharmacy equipment. The success of your company depends on your investment, so let’s examine the various cost-effective pharmaceutical financing options available to business owners.

Whichever your ambitions, you will typically have a source of finance to make them achievable. You can discover that you may need help raising finance to ensure constant cash flow for a variety of reasons, such as purchasing the freehold rights to your pharmacy, investing in shopfitting and stock, hiring new employees, or just managing daily expenses like taxes and your mortgage.

We work with pharmaceutical business owners daily to apply for and secure the appropriate finance for their unique goals, so we know the specific difficulties you encounter.

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How does it work?

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A member of the team will be in touch to collect some basic information. This helps us understand the type of funding that would best suit your business.

We find the best funding for you

We use the information you provided to source the best funding options for you and your business using our panel of over 250 lenders.

We present your options

We’ll then present you will all of the funding options available to you and give you time to decide which one you would like to proceed with.

Options for funding your pharmacy

There are many expenses to think about, whether you are investing in an existing pharmacy as a partner, purchasing it entirely, or purchasing additional pharmacy practices.

These revenue sources and expenses can be a little simpler to anticipate if you are buying an existing company. The business’s current value will be impacted by factors including past financial performance and cash flow, enabling you to agree on a fair price. Do your research before purchasing a drugstore to make sure you’re choosing wisely.

If you’re considering investing in a bigger store or business, you might be planning to proceed on your own, buying out a retiring partner. Buy-in and buy-out finance understands the difficulties and offers commercial finance designed to enable you to take full advantage of your opportunity. High street banks, bank loans and traditional lenders don’t tend to have a huge amount of expertise or expertise within this field, which is why we’ve partnered with specialist lenders that will look at each business’s individual circumstances.

How does it work?

Your first drugstore will cost a lot of money to purchase. For instance, you must take into account the pharmacy’s expenses as well as those of the company as a whole, as well as any stock or equipment that is part of the transaction.

You must also account for the cash flow from your working capital. This includes money to cover all business costs, such as your wage and any employees you hire to manage the business, as well as their salaries. Consider a buffer period to build a clientele in your neighbourhood if this is a startup or struggling business. Commercial property finance might be beneficial for a first time pharmacy purchaser, secured finance offers long term funding at low-interest rates. The purchasing process can be long-winded, so it’s important to do as much due diligence as possible before committing to any type of loan finance.

Independent pharmacies may find it difficult to compete with the big chains. While still allowing you to be your own boss, a pharmacy franchise from one of the top pharmacy companies could lower the risks, allow you to offer a well-known brand, and offer support with marketing and purchasing. Other difficulties include adapting to pharmacy operations post-Brexit and understanding the nuances of NHS pharmacy ownership.

We can assist in identifying threats right away and creating a strategy for your finances. We’re here to assist at every stage, from helping with the application procedure to searching the market and finding the finest acquisition financing with reasonable monthly repayments.

What are your potential routes to funding?

For business loans, the majority of business owners will go to high street lenders. They might already be covered by the major lenders, or they might not know where else to look. However, to thoroughly search the market, we highly recommend partnering with an independent broker.

To find the right kind of pharmacy loan for your company, we consider not only all of the lenders that are available to you but also your particular circumstances. You might discover that specialised lenders frequently offer repayment terms that are more lenient and strive to offer financing options that permit a greater portion of cash for goodwill and/or VAT/tax funding.

Your unique circumstances play a big role in determining the type of loan that is accessible to you. You might be able to acquire more contemporary, adaptable options like Merchant Cash Advance and Tax Loans in addition to conventional loans like commercial mortgages and secured loans.

Equipment funding

Any business that operates in the pharmacy industry needs equipment to function. The expense of your dispensing equipment is clear, but you also require retail equipment like shopfitting, displays, and POS systems. Asset financing is a popular way of spreading the cost of expensive equipment, over fixed repayment terms.

Hire purchase – Hire Purchase gives you outright ownership of the item and allows you to stretch the cost over a term of up to five years, which is ideal if you need equipment that you intend to use for many years. Repayment amounts are predetermined to make budgeting simpler. Spreading costs allows for the preservation of cash flow. Fixed repayments that are customised to your particular conditions.

Leasing – Leasing will give you the independence and flexibility you require if you need the newest equipment without the financial burden of ownership. When you lease, the leasing company may continue to be in charge of maintenance, which reduces your time commitment and financial outlay. No advance payment is necessary. Repayments are set in stone to make managing simpler. Protects working capital. Repayments are fixed so you know what to expect each month.

A wise investment in high-quality used equipment is possible, particularly if you are opening a new clinic. However, a lot of pharmacists don’t take advantage of the potential savings because they think they have to come up with the money.

Tax / VAT Funding

Your cash flow may be affected by substantial quarterly VAT payments or annual tax needs, especially if they coincide with other expenses. You can spread the expense of your tax demand into manageable monthly instalments with the aid of tax loans. See how having fixed monthly payments on a tax loan can improve your control over cash flow.

You can effectively manage your operating capital so that you can keep your business running smoothly by financing VAT and tax returns.

VAT financing is offered if you require additional finances to make these quarterly payments to HMRC, which is how many business owners pay their VAT returns. Planning ahead could reduce stress if your firm has a lot of additional financial commitments to meet during the year.

Working Capital & Cash Flow

A business’s working capital can be increased with the help of working capital financing. During a time of expansion or in the first few months and weeks after launching a practice, it’s frequently employed to give cash to pay employees. It is intended to be paid back over a short- to medium-term period, usually 3-36 months.

There are times when the finances of many practices are tight. Due to various sales cycles, some organisations commonly deal with this problem. However, having insufficient working capital to fund regular operations and encourage expansion is detrimental to your pharmacy, regardless of how frequently or infrequently this issue occurs. Making a working capital loan application is a quick, simple, and adaptable approach to getting the business financing you need to keep your operation running at full capacity. Fortunately, there is a solution to temporary financial problems.

Consolidation Loan

A consolidation loan might be the best option if you have a lot of open contracts, credit card debt, and other ongoing financial obligations.

There are many benefits to consolidating or refinancing, by combining your existing debt into one monthly repayment over a term this fits your circumstances can relieve cash flow and as a result reduce stress.

Consolidation loans can be secured or unsecured. You may be asked to put up collateral as security depending on the amount of debt that is being taken on.

Franchise Funding

One of the best possibilities for your pharmacy may be franchising. If your business is successful, you might think the town over will be equally successful. If you want to control the market, set ambitious goals and ensure that everything happens as planned.

The most expensive part of franchising is the beginning, when all the legal paperwork needs to be taken care of and the franchisees need assistance setting up and training. We will source the lenders to fund the project for you.

If you’re determined to franchise your firm but are unsure that you can afford the start-up charges, you’ll need to apply for a business loan.

Merchant Cash Advance

A merchant cash advance, sometimes referred to as a business cash advance or a revenue-based loan, is a brief, unsecured infusion of cash secured by upcoming credit and debit card purchases made by your pharmacy.

In contrast to a typical unsecured commercial loan, there are no fixed monthly instalments to be concerned about because a portion of the money is immediately returned each time you process a payment on your card machine.

The lender will attempt to lend 1-2.5 times the amount in a typical month. You pay back the loan as a certain percentage of your future credit card sales, so your monthly payback amount will vary as sales naturally fluctuate.

For instance, a 10% repayment sweep might occur if you executed a sale for £100 through your card company. In this case, you would keep £90 and £10 would be immediately paid toward the advance.

Revolving Credit Facility

Overdrafts and revolving credit facilities are not fixed-term business loans. You can withdraw money, pay it back, and withdraw again – just like an overdraft – ideal to provide cash reserves for your pharmacy.

Pay interest only when you utilise the facility – The interest rate on credit facility loans is fixed, and interest is only due when the facility is used. If you are not using it, there is no need to pay interest. You can easily manage this funding option.

Due to the ease with which revolving credit can be accessed whenever required, your pharmacy can experience an increase in cash flow. One of the main benefits of a revolving credit agreement is that you may pay your bills on time, replace your inventory levels quickly, pay your employees on time, and go to bed without worrying about money.

Unsecured Pharmacy Loan

An unsecured business loan is one for which the borrower is not required to put up any security. Because the loan is unsecured, this funding option does not run the risk of losing priceless practice equipment or property. Growing your pharmacy and existing business with an unsecured loan could be the route to funding you’ve been searching for.

An unsecured business loan has an easy repayment plan. You borrow money from a lender after determining that you’ll make consistent, fixed monthly repayments at a certain interest rate. Until the entire loan is repaid, payments are made over the term of the loan. Unsecured loans may have interest rates that are higher than secured loans.

We can help businesses registered in England, Wales Scotland and Northern Ireland. If your registered office is located outside of the UK, it’s very unlikely we’ll be able to assist. We source funds for a limited company, partnership or sole trader.

Due to the number of options available, using an experienced finance broker like ourselves will make the process quick and simple so you can concentrate on the daily operations of your pharmacy.

Smart Funding Solutions are authorised and regulated by the financial conduct authority, FRN: 972740.

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Frequently Asked Questions

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Pharmacy Finance is a tailored loan product designed for pharmacists or pharmacy owners. This loan can be used for a wide range of purposes, including the development of new outlets, modernisation of existing locations or purchasing stock.

Qualified and registered pharmacists, or individuals planning to open a pharmacy, can apply for Pharmacy Finance, provided they meet the specific eligibility criteria set by the lender.

Following approval and acceptance of the terms and conditions, the lender provides the borrower with the agreed loan amount. This loan, along with interest, is then repaid to the lender in regular instalments over a particular period.

The amount that you can borrow under Pharmacy Finance varies and depends on factors such as creditworthiness, income, and pharmacy business plans. You will need to check with the lender to determine an accurate borrowing limit.

Yes, Pharmacy Finance can be utilised for various business needs, including renovations, refurbishments, purchasing new equipment, or even to improve cash flow during slow periods.

Interest rates for Pharmacy Finance are subject to the lender’s terms and can vary based on the amount of the loan, the repayment term, and the applicant’s creditworthiness. It is recommended to compare interest rates from different lenders before finalising any agreement.

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Though requirements may vary between lenders, generally, you may need to provide a filled application form, proof of income, documentation of industry experience or qualifications, and possibly a detailed business plan.

The timeframe for approving a Pharmacy Finance application can vary depending on the lender and the details of the loan itself. However, many lenders will aim to have a decision within a few working days of receiving a complete application.

Yes, Pharmacy Finance typically adheres to a set repayment schedule, which is agreed upon at the time of approval. Payments are then made in regular instalments over an agreed period.

Terms for early repayment differ between lenders. While some may allow early repayment without penalties, others may charge a fee for this. It’s recommended to confirm these details with the lender prior to finalising the agreement.

In case of missed repayments, interest rates may increase, and additional fees might be imposed, potentially affecting your credit score. If you anticipate difficulties in meeting your repayments, contact your lender at the earliest to discuss possible arrangements.

If you’re intending to start, expand, or enhance a pharmacy business, Pharmacy Finance could be a suitable solution. However, before committing to any loan, it’s important to consider the financial requirements and the ability to repay the loan in the future.

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