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    10 Replies Latest reply on Jul 8, 2011 7:15 PM by pahstaffing

    Buying an Existing Pharmacy

    pill1973 Newbie
      I am a Pharmacist with 10 years of experience, i need advice on getting a loan to purchase an existing pharmacy anywhere in the country.
      I have an excellent credit, and a strong resume. I have been told that the default rate on a loan on pharmacy is less than 0.5%.

      Where do i start my search for banks and other lenders who specialize in Pharmacy Business Financing?
        • Re: Buying an Existing Pharmacy
          phanio Pioneer
          You can start at our web site - Business Money Today - all we do is provide informaiton and resources for people just like you looking for a business loan. no cost to use our site.

          You might also think about a SBA guaranteed loans. As a former commecial banker, if your qualifications are as you say, I would consider your deal with or with an SBA backing.

          Business Money Today
          http://www.businessmoneytoday.com
          1 of 1 people found this helpful
            • Re: Buying an Existing Pharmacy
              dltmgmt Newbie
              Are you only purchasing the business or the land/building? How much are you looking to finance? Have you owned a pharmacy before? Where exactly are you purchasing (City and State)?
                • Re: Buying an Existing Pharmacy
                  pill1973 Newbie
                  We are willing to move to any major city or its vicinities.
                  The asking price varies, depending the business that certain pharmacy is doing.
                  Some pharmacies are for sale with land also offered with them but majority are just asking for the good will without land.
                  I never owned a pharmacy before. But have managed several of them, have worked on a district level with a big chain drug store and had been very succesfull.

                  Thanks.
                    • Re: Buying an Existing Pharmacy
                      dltmgmt Newbie

                      I'm trying to come up with something, because you are barely starting off it is going to be very difficult to get a loan. Especially with the way financing companies are working. They usually want the last two years of tax returns for the business and the individual. If you are currently a homeowner you can get a home equity line of credit. The good thing about that is that you might be able to use the interest paid as a tax deduction.
                • Re: Buying an Existing Pharmacy
                  Tracker

                  Saleem:

                   


                  In addition to the excellent information that "phanio" with Business Money Today provides, I would suggest that you narrow your focus to specific locations through research and some introspection to areas where you would like to live and where a pharmacy would have a good chance for success.

                   


                  Once you accomplish this, I would recommend you get in touch with a local business broker to assist you with finding a good business to buy. In addition to helping negotiate the best buy price, a strong broker will help you with pointing you in the right direction for connecting with local lenders for an SBA loan. As "dltmgmt" mentions, you will need to get the books from the current business owner and may need to incorporate a business plan of your own to show to the lender.

                   


                  Good luck.

                   


                  Doug Dolan

                   

                  The Solopreneur's Guide

                   

                  http://thesologuide.com/
                    • Re: Buying an Existing Pharmacy
                      pill1973 Newbie

                      Thanks to everyone for their input.

                      As i mentioned in my post i am purchasing an existing pharmacy. We dont have too many of them in the country, so thats the reason we are willing to move to almost any area.

                      Although making a business plan does not hurt, but it doesnt help alot in my case either. I am looking at well established, running pharmacies and i do not have any intention to change their ways of operation once i take over, not at least for a few years.

                      Pharmacy business is kind of unique, we survive at about 3% net profit, it does not have general expenses like majority of retail businesses do. The payroll is extremely expensive with high insurance and costly inventory.

                      The business has drifted to almost 93% insurance pays, who can easily take up to 45 days to clear a claim, so there is also some liquid cash needed.

                      I am looking for lenders who have worked with pharmacists in purchasing a pharmacy.

                      Thanks

                       

                       

                       


                        • Re: Buying an Existing Pharmacy
                          Tracker

                          Saleem:

                           


                          Not all business plans are formal business plans. A lender may want to not only see the current business owner's books, but what are some of your plans for the business (if you require funds above and beyond the purchase price of the business), especially if the business you want to buy is in the red.

                           


                          Doug Dolan

                           

                          The Solopreneur's Guide

                           

                          http://thesologuide.com/
                          1 of 1 people found this helpful
                          • Re: Buying an Existing Pharmacy
                            phanio Pioneer
                            In regards to your comments; "The business has drifted to almost 93% insurance pays, who can easily take up to 45 days to clear a claim, so there is also some liquid cash needed." - once you are up and running - especially as you are growing your business and will have cash flow issues - there are several ways to smooth out your cash inflows instead of waiting 45 days to get paid. You can always factor those receivables. Thus, you can use that cash to grow and manage your business. Then, when things settle down and your cash flow is more solid and predictable - then quit factoring as this is something you don't want to do forever.

                            Business Money Today
                            http://www.businessmoneytoday.com/Loans/capital-resources/working-capital-asset-based.html
                            1 of 1 people found this helpful
                          • Re: Buying an Existing Pharmacy
                            phanio Pioneer
                            Doug - great point - you are so right.

                            Seleem - Doug (thesologuide) might be able to help move along quickly - he is very insightful and full of great information.
                          • Re: Buying an Existing Pharmacy
                            pahstaffing Newbie

                            Hey Saleem

                             

                            Did you end up opening a pharmacy? if so how is it going? We are looking to open a pharmacy

                             

                            Thanks

                            Anand