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How to Get a Pharmacy Business Loan
In the last three years, the pharmacy industry has seen dramatic shifts. As federal COVID-19 funding sunsets, many pharmacies struggle to keep up with rising costs and the ability to provide for customers. The pharmacy market is expected to reach $551 billion in 2023, according to Grand View Research. Consumers are relying on their local pharmacy more and more and with flu season approaching, it’s important to make sure your pharmacy is able to meet demand and keep up with changing needs and regulations.
A pharmacy business loan can be the solution to help your pharmacy cover costs or that extra push to escalate business growth. Whether you’re looking to buy a pharmacy business or meet increasing demand, a pharmacy business loan can provide the flexible financing you need. QuickBridge is known for its fast, reliable access to funds and in this article, we’ll breakdown the exact steps you need to take to get a pharmacy business loan.
Why do pharmacies need business loans?
A pharmacy business loan provides funds for small businesses to utilize for almost any business expense or to fuel business expansion. There are many types of loans – including short-term and working capital loans – and many kinds of lenders. QuickBridge is an alternative lender that specializes in short-term loans of up to $500,000. Pharmacy business owners can find a flexible financing solution customized to suit their needs. Pharmacies can need financing for many reasons – lack of cash flow, business growth, new opportunities, seasonal downturns, or rising costs all play a factor in needing financing. In particular, pharmacies face rising costs across a variety of business expenses – inventory, insurance, rent, labor, and licenses.
A pharmacy loan can be used for almost any business expense, especially if you need cash quickly. Some of the most common loan uses include:
• Purchasing inventory or stock
• Paying invoices for insurance, rent, or other licenses
• Maintaining a healthy cash flow
• Buying equipment purchases or other expensive items
• Covering general business expenses
• Marketing initiatives
• Hiring and payroll
• Business growth or expansion
Types of pharmacy business loans
Alternative loans can be customized to suit your pharmacy’s needs, but here are the most popular loan types:
Working capital loans
Working capital loans provide funds to cover general business expenses and maintain working capital cash flow.
Short-term loans
Short-term loans provide funds for any immediate business expense. Business owners typically use this loan to jump on an opportunity or cover unexpected expenses.
Emergency loans
When your pharmacy is hit with an unexpected event, an emergency loan helps cover the costs and provide peace of mind during a tumultuous time.
Applying for a pharmacy loan
It is generally pretty simple to secure a pharmacy loan for your business. While every lender has its own process and criteria, you can generally expect the process to go like this:
1. First, you submit an application along with any necessary documents (like bank statements).
2. Then, you’ll get an approval from the lender and review the loan agreement.
3. Upon signing the loan agreement, funds are dispersed into your account. At QuickBridge, funds are often deposited within 24 hours.
4. Finally, you’ll repay the loan according to the loan terms. This can be in daily, weekly, or monthly repayments.
But let’s review what you’ll need for the application process – after all, that’s the first step. Before you get started on an application, you should have an idea of what your pharmacy qualifies for and how much funding you need. General application requirements typically include at least six months in business, at least $250,000 in annual revenue, and fair to excellent credit.
It’s also recommended to have an idea of how much funding you need and if a lender can meet your needs – whether that’s the funding amount or a customized repayment plan. Then, it’s a good idea to have some documents on hand for your application. You commonly see lenders ask for the following on their loan applications:
• Bank statements
• Declarations of any existing debt
• Income tax returns
• Credit score (personal and business)
• Business plan
The QuickBridge application is quick to complete and cuts down on extended paperwork that conventional banks often require. Once you apply, the QuickBridge team reviews your application in a timely manner. In addition to the basic eligibility requirements, lenders also typically look out for businesses with high debt-to-income ratio or poor profit projections as potential red flags in an application. However, it’s important to note QuickBridge looks at your entire business profile before making a decision to lend.
Pharmacy loan disbursement and repayment
If your application is approved, the lender will send the terms and agreement regarding your loan. This includes information on repayment, interest rate, and other associated terms. Typically, business owners get funds deposited within 24 hours upon approval.
Your funds can be used immediately and for almost any business expense. Depending on your loan agreement, you may have daily, weekly, or monthly repayments. The repayment schedule is another reason why it’s important to get the amount of funding you can afford and ensure you factor in the repayment schedule. Defaulting on a loan should be avoided at all costs. If you default, you run the risk of harming your credit record, decreasing your chances for future loans, and losing any collateral you had secured to the loan.
