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Jennifer Roberts

What Is A Pharmacy Loan And How Do I Get One?

Opening a pharmacy and medical supply store will be a tough task to accomplish on your own. There are oftentimes steep overhead costs, with independent stores, chain stores, and online competitors all competing against you for customers.

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Getting a loan for a pharmacy shop isn’t as simple as some of you may think. It can be nearly impossible to borrow from traditional lenders like banks because they view the pharmacy business has a high-risk business. However, luckily for you, there are many businesses out there who specialize in business loans.

There is much more to pharmacies than just selling over the counter medications and filling prescriptions. Pharmacies have a variety of expenses that will impact the overall cost of the business startup. Meeting payroll for your employees, paying utility bills, stocking thousands of medications, health and beauty supplies, etc. All of this and more impact your cash flow.


Whether you want to hire a new pharmacy technician, replenish your stick of lift chair, or remodel your store a pharmacy business loan would help you greatly. If you’re not exactly sure what you need your business loan for in your shop, here’s a list of possibilities:

* Store rent and lease-
you need to rent retail space. You need to plan for about 2000 square feet. The cost of retail space will be different in each region. You should choose a high traffic location that will attract a lot of customers from the local community.

* Franchise fees

Inventory or vendors- the cost of inventory would add up to more than 50% of your startup costs. Inventory is the single largest expense in starting a pharmacy.

* Shopping cart, shopping baskets

* Employee salaries- if you are the pharmacist, then you need to account for your salary, one pharmacy technician, and one sales clerk for all general merchandise. You, as a pharmacist, may need to be prepared to start on a lower salary for the first 12 to 18 months until your pharmacy breaks even and takes off.

* New cash registers, computers, scanners, etc.- there is a whole list of furniture and equipment you need to take into consideration, including but not limited to, shelves, pill counters, pharmacy bins, lab coats, safety gear, etc.

* Refrigerators or coolers

* Utilities

* Security, security cameras & mirrors

* Displays & maintenance

* DIsplays and shelving

* Advertising and online marketing

* Cleaning services

* New medical equipment

Don’t waste your time with traditional lenders who will likely take one look at your
loan application and deny your request. Banks and traditional lenders have to follow strict guidelines that make it virtually impossible to qualify for a pharmacy store loan. You would need perfect credit scores, tax returns, income statements, collateral, and personal guarantees. Banks will make potential borrowers jump through hundreds of hoops just to deny them later on down the road after a long-drawn-out process. Furthermore, even if you do qualify for the bank loan it will take several months for you to have access to any of that money. 

Pharmacy owners with damaged credit or outstanding loans will face an uphill battle with traditional lenders and are more likely to be denied a small business loan. Third-party companies who specialize in offering business loans will be a better course of action. 


When you start a pharmacy, you will need a team of trusted professionals you can rely on for their expertise and experience. In fact, you should put this team together and have them assist you in putting your business plan together. 


The first team member you’ll need is an attorney. You’ll need an attorney who specializes in the healthcare industry, preferably one who has experience with pharmacy startups. This will ensure he or she can guide you through the process while complying with all the state rules and regulations. 


Next, you’ll need a CPA- Certified Public Accountant. This is someone who specializes and serves the retail business. Again, it would benefit you by going with a CPA that has experience with retail pharmacy owners. 


Lastly, you will need to invest in an insurance agent. Hiring an insurance agent will ensure you get the right advice on how much insurance you may need to mitigate your business risks. You will need to make sure that you have insurance coverage for pharmacy malpractice in addition to general business liability insurance. 


Pharmacy loan challenges

After all this advice it may be a little easier to get pharmacy finance overall. However, you may still face the challenge of getting the amount that you need to officially open your doors. Startup pharmacies can cost anywhere from $300,000 to $1,000,000 just to get the doors open. This startup amount all depends on who you talk with, how you choose to finance your pharmacy, how much you plan to spend on inventory, equipment, retail space, furniture, staff, etc. 


Even if you can’t get all the funding you need in your loan at once, there are still alternative actions you can take to get all the funding you need. One of the most common ways to do that is to break up your funding goal into smaller funding projects. For example, you can focus on one aspect of financings like equipment and retail space and then have a separate funding project for inventory and hire staff.


Going this route allows you to work multiple lenders in order to get different sources of funding for separate purposes. Each lender may be better suited for a more specific role in funding your business. For example, buy your pharmacy equipment with an equipment financing company


While getting a pharmacy business loan can be a complicated, difficult thing to accomplish, but it’s not impossible. If you use the tips I shared above it should be much simpler for you to achieve your goals. Remember if you run into roadblocks you have people around you who are specially trained to handle matters like these. Don’t wait to apply for a pharmacy shop loan, start your dream business today!