Acquiring a Loan for Your Independent Pharmacy

Are you an independent pharmacist considering seeking a bank loan for your business? A recent article from Pharmacy Owners offers a great overview of the do’s and don’ts of seeking this type of loan.

When a bank is considering lending to an independent pharmacist, they assess the borrower’s credit using the Five C’s: character, capital, conditions, collateral, and cash flow. Read on to learn more.

  1. Character – The bank wants to determine if a borrower is trustworthy. To do so, they assess personal finances and credit. A borrower’s loan payment history is a big factor in this area.
  2. Capital – When a borrower has a personal stake in the business for which they’re seeking a loan, it is a good indicator of their commitment. The lender will want to assess the personal financial position of the borrower, evaluating assets and liabilities to determine net worth.
  3. Conditions – The bank will want to have some idea of how the money will be used. A well thought-out business plan is key in this area.
  4. Collateral – In the event that a borrower is unable to repay their loan, there must be a back-up plan in case.
  5. Cash Flow – Lenders need to be confident that borrowers will be able to pay back their loan successfully. They will evaluate your business’s cash flow to determine this.

Contact the Pharmacy Team at Blackman & Sloop for guidance on cash management.

Read the article in full at Pharmacy Owners.