pharmacy business

Pharmacy Business Loans and Financing

If you're interested in getting into the pharmaceutical field, a small business funding loan may help you get started. On this page, our experts will outline the best pharmacy business loans and what you will need to take into account before you apply for a loan.

Written by Brian Huber, updated on 11/03/2021
Reviewed by
 Chip Stapleton, Finance Manager on 9.1.2021

Before applying for a pharmacy business loan, you need to consider what sort of expenses you may encounter. For example, you will likely need the latest technology and equipment and the latest medicine on the market. In relation to daily operations, you will need enough cash on hand to cover your expenses. This detailed guide will provide you with insight into which business loans are suitable for which scenarios.

Best Pharmacy Business Loans - Quick Overview

Here we will look at a summary overview of the financing options available to you so that you can choose which one will suit you best. 

Financing Need

Best Loan Type

Loan Features 

Recommended Lender

Upgrade technology, invest in marketing campaigns, equipment maintenance, medical supplies, renovation and upkeep, utilities

Short-term loans

  • Amount: Flexible from $5,000 to $500,000
  • Term: 15 months
  • Interest: One-time factor rate 
  • Time to get the loan: Up to 24 hours

Fora Financial


Equipment financing

  • Amount: up to 100% value of equipment
  • Term: Up to 6 years
  • Interest: Between 4% and 40%
  • Time to get the loan: Up to 48 hours 


Business property

Term Loan

  • Amount: Up to $250,000
  • Term: Up to 24 months
  • Interest: 11.98% - 46.06%
  • Time to get the loan: Up to 2 weeks


Working capital

SBA loan

  • Amount: Up to $5 mil
  • Term: Up to 25 years
  • Interest: From 4.75% and up
  • Time to get the loan: Up to 2 weeks


Operating funds

Business line of credit

  • Amount: Up to $250,000
  • Term: Up to 18 months
  • Interest: Between 4.8% and 25%
  • Time to get the loan: Up to 24 hours


Cashflow & emergencies

Merchant cash advance

  • Amount: Up to $250,000
  • Term: Repaid weekly or monthly
  • Interest: No ongoing interest, just a simple fee based on the loan amount.
  • Time to get the loan: Up to 24 hours

Square Capital

Best Pharmacy Business Loans Explained

It’s time for us to explore all the pharmacy business loans indicated above, in greater detail.  

1. Fora Financial - Best for Short-Term Loans

The running of a pharmacy business entails many aspects and keeping good cash flow is essential. However, not many big banks and lenders are keen on loaning money to such a business, especially a young and growing one. Small-term loans are where pharmacy businesses will find financial assistance when it is needed.

Fora Financial comes highly recommended and can give pharmacy businesses good loan amounts between $5,000 and $500,000 as well as flexible repayment terms.

Getting a loan from Fora Financial takes only a few steps that can be completed online. Simply fill in an application form, provide the necessary documentation, and submit. Applications are finalized within 24 hours and upon approval, the funds are deposited in just three days. Fast repayment gets rewarded with quick payoff discounts of up to 10c to the dollar.

Read the full Fora Financial review for more details.

2. Fundera - Best for Equipment Financing

Equipment financing is essential for most businesses, as it lets you acquire the machinery and furniture you’ll need to be successful. The loan lender will generally give you a lump sum for up to the entire value of the equipment you need, with a medium-term repayment period. You’ll also find that these types of loans have lower interest rates than standard term loans.

There’s no point in acquiring space for your pharmacy business if you don’t have any equipment to place inside it. You’re going to need counters, sales terminals, and computers connected to medical portals and accounts. If you provide a specialized service, such as a small clinic for flu shots, you’ll need the necessary tools for the job.

Fundera has many financial solutions under its umbrella, one of which is equipment financing. Its helpful customer support team will guide you through the various loan options and help you find a solution that meets your business objectives. They’ll also consider you even if you’ve never managed a pharmacy business before.

Read the full Fundera review for more details.  

3. OnDeck - Best for Term-Loans

If you’re looking to acquire, redevelop, or renovate the property that you will use to run your business, a commercial mortgage is a good option. 

Your pharmacy needs a physical location to set up shop. Since it’s considered a commercial entity, you will have a good chance to obtain the funds you need for your property using a commercial mortgage loan. The terms and repayment periods are different from residential mortgages, so you can expect better rates.

OnDeck specializes in term loans, including short-term loans. Instead of penalizing you for prepayments, you might receive a discount in exchange for being a loyal customer. It also has an excellent reputation for fast loan approvals.

Read the full OnDeck review for more details. 

4. SmartBiz - Best for SBA Loans

Small Business Administration (SBA) loans are the ideal solution when you need working capital at low-interest rates and long repayment periods. The government approves financing, for SBA loans, through specific lenders with a guarantee of up to 85%. An SBA loan is an exceptional funding solution for startup companies that have no collateral or alternative funding.

You can use an SBA loan if you want to purchase and install all the fixed and movable assets you need in your pharmacy store. You also have the option to acquire or develop a property, but you have a better chance at securing this type of loan for working capital. This loan type is also available as a financing option if you decide to expand your business at a later stage.

As an approved SBA lender, SmartBiz lets you acquire a loan for a large amount, and it has fewer requirements than the competition. While you may have a plan in mind, SmartBiz will help you analyze it and may suggest alternative options or approaches. This loan provider also deals with commercial real estate funding, so you could also acquire an SBA loan for that purpose.

Read the full SmartBiz review for more details.  

5. BlueVIne - Best for Business Line of Credit

Operating funds are just as significant as capital, such funds will give you the breathing room you need to cover daily expenses. A business line of credit is like a revolving loan, with an amount set aside for you to draw as you see fit. The repayment period is cast in stone, and the repayment value only changes when you use the funds.

When times are tough and you need funds to deal with repairs or daily expenses, a business line of credit may be your life-line. You’ll need to manage it carefully, however, and repay it monthly to ensure that you have reserves available for the next month. Also, the lender may prohibit the use of the account if you miss too many payments.

BlueVine is incredible when it comes to its business line of credit. Your accounting team will have access to the client portal where they can see the balance available and what you still owe. As a reward for loyal payments, the lender may raise the credit limit.

Read the full BlueVine review for more details. 

6. Square Capital - Best for Merchant Cash Advance

A merchant cash advance can benefit companies that sell products via credit and debit cards. The lender will provide you with a lump sum, and will take a small percentage as payment, every time your customer swipes their card. There’s a holding back period until the minimum repayment amount is reached.

Although many of your clients will pay using their medical aid, there are plenty of other items they’ll buy with bank cards. Not all products are approved for medical aid payments. You may also have non-medical merchandise available for sale. 

Square Capital provides card machines to its clients after approving the lump sum cash advance. However, you’ll need to register as a member to take advantage of its low-interest fees. Also, you won’t have to worry about any prepayment fees.

Read the full Square Capital review for more details. 

Recommended Reading: Best Dental Practice Loans for 2022

How Much Does it Cost to Open a Pharmacy Business?

The amount of money you will need to open your pharmacy can vary according to location. If you are looking to open a basic business, you could start with as little as $100,000. In many cases, you will need to rent your commercial property, which can raise the costs to as much as $1.2 million.  

On average, small pharmacy business loans range between $400,000 and $800,000. You will need to remember that it’s not only the establishment and equipment that play a factor, but you will also need to cover legal and insurance fees. You’ll have to pay the employee wages and any scheduled maintenance required.

There are also three types of possible investment approaches: you can personally finance your pharmacy business, taking it upon yourself to pay for the loan; or you can inlove an external investor/partner; or shareholders.

Here are the cost elements you’ll need to consider when creating your business plan:

  • Franchise fees
  • Property rental or acquisition
  • Equipment
  • Inventory and medical supplies
  • Employee wages
  • Specialist fees
  • Computer and sales technology
  • Utilities
  • Legal fees
  • Licenses and permits
  • Repairs and maintenance
  • Business expansion

You should also make allowances for emergency repairs and any assets you require, such as generators and air conditioning systems.

Recommended Reading: Best Daycare Business Loans for 2022

Pharmacy Business Regulatory Compliance

Pharmacy operations in the United States are confronted with a wide range of regulatory compliance obligations. The federal government imposes regulations concerning controlled substance ordering, receiving, storage, distribution, and disposal. Other federal acts require pharmacies to follow rules about patient records, marketing, and insurance reimbursement. 

A pharmacy must also comply with legislation and pharmacy board regulations of the state in which it operates. State laws may be more restrictive than federal rules, which do not supersede the state mandates. 

Major components of a pharmacy business compliance program are:

  • Drug ordering documentation.
  • Inventory management, including drug storage security as well as controls for accurate drug dispensing and disposal.
  • Software for accepting electronic prescriptions.
  • System for utilizing appropriate medical billing codes.
  • Protocols for monitoring prescription fraud and assuring medical necessity of prescribed drugs.

How to Choose the Best Pharmacy Business Loans

When choosing the best pharmacy business loans you will need to start with an effective business plan. You can use your business plan to justify what you need the funding for. You may need to look at several loan types to find the best solution. Of course, you may be lucky enough to find one lender that offers multiple financing types.

We know that obtaining an SBA loan can be exciting - as it boasts low rates and low repayment terms. However, you will need to consider if this loan type will cover everything you need, once you open your doors to the public. Read every clause carefully, making sure the lender isn’t locking you into any unsuitable conditions.

Finally, select the loan that best suits the needs and requirements of your pharmacy business. Do you need long-term capital, equipment, or a running cash flow? You might be setting business up for failure if you choose the wrong loan type. Also, have a look if there are any special loan discounts available for the medical industry. 

Recommended Reading: Small Business Loans for Chiropractors

See Our Additional Guides on Industry-Specific Loans

Bottom Line

Opening a pharmacy business can be rewarding. It can be nice to know you are helping your community remain healthy and fit. However, to ensure your pharmacy business is successful you’ll need to plan well. Focus on industry-specific loans that will keep your monthly repayments low and your profits high. We hope that this guide has shown you the best way to accomplish this.