Pharmacy loans: What are they and is it right for your business
To get an accurate idea of how much a pharmacy is worth, you should speak to an accountant or business broker.
Key takeaways
- You can use a loan to buy a pharmacy or to help with the cashflow or equipment costs involved in running a pharmacy.
- Prepare a detailed business plan that includes financial forecasts and profit margins to strengthen your pharmacy loan application.
- Compare secured and unsecured loan options from banks and non-bank lenders to find funding that matches your business age, turnover and goals.
If you're thinking of buying a pharmacy, before you dive into the world of prescriptions and pill bottles, there's a lot to think about. From navigating government regulations to checking out the financial health of your dream pharmacy, there's plenty to consider.
This guide examines how you can find the right pharmacy to buy, how much it costs to buy a pharmacy and how to find the right business loan to fund your purchase.
What factors should you consider when buying a pharmacy?
Make sure you consider the following factors if you're considering buying a pharmacy:
- Business history. How long has the pharmacy been in business? Does it have a solid base of loyal customers?
- Business performance. You'll need to review the pharmacy's financial performance in previous years to gauge how it is performing. Check previous profit figures and forecasts for the future. Is there room for growth?
- Your experience. While it's not necessary to have previous experience running a pharmacy to qualify for a loan, previous management experience is a must.
- How the industry is faring. Regulatory changes from the federal government can have a significant impact on the profitability of pharmacies. For example, changes to the Pharmaceutical Benefits Scheme (PBS) can see the cost of drugs reduced and have a significant impact on your bottom line. You'll need to make sure you're well across the latest changes to regulations before you buy.
- Why the current owner is selling. Find out why the current owner of the pharmacy is selling as this could have a huge impact on whether buying that particular pharmacy is a successful choice.
- Suppliers. Most PBS medicines reach community pharmacies through the wholesalers approved under the Commonwealth's Community Service Obligation. As at July 2025 the approved distributors were Australian Pharmaceutical Industries (API), Barrett Distributors, Clifford Hallam Healthcare (CH2), Friendly Society Medical Association, Sigma Healthcare and Symbion. Find out which wholesaler the pharmacy buys from and what trading terms apply, because supplier payment terms affect cash flow.
Business loans you can use to buy a pharmacy
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How much will a pharmacy cost?
The price you'll need to pay depends on a range of factors. These include whether you buy a freehold or leasehold pharmacy, the size of the business, the number of staff employed and the range of products it sells.
The true value of a business can only be determined by analysing a long list of factors, including the following:
- Financial statements
- Physical and other assets
- Leases
- Market conditions
- Sales information
- Business plan
- Employee details
- Supplier details
To get an accurate idea of just how much a pharmacy is worth, you should engage the services of an accountant or business broker. They will be able to examine the business as well as its strengths and weaknesses to help determine a fair value.
How can I make sure the business is worth buying?
Before you buy a pharmacy or any other business, you'll need to examine and analyse the following factors:
- The pharmacy's financial position. Take a look at cash flow statements, debts, annual turnover and profit and loss statements from the past five years. Also consider any assets the pharmacy owns.
- The business itself. Is the pharmacy part of a franchise that restricts how it operates? Does the business space have all the necessary features and inclusions? What does the pharmacy sell apart from medications to ensure that it continues to turn a profit?
- Location. Location is a crucial factor in the success of any business that operates in the retail sphere, so consider the pharmacy's location and how that affects its ability to attract customers. For example, is it located in a busy shopping centre or close to a medical centre?
- Staff details. How many people does the pharmacy employ? What qualifications and experience do they have? How much are they paid?
- Supplier information. What supply agreements does the pharmacy have in place? Are they adequate or can you adjust them to suit your needs?
How can I finance the purchase of a pharmacy?
Banks, credit unions and a wide range of non-bank lenders can provide the business loan financing you need to purchase a pharmacy. However, it's not just as simple as filling out a quick application form with your personal details and the amount you want to borrow; you'll need to prepare a detailed business plan to prove your reliability as a borrower.
The lender will want the following details:
- The earnings and profit margins of the business
- Sales performance
- Sales and cash flow forecasts
- Any qualifications and previous experience you may have
Your accountant can run you through the process of developing a detailed business plan and loan application to help you find the financing you need.
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Hi there
I’m a pharmacist and planning to go for partnership with other pharmacy owners. I’ve got $440K in savings that I would like to put down as a down payment. I was wondering if you have the service to act as a lender and get a pre-approval a loan.
Regards
Michael Abdelmalek
Hi Michael,
Congratulations on your new adventure!
To see what options you have to finance your new business, you can click on any suitable options in this table and select the green “go to site” button.
You may also want to engage a lawyer and an accountant, to make sure you set your business up with the ideal ownership structure that allows you to take advantage of the most tax effective strategies that offer legal protection (especially important when going into business in partnership).
Hope this helps!