Pharmacy Business Loans: Best Options for Pharmacists
Pharmacy giants like CVS and Walgreens are everywhere. However, it is still possible to open and grow an independent pharmacy. With pharmacy loans, you can receive the funding you need to meet your goals, no matter how far-fetched they may seem.
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Since the startup costs to open a pharmacy are sky-high, you’ll need hundreds of thousands of dollars right off the bat. Once your pharmacy is up and running, you may want to invest in new revenue sources like health screenings, vaccines, and health improvement programs. By doing so, you can compete with big-name chain pharmacies and increase your chances of success.
Our Experts compiled this handy list of the best pharmacy business loans to help you find the best financing options. Before you accept any loan offer, be sure to shop around to ensure you receive the best rates and terms.
There is no shortage of small business loans for pharmacists on the market. Each one has its own unique features, making it important to compare all your options. In this review we highlight the terms, rates and fees of each lender and explain what makes them a good option. We also share potential downsides of each lender, and provide a rating methodology you can use to select the best option for your needs.
Best Pharmacy Business Loans for 2023 - Full Overview
American Express Business Blueprint™ - Best for Fair Monthly Revenue
Monthly fee: 3-9% for 6 month loans, 6-18% for 12-month loans, 9-27% for 18-month loans
Loan amounts ranging from $2,000 to $250,000
No prepayment penalties and no origination fees
Convenient application process
Pros & Cons
No origination fees
No prepayment penalties
Take a loan from your computer or mobile device 24/7
Fair monthly revenue requirements
High rates: You’ll likely have to pay higher interest rates, which can increase your overall cost of borrowing.
Unclear fees: Since the fees aren’t clearly defined, it may be difficult to budget your line of credit ahead of time.
American Express Business BlueprintTM program hosts the American Express® Business Line of Credit product. A line of credit can be a good option if you’d like to withdraw funds for your pharmacy business as you need to, up to your set credit limit. You’ll only pay interest on the amount you borrow.
Business lines of credit through American Express range from $2,000 to $250,000 with terms of 6, 12, or 18 months and monthly fees of 3-9% for 6 month loans, 6-18% for 12 month loans, or 9-27% for 18 month loans. To get approved, you need at least $3,000 average monthly revenue, a business history of at least 12 months, and a credit score of at least 640. However, all businesses are unique and are subject to approval and review.
For a flexible pharmacy loan and the peace of mind of having fast funding at your disposal, a American Express Business Line of Credit is a great choice.
Industry best factor rate for MCA - as low as 1.10
APR for the Line of credit product starts at 35%
Flexible repayment terms up to 16 months
Get funding in as little as 24 hours
Check your rate with a soft credit pull
Pros & Cons
Easy online application
Instant lending decisions
Fast funding times
Flexible payment terms
Large loan amounts
No collateral required
Rates and fees not disclosed
Startups will not qualify
If you run a pharmacy and are in need of a loan to expand your business, hire more pharmacists, or cover marketing expenses, Backd may be able to offer the funding solutions you need. Founded in 2018, Backd was created to provide small businesses with loans tailored specifically to them. They offer both working capital loans and business lines of credit - keeping you in control of the financing you need.
Working capital loans from Backd range from $10,000 to $2 million with terms up to 16 months. Payments are made daily, weekly, or semi-monthly. Working capital loans are best for pharmacies that are looking to fund a one-time project. If you need access to funds more often, we recommend a business line of credit from Backd. These range from $10,000 to $750,000 and allow you to continually draw on your line as you need it. To qualify for either option, you need to be in business for one year and have at least $100,000 in annual revenue.
If you’ve been denied elsewhere, Backd may be able to offer you the funding you need. Their application is quick and your credit will not be impacted, so we recommend applying and seeing what the company is able to offer you.
Early repayment discount: With a working capital loan, you’ll earn a 7% discount on your remaining balance if you repay it in full within the first 100 days.
Solid reputation: National Funding has been around for over 20 years and funded over $4.5 billion for a variety of business owners to date.
Fast funding: You can receive your money within 24 hours, depending on when you apply.
Daily or weekly repayments: National Funding requires daily or weekly repayments on their working capital loans, which might cause cash flow issues.
Personal guarantee required: Even though you won’t need collateral for a working capital loan, you will need to personally guarantee it.
No special interest loans: While National Funding states it offers business loans to minorities, it doesn’t offer any special loan products for them.
National Funding offers working capital loans for a variety of businesses, including pharmacies. If you need to cover everyday costs like rent, payroll, and utilities, you can get approved for up to $500,000 and potentially save money for paying off your loan early.
National Funding’s working capital business loans range from $5,000 to $500,000 with repayment terms between four months and two years. The pay rate starts at 1.10. To take out a working capital loan, you’ll need a minimum credit score of 600, a business track record of at least six months, and an annual revenue of $250,000 or more.
If your pharmacy needs cash to cover everyday operations, you might want to explore National Funding. With one of its working capital loans, you can receive up to $500,000 within 24 hours of when you get approved. Just make sure you earn sufficient revenue and feel comfortable for daily or weekly repayments.
Lendzi: Best for Pharmacy Businesseses With High Revenue
Excellent customer reviews on independent review sites
Pros & Cons
Excellent customer service
Bad credit accepted
Fast funding times
Multiple loan options
Annual income requirement may be high
Startups will not qualify
Lendzi is our top pick for pharmacy businesses with high revenue. If you’ve been denied elsewhere and have high business revenue, we highly recommend reaching out to Lendzi. The company was founded in 2020 and works diligently to get borrowers the funding they need, regardless of credit. Lendzi is a direct lender and a partner with over 75 other lenders, giving them access to hundreds of different types of loans. This increases your odds substantially at getting approved for a small business loan.
The three products that Lendzi offers for bad credit pharmacy loans are merchant cash advances, working capital loans, and equipment financing. Merchant cash advances require a credit score of 525, have terms of three to 15 months, and loan amounts of $5,000 to $400,000. Working capital loans require a score of just 500, also have terms of three to 15 months, and loan amounts go up to $400,000. If you need to purchase equipment, we recommend equipment financing which goes up to $2 million. And because the equipment acts as collateral, rates are typically much lower. To qualify for any loan from Lendzi, you need to be in business for at least six months and have $180,000 or more in annual revenue.
Lendzi is our top pick for both bad credit pharmacy loans and excellent customer satisfaction ratings. Having bad credit shouldn’t stand in your way of acquiring funding and growing your business, and Lendzi wants to get you the funding you need.
Fast funding: You can receive your funds within 72 hours of approval.
High borrowing limits: Biz2Credit’s commercial real estate loans go up to $6 million.
Quick application: Once you fill out an application, you’ll find out what you’re eligible for in minutes.
Strict eligibility criteria: Biz2Credit does have rigorous requirements that may be difficult to meet.
Additional fees: While fees aren’t clearly disclosed, you may have to pay between 1% and 6% in origination fees.
Founded in 2007, Biz2Credit offers loans to small businesses, including commercial real estate loans. If you need to buy a property for your pharmacy, these loans, which work a lot like mortgages, can come in handy.
Biz2Credit’s commercial real estate loans range from $250,000 to $6 million with terms between 12 and 36 months. APRs start at 10%. For a chance at approval, you need a minimum credit score of 660, at least $250,000 in annual revenue, and an 18-month business track record.
If you have good credit, a commercial real estate loan from Biz2Credit can make it easier to cover the costs of an attractive, modern space for your pharmacy.
Fast approvals: Once you fill out Fundbox’s simple application, you can get approved for a term loan in minutes.
No extra fees: Aside from interest, you won’t have to pay fees to borrow money with Fundbox.
Easy repayments: Fundbox lets you automatically debit payments from your bank account.
High rates: Compared to similar lenders, Fundbox charges higher interest rates.
Small maximum amount: You’ll only be able to borrow up to $150,000 to fund your pharmacy venture with Fundbox.
Fundbox is an alternative lender that uses artificial intelligence to connect borrowers to loans. If you know exactly how much money you want to borrow for your pharmacy, you might benefit from one of its term loans. You’ll receive a lump sum of money upfront and repay it via fixed monthly payments or installments.
Fundbox term loans range from $1,000 to $150,000 with APRs that start around 18% to 20%. For a chance at approval, you must have a credit score of at least 600, minimum annual revenue of $100,000, and a track record of six months in business or more.
If you have an idea of how much capital you need and on the lookout for a smaller loan, a Fundbox term loan should be on your radar.
GoKapital was founded in 2013 and offers six different types of loans that pharmacy businesses can apply for, in addition to commercial property loans and real estate investment loans. Because they do not exclude any types of industries, this lender is ideal for those in the pharmacy business. Types of loans include business term loans, equipment financing, SBA loans, merchant cash advances, startup loans, and business lines of credit.
GoKapital offers loans ranging from $5,000 to $5 million depending on the type of loan you apply for. Qualifications will vary, but the bare minimum accepted is a credit score of 500, business history of one year, and annual income of $240,000 or more. If your income isn’t this high, GoKapital does offer startup loans that require just $50,000 in annual revenue.
GoKapital is your one-stop shop for pharmacy loans. Whether you need a small business line of credit or a large expansion loan, GoKapital can help you secure the funding you need - all while offering competitive rates and fast funding times.
Loan Features: Loan amounts, terms, and repayment plans vary from lender to lender. If you’d like to own your own pharmacy, large amounts, lengthy terms, and flexible repayments are a must.
Application process: Since it takes a lot of time to open and operate a pharmacy, an easy application you can complete in minutes is preferred. A prequalification option that allows you to check your offers without any impact to your credit score can be useful as well.
Interest rates and fees: Ideally, you’d choose loans that offer low interest rates and minimum to no fees. But this may not always be possible, especially if you’re a pharmacy startup.
Qualification process: Some loans cater to more established pharmacy owners while others are open to newer pharmacy businesses with limited credit, revenue, and time in business.
Customer support: As a pharmacy business owner, there’s a good chance you prefer easy access to customer support should you ever need it. This may be available via phone, email, live chat, or resources on the lender’s website.
Online user reviews: Third-party reviews and ratings on sites like Trustpilot and Better Business Bureau (BBB) provide an unbiased look at the lender’s reputation and track record.
Perks and Bonuses: In addition to funding, some pharmacy loans offer perks like hardship assistance, mentoring, and credit score monitoring.
Main Features of the Best Pharmacy Business Loans
Min. Credit Score
Min. Time in Business
$250,000 to $6 million
Starts at 10%
$10,000 to $2 million
$5,000 to $5 million
Up to $2 million
Starts at 3.49%
$1,000 to $150,000
18% to 20%
American Express® Business Line of Credit
Average monthly revenue: at least $3,000
Ranging from $2,000 to $250,000
6 months: 3-9% 12 months: 6-18% 18 months: 9-27%
The Pharmacy and Drug Store Industry in the United States
The pharmacy and drug store industry encompasses a variety of prescription and over-the-counter medications, health and beauty items, and other consumer goods. Its market size, which is measured by revenue, is $346.3 billion in 2022, making it clear that there is a huge demand for pharmacies. It’s no surprise that the pharmacy and drug industry is the 30th largest industry in the U.S.
When compared to the overall economy, the market size of pharmacies and drug stores has skyrocketed. Since federal funding for Medicare and Medicaid is likely to increase in 2021, there is great opportunity for pharmacy owners. You can support senior citizens and lower-income consumers with their prescription drugs they can purchase at subsidized rates.
The U.S. pharmacy market has also focused on specialty drugs, which are either limited in supply, require special handling, or very expensive. These drugs can treat both rare diseases, such as multiple sclerosis and more common conditions like arthritis.
The use of generic drugs, which are more affordable than their brand-name counterparts have increased as well. As a pharmacy owner, you can take advantage of these trends and grow your business.
What Are the Costs of Running a Pharmacy?
To start a pharmacy, you'll likely need between $880,000 and $1,800,000 per year in funding. Of course, your pharmacy location will play a vital role in how much you’ll need to pay for your commercial property, inventory, and staffing.
You can expect the majority of your funds to go toward inventory as the average pharmacy will turn over its inventory up to ten times per year and spend about $100,000 per month or anywhere between $600,000 and $1.2 million per year just on inventory.
Staffing is another significant expense you should prepare for as the average salary of a pharmacist is $128,710, according to the U.S. Bureau of Labor Statistics. You’ll also have to cover the costs of pharmacy technicians, which earn an average of $35,100 per year.
How to Use Pharmacy Loans?
There are many uses for pharmacy loans including:
Inventory: Since inventory will likely be your largest expense and you’ll need to replenish it on a regular basis, a pharmacy loan can come in handy. Ideally, you’d use the funds to buy your products in bulk and save as much as possible.
Remodel Your Pharmacy: One way to stand out among big-name pharmacy chains is to modernize your pharmacy. You can use your loan proceeds to buy iPads, televisions, comfortable furniture, and new lighting.
Working Capital: Working capital refers to ongoing, day-to-day costs like payroll, utilities, insurance, and taxes. A pharmacy loan may help you cover them, especially when you’re short on cash flow.
Hire More Staff: When you first start your venture, you may be the only pharmacist. However, once you expand, you might want to hire additional pharmacists and support staff to make your life easier. A pharmacy loan can allow you to do so.
Invest in New Technology: By using the latest and greatest technology, you can provide excellent service and remain competitive. You can use a loan to upgrade outdated tools and systems.
How to Qualify for Pharmacy Loans?
To increase your chances of getting approved for a pharmacy loan.
Start the Process Early: Since the approval and funding process can take weeks or even months, get started as soon as possible. Don’t wait until the exact moment you need money to shop around, compare offers, and fill out applications.
Check Your Credit: No matter what type of loans you apply for, your credit will likely be considered. While some lenders have rigorous credit requirements, others are more lenient. Regardless, it’s a good idea to review your credit reports, dispute any inaccuracies, and work to improve your credit score.
Develop a Sound Business Plan: A business plan can educate lenders about the goals you have with your pharmacy as well as how you intend to use the loan proceeds. Make sure it's professional, polished, and free of grammar and spelling mistakes.
Look for Secured Loans: If you don’t have the best credit and find it difficult to get approved for unsecured loans, you might want to consider unsecured loans that require you to secure collateral, like your property or equipment. Keep in mind that if you default on your payments, the lender may seize your collateral.
While running a pharmacy is expensive, it can also be very lucrative and rewarding. Fortunately, pharmacy loans can help you obtain the capital you need to launch and grow your business. Just make sure you only borrow what you need and repay your loans on time, every time.